0001384101-20-000058 | 10-Q | XBRL Viewer

Cover - shares	3 Months Ended
Cover - shares	Mar. 31, 2020	Apr. 30, 2020
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2020
Document Transition Report	false
Entity File Number	001-36156
Entity Registrant Name	VERACYTE, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	20-5455398
Entity Address, Address Line One	6000 Shoreline Court
Entity Address, Address Line Two	Suite 300
Entity Address, City or Town	South San Francisco
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	94080
City Area Code	650
Local Phone Number	243-6300
Title of 12(b) Security	Common Stock, par value, $0.001 per share
Trading Symbol	VCYT
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		50,053,437
Entity Central Index Key	0001384101
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q1

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Current assets:
Cash and cash equivalents	$ 153,132	$ 159,317
Accounts receivable	19,091	19,329
Supplies	6,094	6,806
Prepaid expenses and other current assets	3,045	2,235
Total current assets	181,362	187,687
Property and equipment, net	8,788	8,933
Right-of-use assets - operating lease	8,576	8,808
Finite-lived intangible assets, net	63,744	65,019
Goodwill	2,725	2,725
Restricted cash	603	603
Other assets	1,302	1,437
Total assets	267,100	275,212
Current liabilities:
Accounts payable	7,665	2,328
Accrued liabilities	10,079	13,734
Operating Lease, Liability, Current	1,450	1,407
Total current liabilities	19,194	17,469
Long-term debt	748	694
Acquisition-related contingent consideration	5,604	6,088
Operating Lease, Liability, Noncurrent	11,132	11,506
Total liabilities	36,678	35,757
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.001 par value; 5,000,000 shares authorized, no shares issued and outstanding as of March 31, 2020 and December 31, 2019	0	0
Common stock, $0.001 par value; 125,000,000 shares authorized, 49,999,923 and 49,625,341 shares issued and outstanding as of March 31, 2020 and December 31, 2019, respectively	50	50
Additional paid-in capital	488,773	486,090
Accumulated deficit	(258,401)	(246,685)
Total stockholders’ equity	230,422	239,455
Total liabilities and stockholders’ equity	$ 267,100	$ 275,212

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Mar. 31, 2020	Dec. 31, 2019
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)	49,999,923	49,625,341
Common stock, outstanding (in shares)	49,999,923	49,625,341

Condensed Consolidated Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Total Revenue	$ 31,122	$ 29,529
Operating expenses:
Cost of testing revenue		8,513
Research and development	4,407	3,435
Selling and marketing	17,584	12,477
General and administrative	7,813	6,904
Intangible asset amortization	1,275	267
Total operating expenses	43,322	31,596
Loss from operations	(12,200)	(2,067)
Interest expense	(55)	(303)
Other income, net	539	453
Net loss and comprehensive loss	(11,716)	(1,917)
Comprehensive loss	$ (11,716)	$ (1,917)
Net loss per common share, basic and diluted (in usd per share)	$ (0.24)	$ (0.05)
Shares used to compute net loss per common share, basic and diluted (in shares)	49,792,631	41,168,593
Testing
Total Revenue	$ 26,991	$ 25,389
Operating expenses:
Cost of testing revenue	10,568	8,513
Product
Total Revenue	3,409	0
Operating expenses:
Cost of testing revenue	1,559	0
Biopharmaceutical
Total Revenue	722	4,140
Operating expenses:
Cost of testing revenue	$ 116	$ 0

Condensed Consolidated Statements of Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands	Total	Common Stock	Additional Paid-in Capital	Accumulated Deficit
Balance at Dec. 31, 2018	$ 79,755	$ 41	$ 313,800	$ (234,086)
Balance (in shares) at Dec. 31, 2018		40,863
Increase (Decrease) in Stockholders' Equity [Rollforward]
Issuance of common stock on exercise of stock options and vesting of restricted stock units	4,240	$ 1	4,239
Issuance of common stock on exercise of stock options and vesting of restricted stock units (in shares)		566
Issuance of common stock under employee stock purchase plan (ESPP)	491		491
Issuance of common stock under ESPP (in shares)		80
Tax portion of vested restricted stock units	(556)		(556)
Stock-based compensation expense (employee)	1,598		1,598
Stock-based compensation expense (non-employee)	20		20
Stock-based compensation expense (ESPP)	141		141
Net loss	(1,917)
Comprehensive loss	(1,917)			(1,917)
Balance at Mar. 31, 2019	83,772	$ 42	319,733	(236,003)
Balance (in shares) at Mar. 31, 2019		41,509
Balance at Dec. 31, 2019	239,455	$ 50	486,090	(246,685)
Balance (in shares) at Dec. 31, 2019		49,625
Increase (Decrease) in Stockholders' Equity [Rollforward]
Issuance of common stock on exercise of stock options and vesting of restricted stock units	981		981
Issuance of common stock on exercise of stock options and vesting of restricted stock units (in shares)		314
Issuance of common stock under employee stock purchase plan (ESPP)	1,101		1,101
Issuance of common stock under ESPP (in shares)		61
Tax portion of vested restricted stock units	(2,304)		(2,304)
Stock-based compensation expense (employee)	2,551		2,551
Stock-based compensation expense (ESPP)	354		354
Net loss	(11,716)
Comprehensive loss	(11,716)			(11,716)
Balance at Mar. 31, 2020	$ 230,422	$ 50	$ 488,773	$ (258,401)
Balance (in shares) at Mar. 31, 2020		50,000

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Operating activities
Net loss	$ (11,716)	$ (1,917)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	1,972	945
Gain on disposal of property and equipment	0	(16)
Stock-based compensation	2,905	1,759
Amortization of debt issuance costs	0	8
Interest on end-of-term debt obligation	54	64
Write-down of excess supplies	1,088	0
Noncash lease expense	232	212
Revaluation of acquisition-related contingent consideration	(484)	0
Changes in operating assets and liabilities:
Accounts receivable	238	(3,447)
Supplies	(376)	(366)
Prepaid expenses and other current assets	(818)	(11)
Operating lease liability	(331)	(292)
Other assets	135	37
Accounts payable	5,450	1,726
Accrued liabilities	(3,650)	287
Net cash used in operating activities	(5,301)	(1,011)
Investing activities
Purchases of property and equipment	(665)	(765)
Proceeds from disposal of property and equipment	0	16
Net cash used in investing activities	(665)	(749)
Financing activities
Payment of long-term debt	0	(12,500)
Payment of finance lease liability	0	(75)
Payment of taxes on vested restricted stock units	(2,304)	(556)
Proceeds from the exercise of common stock options and employee stock purchases	2,085	4,737
Net cash used in financing activities	(219)	(8,394)
Net decrease in cash, cash equivalents and restricted cash	(6,185)	(10,154)
Cash, cash equivalents and restricted cash at beginning of period	159,920	78,598
Cash, cash equivalents and restricted cash at end of period	153,735	68,444
Supplementary cash flow information:
Purchases of property and equipment included in accounts payable and accrued liability	113	95
Interest paid on debt	1	228
Total cash, cash equivalents and restricted cash	$ 153,735	$ 68,444

Organization and Description of Business

3 Months Ended

Mar. 31, 2020

Accounting Policies [Abstract]

Organization and Description of Business

Veracyte, Inc., or Veracyte, or the Company, is a global genomic diagnostics company that improves patient care by providing answers to clinical questions to inform diagnosis and treatment decisions throughout the patient journey in cancer and other diseases. The Company’s growing menu of genomic tests leverage advances in genomic science and technology to change care for patients, enabling them to avoid risky, costly procedures and quicken time to appropriate treatment. With Veracyte’s exclusive global access to a best-in-class diagnostics instrument platform, the Company is positioned to deliver its tests to patients worldwide through laboratories and hospitals that can perform the tests locally.

Veracyte 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.

The Company performs its genomic tests for thyroid cancer, lung cancer and idiopathic pulmonary fibrosis, or IPF, in its CLIA-certified laboratory in South San Francisco, California. In December 2019, the Company announced the exclusive global diagnostics license to the NanoString nCounter FLEX Analysis System, and the acquisition of the Prosigna breast cancer prognostic gene signature assay, which is commercially available, and the LymphMark lymphoma subtyping assay, which is in development. Both tests are designed for use on the nCounter system.

The Company offers genomic tests in four disease areas: thyroid cancer; lung cancer; IPF and breast cancer.

Thyroid Cancer - Afirma Genomic Sequencing Classifier and Xpression Atlas. The Company's Afirma offerings comprise the Afirma GSC and Xpression Atlas, which help guide next steps for patients with potentially cancerous thyroid nodules. The offerings are intended to provide physicians with clinically actionable results from a single fine needle aspiration, or FNA biopsy. The Afirma GSC was developed with RNA whole-transcriptome sequencing and machine learning, and is used to identify patients with benign thyroid nodules among those with indeterminate cytopathology results in order to rule out unnecessary thyroid surgery.

The Afirma Xpression Atlas complements the Afirma GSC by providing genomic alteration content from the same FNA samples used in Afirma GSC testing to help physicians decide with greater confidence on the surgical or therapeutic pathway for their patients. The Company commercially launched the Afirma Xpression Atlas in 2018 and in April 2020 introduced an expanded version of the test, which includes significantly more genomic content.

Lung Cancer - Percepta Genomic Sequencing Classifier. The Percepta classifier improves lung cancer diagnosis when diagnostic bronchoscopy results are inconclusive. This second-generation test was developed using the Company's RNA whole-transcriptome sequencing and machine learning platform and was commercially introduced in June 2019. The Percepta classifier identifies patients with lung nodules who are at low risk of cancer and may avoid further, invasive procedures as well as patients at high risk of cancer so they may obtain faster diagnosis and treatment. The test is built upon foundational "field of injury" science - through which genomic changes associated with lung cancer in current and former smokers can be identified with a simple brushing of a person's airway - without the need to sample the often hard-to-reach nodule directly.

IPF - Envisia Genomic Classifier. The Envisia classifier improves diagnosis of IPF by helping physicians better differentiate IPF from other interstitial lung diseases, or ILDs, without the need for surgery. The test identifies the genomic pattern of usual interstitial pneumonia, or UIP, a hallmark of IPF, with high accuracy on patient samples that are obtained through transbronchial biopsy, a nonsurgical procedure that is commonly used in lung evaluation.

Breast Cancer - Prosigna Breast Cancer Prognostic Gene Signature Assay. The Prosigna test, acquired in December 2019 through the Company's strategic transaction with NanoString, uses advanced genomic technology to inform next steps for patients with early-stage breast cancer, based on the genomic make-up of their disease. The test uses a set of 50 genes known as the PAM50 gene signature and can provide a breast cancer patient and physician with prognostic score that indicates the probability of cancer recurrence over ten years. Physicians use Prosigna to help guide therapeutic decisions so that patients receive a therapeutic intervention, such as

chemotherapy, only if clinically warranted. Patient test results outside of the United States include intrinsic breast cancer subtypes to complement the risk-of-recurrence score.

The Company’s approach also provides multiple opportunities for partnerships with biopharmaceutical companies. In developing its products, the Company has built or gained access to unique biorepositories, proprietary technology and bioinformatics that it believes are important to the development of new targeted therapies, determining clinical trial eligibility and guiding treatment selection.

The Company's testing services are performed in its clinical reference laboratories located in South San Francisco, California and Austin, Texas. The Prosigna test kits and associated products are sold to laboratories and hospitals in global markets.

Basis of Presentation

The Company’s condensed consolidated 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 consolidated balance sheet as of March 31, 2020, the condensed consolidated statements of operations and comprehensive loss for the three months ended March 31, 2020 and 2019, the condensed consolidated statements of stockholders' equity for the three months ended March 31, 2020 and 2019, and the condensed consolidated statements of cash flows for the three months ended March 31, 2020 and 2019 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, stockholders' equity and cash flows for the periods presented. The condensed consolidated balance sheet at December 31, 2019 has been derived from audited financial statements. The results for the three months ended March 31, 2020 are not necessarily indicative of the results expected for the full year or any other period.

The accompanying interim period condensed consolidated 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, 2019.

Reclassifications

Certain prior period balances have been reclassified to conform to current period presentation of the Company’s condensed consolidated financial statements and accompanying notes. Such reclassifications have no effect on previously reported results of operations, retained earnings or consolidated balance sheet totals; however, for the period ended March 31, 2019, the Company reclassified $212,000 of changes in operating assets and liabilities to noncash lease expense in the statement of cash flows.

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 liabilities as of the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Items subject to such estimates include: revenue recognition; write-down of supplies; the useful lives of property and equipment; the recoverability of long-lived assets; the incremental borrowing rate for leases; the estimation of the fair value of intangible assets and contingent consideration; 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

On May 7, 2019, the Company issued and sold 6,325,000 shares of common stock in a registered public offering, including 825,000 shares issued and sold upon the underwriters’ exercise in full of their option to purchase additional shares, at a price to the public of $23.25 per share. The Company's net proceeds from the offering were approximately $137.8 million, after deducting underwriting discounts and commissions and offering expenses of $9.2 million.

Cash and Cash Equivalents

The Company considers demand deposits in a bank, money market funds and highly liquid investments with an original maturity of 90 days or less to be cash equivalents. Cash equivalents include overnight reverse repurchase agreements which are tri-party repurchase agreements and have maturities of three months or less at the time of investment and are collateralized by U.S. treasury and agency securities of at least 102% of the principal amount. In a tri-party repurchase agreement, a third-party custodian bank functions as an independent intermediary to facilitate transfer of cash and holding the collateral on behalf of the underlying investor for the term of the agreement thereby minimizing risk and exposure to both parties. These overnight reverse repurchase agreements are included within cash equivalents due to their high liquidity and relatively low risk. There were no overnight reverse repurchase agreements at March 31, 2020.

Concentrations of Credit Risk and Other Risks and Uncertainties

The worldwide spread of coronavirus, or COVID-19, has created significant uncertainty in the global economy. There have been no comparable recent events that provide guidance as to the effect the spread of COVID-19 as a global pandemic may have, and, as a result, the ultimate impact of COVID-19 and the extent to which COVID-19 impacts the Company’s business, results of operations and financial condition will depend on future developments, which are highly uncertain and difficult to predict. If the financial markets or the overall economy are impacted for an extended period, the Company’s liquidity, revenues, supplies, goodwill and intangibles may be adversely affected

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, and its nCounter FLEX Analysis System and related test kits 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. Credit risk for accounts receivable from testing revenue is incorporated in testing revenue accrual rates as the Company assesses historical collection rates and current developments to determine accrual rates and amounts the Company will ultimately collect. The Company generally does not perform evaluations of customers’ financial condition for testing revenue and generally does not require collateral. The Company assesses credit risk and the amount of accounts receivable the Company will ultimately collect for product, biopharmaceutical and collaboration revenue based on collection history, current developments and credit worthiness of the customer. The estimate of credit losses is not material at March 31, 2020.

Through March 31, 2020, most 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 and other customers in excess of 10% of total revenue and their related revenue as a percentage of total revenue were as follows:


	Three Months Ended March 31,
	2020		2019
Medicare	25	%	21	%
Johnson and Johnson Services, Inc.	*		13	%
UnitedHealthcare	11	%	11	%
	36	%	45	%

^{*Less than 10%}

The Company’s third-party payers and other customers in excess of 10% of accounts receivable and their related accounts receivable balance as a percentage of total accounts receivable were as follows at the following dates:


	March 31, 2020		December 31, 2019
Johnson and Johnson Services, Inc.	*		10	%
Medicare	14	%	15	%

^{*Less than 10%}

Restricted Cash

The Company had deposits of $603,000 included in long-term assets as of March 31, 2020 and December 31, 2019, 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

Testing Revenue

The Company recognizes testing revenue in accordance with the provisions of ASC 606, Revenue from Contracts with Customers, or ASC 606. Most of the Company’s revenue is generated from the provision of testing 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.

For the three months ended March 31, 2019, the Company changed its testing revenue estimates due to actual and anticipated cash collections for tests delivered in 2018 or prior years and recognized additional revenue of $0.6 million, which resulted in a decrease in the Company's loss from operations of $0.6 million and a decrease in loss per share of $0.02 for the three months ended March 31, 2019. The change in testing revenue estimates for the three months ended March 31, 2020 was not material.

Product Revenue

The Company began recognizing product revenue in December 2019, when the Company executed an agreement with NanoString for the exclusive global license to the nCounter platform and acquisition of products for diagnostic use. More details on this agreement are in Note 4 - Business Combination.

Product revenue from instruments, consumables and in vitro diagnostic kits is recognized generally upon shipment or when the instrument is ready for use by the end customer, which is when title of the product has been transferred to the customer. This process involves identifying the contract with a customer, determining the performance obligations in the contract, determining the contract price, allocating the contract price to the distinct performance obligations in the contract, and recognizing revenue when the performance obligations have been satisfied. A performance obligation is considered distinct from other obligations in a contract when it provides a benefit to the customer either on its own or together with other resources that are readily available to the customer and is separately identified in the contract. Performance obligations are considered satisfied once the Company has transferred control of a product to the customer, meaning the customer has the ability to use and obtain the benefit of the product. The Company recognizes product revenue for satisfied performance obligations only when there are no uncertainties regarding payment terms or transfer of control. Shipping and handling costs incurred for product shipments are charged to the Company's customers and included in product revenue. Revenues are presented net of the taxes that are collected from customers and remitted to governmental authorities.

Biopharmaceutical and Collaboration Revenue

From time to time, the Company enters into arrangements for research and development and/or laboratory services. Such arrangements may require the Company to deliver various rights, services and/or samples, including intellectual property rights/licenses, R&D services, and/or laboratory services. The underlying terms of these arrangements generally provide for consideration to the Company in the form of nonrefundable upfront license fees, development and commercial performance milestone payments, royalty payments, and/or profit sharing.

In arrangements involving more than one performance obligation, each required performance obligation is evaluated to determine whether it qualifies as a distinct performance obligation based on whether (i) the customer can benefit from the good or service either on its own or together with other resources that are readily available and (ii) the good or service is separately identifiable from other promises in the contract. The consideration under the arrangement is then allocated to each separate distinct performance obligation based on its respective relative stand-alone selling price. The estimated selling price of each deliverable reflects the Company's best estimate of what the selling price would be if the deliverable was regularly sold by the Company on a stand-alone basis or using an adjusted market assessment approach if selling price on a stand-alone basis is not available.

The consideration allocated to each distinct performance obligation is recognized as revenue when control of the related goods is transferred or services are performed. Consideration associated with at-risk substantive performance milestones is recognized as revenue when it is probable that a significant reversal of the cumulative revenue recognized will not occur. Should there be royalties, the Company utilizes the sales and usage-based royalty exception in arrangements that resulted from the license of intellectual property, recognizing revenues generated from royalties or profit sharing as the underlying sales occur.

Collaborative Arrangements

The Company enters into collaborative arrangements with partners that fall under the scope of ASC Topic 808, Collaborative Arrangements, or ASC 808. While these arrangements are in the scope of ASC 808, the Company may analogize to ASC 606 for some aspects of these arrangements. The Company analogizes to ASC 606 for certain activities within the collaborative arrangement for the delivery of a good or service (i.e., a unit of account) that is part of its ongoing major or central operations.

The terms of the Company’s collaborative arrangements typically include one or more of the following: (i) up-front fees; (ii) milestone payments related to the achievement of development, regulatory, or commercial goals; and (iii) royalties on net sales of licensed products. Each of these payments may result in collaboration revenues or an offset against research and development expense.

Net sales of data or other services to our customers are classified under biopharmaceutical revenue, and all other non-customer revenue, such as milestones, are classified under collaboration revenue in our consolidated statements of operations and comprehensive loss. There was no collaboration revenue in the three months ended March 31, 2020 and 2019.

As part of the accounting for these arrangements, the Company must develop estimates and assumptions that require judgment to determine the underlying stand-alone selling price for each performance obligation which determines how the transaction price is allocated among the performance obligations. Generally, the estimation of the stand-alone selling price may include such estimates as independent evidence of market price, forecasted revenues or costs, development timelines, discount rates, and probabilities of technical and regulatory success. The Company evaluates each performance obligation to determine if they can be satisfied at a point in time or over time, and it measures the services delivered to the collaborative partner which are periodically reviewed based on the progress of the related program. The effect of any change made to an estimated input component and, therefore revenue or expense recognized, would be recorded as a change in estimate. In addition, variable consideration (e.g., milestone payments) must be evaluated to determine if it is constrained and, therefore, excluded from the transaction price.

Up-front Fees: If a license to the Company’s intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, the Company recognizes revenues from the transaction price allocated to the license when the license is transferred to the licensee and the licensee is able to use and benefit from the license. For licenses that are bundled with other promises, the Company utilizes judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time.

Milestone Payments: At the inception of each arrangement that includes milestone payments (variable consideration), the Company evaluates whether the milestones are considered probable of being reached and estimates the amount to be included in the transaction price using the most likely amount method. If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the transaction price. Milestone payments that are not within the Company’s or the collaborative partner’s control, such as non-operational developmental and regulatory approvals, are generally not considered probable of being achieved until those approvals are received. At the end of each reporting period, the Company re-evaluates the probability of achievement of milestones that are within its or the collaborative partner’s control, such as operational developmental milestones and any related constraint, and if necessary, adjusts its estimate of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis, which would affect collaboration revenues and earnings in the period of adjustment. Revisions to the Company’s estimate of the transaction price may also result in negative collaboration revenues and earnings in the period of adjustment.

Services Agreement with Loxo Oncology

On April 9, 2018, the Company entered into an agreement with Loxo Oncology, Inc., or Loxo, whereby the Company agreed to provide certain tissue samples and other services in exchange for agreed-upon fees. The agreement has a term of one year with an automatic renewal of one year and Loxo may terminate the agreement at any time with at least 90 days' notice. As of March 31, 2020, the agreement has not been terminated. The Company evaluated the accounting for this agreement under ASC 606 and concluded the performance obligations thereunder are the delivery of tissue samples and performance of services, both of which are distinct. For the three months ended March 31, 2019, the Company recognized revenue of $90,000 for the delivery of tissue samples. There were no deliveries of tissue samples for the three months ended March 31, 2020. The Company recognized revenue of $250,000 for the performance of services for each of the three months ended March 31, 2020 and 2019, respectively. The cost of revenue associated with revenue recognized under the agreement with Loxo is not significant. There was no deferred revenue related to this agreement at either March 31, 2020 or December 31, 2019.

Diagnostic Development Agreement with Johnson & Johnson

On December 28, 2018, the Company entered into a diagnostics development agreement with Johnson and Johnson Services, Inc., or JJSI, (i) to cooperate on a program to enable the Company to use JJSI samples and clinical data to develop a next generation bronchial genomic classifier diagnostic for lung cancer diagnosis, or Percepta v.2, and a nasal genomic classifier diagnostic for lung cancer and (ii) for JJSI to use Veracyte data generated in two Veracyte development programs for therapeutic purposes and for purposes of developing a companion diagnostic product used in conjunction with a JJSI therapeutic. The Company granted a license to JJSI with the right to use data and under the Company's intellectual property rights for JJSI's therapeutic purposes, including the development and commercialization of a companion diagnostic for its products, from the Percepta v.2 and Nasal programs. The license granted to JJSI is not distinct from other performance obligations as JJSI receives benefit only when other performance obligations are met.

Under the terms of the agreement, the Company will provide data from its RNA whole-transcriptome sequencing platform to JJSI in exchange for $7.0 million in payments from JJSI. The Company is also entitled to additional payments from JJSI of up to $13.0 million, conditioned upon the achievement of certain milestones relating to the development and reimbursement of the Percepta v.2 and Nasal tests. For a period of ten years commencing with the first commercial sale of the Percepta v.2 and Nasal tests, respectively, the Company will make payments to JJSI of one percent of net cash collections for Percepta v.2 and in the low-single digits of net cash collections for the Nasal test, depending on the number and timing of JJSI samples and associated clinical data the Company receives from JJSI.

The JJSI agreement is considered to be within the scope of ASC 808, as the parties are active participants and exposed to the risks and rewards of the collaborative activity. The Company evaluated the terms of the JJSI agreement and has analogized to ASC 606 for the delivery of RNA whole-transcriptome sequencing data to JJSI under the collaborative arrangement, which the Company believes is a distinct service for which JJSI meets the definition of a customer. Using the concepts of ASC 606, the Company has identified the delivery of data as its only performance obligation. The Company further determined that the transaction price under the arrangement was the $7.0 million in payments which was allocated to the obligation to deliver data. The $13.0 million in future potential payments is considered variable consideration because the Company determined that the potential payments are contingent upon

regulatory and commercialization milestones that are uncertain to occur and, as such, were not included in the transaction price, and will be recognized accordingly as each potential payment becomes probable.

The Company recognized revenue of $7.0 million and $4.0 million during 2019 for the provision of data and fulfillment of obligations relating to Percepta v.2 and Nasal program development milestones, respectively. There was no revenue for the three months ended March 31, 2020. For the three months ended March 31, 2019, the Company recognized revenue of $3.8 million for the provision of data relating to Percepta v.2, classified under biopharmaceutical revenue in the consolidated statement of operations and comprehensive loss. There was no accounts receivable from JJSI at March 31, 2020 and accounts receivable from JJSI was $2.0 million at December 31, 2019. There was no deferred revenue related to this agreement at March 31, 2020 and December 31, 2019.

Collaboration Agreement with AstraZeneca Group

On December 23, 2019, the Company entered into an agreement with Acerta Pharma B.V., or Acerta, a member of AstraZeneca Group whereby the Company agreed to provide genomic information that will support Acerta’s development of oncology therapeutics. Acerta will pay the Company for certain development activities and pay milestones to the Company for the achievement of development milestones. For the three months ended March 31, 2020, the Company recognized $0.1 million of revenue for certain development costs activities and accounts receivable from Acerta was $0.1 million at March 31, 2020. The agreement will be accounted for in accordance with the policy on collaborative arrangements, as mentioned in this footnote.

Biopharmaceutical Services Agreement

During the quarter ended March 31, 2020, the Company entered into an agreement to provide research and development services of $0.5 million for which the Company recognized $0.3 million of biopharmaceutical revenue for the three months ended March 31, 2020.

Cost of Testing Revenue

The components of our cost of testing services are laboratory expenses, sample collection expenses, compensation expense, license fees and royalties, depreciation and amortization, other expenses such as equipment and laboratory supplies, and allocations of facility and information technology expenses. Costs associated with performing tests are expensed as the test is processed regardless of whether and when revenue is recognized with respect to that test. Cost of testing revenue for the three months ended March 31, 2020 included $1.1 million write-down of supplies for the potential expiration of reagents due to an anticipated decline in volumes resulting from the COVID-19 pandemic.

Cost of Product Revenue

Cost of product revenue consists primarily of costs of purchasing instruments and consumables from third-party contract manufacturers, installation, warranty, service and packaging and delivery costs. In addition, cost of product includes royalty costs for licensed technologies included in the Company’s products and labor expenses. Cost of product revenue for instruments and consumables is recognized in the period the related revenue is recognized. Shipping and handling costs incurred for product shipments are included in cost of product in the consolidated statements of operations.

Cost of Biopharmaceutical Revenue

Cost of biopharmaceutical revenue consists of costs of performing activities under arrangements that require the Company to perform research and development services on behalf of a customer pursuant to a biopharmaceutical service agreement.

Recent Accounting Pronouncements

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses: Measurement of Credit Losses on Financial Instruments. This ASU requires entities to estimate an expected lifetime credit loss on financial assets ranging from short-term trade accounts receivable to long-term financings and report credit losses using an expected losses model rather than the incurred losses model that was previously used, and establishes additional disclosures related to credit

risks. This guidance became effective for the Company beginning January 1, 2020. Based on the composition of its trade receivables, investment portfolio and other financial assets, current economic conditions and historical credit loss activity, the adoption of this standard did not have a material impact on the Company's condensed consolidated financial statements and related disclosures.In November 2018, the FASB issued ASU No. 2018-18, Collaborative Arrangements (Topic 808). Under this ASU, transactions in collaborative arrangements are to be accounted for under ASC 606 if the counterparty is a customer for a good or service (or bundle of goods and services) that is a distinct unit of account. Also, entities are precluded from presenting consideration from transactions with a counterparty that is not a customer together with revenue recognized from ASC 606. This ASU is effective for all interim and annual reporting periods beginning on or after December 15, 2019, with early adoption permitted. The Company adopted this ASU in 2019 with no cumulative-effect adjustments or retrospective impact.

Net Loss Per Common Share

3 Months Ended

Mar. 31, 2020

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 March 31,
	2020	2019
Shares of common stock subject to outstanding options	4,760,128	5,670,819
Employee stock purchase plan	19,857	25,672
Restricted stock units	936,524	538,759
Total common stock equivalents	5,716,509	6,235,250

Accrued Liabilities

3 Months Ended

Mar. 31, 2020

Payables and Accruals [Abstract]

Accrued Liabilities

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


	March 31, 2020		December 31, 2019
Accrued compensation expenses	$	7,497	$	10,100
Accrued other	2,582		3,634
Total accrued liabilities	$	10,079	$	13,734

Business Combination

3 Months Ended

Mar. 31, 2020

Business Combinations [Abstract]

Business Combination

On December 3, 2019, the Company executed an agreement with NanoString for the exclusive global diagnostics license to the nCounter FLEX Analysis System, and the acquisition of the Prosigna breast cancer prognostic gene signature assay, and the LymphMark lymphoma subtyping assay. The strategic transaction positions the Company to expand its genomic diagnostics business globally, with the ability to deliver its advanced genomic tests to physicians and their patients via hospital and clinical laboratories throughout the European Union and other parts of the world. The Company has accounted for this agreement under Accounting Standards Codification 805, Business Combinations. Pursuant to the terms of the agreement, Veracyte paid NanoString $40.0 million in cash and $10.0 million in Veracyte common stock, and may pay up to an additional $10.0 million in cash, contingent upon the commercial launch of Veracyte diagnostic tests for use on the platform. This contingency was valued at $6.1 million as of the acquisition date and as of December 31, 2019, recorded as a liability, and will be remeasured to fair value at each reporting date until the contingent consideration is settled. As of March 31, 2020, this contingency was remeasured to $5.6 million with the corresponding change included in general and administrative expense in the Company's condensed consolidated statements of operations and comprehensive loss.

Assets acquired are recorded based on valuations derived from estimated fair value assessments and assumptions used by the Company. While the Company believes that its estimates and assumptions underlying the valuations are reasonable, different estimates and assumptions could result in different valuations assigned to the individual assets acquired and the resulting amount of goodwill. The following table summarizes the fair values of assets acquired and liabilities assumed at the date of acquisition (in thousands):


Prosigna product technology	$	4,120
Prosigna customer relationships	2,430
nCounter FLEX Dx license	46,880
LymphMark product technology	990
Total identifiable intangible assets acquired	54,420
Goodwill	1,668
Net assets acquired	$	56,088

Identifiable acquisition-related intangibles included in the above table are finite-lived and are being amortized on a straight-line basis over their estimated lives, which approximates the pattern in which the economic benefits of the intangible assets are expected to be realized, as follows:


			Estimated Useful life (In Years)
Prosigna product technology			15
Prosigna customer relationships			5
nCounter FLEX Dx license			15
LymphMark product technology			7

Goodwill represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired. This acquisition includes $1.7 million of goodwill which the Company believes consists principally of the organized workforce that will help the Company execute its strategic plans in relation to the assets acquired. In accordance with ASC 350, goodwill will not be amortized but will be tested for impairment at least annually. As of March 31, 2020, goodwill is not deductible for tax purposes, however, if contingent consideration is paid at a future date, the portions of contingent consideration paid and allocated to the intangible assets for tax purposes will be tax deductible. The accounting for this acquisition is preliminary and will be finalized upon completion of the analysis of certain contracts acquired and executed as part of this acquisition along with the impact on goodwill, should there be any.

Fair Value Measurements	3 Months Ended
Fair Value Measurements	Mar. 31, 2020
Fair Value Disclosures [Abstract]
Fair Value Measurements	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 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 includes money market funds, overnight reverse repurchase agreements 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 consolidated balance sheets, were $150.7 million and $57.6 million as of March 31, 2020 and December 31, 2019, respectively, and are Level I assets as described above. Overnight reverse repurchase agreements, included in cash and cash equivalents in the accompanying condensed consolidated balance sheets, were zero and $100.0 million as of March 31, 2020 and December 31, 2019, respectively, and are Level II assets as described above. There were no unrealized gains or losses from overnight reverse repurchase agreements at March 31, 2020 and December 31, 2019. The deposit for the lease, included in restricted cash in the accompanying condensed consolidated balance sheets, was $603,000 as of March 31, 2020 and December 31, 2019, and is a Level I asset as described above. The contingent consideration in Note 4, Business Combination, associated with the agreement with NanoString on December 3, 2019, is a Level III financial liability. The estimation of the fair value of the contingent consideration is based on the present value of the expected payments calculated by assessing the likelihood of when the related milestones would be achieved, discounted using the Company's estimated borrowing rate. These estimates form the basis for making judgments about the carrying value of the contingent consideration that are not readily apparent from other sources. Changes to the forecasts for the achievement of the milestones and the estimates of the borrowing rate can significantly affect the estimated fair value of the contingent consideration.

- 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

3 Months Ended

Mar. 31, 2020

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 and expansion options. The Company had deposits of $603,000 included in long-term assets as of March 31, 2020 and December 31, 2019, 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 Company provided a cash security deposit for this lease of $139,000, included in other assets in the Company’s condensed consolidated balance sheets as of March 31, 2020 and December 31, 2019.

Future minimum lease payments under non-cancelable operating leases as of March 31, 2020 are as follows (in thousands of dollars):


Year Ending December 31,
Remainder of 2020	$	1,760
2021	2,401
2022	2,472
2023	2,543
2024	2,614
Thereafter	4,227
Total future minimum lease payments	16,017
Less: amount representing interest	3,435
Present value of future lease payments	12,582
Less: short-term lease liabilities	1,450
Long-term lease liabilities	$	11,132

The Company recognizes operating lease expense on a straight-line basis over the non-cancelable lease period. Operating lease expense was $474,000 and $476,000 for the three months ended March 31, 2020 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 condensed consolidated 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 legal proceeding pending that could have, either individually or in the aggregate, a material adverse effect on the Company’s condensed consolidated financial statements.

Debt

3 Months Ended

Mar. 31, 2020

Debt Disclosure [Abstract]

Debt

Loan and Security Agreement

On November 3, 2017, the Company entered into a loan and security agreement, or 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 advance term loan, or Term Loan Advance, and a revolving line of credit of up to $10.0 million, or 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 March 31, 2020. 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 5.43% 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 average Term Loan Advance interest rate for the three months ended March 31, 2020 was 5.8%.

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 January 2019 and May 2019, the Company prepaid $12.5 million and $12.4 million, respectively, of the principal amount of the Term Loan Advance. These prepayments did not trigger any prepayment premium because they were partial, not full, repayments of the principal amount.

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 the Company's 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 March 31, 2020, the Company was in compliance with the loan covenants.

The net debt obligation for borrowings made under the Loan and Security Agreement was as follows (in thousands of dollars):


	March 31, 2020		December 31, 2019
Debt principal	$	100	$	100
End-of-term debt obligation	648		594

Net debt obligation	$	748	$	694

Future principal and end-of-term debt obligation payments under the Loan and Security Agreement are $1.3 million and due in 2022.

The end-of-term debt obligation accretes over the term of the Loan and Security Agreement until maturity and is included in interest expense in the Company's condensed consolidated statements of operations and comprehensive loss.

Stockholders' Equity

3 Months Ended

Mar. 31, 2020

Equity [Abstract]

Stockholders' Equity

Stockholders’ Equity

Common Stock

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


	March 31, 2020	December 31, 2019
Stock options and restricted stock units issued and outstanding	5,988,461	5,562,484
Stock options and restricted stock units available for grant under stock option plans	3,200,200	1,954,804
Common stock available for the Employee Stock Purchase Plan	112,226	173,168
Total	9,300,887	7,690,456

Thyroid Cytopathology Partners	3 Months Ended
Thyroid Cytopathology Partners	Mar. 31, 2020
Thyroid Cytopathology Partners
Thyroid Cytopathology Partners	Thyroid Cytopathology Partners The Company has an agreement with a specialized pathology practice, Thyroid Cytopathology Partners, ("TCP"), to provide testing services to the Company, or TCP Agreement. The TCP 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. Under the TCP Agreement, the Company pays TCP based on a fixed price per test schedule which is reviewed periodically for changes in market pricing, and the TCP Agreement included a clause allowing 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. The Company previously concluded that TCP represented a variable interest entity as a result of the facility arrangement clause, but that the Company was not the primary beneficiary as it did not have the ability to direct the activities that most significantly impacted TCP's economic performance, and therefore did not consolidate TCP. On February 14, 2019, the TCP Agreement was amended to remove the facility clause. Accordingly, the Company believes TCP was no longer a variable interest entity as of that date. TCP's portion of rent and related operating expenses reimbursed to the Company for the shared space at the Austin, Texas facility was $11,000 for the three months ended March 31, 2019, and is included in other income, net in the Company’s condensed consolidated statements of operations and comprehensive loss.

Income Taxes	3 Months Ended
Income Taxes	Mar. 31, 2020
Income Tax Disclosure [Abstract]
Income Taxes	Income Taxes The Company did not record a provision or benefit for income taxes during the three months ended March 31, 2020 and 2019. The Company continues to maintain a full valuation allowance against its net deferred tax assets. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was enacted in response to the COVID-19 pandemic. The Company does not expect the provisions of the legislation to have a significant impact on the effective tax rate of the Company.

Organization and Description of Business (Policies)	3 Months Ended
Organization and Description of Business (Policies)	Mar. 31, 2020
Accounting Policies [Abstract]
Basis of Presentation	Basis of Presentation The Company’s condensed consolidated 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 consolidated balance sheet as of March 31, 2020, the condensed consolidated statements of operations and comprehensive loss for the three months ended March 31, 2020 and 2019, the condensed consolidated statements of stockholders' equity for the three months ended March 31, 2020 and 2019, and the condensed consolidated statements of cash flows for the three months ended March 31, 2020 and 2019 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, stockholders' equity and cash flows for the periods presented. The condensed consolidated balance sheet at December 31, 2019 has been derived from audited financial statements. The results for the three months ended March 31, 2020 are not necessarily indicative of the results expected for the full year or any other period. The accompanying interim period condensed consolidated 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, 2019.
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 liabilities as of the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Items subject to such estimates include: revenue recognition; write-down of supplies; the useful lives of property and equipment; the recoverability of long-lived assets; the incremental borrowing rate for leases; the estimation of the fair value of intangible assets and contingent consideration; 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 worldwide spread of coronavirus, or COVID-19, has created significant uncertainty in the global economy. There have been no comparable recent events that provide guidance as to the effect the spread of COVID-19 as a global pandemic may have, and, as a result, the ultimate impact of COVID-19 and the extent to which COVID-19 impacts the Company’s business, results of operations and financial condition will depend on future developments, which are highly uncertain and difficult to predict. If the financial markets or the overall economy are impacted for an extended period, the Company’s liquidity, revenues, supplies, goodwill and intangibles may be adversely affected 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, and its nCounter FLEX Analysis System and related test kits 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. Credit risk for accounts receivable from testing revenue is incorporated in testing revenue accrual rates as the Company assesses historical collection rates and current developments to determine accrual rates and amounts the Company will ultimately collect. The Company generally does not perform evaluations of customers’ financial condition for testing revenue and generally does not require collateral. The Company assesses credit risk and the amount of accounts receivable the Company will ultimately collect for product, biopharmaceutical and collaboration revenue based on collection history, current developments and credit worthiness of the customer. The estimate of credit losses is not material at March 31, 2020.
Cash	Cash and Cash Equivalents The Company considers demand deposits in a bank, money market funds and highly liquid investments with an original maturity of 90 days or less to be cash equivalents. Cash equivalents include overnight reverse repurchase agreements which are tri-party repurchase agreements and have maturities of three months or less at the time of investment and are collateralized by U.S. treasury and agency securities of at least 102% of the principal amount. In a tri-party repurchase agreement, a third-party custodian bank functions as an independent intermediary to facilitate transfer of cash and holding the collateral on behalf of the underlying investor for the term of the agreement thereby minimizing risk and exposure to both parties. These overnight reverse repurchase agreements are included within cash equivalents due to their high liquidity and relatively low risk. There were no overnight reverse repurchase agreements at March 31, 2020. Restricted Cash The Company had deposits of $603,000 included in long-term assets as of March 31, 2020 and December 31, 2019, 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 Testing Revenue The Company recognizes testing revenue in accordance with the provisions of ASC 606, Revenue from Contracts with Customers, or ASC 606. Most of the Company’s revenue is generated from the provision of testing 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. For the three months ended March 31, 2019, the Company changed its testing revenue estimates due to actual and anticipated cash collections for tests delivered in 2018 or prior years and recognized additional revenue of $0.6 million, which resulted in a decrease in the Company's loss from operations of $0.6 million and a decrease in loss per share of $0.02 for the three months ended March 31, 2019. The change in testing revenue estimates for the three months ended March 31, 2020 was not material. Product Revenue The Company began recognizing product revenue in December 2019, when the Company executed an agreement with NanoString for the exclusive global license to the nCounter platform and acquisition of products for diagnostic use. More details on this agreement are in Note 4 - Business Combination. Product revenue from instruments, consumables and in vitro diagnostic kits is recognized generally upon shipment or when the instrument is ready for use by the end customer, which is when title of the product has been transferred to the customer. This process involves identifying the contract with a customer, determining the performance obligations in the contract, determining the contract price, allocating the contract price to the distinct performance obligations in the contract, and recognizing revenue when the performance obligations have been satisfied. A performance obligation is considered distinct from other obligations in a contract when it provides a benefit to the customer either on its own or together with other resources that are readily available to the customer and is separately identified in the contract. Performance obligations are considered satisfied once the Company has transferred control of a product to the customer, meaning the customer has the ability to use and obtain the benefit of the product. The Company recognizes product revenue for satisfied performance obligations only when there are no uncertainties regarding payment terms or transfer of control. Shipping and handling costs incurred for product shipments are charged to the Company's customers and included in product revenue. Revenues are presented net of the taxes that are collected from customers and remitted to governmental authorities. Biopharmaceutical and Collaboration Revenue From time to time, the Company enters into arrangements for research and development and/or laboratory services. Such arrangements may require the Company to deliver various rights, services and/or samples, including intellectual property rights/licenses, R&D services, and/or laboratory services. The underlying terms of these arrangements generally provide for consideration to the Company in the form of nonrefundable upfront license fees, development and commercial performance milestone payments, royalty payments, and/or profit sharing. In arrangements involving more than one performance obligation, each required performance obligation is evaluated to determine whether it qualifies as a distinct performance obligation based on whether (i) the customer can benefit from the good or service either on its own or together with other resources that are readily available and (ii) the good or service is separately identifiable from other promises in the contract. The consideration under the arrangement is then allocated to each separate distinct performance obligation based on its respective relative stand-alone selling price. The estimated selling price of each deliverable reflects the Company's best estimate of what the selling price would be if the deliverable was regularly sold by the Company on a stand-alone basis or using an adjusted market assessment approach if selling price on a stand-alone basis is not available. The consideration allocated to each distinct performance obligation is recognized as revenue when control of the related goods is transferred or services are performed. Consideration associated with at-risk substantive performance milestones is recognized as revenue when it is probable that a significant reversal of the cumulative revenue recognized will not occur. Should there be royalties, the Company utilizes the sales and usage-based royalty exception in arrangements that resulted from the license of intellectual property, recognizing revenues generated from royalties or profit sharing as the underlying sales occur. Collaborative Arrangements The Company enters into collaborative arrangements with partners that fall under the scope of ASC Topic 808, Collaborative Arrangements, or ASC 808. While these arrangements are in the scope of ASC 808, the Company may analogize to ASC 606 for some aspects of these arrangements. The Company analogizes to ASC 606 for certain activities within the collaborative arrangement for the delivery of a good or service (i.e., a unit of account) that is part of its ongoing major or central operations. The terms of the Company’s collaborative arrangements typically include one or more of the following: (i) up-front fees; (ii) milestone payments related to the achievement of development, regulatory, or commercial goals; and (iii) royalties on net sales of licensed products. Each of these payments may result in collaboration revenues or an offset against research and development expense. Net sales of data or other services to our customers are classified under biopharmaceutical revenue, and all other non-customer revenue, such as milestones, are classified under collaboration revenue in our consolidated statements of operations and comprehensive loss. There was no collaboration revenue in the three months ended March 31, 2020 and 2019. As part of the accounting for these arrangements, the Company must develop estimates and assumptions that require judgment to determine the underlying stand-alone selling price for each performance obligation which determines how the transaction price is allocated among the performance obligations. Generally, the estimation of the stand-alone selling price may include such estimates as independent evidence of market price, forecasted revenues or costs, development timelines, discount rates, and probabilities of technical and regulatory success. The Company evaluates each performance obligation to determine if they can be satisfied at a point in time or over time, and it measures the services delivered to the collaborative partner which are periodically reviewed based on the progress of the related program. The effect of any change made to an estimated input component and, therefore revenue or expense recognized, would be recorded as a change in estimate. In addition, variable consideration (e.g., milestone payments) must be evaluated to determine if it is constrained and, therefore, excluded from the transaction price. Up-front Fees: If a license to the Company’s intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, the Company recognizes revenues from the transaction price allocated to the license when the license is transferred to the licensee and the licensee is able to use and benefit from the license. For licenses that are bundled with other promises, the Company utilizes judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time. Milestone Payments: At the inception of each arrangement that includes milestone payments (variable consideration), the Company evaluates whether the milestones are considered probable of being reached and estimates the amount to be included in the transaction price using the most likely amount method. If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the transaction price. Milestone payments that are not within the Company’s or the collaborative partner’s control, such as non-operational developmental and regulatory approvals, are generally not considered probable of being achieved until those approvals are received. At the end of each reporting period, the Company re-evaluates the probability of achievement of milestones that are within its or the collaborative partner’s control, such as operational developmental milestones and any related constraint, and if necessary, adjusts its estimate of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis, which would affect collaboration revenues and earnings in the period of adjustment. Revisions to the Company’s estimate of the transaction price may also result in negative collaboration revenues and earnings in the period of adjustment. Services Agreement with Loxo Oncology On April 9, 2018, the Company entered into an agreement with Loxo Oncology, Inc., or Loxo, whereby the Company agreed to provide certain tissue samples and other services in exchange for agreed-upon fees. The agreement has a term of one year with an automatic renewal of one year and Loxo may terminate the agreement at any time with at least 90 days' notice. As of March 31, 2020, the agreement has not been terminated. The Company evaluated the accounting for this agreement under ASC 606 and concluded the performance obligations thereunder are the delivery of tissue samples and performance of services, both of which are distinct. For the three months ended March 31, 2019, the Company recognized revenue of $90,000 for the delivery of tissue samples. There were no deliveries of tissue samples for the three months ended March 31, 2020. The Company recognized revenue of $250,000 for the performance of services for each of the three months ended March 31, 2020 and 2019, respectively. The cost of revenue associated with revenue recognized under the agreement with Loxo is not significant. There was no deferred revenue related to this agreement at either March 31, 2020 or December 31, 2019. Diagnostic Development Agreement with Johnson & Johnson On December 28, 2018, the Company entered into a diagnostics development agreement with Johnson and Johnson Services, Inc., or JJSI, (i) to cooperate on a program to enable the Company to use JJSI samples and clinical data to develop a next generation bronchial genomic classifier diagnostic for lung cancer diagnosis, or Percepta v.2, and a nasal genomic classifier diagnostic for lung cancer and (ii) for JJSI to use Veracyte data generated in two Veracyte development programs for therapeutic purposes and for purposes of developing a companion diagnostic product used in conjunction with a JJSI therapeutic. The Company granted a license to JJSI with the right to use data and under the Company's intellectual property rights for JJSI's therapeutic purposes, including the development and commercialization of a companion diagnostic for its products, from the Percepta v.2 and Nasal programs. The license granted to JJSI is not distinct from other performance obligations as JJSI receives benefit only when other performance obligations are met. Under the terms of the agreement, the Company will provide data from its RNA whole-transcriptome sequencing platform to JJSI in exchange for $7.0 million in payments from JJSI. The Company is also entitled to additional payments from JJSI of up to $13.0 million, conditioned upon the achievement of certain milestones relating to the development and reimbursement of the Percepta v.2 and Nasal tests. For a period of ten years commencing with the first commercial sale of the Percepta v.2 and Nasal tests, respectively, the Company will make payments to JJSI of one percent of net cash collections for Percepta v.2 and in the low-single digits of net cash collections for the Nasal test, depending on the number and timing of JJSI samples and associated clinical data the Company receives from JJSI. The JJSI agreement is considered to be within the scope of ASC 808, as the parties are active participants and exposed to the risks and rewards of the collaborative activity. The Company evaluated the terms of the JJSI agreement and has analogized to ASC 606 for the delivery of RNA whole-transcriptome sequencing data to JJSI under the collaborative arrangement, which the Company believes is a distinct service for which JJSI meets the definition of a customer. Using the concepts of ASC 606, the Company has identified the delivery of data as its only performance obligation. The Company further determined that the transaction price under the arrangement was the $7.0 million in payments which was allocated to the obligation to deliver data. The $13.0 million in future potential payments is considered variable consideration because the Company determined that the potential payments are contingent upon regulatory and commercialization milestones that are uncertain to occur and, as such, were not included in the transaction price, and will be recognized accordingly as each potential payment becomes probable. The Company recognized revenue of $7.0 million and $4.0 million during 2019 for the provision of data and fulfillment of obligations relating to Percepta v.2 and Nasal program development milestones, respectively. There was no revenue for the three months ended March 31, 2020. For the three months ended March 31, 2019, the Company recognized revenue of $3.8 million for the provision of data relating to Percepta v.2, classified under biopharmaceutical revenue in the consolidated statement of operations and comprehensive loss. There was no accounts receivable from JJSI at March 31, 2020 and accounts receivable from JJSI was $2.0 million at December 31, 2019. There was no deferred revenue related to this agreement at March 31, 2020 and December 31, 2019. Collaboration Agreement with AstraZeneca Group On December 23, 2019, the Company entered into an agreement with Acerta Pharma B.V., or Acerta, a member of AstraZeneca Group whereby the Company agreed to provide genomic information that will support Acerta’s development of oncology therapeutics. Acerta will pay the Company for certain development activities and pay milestones to the Company for the achievement of development milestones. For the three months ended March 31, 2020, the Company recognized $0.1 million of revenue for certain development costs activities and accounts receivable from Acerta was $0.1 million at March 31, 2020. The agreement will be accounted for in accordance with the policy on collaborative arrangements, as mentioned in this footnote. Biopharmaceutical Services Agreement During the quarter ended March 31, 2020, the Company entered into an agreement to provide research and development services of $0.5 million for which the Company recognized $0.3 million of biopharmaceutical revenue for the three months ended March 31, 2020. Cost of Testing Revenue The components of our cost of testing services are laboratory expenses, sample collection expenses, compensation expense, license fees and royalties, depreciation and amortization, other expenses such as equipment and laboratory supplies, and allocations of facility and information technology expenses. Costs associated with performing tests are expensed as the test is processed regardless of whether and when revenue is recognized with respect to that test. Cost of testing revenue for the three months ended March 31, 2020 included $1.1 million write-down of supplies for the potential expiration of reagents due to an anticipated decline in volumes resulting from the COVID-19 pandemic. Cost of Product Revenue Cost of product revenue consists primarily of costs of purchasing instruments and consumables from third-party contract manufacturers, installation, warranty, service and packaging and delivery costs. In addition, cost of product includes royalty costs for licensed technologies included in the Company’s products and labor expenses. Cost of product revenue for instruments and consumables is recognized in the period the related revenue is recognized. Shipping and handling costs incurred for product shipments are included in cost of product in the consolidated statements of operations. Cost of Biopharmaceutical Revenue Cost of biopharmaceutical revenue consists of costs of performing activities under arrangements that require the Company to perform research and development services on behalf of a customer pursuant to a biopharmaceutical service agreement.
Recent Accounting Pronouncements	Recent Accounting Pronouncements In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses: Measurement of Credit Losses on Financial Instruments. This ASU requires entities to estimate an expected lifetime credit loss on financial assets ranging from short-term trade accounts receivable to long-term financings and report credit losses using an expected losses model rather than the incurred losses model that was previously used, and establishes additional disclosures related to credit risks. This guidance became effective for the Company beginning January 1, 2020. Based on the composition of its trade receivables, investment portfolio and other financial assets, current economic conditions and historical credit loss activity, the adoption of this standard did not have a material impact on the Company's condensed consolidated financial statements and related disclosures.In November 2018, the FASB issued ASU No. 2018-18, Collaborative Arrangements (Topic 808). Under this ASU, transactions in collaborative arrangements are to be accounted for under ASC 606 if the counterparty is a customer for a good or service (or bundle of goods and services) that is a distinct unit of account. Also, entities are precluded from presenting consideration from transactions with a counterparty that is not a customer together with revenue recognized from ASC 606. This ASU is effective for all interim and annual reporting periods beginning on or after December 15, 2019, with early adoption permitted. The Company adopted this ASU in 2019 with no cumulative-effect adjustments or retrospective impact.

Organization and Description of Business (Tables)

3 Months Ended

Mar. 31, 2020

Accounting Policies [Abstract]

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

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


	Three Months Ended March 31,
	2020		2019
Medicare	25	%	21	%
Johnson and Johnson Services, Inc.	*		13	%
UnitedHealthcare	11	%	11	%
	36	%	45	%

^{*Less than 10%}


	March 31, 2020		December 31, 2019
Johnson and Johnson Services, Inc.	*		10	%
Medicare	14	%	15	%

^{*Less than 10%}

Net Loss Per Common Share (Tables)

3 Months Ended

Mar. 31, 2020

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 March 31,
	2020	2019
Shares of common stock subject to outstanding options	4,760,128	5,670,819
Employee stock purchase plan	19,857	25,672
Restricted stock units	936,524	538,759
Total common stock equivalents	5,716,509	6,235,250

Accrued Liabilities (Tables)

3 Months Ended

Mar. 31, 2020

Payables and Accruals [Abstract]

Schedule of accrued liabilities

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


	March 31, 2020		December 31, 2019
Accrued compensation expenses	$	7,497	$	10,100
Accrued other	2,582		3,634
Total accrued liabilities	$	10,079	$	13,734

Business Combinations (Tables)

3 Months Ended

Mar. 31, 2020

Business Combinations [Abstract]

Schedule of fair value of assets acquired and liabilities assumed

The following table summarizes the fair values of assets acquired and liabilities assumed at the date of acquisition (in thousands):


Prosigna product technology	$	4,120
Prosigna customer relationships	2,430
nCounter FLEX Dx license	46,880
LymphMark product technology	990
Total identifiable intangible assets acquired	54,420
Goodwill	1,668
Net assets acquired	$	56,088

Schedule of identifiable acquisition-related intangibles


			Estimated Useful life (In Years)
Prosigna product technology			15
Prosigna customer relationships			5
nCounter FLEX Dx license			15
LymphMark product technology			7

Commitments and Contingencies (Tables)

3 Months Ended

Mar. 31, 2020

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 March 31, 2020 are as follows (in thousands of dollars):


Year Ending December 31,
Remainder of 2020	$	1,760
2021	2,401
2022	2,472
2023	2,543
2024	2,614
Thereafter	4,227
Total future minimum lease payments	16,017
Less: amount representing interest	3,435
Present value of future lease payments	12,582
Less: short-term lease liabilities	1,450
Long-term lease liabilities	$	11,132

Debt (Tables)

3 Months Ended

Mar. 31, 2020

Debt Disclosure [Abstract]

Schedule of debt obligation for borrowings

The net debt obligation for borrowings made under the Loan and Security Agreement was as follows (in thousands of dollars):


	March 31, 2020		December 31, 2019
Debt principal	$	100	$	100
End-of-term debt obligation	648		594

Net debt obligation	$	748	$	694

Stockholders' Equity (Tables)

3 Months Ended

Mar. 31, 2020

Equity [Abstract]

Schedule of reserved shares of common stock for issuance

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


	March 31, 2020	December 31, 2019
Stock options and restricted stock units issued and outstanding	5,988,461	5,562,484
Stock options and restricted stock units available for grant under stock option plans	3,200,200	1,954,804
Common stock available for the Employee Stock Purchase Plan	112,226	173,168
Total	9,300,887	7,690,456

Organization and Description of Business - Narrative (Details) $ / shares in Units, shares in Thousands			3 Months Ended				12 Months Ended
	May 07, 2019 USD ($) $ / shares shares	Apr. 09, 2018	Mar. 31, 2020 USD ($) segment diseaseAreas financial_institution delivery $ / shares	Sep. 30, 2019 USD ($)	Jun. 30, 2019 USD ($)	Mar. 31, 2019 USD ($) $ / shares	Dec. 31, 2019 USD ($)
Cash and Cash Equivalents [Line Items]
Number of operating segments \| segment			1
Number of disease areas with genomic testing \| diseaseAreas			4
Prior period reclassification adjustment						$ 212,000
Number of shares issued and sold (in shares) \| shares	6,325
Price per share (in usd per share) \| $ / shares	$ 23.25
Proceeds from issuance of common stock	$ 137,800,000
Stock issuance costs	$ 9,200,000
Percent of principal amount needed to be collateralized by U.S. treasury and agency securities			102.00%
Number of major financial institutions with which the company's cash and cash equivalents are deposited (in financial institutions) \| financial_institution			1
Restricted cash			$ 603,000				$ 603,000
Loss from operations			$ (12,200,000)			$ (2,067,000)
Net income (loss) per common share, basic and diluted (in usd per share) \| $ / shares			$ (0.24)			$ (0.05)
Number of tissue sample deliveries (in deliveries) \| delivery			0
Revenue			$ 31,122,000			$ 29,529,000
Right-of-use assets - operating lease			8,576,000				8,808,000
Operating lease, liability			12,582,000
Headquarters and laboratory facilities, South San Francisco, lease signed April 2015
Cash and Cash Equivalents [Line Items]
Restricted cash			603,000				603,000
Biopharmaceutical Company
Cash and Cash Equivalents [Line Items]
Deferred revenue			0				0
Tissue Samples
Cash and Cash Equivalents [Line Items]
Contract with customer, revenue recognized			90,000
Contract agreement term		1 year
Automatic renewal period of contract agreement		1 year
Termination period		90 days
Revenue			3,409,000			0
Other Services
Cash and Cash Equivalents [Line Items]
Contract with customer, revenue recognized				$ 250,000	$ 250,000	250,000
Testing
Cash and Cash Equivalents [Line Items]
Revenue			26,991,000			25,389,000
Write-down of supplies			1,100,000
Testing \| Revenue recognition
Cash and Cash Equivalents [Line Items]
Loss from operations						$ 600,000
Net income (loss) per common share, basic and diluted (in usd per share) \| $ / shares						$ 0.02
Revenue						$ 600,000
Biopharmaceutical
Cash and Cash Equivalents [Line Items]
Revenue			722,000			4,140,000
Johnson & Johnson
Cash and Cash Equivalents [Line Items]
Receivable from agreement			7,000,000.0
Contractual proceeds			$ 13,000,000.0
Percentage of net cash collections, fee			1.00%
Accounts Receivable, after Allowance for Credit Loss			$ 0				2,000,000.0
Johnson & Johnson \| Percepta v.2
Cash and Cash Equivalents [Line Items]
Revenue			0			$ 3,800,000	7,000,000.0
Johnson & Johnson \| NasaRISK
Cash and Cash Equivalents [Line Items]
Revenue							$ 4,000,000.0
AstraZeneca
Cash and Cash Equivalents [Line Items]
Revenue			100,000
Accounts Receivable, after Allowance for Credit Loss			100,000
Biopharmaceutical Company
Cash and Cash Equivalents [Line Items]
Contract agreement, amount			500,000
Biopharmaceutical Company \| Biopharmaceutical
Cash and Cash Equivalents [Line Items]
Revenue			$ 300,000
Over-Allotment Option
Cash and Cash Equivalents [Line Items]
Number of shares issued and sold (in shares) \| shares	825

Organization and Description of Business - Credit Risk (Details)	3 Months Ended		12 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019
Revenue \| Revenue concentration risk
Concentrations of Credit Risk and Other Risks and Uncertainties
Concentrations of credit risk (as a percent)	36.00%	45.00%
Revenue \| Revenue concentration risk \| Medicare
Concentrations of Credit Risk and Other Risks and Uncertainties
Concentrations of credit risk (as a percent)	25.00%	21.00%
Revenue \| Revenue concentration risk \| Johnson & Johnson
Concentrations of Credit Risk and Other Risks and Uncertainties
Concentrations of credit risk (as a percent)		13.00%
Revenue \| Revenue concentration risk \| UnitedHealthcare
Concentrations of Credit Risk and Other Risks and Uncertainties
Concentrations of credit risk (as a percent)	11.00%	11.00%
Accounts receivable \| Gross receivables concentration risk \| Medicare
Concentrations of Credit Risk and Other Risks and Uncertainties
Concentrations of credit risk (as a percent)	14.00%		15.00%
Accounts receivable \| Gross receivables concentration risk \| Johnson & Johnson
Concentrations of Credit Risk and Other Risks and Uncertainties
Concentrations of credit risk (as a percent)			10.00%

Net Loss Per Common Share (Details) - shares	3 Months Ended
Net Loss Per Common Share (Details) - shares	Mar. 31, 2020	Mar. 31, 2019
Outstanding shares of common stock equivalents that have been excluded from diluted net loss per common share
Total common stock equivalents (in shares)	5,716,509	6,235,250
Shares of common stock subject to outstanding options
Outstanding shares of common stock equivalents that have been excluded from diluted net loss per common share
Total common stock equivalents (in shares)	4,760,128	5,670,819
Employee stock purchase plan
Outstanding shares of common stock equivalents that have been excluded from diluted net loss per common share
Total common stock equivalents (in shares)	19,857	25,672
Restricted stock units
Outstanding shares of common stock equivalents that have been excluded from diluted net loss per common share
Total common stock equivalents (in shares)	936,524	538,759

Accrued Liabilities (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Payables and Accruals [Abstract]
Accrued compensation expenses	$ 7,497	$ 10,100
Accrued other	2,582	3,634
Total accrued liabilities	$ 10,079	$ 13,734

Business Combinations (Details) - USD ($) $ in Thousands	Dec. 03, 2019	Mar. 31, 2020	Dec. 31, 2019
Business Acquisition [Line Items]
Acquisition related contingent liability		$ 5,604	$ 6,088
Goodwill		2,725	2,725
NanoString
Business Acquisition [Line Items]
Cash paid in business acquisition	$ 40,000
Contingent consideration, maximum to be paid	10,000
Acquisition related contingent liability	6,100	$ 5,600	$ 6,100
Goodwill	1,668
NanoString \| Common Stock
Business Acquisition [Line Items]
Equity issued in business acquisition	$ 10,000

Business Combination - Acquisition (Details) - USD ($) $ in Thousands	Dec. 03, 2019	Mar. 31, 2020	Dec. 31, 2019
Business Acquisition [Line Items]
Goodwill		$ 2,725	$ 2,725
Prosigna product technology
Business Acquisition [Line Items]
Estimated useful life	15 years
Prosigna customer relationships
Business Acquisition [Line Items]
Estimated useful life	5 years
nCounter FLEX Dx license
Business Acquisition [Line Items]
Estimated useful life	15 years
LymphMark product technology
Business Acquisition [Line Items]
Estimated useful life	7 years
NanoString
Business Acquisition [Line Items]
Total identifiable intangible assets acquired	$ 54,420
Goodwill	1,668
Net assets acquired	56,088
NanoString \| Prosigna product technology
Business Acquisition [Line Items]
Total identifiable intangible assets acquired	4,120
NanoString \| Prosigna customer relationships
Business Acquisition [Line Items]
Total identifiable intangible assets acquired	2,430
NanoString \| nCounter FLEX Dx license
Business Acquisition [Line Items]
Total identifiable intangible assets acquired	46,880
NanoString \| LymphMark product technology
Business Acquisition [Line Items]
Total identifiable intangible assets acquired	$ 990

Fair Value Measurements (Details) - USD ($)	3 Months Ended
Fair Value Measurements (Details) - USD ($)	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019	Dec. 03, 2019
Fair value measurements
Restricted cash	$ 603,000		$ 603,000
NanoString
Fair value measurements
Contingent consideration, maximum to be paid				$ 10,000,000.0
Headquarters and laboratory facilities, South San Francisco, lease signed April 2015
Fair value measurements
Restricted cash	603,000		603,000
Level I \| Headquarters and laboratory facilities, South San Francisco, lease signed April 2015
Fair value measurements
Restricted cash	603,000		603,000
Level I \| Money market funds
Fair value measurements
Financial assets	150,700,000		57,600,000
Overnight repurchase agreements
Fair value measurements
Unrealized Gain (Loss) on Investments	0	$ 0
Overnight repurchase agreements \| Level II
Fair value measurements
Cash and and cash equivalents, fair value	$ 0		$ 100,000,000.0

Commitments and Contingencies - Operating Lease (Details) ft² in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2020 USD ($) ft²	Mar. 31, 2019 USD ($)	Dec. 31, 2019 USD ($)
Future minimum lease payments under non-cancelable operating leases
Remainder of 2020	$ 1,760
2020	2,401
2021	2,472
2022	2,543
2023	2,614
Thereafter	4,227
Total future minimum lease payments	16,017
Less: amount representing interest	3,435
Present value of future lease payments	12,582
Less: short-term lease liabilities	1,450		$ 1,407
Long-term lease liabilities	11,132		11,506
Operating lease expense	$ 474	$ 476
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
Other assets \| Laboratory facilities, Austin, Texas
Operating Leases
Security deposit	$ 139		$ 139

Debt - Narrative (Details) - USD ($)	1 Months Ended		3 Months Ended
Debt - Narrative (Details) - USD ($)	May 31, 2019	Jan. 31, 2019	Mar. 31, 2020	Mar. 31, 2019	Nov. 03, 2017
Debt Instrument [Line Items]
Repayments of long-term debt			$ 0	$ 12,500,000
Line of credit
Debt Instrument [Line Items]
Long-term debt			1,300,000
Silicon Valley Bank \| Line of credit
Debt Instrument [Line Items]
Maximum borrowing capacity					$ 35,000,000.0
Liquidity requirement, minimum			$ 40,000,000.0
Secured debt \| Silicon Valley Bank \| Line of credit
Debt Instrument [Line Items]
Maximum borrowing capacity					25,000,000.0
Effective interest rate (as a percent)			5.80%
Balloon payment to be paid					1,200,000
Secured debt \| Silicon Valley Bank \| Line of credit \| London Interbank Offered Rate (LIBOR)
Debt Instrument [Line Items]
Basis spread on variable rate			4.20%
Secured debt \| Silicon Valley Bank \| Line of credit \| London Interbank Offered Rate (LIBOR) \| Minimum
Debt Instrument [Line Items]
Interest rate (as a percent)			5.43%
Revolving credit facility \| Silicon Valley Bank \| Line of credit
Debt Instrument [Line Items]
Maximum borrowing capacity					$ 10,000,000.0
Repayments of long-term debt	$ 12,400,000	$ 12,500,000
Revolving credit facility \| Silicon Valley Bank \| Line of credit \| London Interbank Offered Rate (LIBOR)
Debt Instrument [Line Items]
Basis spread on variable rate			3.50%
Revolving credit facility \| Silicon Valley Bank \| Line of credit \| 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 \| Line of credit \| London Interbank Offered Rate (LIBOR)
Debt Instrument [Line Items]
Prepayment premium			$ 750,000
Debt prepayment tranche two \| Revolving credit facility \| Silicon Valley Bank \| Line of credit \| London Interbank Offered Rate (LIBOR)
Debt Instrument [Line Items]
Prepayment premium			500,000
Debt prepayment tranche three \| Revolving credit facility \| Silicon Valley Bank \| Line of credit \| London Interbank Offered Rate (LIBOR)
Debt Instrument [Line Items]
Prepayment premium			$ 250,000

Debt - Debt Obligation for Borrowings (Details) - Line of credit - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Debt Instrument [Line Items]
Debt principal	$ 100	$ 100
End-of-term debt obligation	648	594
Net debt obligation	$ 748	$ 694

Stockholders' Equity (Details) - shares	Mar. 31, 2020	Dec. 31, 2019
Common Stock
Options issued and outstanding (in shares)	5,988,461	5,562,484
Total number of shares reserved for issuance (in shares)	9,300,887	7,690,456
Shares of common stock subject to outstanding options
Common Stock
Shares available for issuance (in shares)	3,200,200	1,954,804
ESPP (in shares)
Common Stock
Shares available for issuance (in shares)	112,226	173,168

Thyroid Cytopathology Partners (Details) - Thyroid Cytopathology Partners - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Thyroid Cytopathology Partners
Notice of intent not to renew period	12 months
Reduction to rent expense for TCP's portion of costs for subleased space		$ 11