0001384101-18-000078 | 10-Q | XBRL Viewer

Document and Entity Information - shares	9 Months Ended
Document and Entity Information - shares	Sep. 30, 2018	Oct. 25, 2018
Document and Entity Information
Entity Registrant Name	VERACYTE, INC.
Entity Central Index Key	0001384101
Document Type	10-Q
Document Period End Date	Sep. 30, 2018
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Emerging Growth Company	true
Entity Small Business	true
Entity Ex Transition Period	true
Entity Common Stock, Shares Outstanding		40,538,779
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q3

Condensed Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Current assets:
Cash and cash equivalents	$ 77,846	$ 33,891
Accounts receivable	12,262	12,716
Supplies	3,463	5,324
Prepaid expenses and other current assets	1,803	1,997
Total current assets	95,374	53,928
Property and equipment, net	8,939	9,688
Finite-lived intangible assets, net	12,267	13,067
Goodwill	1,057	1,057
Restricted cash	603	603
Other assets	837	326
Total assets	119,077	78,669
Current liabilities:
Accounts payable	1,175	3,853
Accrued liabilities	9,261	8,175
Total current liabilities	10,436	12,028
Long-term debt	25,192	24,938
Capital lease liability, net of current portion	79	308
Deferred rent, net of current portion	3,953	4,170
Total liabilities	39,660	41,444
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.001 par value; 5,000,000 shares authorized, no shares issued and outstanding as of September 30, 2018 and December 31, 2017	0	0
Common stock, $0.001 par value; 125,000,000 shares authorized, 40,535,674 and 34,210,388 shares issued and outstanding as of September 30, 2018 and December 31, 2017, respectively	41	34
Additional paid-in capital	310,357	248,278
Accumulated deficit	(230,981)	(211,087)
Total stockholders’ equity	79,417	37,225
Total liabilities and stockholders’ equity	$ 119,077	$ 78,669

Condensed Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2018	Dec. 31, 2017
Statement of Financial Position [Abstract]
Preferred stock, par value (in usd per share)	$ 0.001	$ 0.001
Preferred stock, authorized (in shares)	5,000,000	5,000,000
Preferred stock, issued (in shares)	0	0
Preferred stock, outstanding (in shares)	0	0
Common stock, par value (in usd per share)	$ 0.001	$ 0.001
Common stock, authorized (in shares)	125,000,000	125,000,000
Common stock, issued (in shares)	40,535,674	34,210,388
Common stock, outstanding (in shares)	40,535,674	34,210,388

Condensed Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Income Statement [Abstract]
Revenue	$ 23,466	$ 17,519	$ 66,258	$ 52,357
Operating expenses:
Cost of revenue	8,261	7,169	24,374	20,426
Research and development	3,419	3,046	11,695	10,679
Selling and marketing	10,081	7,885	31,247	23,215
General and administrative	5,742	5,520	17,318	17,731
Intangible asset amortization	267	267	800	800
Total operating expenses	27,770	23,887	85,434	72,851
Loss from operations	(4,304)	(6,368)	(19,176)	(20,494)
Interest expense	(498)	(815)	(1,427)	(2,423)
Other income, net	333	134	709	353
Net loss	(4,469)	(7,049)	(19,894)	(22,564)
Comprehensive loss	$ (4,469)	$ (7,049)	$ (19,894)	$ (22,564)
Net loss per common share, basic and diluted (in usd per share)	$ (0.12)	$ (0.21)	$ (0.56)	$ (0.67)
Shares used to compute net loss per common share, basic and diluted (in shares)	38,620,036	33,946,748	35,769,623	33,881,705

Condensed Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
Operating activities
Net loss	$ (19,894)	$ (22,564)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	2,950	2,839
Stock-based compensation	4,425	4,825
Other income	(93)	0
Amortization of debt issuance costs	24	79
Interest on end-of-term debt obligation	230	0
Changes in operating assets and liabilities:
Accounts receivable	454	(2,879)
Supplies	1,861	(285)
Prepaid expenses and current other assets	61	240
Other assets	(511)	(44)
Accounts payable	(2,636)	891
Accrued liabilities and deferred rent	834	(1,201)
Net cash used in operating activities	(12,295)	(18,099)
Investing activities
Purchases of property and equipment	(1,420)	(1,455)
Proceeds from sale of property and equipment	0	440
Net cash used in investing activities	(1,420)	(1,015)
Financing activities
Proceeds from the issuance of common stock in a public offering, net of costs	55,039	200
Proceeds from legal settlement regarding short-swing profits	403	0
Payment of capital lease liability	(217)	(204)
Proceeds from the exercise of common stock options and employee stock purchases	2,445	974
Net cash provided by financing activities	57,670	970
Net increase (decrease) in cash, cash equivalents and restricted cash	43,955	(18,144)
Cash, cash equivalents and restricted cash at beginning of period	34,494	59,942
Cash, cash equivalents and restricted cash at end of period	78,449	41,798
Supplementary cash flow information of non-cash investing and financing activities:
Total cash, cash equivalents and restricted cash	78,449	41,798
Purchases of property and equipment included in accounts payable and accrued liabilities	23	188
Interest paid on debt	1,235	$ 2,318
Cash and cash equivalents	77,846
Restricted cash	$ 603

Organization and Description of Business

9 Months Ended

Sep. 30, 2018

Accounting Policies [Abstract]

Organization and Description of Business

Veracyte, Inc. (“Veracyte” or the “Company”) was incorporated in the state of Delaware on August 15, 2006 as Calderome, Inc. Calderome operated as an incubator until early 2008. On March 4, 2008, the Company changed its name to Veracyte, Inc. The Company’s operations are based in South San Francisco, California and Austin, Texas, and it operates in one segment.

Veracyte is a genomic diagnostics company that resolves diagnostic uncertainty by combining genomic technology, clinical science and machine learning to provide diagnostic answers to physicians and patients.

Since the Company's founding in 2008, it has commercialized three products:

Afirma Thyroid FNA Analysis - Includes the next-generation Afirma Genomic Sequencing Classifier, or GSC, and its predecessor, the Afirma Gene Expression Classifier, or GEC, that is used to identify patients with benign thyroid nodules among those with indeterminate cytopathology results in order to preserve the thyroid. The Afirma classifier was developed using machine learning that is based on ensemble methods in which multiple algorithms - each playing its own role - are used to interpret large amounts of ribonucleic acid, or RNA, sequencing genomic data and obtain a better predictive performance than any single algorithm.

Percepta Bronchial Genomic Classifier - The 23-gene Percepta classifier improves lung cancer screening and diagnosis by increasing the diagnostic performance of bronchoscopies and identifying patients with lung nodules who are at low risk of cancer, without the need for more invasive procedures. The test leverages the field of injury concept and analyzes genomic changes that occur in the epithelial cells lining the airways of current or former smokers to assess a patient’s risk of having lung cancer, without the need to test the often-hard-to-reach nodule directly.

Envisia Genomic Classifier - The Envisia classifier is designed to improve physicians’ ability to differentiate idiopathic pulmonary fibrosis, or IPF, from other interstitial lung diseases, or ILD, without the need for invasive and potentially risky surgery. The Envisia classifier was developed using machine learning coupled with powerful, deep RNA sequencing to detect the presence or absence of usual interstitial pneumonia, or UIP, a classic diagnostic pattern whose presence is essential for the diagnosis of IPF.

All of the Company's testing services are made available through its clinical reference laboratories located in South San Francisco, California and Austin, Texas, both of which meet required federal and state licensing requirements.

Basis of Presentation

The Company’s financial statements have been prepared in accordance with accounting principles generally accepted in the United States, or GAAP. Certain information and note disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. The condensed balance sheet as of September 30, 2018, the condensed statements of operations and comprehensive loss for the three and nine months ended September 30, 2018 and 2017, and the condensed statements of cash flows for the nine months ended September 30, 2018 and 2017 are unaudited, but include all adjustments, consisting only of normal recurring adjustments, which the Company considers necessary for a fair presentation of its financial position, operating results and cash flows for the periods presented. The condensed balance sheet at December 31, 2017 has been derived from audited financial statements. The results for the three and nine months ended September 30, 2018 are not necessarily indicative of the results expected for the full year or any other period.

The accompanying interim period condensed financial statements and related financial information included in this Quarterly Report on Form 10-Q should be read in conjunction with the audited financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017.

Use of Estimates

The preparation of unaudited interim 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 as of the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Significant items subject to such estimates include: revenue recognition; contractual allowances; the useful lives of property and equipment; the recoverability of long-lived assets; the estimation of the fair value of intangible assets; stock options; income tax uncertainties, including a valuation allowance for deferred tax assets; and contingencies. The Company bases these estimates on historical and anticipated results, trends, and various other assumptions that the Company believes are reasonable under the circumstances, including assumptions as to future events. These estimates form the basis for making judgments about the carrying values of assets and liabilities and recorded revenue and expenses that are not readily apparent from other sources. Actual results could differ from those estimates and assumptions.

Issuance of Common Stock in a Public Offering

In July 2018, the Company issued and sold 5,750,000 shares of common stock in a registered public offering, including the underwriters' exercise in full of their option to purchase an additional 750,000 shares, at a price to the public of $10.25 per share. The Company's net proceeds from the offering were approximately $55.0 million, after deducting underwriting commissions and offering expenses of $3.9 million.

Concentrations of Credit Risk and Other Risks and Uncertainties

The majority of the Company’s cash and cash equivalents are deposited with one major financial institution in the United States. Deposits in this institution may exceed the amount of insurance provided on such deposits. The Company has not experienced any losses on its deposits of cash and cash equivalents.

Several of the components of the Company’s sample collection kit and test reagents are obtained from single-source suppliers. If these single-source suppliers fail to satisfy the Company’s requirements on a timely basis, it could suffer delays in being able to deliver its diagnostic solutions, a possible loss of revenue, or incur higher costs, any of which could adversely affect its operating results.

The Company is also subject to credit risk from its accounts receivable related to its sales. The Company generally does not perform evaluations of customers’ financial condition and generally does not require collateral.

Through September 30, 2018, substantially all of the Company’s revenue has been derived from the sale of Afirma. To date, Afirma has been delivered primarily to physicians in the United States. The Company’s third-party payers in excess of 10% of revenue and their related revenue as a percentage of total revenue were as follows:



	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
Medicare	29	%	26	%	28	%	26	%
UnitedHealthcare	13	%	14	%	12	%	14	%
	42	%	40	%	40	%	40	%

The Company’s significant third-party payers and their related accounts receivable balance as a percentage of total accounts receivable were as follows:



	September 30, 2018		December 31, 2017
Medicare	17	%	22	%
UnitedHealthcare	11	%	9	%

No other third-party payer represented more than 10% of the Company’s accounts receivable balances as of those dates.

Restricted Cash

The Company had deposits of $603,000 included in long-term assets as of September 30, 2018 and December 31, 2017, restricted from withdrawal and held by a bank in the form of collateral for an irrevocable standby letter of credit held as security for the lease of the Company’s South San Francisco facility.

Revenue Recognition

The Company commenced recognizing revenue in accordance with the provisions of ASC 606, Revenue from Contracts with Customers, or ASC 606, starting January 1, 2018. Prior to January 1, 2018, the Company recognized revenue in accordance with the provisions of ASC 954-605, Health Care Entities - Revenue Recognition, or ASC 954.

Revenue from Diagnostic Services

Most of the Company’s revenue is generated from the provision of diagnostic services. These services are completed upon the delivery of test results to the prescribing physician, at which time the Company bills for the services. The Company recognizes revenue related to billings based on estimates of the amount that will ultimately be realized. In determining the amount to accrue for a delivered test, the Company considers factors such as payment history, payer coverage, whether there is a reimbursement contract between the payer and the Company, payment as a percentage of agreed upon rate (if applicable), amount paid per test and any current developments or changes that could impact reimbursement. These estimates require significant judgment by management.

The Company adopted ASC 606 on January 1, 2018 using the modified retrospective method, which requires a cumulative catch-up adjustment as if the Company had recognized revenue under ASC 606 from January 1, 2016 to December 31, 2017. Prior to January 1, 2018, the Company recognized revenue in accordance with ASC 954 and recognized revenue for tests delivered on an accrual basis when amounts that will ultimately be realized could be reasonably estimated, and on the cash basis when there was insufficient information to estimate revenue accruals. There was sufficient payment history for the Company to substantially accrue all revenue upon delivery of test results starting July 1, 2016 and the Company continued to recognize revenue upon cash receipt for unaccrued tests that were delivered prior to July 1, 2016. There was no revenue recognized on the cash basis for the three and nine months ended September 30, 2018 and revenue recognized on the cash basis for the three and nine months ended September 30, 2017 was $262,000 and $2.4 million, respectively.

As noted above, on July 1, 2016 the Company began recognizing revenue from substantially all its tests on the accrual basis of accounting at an amount equal to management’s best estimate of the cash to ultimately be collected. For tests delivered prior to July 1, 2016, substantially all the related cash had been collected by December 31, 2017. Thus, at January 1, 2018, the cumulative impact of adopting ASC 606 was not material and no adjustment was recorded.

During the first nine months of 2018, the Company collected cash in excess of the revenue recognized for certain tests delivered prior to July 1, 2018. As a result, the Company changed its estimate of the amounts to be recognized for these tests and recognized an additional net $0.5 million and $1.7 million of revenue for the three and nine months ended September 30, 2018, respectively. These changes in estimates resulted in decreases in loss from operations of $0.5 million and $1.7 million and decreases in loss per share of approximately $0.01 and $0.05 for the three and nine months ended September 30, 2018, respectively.

Biopharmaceutical Services

On April 9, 2018, the Company entered into an agreement with a biopharmaceutical company whereby the Company agreed to provide certain tissue samples and other services in exchange for agreed-upon fees. During the quarter ended June 30, 2018, the Company recognized $450,000 of revenue upon deliveries of tissue samples and the Company received $500,000 for other services, which will be recognized ratably during the quarters ended September 30 and December 31, 2018 as the services are performed. Thereafter, the Company expects to receive approximately $250,000 per quarter as services are performed and may also recognize revenue related to the deliveries of additional tissue samples as long as the agreement is not terminated. The agreement has a term of one year with an automatic renewal of one year and the biopharmaceutical company may terminate the agreement at any time with at least 90 days' notice. The Company evaluated the accounting for this agreement under ASC 606 and concluded the performance obligations thereunder are the deliveries of tissue samples and performance of services, both of which are distinct. There were no deliveries of tissue samples for the three months ended September 30, 2018 and the Company recognized revenue of $450,000 for the deliveries of tissue samples for the nine months ended September 30, 2018. The Company recognized service revenue of $250,000 for the three and nine months ended September 30, 2018.

Legal Settlement

In March 2018, the Company received $0.4 million as a settlement with an institutional investor that was a beneficial owner of the Company's common stock related to the disgorgement of short-swing profits pursuant to Section 16(b) of the Securities Exchange Act of 1934, as amended, or the Exchange Act. The settlement of $0.4 million was recognized as additional paid-in capital.

Recent Accounting Pronouncements

In February 2016, the FASB issued ASU No. 2016-2, Leases (Topic 842). This ASU is aimed at making leasing activities more transparent and comparable, and requires substantially all leases be recognized by lessees on their balance sheet as a right-of-use asset and corresponding lease liability, including leases currently accounted for as operating leases. The ASU will be effective for interim and annual periods beginning after December 15, 2018. Additionally, the FASB issued ASU, No. 2018-11, Leases (Topic 842): Targeted Improvements, which offers an additional transition method whereby entities may apply the new leases standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings rather than application of the new leases standard at the beginning of the earliest period presented in the financial statements. The Company expects to adopt this standard beginning in 2019 and does not expect that this standard will have a material impact on its results of operations or cash flows, but that it will have a material impact on the Company’s assets and liabilities. The Company has accumulated a list of its leases and is currently in the process of quantifying the impact of adopting this ASU.

In June 2018, the FASB issued ASU No. 2018-07, Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share Based Payment Accounting. Under this ASU, the accounting for share - based payments to nonemployees and employees will be substantially aligned, primarily by permitting the measurement of nonemployee awards to be fixed at the grant date. This ASU is effective for all interim and annual reporting periods beginning on or after December 15, 2018, with early adoption permitted. The Company does not expect the adoption to have a material impact to the condensed consolidated financial statements.

Net Loss Per Common Share

9 Months Ended

Sep. 30, 2018

Earnings Per Share [Abstract]

Net Loss Per Common Share

Basic net loss per common share is calculated by dividing net loss attributable to common stockholders by the weighted-average number of common shares outstanding during the period, without consideration of common stock equivalents. Diluted net loss per common share is computed by dividing net loss attributable to common stockholders by the weighted-average number of common share equivalents outstanding for the period determined using the treasury stock method. The following outstanding common stock equivalents have been excluded from diluted net loss per common share because their inclusion would be anti-dilutive:



	Three Months Ended September 30,		Nine Months Ended September 30,
	2018	2017	2018	2017
Shares of common stock subject to outstanding options	5,995,401	6,322,215	6,065,250	6,134,966
Employee stock purchase plan	27,117	25,481	32,513	31,944
Restricted stock units	445,598	70,000	363,896	59,945
Total common stock equivalents	6,468,116	6,417,696	6,461,659	6,226,855

Accrued Liabilities

9 Months Ended

Sep. 30, 2018

Payables and Accruals [Abstract]

Accrued Liabilities

Accrued liabilities consisted of the following (in thousands of dollars):



	September 30, 2018		December 31, 2017
Accrued compensation expenses	$	6,409	$	5,293
Accrued other	2,852		2,882
Total accrued liabilities	$	9,261	$	8,175

Fair Value Measurements

9 Months Ended

Sep. 30, 2018

Fair Value Disclosures [Abstract]

Fair Value Measurements

The Company records its financial assets and liabilities at fair value. The carrying amounts of certain financial instruments of the Company, including cash and cash equivalents, prepaid expenses and other current assets, accounts payable and accrued liabilities, approximate fair value due to their relatively short maturities. The carrying value of the Company’s debt approximates its fair value because the interest rate approximates market rates that the Company could obtain for debt with similar terms. The fair value of the Company’s debt is estimated using the net present value of the payments, discounted at an interest rate that is consistent with market interest rates, which is a Level II input. The accounting guidance for fair value provides a framework for measuring fair value, clarifies the definition of fair value, and expands disclosures regarding fair value measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. The accounting guidance establishes a three-tiered hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value as follows:


•	Level I: Inputs which include quoted prices in active markets for identical assets and liabilities;


•	Level II: Inputs other than Level I that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and


•	Level III: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

The fair value of the Company’s financial assets include money market funds and a deposit for the lease of the Company's South San Francisco facility. Money market funds, included in cash and cash equivalents in the accompanying condensed balance sheets, were $77.4 million and $33.1 million as of September 30, 2018 and December 31, 2017, respectively, and are Level I assets as described above. The deposit for the lease, included in restricted cash in the accompanying condensed balance sheets, was $603,000 as of September 30, 2018 and December 31, 2017, and is a Level I asset as described above.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Commitments and Contingencies

9 Months Ended

Sep. 30, 2018

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Operating Leases

The Company leases its headquarters and laboratory facilities in South San Francisco, California under a non-cancelable lease agreement for approximately 59,000 square feet. The lease began in June 2015 and ends in March 2026 and contains extension of lease term options. The Company had deposits of $603,000 included in long-term assets as of September 30, 2018 and December 31, 2017, restricted from withdrawal and held by a bank in the form of collateral for an irrevocable standby letter of credit held as security for the lease of the South San Francisco facility.

The Company also leases laboratory and office space in Austin, Texas under a lease that expires in January 2029 and includes options for expansion and early termination in 2025. The related cash security deposit of $139,000 as of September 30, 2018 and December 31, 2017 is included in other assets in the Company’s condensed balance sheets.

Future minimum lease payments under non-cancelable operating leases as of September 30, 2018 are as follows (in thousands of dollars):



Year Ending December 31,
Remainder of 2018	$	516
2019	2,227
2020	2,332
2021	2,401
2022	2,472
Thereafter	9,384
Total minimum lease payments	$	19,332

The Company recognizes rent expense on a straight-line basis over the non-cancelable lease period. Rent expense was $476,000 and $469,000 for the three months ended September 30, 2018 and 2017, respectively, and $1.4 million in each of the nine months ended September 30, 2018 and 2017.

Capital Lease

The Company entered into a capital lease in December 2016 for $1.2 million of laboratory equipment. The Company paid an upfront amount of $330,000 and the present value of the total future minimum lease payments was $874,000. As of September 30, 2018, the annual future minimum lease payments are $79,000 and $317,000 for the remainder of 2018 and 2019, respectively.

Contingencies

From time to time, the Company may be involved in legal proceedings arising in the ordinary course of business. The Company assesses contingencies to determine the degree of probability and range of possible loss for potential accrual in its financial statements. An estimated loss contingency is accrued in the financial statements if it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. The Company believes there is no litigation pending that could have, either individually or in the aggregate, a material adverse effect on the Company’s financial statements.

Debt

9 Months Ended

Sep. 30, 2018

Debt Disclosure [Abstract]

Debt

Loan and Security Agreement

On November 3, 2017, the Company entered into a loan and security agreement, or the Loan and Security Agreement, with Silicon Valley Bank. The Loan and Security Agreement allows the Company to borrow up to $35.0 million, with a $25.0 million term loan, or the Term Loan Advance, and a revolving line of credit of up to $10.0 million, or the Revolving Line of Credit. The Term Loan Advance was advanced upon the closing of the Loan and Security Agreement and was used to pay the outstanding balance of the Company’s existing long-term debt, which was canceled at that date. The Company had not drawn on the Revolving Line of Credit as of September 30, 2018. Borrowings under the Loan and Security Agreement mature on October 1, 2022. Amounts may be borrowed and repaid under the Revolving Line of Credit up until the earliest of full repayment or maturity of the Loan and Security Agreement, termination of the Loan and Security Agreement, or October 1, 2022.

The Term Loan Advance bears interest at a variable rate equal to (i) the thirty-day U.S. London Interbank Offer Rate, or LIBOR plus (ii) 4.20%, with a minimum rate of 5.34% per annum. Principal amounts outstanding under the Revolving Line of Credit bear interest at a variable rate equal to (i) LIBOR plus (ii) 3.50%, with a minimum rate of 4.70% per annum. The effective interest rate was 8.05% for the Term Loan Advance as of September 30, 2018.

The Company may prepay the outstanding principal amount under the Term Loan Advance plus accrued and unpaid interest and, if the Term Loan Advance is repaid in full, a prepayment premium. The prepayment premium will be (i) $750,000 if prepayment is made prior to November 3, 2018, (ii) $500,000 if the prepayment is made after November 3, 2018 but on or before November 3, 2019, or (iii) $250,000 if the prepayment is made after November 3, 2019.

In addition, a final payment on the Term Loan Advance in the amount of $1.2 million is due upon the earlier of the maturity date of the Term Loan Advance or its payment in full. The Loan and Security Agreement contains customary representations, warranties, and events of default such as a material adverse change in our business, operations or financial condition, as well as affirmative and negative covenants. The negative covenants include, among other provisions, covenants that limit or restrict the Company's ability to incur liens, make investments, incur indebtedness, merge with or acquire other entities, dispose of assets, make dividends or other distributions to holders of its equity interests, engage in any new line of business, or enter into certain transactions with affiliates, in each case subject to certain exceptions. The Company’s obligations under the Loan and Security Agreement are secured by substantially all of its assets (excluding intellectual property), subject to certain customary exceptions. The Loan and Security Agreement also requires the Company to achieve certain revenue levels tested quarterly on a trailing twelve-month basis. However, failure to maintain the revenue levels will not be considered a default if the sum of the Company’s unrestricted cash and cash equivalents maintained with Silicon Valley Bank and amount available under the Revolving Line of Credit is at least $40.0 million. As of September 30, 2018, the Company was in compliance with the loan covenants.

As of September 30, 2018, the net debt obligation for borrowings made under the Loan and Security Agreement was as follows (in thousands of dollars):



	September 30, 2018			December 31, 2017
Debt principal	$	25,000		$	25,000
End-of-term debt obligation	283			53
Unamortized debt issuance costs	(91		)	(115		)
Net debt obligation	$	25,192		$	24,938

Future principal and end-of-term debt obligation payments due under the Loan and Security Agreement are as follows (in thousands of dollars):



Year Ending December 31,
2019	$	1,389
2020	8,333
2021	8,333
2022	8,132
Total	$	26,187

Credit Agreement

In March 2016, the Company entered into a credit agreement, or the Credit Agreement, with Visium Healthcare Partners, LP. Under the Credit Agreement, two term loans were available to the Company with an aggregate principal amount of up to $40.0 million. The Company drew down the initial $25.0 million term loan, or the Term Loan, on March 30, 2016.

As noted above, upon entering into the Loan and Security Agreement, the Credit Agreement was paid in full and terminated on November 3, 2017, wherein all commitments were terminated, all liens were released and all outstanding principal, interest and fees accrued thereunder were repaid in the aggregate amount of $27.3 million, including a prepayment premium of $1.5 million.

Stockholders' Equity

9 Months Ended

Sep. 30, 2018

Equity [Abstract]

Stockholders' Equity

Stockholders’ Equity

Common Stock

The Company had reserved shares of common stock for issuance as follows:



	September 30, 2018	December 31, 2017
Stock options and restricted stock units issued and outstanding	6,581,890	6,061,081
Stock options and restricted stock units available for grant under stock option plans	1,552,554	1,133,907
Common stock available for the Employee Stock Purchase Plan	309,419	456,002
Total	8,443,863	7,650,990

Thyroid Cytopathology Partners	9 Months Ended
Thyroid Cytopathology Partners	Sep. 30, 2018
Thyroid Cytopathology Partners
Thyroid Cytopathology Partners	Thyroid Cytopathology Partners In 2010, the Company entered into an arrangement with Pathology Resource Consultants, P.A., or PRC, to set up and manage a specialized pathology practice to provide testing services to the Company. There was no direct monetary compensation from the Company to PRC as a result of this arrangement. The Company's service agreement was with the specialized pathology practice, Thyroid Cytopathology Partners, or TCP, which was managed by PRC and was effective through December 31, 2015, and thereafter automatically renewed every year unless either party provided notice of intent not to renew at least 12 months prior to the end of the then-current term. Under the service agreement, the Company paid TCP based on a fixed price per test schedule, which was reviewed periodically for changes in market pricing. Subsequent to December 2012, an amendment to the service agreement allowed TCP to sublease a portion of the Company's facility in Austin, Texas. The Company does not have an ownership interest in or provide any form of financial or other support to TCP. On October 16, 2017, the Company amended and restated its service agreement with TCP. The agreement is effective through October 31, 2022, and thereafter automatically renews every year unless either party provides notice of intent not to renew at least 12 months prior to the end of the then-current term. In connection with amending and restating the TCP agreement, the Company’s arrangement with PRC was simultaneously assigned by PRC to TCP and immediately terminated, and the Company agreed to pay PRC a total of $1.8 million over eight quarterly installments in exchange for TCP reducing the price per test it charges the Company during the term of the amended TCP agreement. Payments are amortized over the term of the agreement. The Company has concluded that TCP represents a variable interest entity and that the Company is not the primary beneficiary as it does not have the ability to direct the activities that most significantly impact TCP's economic performance. Therefore, the Company does not consolidate TCP. All amounts paid to TCP under the service agreement are expensed as incurred and included in cost of revenue in the accompanying statements of operations and comprehensive loss. The Company incurred $1.0 million and $1.2 million for the three months ended September 30, 2018 and 2017, respectively, and $2.9 million and $3.6 million for the nine months ended September 30, 2018 and 2017, respectively, in cytopathology testing and evaluation services expenses with TCP, which are included in cost of revenues in the Company’s condensed statements of operations and comprehensive loss. The Company’s outstanding obligations to TCP for cytopathology testing services were $289,000 and $308,000 as of September 30, 2018 and December 31, 2017, respectively, and are included in accounts payable on the accompanying condensed balance sheets. TCP reimburses the Company for its proportionate share of the Company’s rent and related operating expenses for the leased facility. TCP’s portion of rent and related operating expenses for the shared space at the Austin, Texas facility was $32,000 and $25,000 for the three months ended September 30, 2018 and 2017, respectively, and $96,000 and $78,000 for the nine months ended September 30, 2018 and 2017, respectively, and is included in other income, net in the Company’s condensed statements of operations and comprehensive loss.

Income Taxes	9 Months Ended
Income Taxes	Sep. 30, 2018
Income Tax Disclosure [Abstract]
Income Taxes	Income Taxes The Company did not record a provision or benefit for income taxes during the three and nine months ended September 30, 2018 and 2017. The Company continues to maintain a full valuation allowance against its net deferred tax assets. As of September 30, 2018, the Company had unrecognized tax benefits of $2.5 million, none of which would currently affect the Company’s effective tax rate if recognized due to the Company’s net deferred tax assets being fully offset by a valuation allowance. The Company does not anticipate that the amount of unrecognized tax benefits relating to tax positions existing at September 30, 2018 will significantly increase or decrease within the next 12 months. There was no interest expense or penalties related to unrecognized tax benefits recorded through September 30, 2018. A number of years may elapse before an uncertain tax position is audited and finally resolved. While it is often difficult to predict the final outcome or the timing of resolution of any particular uncertain tax position, the Company believes that its reserves for income taxes reflect the most likely outcome. The Company adjusts these reserves, as well as the related interest, with consideration of changing facts and circumstances. Settlement of any particular position could require the use of cash. On December 22, 2017, the U.S. government enacted comprehensive tax legislation referred to as the Tax Cuts and Jobs Act, or the Tax Act. The Tax Act significantly revises the future ongoing U.S. corporate income tax by, among other things, lowering the U.S. corporate income tax rates and implementing a territorial tax system. The corporate tax rate was reduced from 35% to 21% for tax years beginning after December 31, 2017 and certain provisions exist on which to allow accelerated expensing of equipment for a portion of 2017 and for future years. These changes primarily impacted the value of the Company’s deferred tax assets with a corresponding offset to valuation allowance, both of which were recognized in the year ended December 31, 2017. The Tax Act also limits the amount of net operating losses that can be used to reduce taxable income to 80% for net operating losses generated for periods beginning after December 31, 2017. Existing net operating losses, arising in years on or before December 31, 2017 are not affected by the Tax Act. The Company has completed a preliminary assessment of the accounting for the income tax effects of the Tax Act, as it relates to its current structure, including provisions that are effective for tax years beginning in 2018. The Company's preliminary assessment is subject to revisions to any additional guidance issued by the U.S. Treasury Department, Internal Revenue Service, FASB, and other standard-setting and regulatory bodies. Adjustments may materially impact the Company's provision for income taxes and the assessment of the accounting for the tax effects of the Tax Act will not extend beyond one year from the enactment date.

Organization and Description of Business (Policies)	9 Months Ended
Organization and Description of Business (Policies)	Sep. 30, 2018
Accounting Policies [Abstract]
Basis of Presentation	Basis of Presentation The Company’s financial statements have been prepared in accordance with accounting principles generally accepted in the United States, or GAAP. Certain information and note disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. The condensed balance sheet as of September 30, 2018, the condensed statements of operations and comprehensive loss for the three and nine months ended September 30, 2018 and 2017, and the condensed statements of cash flows for the nine months ended September 30, 2018 and 2017 are unaudited, but include all adjustments, consisting only of normal recurring adjustments, which the Company considers necessary for a fair presentation of its financial position, operating results and cash flows for the periods presented. The condensed balance sheet at December 31, 2017 has been derived from audited financial statements. The results for the three and nine months ended September 30, 2018 are not necessarily indicative of the results expected for the full year or any other period. The accompanying interim period condensed financial statements and related financial information included in this Quarterly Report on Form 10-Q should be read in conjunction with the audited financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017.
Use of Estimates	Use of Estimates The preparation of unaudited interim 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 as of the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Significant items subject to such estimates include: revenue recognition; contractual allowances; the useful lives of property and equipment; the recoverability of long-lived assets; the estimation of the fair value of intangible assets; stock options; income tax uncertainties, including a valuation allowance for deferred tax assets; and contingencies. The Company bases these estimates on historical and anticipated results, trends, and various other assumptions that the Company believes are reasonable under the circumstances, including assumptions as to future events. These estimates form the basis for making judgments about the carrying values of assets and liabilities and recorded revenue and expenses that are not readily apparent from other sources. Actual results could differ from those estimates and assumptions.
Concentrations of Credit Risk and Other Risks and Uncertainties	Concentrations of Credit Risk and Other Risks and Uncertainties The majority of the Company’s cash and cash equivalents are deposited with one major financial institution in the United States. Deposits in this institution may exceed the amount of insurance provided on such deposits. The Company has not experienced any losses on its deposits of cash and cash equivalents. Several of the components of the Company’s sample collection kit and test reagents are obtained from single-source suppliers. If these single-source suppliers fail to satisfy the Company’s requirements on a timely basis, it could suffer delays in being able to deliver its diagnostic solutions, a possible loss of revenue, or incur higher costs, any of which could adversely affect its operating results. The Company is also subject to credit risk from its accounts receivable related to its sales. The Company generally does not perform evaluations of customers’ financial condition and generally does not require collateral.
Restricted Cash	Restricted Cash The Company had deposits of $603,000 included in long-term assets as of September 30, 2018 and December 31, 2017, restricted from withdrawal and held by a bank in the form of collateral for an irrevocable standby letter of credit held as security for the lease of the Company’s South San Francisco facility.
Revenue Recognition	Revenue Recognition The Company commenced recognizing revenue in accordance with the provisions of ASC 606, Revenue from Contracts with Customers, or ASC 606, starting January 1, 2018. Prior to January 1, 2018, the Company recognized revenue in accordance with the provisions of ASC 954-605, Health Care Entities - Revenue Recognition, or ASC 954. Revenue from Diagnostic Services Most of the Company’s revenue is generated from the provision of diagnostic services. These services are completed upon the delivery of test results to the prescribing physician, at which time the Company bills for the services. The Company recognizes revenue related to billings based on estimates of the amount that will ultimately be realized. In determining the amount to accrue for a delivered test, the Company considers factors such as payment history, payer coverage, whether there is a reimbursement contract between the payer and the Company, payment as a percentage of agreed upon rate (if applicable), amount paid per test and any current developments or changes that could impact reimbursement. These estimates require significant judgment by management. The Company adopted ASC 606 on January 1, 2018 using the modified retrospective method, which requires a cumulative catch-up adjustment as if the Company had recognized revenue under ASC 606 from January 1, 2016 to December 31, 2017. Prior to January 1, 2018, the Company recognized revenue in accordance with ASC 954 and recognized revenue for tests delivered on an accrual basis when amounts that will ultimately be realized could be reasonably estimated, and on the cash basis when there was insufficient information to estimate revenue accruals. There was sufficient payment history for the Company to substantially accrue all revenue upon delivery of test results starting July 1, 2016 and the Company continued to recognize revenue upon cash receipt for unaccrued tests that were delivered prior to July 1, 2016. There was no revenue recognized on the cash basis for the three and nine months ended September 30, 2018 and revenue recognized on the cash basis for the three and nine months ended September 30, 2017 was $262,000 and $2.4 million, respectively. As noted above, on July 1, 2016 the Company began recognizing revenue from substantially all its tests on the accrual basis of accounting at an amount equal to management’s best estimate of the cash to ultimately be collected. For tests delivered prior to July 1, 2016, substantially all the related cash had been collected by December 31, 2017. Thus, at January 1, 2018, the cumulative impact of adopting ASC 606 was not material and no adjustment was recorded.
Recent Accounting Pronouncements	Recent Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-2, Leases (Topic 842). This ASU is aimed at making leasing activities more transparent and comparable, and requires substantially all leases be recognized by lessees on their balance sheet as a right-of-use asset and corresponding lease liability, including leases currently accounted for as operating leases. The ASU will be effective for interim and annual periods beginning after December 15, 2018. Additionally, the FASB issued ASU, No. 2018-11, Leases (Topic 842): Targeted Improvements, which offers an additional transition method whereby entities may apply the new leases standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings rather than application of the new leases standard at the beginning of the earliest period presented in the financial statements. The Company expects to adopt this standard beginning in 2019 and does not expect that this standard will have a material impact on its results of operations or cash flows, but that it will have a material impact on the Company’s assets and liabilities. The Company has accumulated a list of its leases and is currently in the process of quantifying the impact of adopting this ASU. In June 2018, the FASB issued ASU No. 2018-07, Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share Based Payment Accounting. Under this ASU, the accounting for share - based payments to nonemployees and employees will be substantially aligned, primarily by permitting the measurement of nonemployee awards to be fixed at the grant date. This ASU is effective for all interim and annual reporting periods beginning on or after December 15, 2018, with early adoption permitted. The Company does not expect the adoption to have a material impact to the condensed consolidated financial statements.

Organization and Description of Business (Tables)

9 Months Ended

Sep. 30, 2018

Revenue concentration risk | Revenue

Concentration Risk

Schedule of the Company's third-party payers as a percentage of total

The Company’s third-party payers in excess of 10% of revenue and their related revenue as a percentage of total revenue were as follows:



	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
Medicare	29	%	26	%	28	%	26	%
UnitedHealthcare	13	%	14	%	12	%	14	%
	42	%	40	%	40	%	40	%

Gross receivables concentration risk | Accounts receivable

Concentration Risk

Schedule of the Company's third-party payers as a percentage of total

The Company’s significant third-party payers and their related accounts receivable balance as a percentage of total accounts receivable were as follows:



	September 30, 2018		December 31, 2017
Medicare	17	%	22	%
UnitedHealthcare	11	%	9	%

Net Loss Per Common Share (Tables)

9 Months Ended

Sep. 30, 2018

Earnings Per Share [Abstract]

Schedule of outstanding shares of common stock equivalents that have been excluded from diluted net loss per common share

The following outstanding common stock equivalents have been excluded from diluted net loss per common share because their inclusion would be anti-dilutive:



	Three Months Ended September 30,		Nine Months Ended September 30,
	2018	2017	2018	2017
Shares of common stock subject to outstanding options	5,995,401	6,322,215	6,065,250	6,134,966
Employee stock purchase plan	27,117	25,481	32,513	31,944
Restricted stock units	445,598	70,000	363,896	59,945
Total common stock equivalents	6,468,116	6,417,696	6,461,659	6,226,855

Accrued Liabilities (Tables)

9 Months Ended

Sep. 30, 2018

Payables and Accruals [Abstract]

Schedule of accrued liabilities

Accrued liabilities consisted of the following (in thousands of dollars):



	September 30, 2018		December 31, 2017
Accrued compensation expenses	$	6,409	$	5,293
Accrued other	2,852		2,882
Total accrued liabilities	$	9,261	$	8,175

Commitments and Contingencies (Tables)

9 Months Ended

Sep. 30, 2018

Commitments and Contingencies Disclosure [Abstract]

Schedule of future minimum lease payments under non-cancelable operating leases

Future minimum lease payments under non-cancelable operating leases as of September 30, 2018 are as follows (in thousands of dollars):



Year Ending December 31,
Remainder of 2018	$	516
2019	2,227
2020	2,332
2021	2,401
2022	2,472
Thereafter	9,384
Total minimum lease payments	$	19,332

Debt (Tables)

9 Months Ended

Sep. 30, 2018

Debt Disclosure [Abstract]

Schedule of debt obligation for borrowings

As of September 30, 2018, the net debt obligation for borrowings made under the Loan and Security Agreement was as follows (in thousands of dollars):



	September 30, 2018			December 31, 2017
Debt principal	$	25,000		$	25,000
End-of-term debt obligation	283			53
Unamortized debt issuance costs	(91		)	(115		)
Net debt obligation	$	25,192		$	24,938

Schedule of debt obligation payments

Future principal and end-of-term debt obligation payments due under the Loan and Security Agreement are as follows (in thousands of dollars):



Year Ending December 31,
2019	$	1,389
2020	8,333
2021	8,333
2022	8,132
Total	$	26,187

Stockholders' Equity (Tables)

9 Months Ended

Sep. 30, 2018

Equity [Abstract]

Schedule of reserved shares of common stock for issuance

The Company had reserved shares of common stock for issuance as follows:



	September 30, 2018	December 31, 2017
Stock options and restricted stock units issued and outstanding	6,581,890	6,061,081
Stock options and restricted stock units available for grant under stock option plans	1,552,554	1,133,907
Common stock available for the Employee Stock Purchase Plan	309,419	456,002
Total	8,443,863	7,650,990

Organization and Description of Business - Narrative (Details)		1 Months Ended		3 Months Ended			9 Months Ended
	Apr. 09, 2018	Jul. 31, 2018 USD ($) $ / shares shares	Mar. 31, 2018 USD ($)	Sep. 30, 2018 USD ($) financial_institution $ / shares	Jun. 30, 2018 USD ($)	Sep. 30, 2017 USD ($) $ / shares	Sep. 30, 2018 USD ($) financial_institution segment product $ / shares	Sep. 30, 2017 USD ($) $ / shares	Dec. 31, 2017 USD ($)
Cash and Cash Equivalents [Line Items]
Number of operating segments \| segment							1
Number of products \| product							3
Number of shares issued and sold (in shares) \| shares		5,750,000
Price per share (in usd per share) \| $ / shares		$ 10.25
Proceeds from the issuance of common stock in a public offering, net of costs		$ 55,000,000					$ 55,039,000	$ 200,000
Stock issuance costs		$ 3,900,000
Number of major financial institutions with which the company's cash and cash equivalents are deposited \| financial_institution				1			1
Long term deposit consisting of letter of credit serving as security for lease				$ 603,000			$ 603,000		$ 603,000
Revenue recognized received in cash				0		$ 262,000	0	2,400,000
Revenue				23,466,000		17,519,000	66,258,000	52,357,000
Loss from operations				$ (4,304,000)		$ (6,368,000)	$ (19,176,000)	$ (20,494,000)
Net income (loss) per common share, basic and diluted (in usd per share) \| $ / shares				$ (0.12)		$ (0.21)	$ (0.56)	$ (0.67)
Litigation settlement, amount awarded from other party			$ 400,000
Accrued Income Receivable
Cash and Cash Equivalents [Line Items]
Revenue				$ 500,000			$ 1,700,000
Loss from operations				$ 500,000			$ 1,700,000
Net income (loss) per common share, basic and diluted (in usd per share) \| $ / shares				$ (0.01)			$ (0.05)
Headquarters and laboratory facilities, South San Francisco, lease signed April 2015
Cash and Cash Equivalents [Line Items]
Long term deposit consisting of letter of credit serving as security for lease				$ 603,000			$ 603,000		$ 603,000
Tissue Samples
Cash and Cash Equivalents [Line Items]
Contract with customer, revenue recognized				0	$ 450,000		450,000
Contract agreement term	1 year
Automatic renewal period of contract agreement	1 year
Other Services
Cash and Cash Equivalents [Line Items]
Contract with customer, revenue recognized				250,000			250,000
Revenue, remaining performance obligation					$ 500,000
Performance obligation, amount to be recognized per quarter				$ 250,000			$ 250,000
Over-Allotment Option
Cash and Cash Equivalents [Line Items]
Number of shares issued and sold (in shares) \| shares		750,000

Organization and Description of Business - Biopharmaceutical Services, Performance Obligation (Details) $ in Thousands	Jun. 30, 2018 USD ($)
Other Services
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue, remaining performance obligation	$ 500

Organization and Description of Business - Credit Risk (Details)	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Revenue \| Revenue concentration risk
Concentrations of Credit Risk and Other Risks and Uncertainties
Concentrations of credit risk (as a percent)	42.00%	40.00%	40.00%	40.00%
Revenue \| Revenue concentration risk \| Medicare
Concentrations of Credit Risk and Other Risks and Uncertainties
Concentrations of credit risk (as a percent)	29.00%	26.00%	28.00%	26.00%
Revenue \| Revenue concentration risk \| UnitedHealthcare
Concentrations of Credit Risk and Other Risks and Uncertainties
Concentrations of credit risk (as a percent)	13.00%	14.00%	12.00%	14.00%
Accounts receivable \| Gross receivables concentration risk \| Medicare
Concentrations of Credit Risk and Other Risks and Uncertainties
Concentrations of credit risk (as a percent)			17.00%		22.00%
Accounts receivable \| Gross receivables concentration risk \| UnitedHealthcare
Concentrations of Credit Risk and Other Risks and Uncertainties
Concentrations of credit risk (as a percent)			11.00%		9.00%

Net Loss Per Common Share (Details) - shares	3 Months Ended		9 Months Ended
Net Loss Per Common Share (Details) - shares	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Outstanding shares of common stock equivalents that have been excluded from diluted net loss per common share
Total common stock equivalents (in shares)	6,468,116	6,417,696	6,461,659	6,226,855
Shares of common stock subject to outstanding options (in shares)
Outstanding shares of common stock equivalents that have been excluded from diluted net loss per common share
Total common stock equivalents (in shares)	5,995,401	6,322,215	6,065,250	6,134,966
Employee stock purchase plan (in shares)
Outstanding shares of common stock equivalents that have been excluded from diluted net loss per common share
Total common stock equivalents (in shares)	27,117	25,481	32,513	31,944
Restricted stock units (in shares)
Outstanding shares of common stock equivalents that have been excluded from diluted net loss per common share
Total common stock equivalents (in shares)	445,598	70,000	363,896	59,945

Accrued Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Payables and Accruals [Abstract]
Accrued compensation expenses	$ 6,409	$ 5,293
Accrued other	2,852	2,882
Total accrued liabilities	$ 9,261	$ 8,175

Fair Value Measurements (Details) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Fair value measurements
Restricted cash	$ 603	$ 603
Headquarters and laboratory facilities, South San Francisco, lease signed April 2015
Fair value measurements
Restricted cash	603	603
Recurring \| Level I \| Headquarters and laboratory facilities, South San Francisco, lease signed April 2015
Fair value measurements
Restricted cash	603	603
Recurring \| Level I \| Money market funds
Fair value measurements
Financial assets	$ 77,400	$ 33,100

Commitments and Contingencies - Operating Lease (Details) ft² in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018 USD ($)	Sep. 30, 2017 USD ($)	Sep. 30, 2018 USD ($) ft²	Sep. 30, 2017 USD ($)	Dec. 31, 2017 USD ($)
Future minimum lease payments under non-cancelable operating leases
Remainder of 2018	$ 516		$ 516
2019	2,227		2,227
2020	2,332		2,332
2021	2,401		2,401
2022	2,472		2,472
Thereafter	9,384		9,384
Total minimum lease payments	19,332		19,332
Facilities rent expense	476	$ 469	$ 1,400	$ 1,400
Headquarters and laboratory facilities, South San Francisco, lease signed April 2015
Operating Leases
Amount of space leased (in square feet) \| ft²			59
Security deposit	603		$ 603		$ 603
Laboratory facilities, Austin, Texas \| Other assets
Operating Leases
Security deposit	$ 139		$ 139		$ 139

Commitments and Contingencies - Capital Lease (Details) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2016
Capital Leased Assets [Line Items]
Payment for remainder of 2018	$ 79
Payment for 2019	$ 317
Equipment
Capital Leased Assets [Line Items]
Capital leased equipment		$ 1,200
Upfront payment		330
Present value of future minimum payments		$ 874

Debt - Narrative (Details) - Line of credit			9 Months Ended
Debt - Narrative (Details) - Line of credit	Nov. 03, 2017 USD ($)	Mar. 30, 2016 USD ($)	Sep. 30, 2018 USD ($)	Mar. 31, 2016 USD ($) term_loan
Silicon Valley Bank
Debt Instrument [Line Items]
Maximum borrowing capacity	$ 35,000,000
Liquidity requirement, minimum			$ 40,000,000
Visium
Debt Instrument [Line Items]
Maximum borrowing capacity				$ 40,000,000.0
Number of term loans \| term_loan				2
Repayments of long-term debt	27,300,000
Payment of end of term obligation	1,500,000
Secured debt \| Silicon Valley Bank
Debt Instrument [Line Items]
Maximum borrowing capacity	25,000,000
Effective interest rate (as a percent)			8.05%
Balloon payment to be paid	1,200,000.0
Secured debt \| Silicon Valley Bank \| London Interbank Offered Rate (LIBOR)
Debt Instrument [Line Items]
Basis spread on variable rate			4.20%
Secured debt \| Silicon Valley Bank \| London Interbank Offered Rate (LIBOR) \| Minimum
Debt Instrument [Line Items]
Interest rate (as a percent)			5.34%
Revolving credit facility \| Silicon Valley Bank
Debt Instrument [Line Items]
Maximum borrowing capacity	$ 10,000,000
Revolving credit facility \| Silicon Valley Bank \| London Interbank Offered Rate (LIBOR)
Debt Instrument [Line Items]
Basis spread on variable rate			3.50%
Revolving credit facility \| Silicon Valley Bank \| London Interbank Offered Rate (LIBOR) \| Minimum
Debt Instrument [Line Items]
Interest rate (as a percent)			4.70%
Debt prepayment tranche one \| Revolving credit facility \| Silicon Valley Bank \| London Interbank Offered Rate (LIBOR)
Debt Instrument [Line Items]
Prepayment premium			$ 750,000
Debt prepayment tranche two \| Revolving credit facility \| Silicon Valley Bank \| London Interbank Offered Rate (LIBOR)
Debt Instrument [Line Items]
Prepayment premium			500,000
Debt prepayment tranche three \| Revolving credit facility \| Silicon Valley Bank \| London Interbank Offered Rate (LIBOR)
Debt Instrument [Line Items]
Prepayment premium			$ 250,000
Initial term loan \| Visium
Debt Instrument [Line Items]
Proceeds from lines of credit		$ 25,000,000

Debt - Debt Obligation for Borrowings (Details) - Line of credit - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2018	Dec. 31, 2017
Debt Instrument [Line Items]
Debt principal	$ 25,000	$ 25,000
End-of-term debt obligation	283	53
Unamortized debt issuance costs	(91)	(115)
Net debt obligation	$ 25,192	$ 24,938

Debt - Debt Obligation Payments (Details) - Line of credit $ in Thousands	Sep. 30, 2018 USD ($)
Future principal payments
2019	$ 1,389
2020	8,333
2021	8,333
2022	8,132
Total	$ 26,187

Stockholders' Equity (Details) - shares	Sep. 30, 2018	Dec. 31, 2017
Common Stock
Options issued and outstanding (in shares)	6,581,890	6,061,081
Total number of shares reserved for issuance (in shares)	8,443,863	7,650,990
Shares of common stock subject to outstanding options (in shares)
Common Stock
Shares available for issuance (in shares)	1,552,554	1,133,907
ESPP (in shares)
Common Stock
Shares available for issuance (in shares)	309,419	456,002

Thyroid Cytopathology Partners (Details)	3 Months Ended		9 Months Ended		12 Months Ended
Thyroid Cytopathology Partners (Details)	Sep. 30, 2018 USD ($)	Sep. 30, 2017 USD ($)	Sep. 30, 2018 USD ($)	Sep. 30, 2017 USD ($)	Dec. 31, 2017 USD ($)	Oct. 16, 2017 USD ($) installment
Thyroid Cytopathology Partners
Outstanding obligations	$ 1,175,000		$ 1,175,000		$ 3,853,000
Thyroid Cytopathology Partners
Thyroid Cytopathology Partners
Notice of intent not to renew period					12 months
Contract termination fee						$ 1,800,000.0
Payment installments for contract termination fee (in installments) \| installment						8
Expenses for cytopathology testing and evaluation services	1,000,000	$ 1,200,000	2,900,000	$ 3,600,000
Outstanding obligations	289,000		289,000		$ 308,000
Reduction to rent expense for TCP's portion of costs for subleased space	$ 32,000	$ 25,000	$ 96,000	$ 78,000

Income Taxes (Details)	9 Months Ended
Income Taxes (Details)	Sep. 30, 2018 USD ($)
Income Tax Disclosure [Abstract]
Unrecognized tax benefit	$ 2,500,000
Interest expense or penalties related to unrecognized tax benefits	$ 0