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Share Name | Share Symbol | Market | Type |
---|---|---|---|
DexCom Inc | NASDAQ:DXCM | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
-0.27 | -0.21% | 125.61 | 125.62 | 126.60 | 127.88 | 124.61 | 127.03 | 2,311,411 | 23:11:22 |
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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33-0857544
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(State or Other Jurisdiction of
Incorporation or Organization)
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(I.R.S. Employer
Identification No.)
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6340 Sequence Drive
San Diego, California
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92121
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(Address of Principal Executive Offices)
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(Zip Code)
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Title of Each Class
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Name of Each Exchange on Which Registered
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Common Stock, $0.001 Par Value Per Share
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The Nasdaq Stock Market LLC
(Nasdaq Global Select Market)
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Class
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Outstanding at February 23, 2018
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Common stock, $0.001 par value per share
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86,997,158
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Page
Number
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PART I
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ITEM 1.
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Business
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ITEM 1A.
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Risk Factors
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ITEM 1B.
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Unresolved Staff Comments
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ITEM 2.
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Properties
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ITEM 3.
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Legal Proceedings
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ITEM 4.
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Mine Safety Disclosures
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PART II
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ITEM 5.
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Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
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ITEM 6.
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Selected Financial Data
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ITEM 7.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations
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ITEM 7A.
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Quantitative and Qualitative Disclosures about Market Risk
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ITEM 8.
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Consolidated Financial Statements and Supplementary Data
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ITEM 9.
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Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
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ITEM 9A.
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Controls and Procedures
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ITEM 9B.
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Other Information
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PART III
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ITEM 10.
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Directors, Executive Officers and Corporate Governance
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ITEM 11.
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Executive Compensation
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ITEM 12.
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Security Ownership of Certain Beneficial Owners and Management and Related Stockholders Matters
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ITEM 13.
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Certain Relationships and Related Transactions, and Director Independence
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ITEM 14.
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Principal Accounting Fees and Services
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PART IV
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ITEM 15.
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Exhibits, Financial Statement Schedules
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ITEM 16.
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Form 10-K Summary
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ITEM 1.
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BUSINESS
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•
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Limited Information.
Even if people with diabetes test several times each day, each measurement represents a single blood glucose value at a single point in time. Given the many factors that can affect blood glucose levels, excursions above and below the normal range often occur between these discrete measurement points in time. Without the ability to determine whether their blood glucose level is rising, falling or holding constant, and the rate at which their blood glucose level is changing, the individual’s ability to effectively manage and maintain blood glucose levels within normal ranges is severely limited. Further, people with diabetes cannot test themselves during sleep, when the risk of hypoglycemia is significantly increased.
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•
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Inconvenience.
The process of measuring blood glucose levels with single-point finger stick devices can cause significant disruption in the daily activities of people with diabetes and their families. People with diabetes using single-point finger stick devices must stop whatever they are doing several times per day, self-inflict a painful prick and draw blood to measure blood glucose levels. To do so, people with diabetes must always carry a fully supplied kit that may include a spring-loaded needle, or lancet, disposable test strips, cleansing wipes and the meter, and then safely dispose of the used supplies. This process is inconvenient and may cause uneasiness in social situations.
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•
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Difficulty of Use.
To obtain a sample with single-point finger stick devices, people with diabetes generally prick one of their fingertips or, occasionally, a forearm with a lancet. They then squeeze the area to produce the blood sample and another prick may be required if a sufficient volume of blood is not obtained the first time. The blood sample is then placed on a disposable test strip that is inserted into a blood glucose meter. This task can be difficult for individuals with decreased tactile sensation and visual acuity, which are common complications of diabetes.
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•
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Pain.
Although the fingertips are rich in blood flow and provide a good site to obtain a blood sample, they are also densely populated with highly sensitive nerve endings. This makes the lancing and subsequent manipulation of the finger to draw blood painful. The pain and discomfort are compounded by the fact that fingers offer limited surface area, so tests are often performed on areas that are sore from prior tests. People with diabetes may also suffer pain when the finger prick site is disturbed during regular activities.
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Improved Outcomes.
Results of a major multicenter clinical trial funded by the JDRF demonstrated that patients with Type 1 diabetes who used continuous glucose monitoring devices to help manage their disease experienced significant improvements in glucose control. Data published in a peer-reviewed article based on the pivotal trial for our first-generation system demonstrated that patients using the system showed statistically significant improvements in glucose levels within the target range when compared to patients relying solely on single-point finger stick measurements. Additional peer-reviewed published data has demonstrated that patients with access to seven days of continuous glucose data statistically improved glucose control by further increasing their time spent with glucose levels in the target range, thereby reducing time spent in both hyperglycemic and hypoglycemic ranges. Finally, peer reviewed data published from the DIaMonD study demonstrated that DexCom CGM System users on MDI (multiple daily injections) achieved a one percent average reduction in hemoglobin A1c levels, a measure of the average amount of glucose in the blood over the prior three months, after 24 weeks of regular use, compared to their baseline. Study participants also increased time spent in their target A1c range and spent less time in hypoglycemia and hyperglycemia when they used a DexCom CGM system compared to those who used only a standard blood glucose meter to monitor their glucose.
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•
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Access to Real-Time Values, Trend Information and Alerts.
At the push of a button, people with diabetes can view their current glucose value, along with a graphical display of the historical trend information on our receiver or alternate display device. Without continuous monitoring, the individual is often unaware if his or her glucose is rising, declining or remaining constant. Access to continuous real-time glucose measurements provides people with diabetes information that may aid in attaining better glucose control. Additionally, our G4 PLATINUM and G5 Mobile systems alert people with diabetes when their glucose levels approach inappropriately high or low levels so that they may intervene.
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Intuitive User Interface.
We have developed a user interface that we believe is intuitive and easy to use. The G5 Mobile receiver’s compact design includes user-friendly buttons or touchscreen, an easy-to-read color display, simple navigation tools, audible alerts and graphical display of trend information. Similar benefits are available via the interfaces we have made available on iOS and Android devices. In certain countries outside of the United States, these devices can serve as substitutes for our receivers or alternate display units in certain geographies.
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Convenience and Comfort.
Our G4 PLATINUM and G5 Mobile systems provide people with diabetes with the benefits of continuous monitoring, without having to perform finger stick tests for every measurement. Additionally, the disposable sensor electrode that is inserted under the skin is a very thin wire, minimizing potential discomfort associated with inserting or wearing the disposable sensor. The external portion of the sensor, including the transmitter, is small, has a low profile and is designed to be easily worn under clothing. The wireless receiver is the size of a small digital music player and can be carried discreetly in a pocket or purse. We believe that convenience is an important factor in achieving widespread adoption of a continuous glucose monitoring system.
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Connectivity to Others.
Our Share remote monitoring systems enable users of our G4 PLATINUM and G5 Mobile systems to have their sensor glucose information remotely monitored by their family or friends by wirelessly transmitting data through an app on the patient’s smart phone. Up to five designated recipients, or “followers,” can remotely monitor a patient’s glucose information and receive secondary alert notifications from almost anywhere via each follower's mobile device.
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Establish and maintain our technology platform as the leading approach to continuous glucose monitoring and leverage our development expertise to rapidly bring products to market, including for expanded indications.
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Drive the adoption of our ambulatory products through a direct sales and marketing effort, as well as key distribution arrangements.
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Drive additional adoption through technology integration partnerships such as our current partnerships with Eli Lilly, Insulet, Tandem and others.
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Seek broad coverage policies and reimbursement for our products from private third-party payors and national health systems such as Medicare.
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Drive increased utilization and adoption of our products through a cloud-based data repository platform that enables people with diabetes to aggregate and analyze data from numerous diabetes devices and share the data with their healthcare providers.
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Expand the use of our products to other patient care settings and patient demographics, including people with Type 2 diabetes.
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Provide a high level of customer support, service and education.
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Pursue the highest safety and quality levels for our products.
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creating awareness of the benefits of continuous glucose monitoring and the advantages of our technology with endocrinologists, physicians, diabetes educators and people with diabetes;
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providing strong and simple educational and training programs to healthcare providers and people with diabetes to ensure easy, safe and effective use of our systems; and
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maintaining a readily accessible telephone and web-based technical and customer support infrastructure, which includes clinicians, diabetes educators and reimbursement specialists, to help referring physicians, diabetes educators and people with diabetes as necessary.
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recruit and retain adequate numbers of effective sales personnel;
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effectively train our sales personnel in the benefits of our products;
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establish and maintain successful sales, marketing, training and education programs that encourage endocrinologists, physicians and diabetes educators to recommend our products to their patients; and
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manage geographically disbursed operations.
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safe, reliable and high quality performance of products;
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cost of products and eligibility for reimbursement;
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comfort and ease of use;
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effective sales, marketing and distribution;
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brand awareness and strong acceptance by healthcare professionals and people with diabetes;
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customer service and support and comprehensive education for people with diabetes and diabetes care providers;
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speed of product innovation and time to market;
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regulatory expertise; and
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technological leadership and superiority.
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avoid the constraints we anticipate in our current facilities commencing in 2018-2019;
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geographically diversify our manufacturing base to mitigate the risks of having all of our manufacturing located in earthquake and fire-prone California; and
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help manage certain of our operating expenses by taking advantage of Arizona’s lower costs and taxes relative to California.
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•
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our systems may not be safe or effective to the
FDA
’s satisfaction;
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the data from our pre-clinical studies and clinical trials may be insufficient to support approval;
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the manufacturing process or facilities we use may not meet applicable requirements; and
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•
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changes in
FDA
approval policies or adoption of new regulations may require additional data.
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•
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the
FDA
or other regulatory authorities do not approve a clinical trial protocol or a clinical trial, or place a clinical trial on hold;
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patients do not enroll in clinical trials at the rate we expect;
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patients do not comply with trial protocols;
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patient follow-up is not at the rate we expect;
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patients experience adverse side effects;
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patients die during a clinical trial, even though their death may not be related to our products;
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institutional review boards and third-party clinical investigators may delay or reject our trial protocol;
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third-party clinical investigators decline to participate in a trial or do not perform a trial on our anticipated schedule or consistent with the clinical trial protocol, good clinical practices or other
FDA
requirements;
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DexCom or third-party organizations do not perform data collection, monitoring and analysis in a timely or accurate manner or consistent with the clinical trial protocol or investigational or statistical plans;
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third-party clinical investigators have significant financial interests related to DexCom or the study that the
FDA
deems to make the study results unreliable, or DexCom or investigators fail to disclose such interests;
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regulatory inspections of our clinical trials or manufacturing facilities, which may, among other things, require us to undertake corrective action or suspend or terminate our clinical trials;
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•
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changes in governmental regulations or administrative actions applicable to our trial protocols;
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the interim or final results of the clinical trial are inconclusive or unfavorable as to safety or efficacy; and
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the
FDA
concludes that our trial design is inadequate to demonstrate safety and efficacy.
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•
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establishment registration and device listing;
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•
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QSR
, which requires manufacturers to follow design, testing, control, storage, supplier/contractor selection, complaint handling, documentation and other quality assurance procedures;
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labeling regulations, which prohibit the promotion of products for unapproved or off-label uses or indications and impose other restrictions on labeling, advertising and promotion;
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medical device reporting regulations, which require that manufacturers report to the
FDA
if a device may have caused or contributed to a death or serious injury or malfunctioned in a way that would likely cause or contribute to a death or serious injury if it were to recur;
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•
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voluntary and mandatory device recalls to address problems when a device is defective and/or could be a risk to health; and
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corrections and removal reporting regulations, which require that manufacturers report to the
FDA
field corrections and product recalls or removals if undertaken to reduce a risk to health posed by the device or to remedy a violation of the
FDCA
that may present a risk to health.
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warning letters or untitled letters that require corrective action;
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fines and civil penalties;
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unanticipated expenditures;
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delays in approving or refusal to approve our future continuous glucose monitoring systems or other products;
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•
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FDA
refusal to issue certificates to foreign governments needed to export our products for sale in other countries;
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suspension or withdrawal of
FDA
approval;
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product recall or seizure;
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interruption of production;
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operating restrictions;
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injunctions; and
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criminal prosecution.
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ITEM 1A.
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RISK FACTORS
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research and development relating to our continuous glucose monitoring systems;
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sales and marketing and manufacturing expenses associated with the commercialization of our G4 PLATINUM and G5 Mobile systems; and
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expansion of our workforce.
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recruit and retain adequate numbers of effective and experienced sales personnel;
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•
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effectively train our sales personnel in the benefits and risks of our products;
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establish and maintain successful sales, marketing and education programs that educate endocrinologists, physicians and diabetes educators so they can appropriately inform their patients about our products; and
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manage geographically dispersed sales and marketing operations.
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the system may not be deemed by the
FDA
to be substantially equivalent to appropriate predicate devices;
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•
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the system may not satisfy the
FDA
's safety or efficacy requirements;
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•
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the data from pre-clinical studies and clinical trials may be insufficient to support approval;
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•
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the manufacturing process or facilities used may not meet applicable requirements; and
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•
|
changes in
FDA
approval policies or adoption of new regulations may require additional data.
|
•
|
the
FDA
or other regulatory authorities do not approve a clinical trial protocol or a clinical trial, or place a clinical trial on hold;
|
•
|
patients do not enroll in clinical trials at the rate we expect;
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•
|
patients do not comply with trial protocols;
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•
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patient follow-up does not occur at the rate we expect;
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•
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patients experience adverse side effects;
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patients die during a clinical trial, even though their death may not be related to our products;
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institutional review boards, or IRBs, and third-party clinical investigators may delay or reject our trial protocol;
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third-party clinical investigators decline to participate in a trial or do not perform a trial on our anticipated schedule or consistent with the investigator agreements, clinical trial protocol, good clinical practices or other
FDA
or IRB requirements;
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DexCom or third-party organizations do not perform data collection, monitoring and analysis in a timely or accurate manner or consistent with the clinical trial protocol or investigational or statistical plans;
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•
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third-party clinical investigators have significant financial interests related to DexCom or the study that the
FDA
deems to make the study results unreliable, or DexCom or investigators fail to disclose such interests;
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•
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regulatory inspections of our clinical trials or manufacturing facilities may, among other things, require us to undertake corrective action or suspend or terminate our clinical trials;
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•
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changes in governmental regulations, policies or administrative actions applicable to our trial protocols;
|
•
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the interim or final results of the clinical trial are inconclusive or unfavorable as to safety or efficacy; and
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•
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the
FDA
concludes that our trial design is inadequate to demonstrate safety and efficacy.
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•
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the pricing of our products and services;
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the distribution of our products and services;
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billing for services;
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the obligation to report and return identified overpayments;
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financial relationships with physicians and other referral sources;
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inducements and courtesies given to physicians and other health care providers and patients;
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•
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labeling products;
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the characteristics and quality of our products and services;
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confidentiality, maintenance and security issues associated with medical records and individually identifiable health and other personal information;
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medical device reporting;
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prohibitions on kickbacks, also referred to as anti-kickback laws or regulations;
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any scheme to defraud any healthcare benefit program;
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physician payment disclosure requirements;
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personal health information;
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privacy;
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data protection;
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mobile communications;
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false claims; and
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professional licensure
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we may not be able to obtain adequate supply in a timely manner or on commercially reasonable terms;
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our products are technologically complex and it is difficult to develop alternative supply sources;
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we are not a major customer of many of our suppliers, and these suppliers may therefore give other customers' needs higher priority than ours;
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our suppliers may make errors in manufacturing components that could negatively affect the efficacy or safety of our products or cause delays in shipment of our products;
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we may have difficulty locating and qualifying alternative suppliers for our single-source supplies;
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switching components may require product redesign and submission to the
FDA
of a
PMA
supplement or possibly a separate
PMA
, either of which could significantly delay production;
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our suppliers manufacture products for a range of customers, and fluctuations in demand for the products these suppliers manufacture for others may affect their ability to deliver components to us in a timely manner;
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our suppliers may make obsolete components that are critical to our products; and
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our suppliers may encounter financial hardships unrelated to our demand for components, including those related to changes in global economic conditions, which could inhibit their ability to fulfill our orders and meet our requirements.
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warning letters or untitled letters that require corrective action;
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•
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delays in approving or refusal to approve our continuous glucose monitoring systems;
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•
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fines and civil or criminal penalties;
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•
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unanticipated expenditures;
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•
|
FDA
refusal to issue certificates to foreign governments needed to export our products for sale in other countries;
|
•
|
suspension or withdrawal of clearance or approval by the
FDA
or other regulatory bodies;
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•
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product recall or seizure;
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administrative detention;
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•
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interruption of production, partial suspension, or complete shutdown of production;
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interruption of the supply of components from our key component suppliers;
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operating restrictions;
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court consent decrees;
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FDA
orders to repair, replace, or refund the cost of devices;
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injunctions; and
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criminal prosecution.
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significantly greater name recognition;
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established relations with healthcare professionals, customers and third-party payors;
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•
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established distribution networks;
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additional lines of products, and the ability to bundle products to offer higher discounts or incentives to gain a competitive advantage;
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greater experience in conducting research and development, manufacturing, clinical trials, obtaining regulatory approval for products and marketing approved products;
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the ability to integrate multiple products to provide additional features beyond continuous glucose monitoring; and
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greater financial and human resources for product development, sales and marketing, and patent litigation.
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additional government oversight of our operations;
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loss of existing customers;
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difficulty in attracting new customers;
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problems in determining product cost estimates and establishing appropriate pricing;
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difficulty in preventing, detecting, and controlling fraud;
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•
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disputes with customers, physicians, and other health care professionals;
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•
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increases in operating expenses, incurrence of expenses, including remediation costs;
|
•
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loss of revenues;
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•
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product development delays;
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•
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disruption of key business operations; and
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•
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diversion of attention of management and key information technology resources.
|
•
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the FDA approval of our G5 Mobile system in the United States in August 2015 and the approval to sell our G5 Mobile system in the countries that recognize our CE Mark in September 2015 means that we have relatively limited experience selling our G5 Mobile system;
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•
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widespread market acceptance of our products by physicians and people with diabetes will largely depend on our ability to demonstrate their relative safety, efficacy, reliability, cost-effectiveness and ease of use;
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•
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the limited size of our sales force;
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•
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we may not have sufficient financial or other resources to adequately expand the commercialization efforts for our products;
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•
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our FDA and other regulatory submissions may be delayed, or approved with limited product labeling;
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we may not be able to manufacture our products in commercial quantities or at an acceptable cost;
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•
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people with diabetes do not generally receive broad reimbursement from third-party payors for their purchase of our products since many payors require that a policy holder meet specific medical criteria to qualify for reimbursement, which may reduce widespread use of our products;
|
•
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the uncertainties associated with establishing and qualifying new manufacturing facilities;
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•
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except for the G5 Mobile, our systems are not labeled as a replacement for the information that is obtained from single-point finger stick devices (and even the G5 Mobile continues to require twice-daily finger sticks for calibration);
|
•
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people with diabetes will need to incur the costs of our systems in addition to single-point finger stick devices;
|
•
|
the relative immaturity of the continuous glucose monitoring market internationally, and the general absence of international reimbursement of continuous glucose monitoring devices by third-party payors and government healthcare providers outside the United States;
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•
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the introduction and market acceptance of competing products and technologies;
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•
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our inability to obtain sufficient quantities of supplies at appropriate quality levels from our single-source and other key suppliers;
|
•
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our inability to manufacture products that perform in accordance with expectations of consumers; and
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•
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rapid technological change may make our technology and our products obsolete.
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•
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local product preferences and product requirements;
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•
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longer-term receivables than are typical in the United States;
|
•
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fluctuations in foreign currency exchange rates;
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•
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less intellectual property protection in some countries outside the United States than exists in the United States;
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•
|
trade protection measures and import and export licensing requirements;
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•
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workforce instability;
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•
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political and economic instability; and
|
•
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the potential payment of U.S. income taxes on certain earnings of our subsidiaries outside the United States upon repatriation.
|
•
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securities analyst coverage or lack of coverage of our common stock or changes in their estimates of our financial performance;
|
•
|
variations in quarterly operating results;
|
•
|
future sales of our common stock by our stockholders;
|
•
|
investor perception of us and our industry;
|
•
|
announcements by us or our competitors of significant agreements, acquisitions, capital commitments or product launches or discontinuations;
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•
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changes in market valuation or earnings of our competitors;
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•
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negative business or financial announcements regarding our partners;
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•
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general economic conditions;
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•
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regulatory actions;
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•
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legislation and political conditions; and
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•
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terrorist acts.
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•
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our inability to manufacture an adequate supply of product at appropriate quality levels and acceptable costs;
|
•
|
possible delays in our research and development programs or in the completion of any clinical trials;
|
•
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a lack of acceptance of our products in the marketplace by physicians and people with diabetes;
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•
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the inability of customers to receive reimbursements from third-party payors;
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•
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failures to comply with regulatory requirements, which could lead to withdrawal of products from the market;
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•
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our failure to continue the commercialization of any of our continuous glucose monitoring systems;
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•
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competition;
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•
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inadequate financial and other resources; and
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•
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global and political economic conditions, political instability and military hostilities.
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the terms on which credit may be available to us could be less attractive, both in the economic terms of the credit and the legal covenants;
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•
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the possible lack of availability of additional credit;
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•
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the potential for higher levels of interest expense to service or maintain our outstanding debt;
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the possibility of additional borrowings in the future to repay our indebtedness when it comes due; and
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•
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the possible diversion of capital resources from other uses.
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our Board of Directors may, without stockholder approval, issue shares of preferred stock with special voting or economic rights;
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our stockholders do not have cumulative voting rights and, therefore, each of our directors can only be elected by holders of a majority of our outstanding common stock;
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•
|
a special meeting of stockholders may only be called by a majority of our Board of Directors, the Chairman of our Board of Directors, or our Chief Executive Officer;
|
•
|
our stockholders may not take action by written consent;
|
•
|
our Board of Directors is divided into three classes, only one of which is elected each year; and
|
•
|
we require advance notice for nominations for election to the Board of Directors or for proposing matters that can be acted upon by stockholders at stockholder meetings
|
•
|
our vulnerability to adverse general economic conditions and competitive pressures will be heightened;
|
•
|
we will be required to dedicate a larger portion of our cash flow from operations to interest payments, limiting the availability of cash for other purposes;
|
•
|
our flexibility in planning for, or reacting to, changes in our business and industry maybe more limited; and
|
•
|
our ability to obtain additional financing in the future for working capital, capital expenditures, acquisitions, general corporate purposes or other purposes may be impaired.
|
ITEM 1B.
|
UNRESOLVED STAFF COMMENTS
|
ITEM 2.
|
PROPERTIES
|
Location
|
Approximate Square Feet
|
Operation
|
Lease Expiration Dates
|
|
San Diego, CA
|
383,500
|
|
Laboratory, Manufacturing, Research and Development, Warehouse, General and Administrative, Sales and Marketing
|
2022
(1)
|
Edinburgh, Scotland
|
9,100
|
|
EMEA Headquarters, Clinical, Regulatory, Marketing, General and Administrative
|
2026
|
Mesa, AZ
|
148,797
|
|
General and Administrative, Future Laboratory, Manufacturing, Warehouse
(3)
|
2028
(2)
|
ITEM 3.
|
LEGAL PROCEEDINGS
|
ITEM 4.
|
MINE SAFETY DISCLOSURES
|
ITEM 5.
|
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
|
|
|
High
|
|
Low
|
||||
Year Ended December 31, 2017
|
|
|
|
|
||||
First Quarter
|
|
$
|
88.80
|
|
|
$
|
57.68
|
|
Second Quarter
|
|
$
|
85.32
|
|
|
$
|
66.16
|
|
Third Quarter
|
|
$
|
78.92
|
|
|
$
|
42.62
|
|
Fourth Quarter
|
|
$
|
62.35
|
|
|
$
|
43.74
|
|
|
|
High
|
|
Low
|
||||
Year Ended December 31, 2016
|
|
|
|
|
||||
First Quarter
|
|
$
|
83.87
|
|
|
$
|
47.92
|
|
Second Quarter
|
|
$
|
81.23
|
|
|
$
|
60.07
|
|
Third Quarter
|
|
$
|
96.38
|
|
|
$
|
76.21
|
|
Fourth Quarter
|
|
$
|
87.81
|
|
|
$
|
59.36
|
|
ITEM 6.
|
SELECTED FINANCIAL DATA
|
|
|
Years Ended December 31,
|
||||||||||||||||||
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
|
|
(in millions, except per share data)
|
||||||||||||||||||
Consolidated Statements of Operations Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Product revenue
|
|
$
|
718.5
|
|
|
$
|
573.3
|
|
|
$
|
400.7
|
|
|
$
|
257.1
|
|
|
$
|
157.1
|
|
Development grant and other revenue
|
|
—
|
|
|
—
|
|
|
1.3
|
|
|
2.1
|
|
|
2.9
|
|
|||||
Total revenue
|
|
718.5
|
|
|
573.3
|
|
|
402.0
|
|
|
259.2
|
|
|
160.0
|
|
|||||
Product cost of sales
|
|
226.4
|
|
|
194.9
|
|
|
123.6
|
|
|
82.3
|
|
|
58.1
|
|
|||||
Development and other cost of sales
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.6
|
|
|
1.8
|
|
|||||
Total cost of sales
|
|
226.4
|
|
|
194.9
|
|
|
123.6
|
|
|
82.9
|
|
|
59.9
|
|
|||||
Gross profit
|
|
492.1
|
|
|
378.4
|
|
|
278.4
|
|
|
176.3
|
|
|
100.1
|
|
|||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Research and development
|
|
185.4
|
|
|
156.1
|
|
|
137.5
|
|
|
69.4
|
|
|
44.8
|
|
|||||
Selling, general and administrative
|
|
349.2
|
|
|
286.2
|
|
|
198.0
|
|
|
128.4
|
|
|
84.2
|
|
|||||
Total operating expenses
|
|
534.6
|
|
|
442.3
|
|
|
335.5
|
|
|
197.8
|
|
|
129.0
|
|
|||||
Operating loss
|
|
(42.5
|
)
|
|
(63.9
|
)
|
|
(57.1
|
)
|
|
(21.5
|
)
|
|
(28.9
|
)
|
|||||
Other income (expense)
|
|
3.4
|
|
|
(0.7
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Interest income
|
|
3.3
|
|
|
0.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Interest expense
|
|
(12.8
|
)
|
|
(0.7
|
)
|
|
(0.4
|
)
|
|
(0.8
|
)
|
|
(0.9
|
)
|
|||||
Loss before income taxes
|
|
(48.6
|
)
|
|
(64.9
|
)
|
|
(57.5
|
)
|
|
(22.3
|
)
|
|
(29.8
|
)
|
|||||
Income tax expense
|
|
1.6
|
|
|
0.7
|
|
|
0.1
|
|
|
0.1
|
|
|
—
|
|
|||||
Net loss
|
|
$
|
(50.2
|
)
|
|
$
|
(65.6
|
)
|
|
$
|
(57.6
|
)
|
|
$
|
(22.4
|
)
|
|
$
|
(29.8
|
)
|
Basic and diluted net loss per share attributable to common stockholders
(1)
|
|
$
|
(0.58
|
)
|
|
$
|
(0.78
|
)
|
|
$
|
(0.72
|
)
|
|
$
|
(0.30
|
)
|
|
$
|
(0.42
|
)
|
Shares used to compute basic and diluted net loss per share attributable to common stockholders
(1)
|
|
86.3
|
|
|
83.6
|
|
|
79.8
|
|
|
75.2
|
|
|
71.1
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
As of December 31,
|
||||||||||||||||||
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
|
|
(in millions)
|
||||||||||||||||||
Consolidated Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash, cash equivalents, and short-term marketable securities
|
|
$
|
548.6
|
|
|
$
|
123.7
|
|
|
$
|
115.2
|
|
|
$
|
83.6
|
|
|
$
|
54.6
|
|
Working capital
|
|
605.8
|
|
|
177.6
|
|
|
164.4
|
|
|
105.3
|
|
|
61.0
|
|
|||||
Total assets
|
|
904.1
|
|
|
402.8
|
|
|
292.0
|
|
|
184.6
|
|
|
122.5
|
|
|||||
Long term obligations
|
|
345.8
|
|
|
16.6
|
|
|
3.9
|
|
|
3.8
|
|
|
6.3
|
|
|||||
Total stockholders’ equity
|
|
$
|
419.4
|
|
|
$
|
283.8
|
|
|
$
|
221.2
|
|
|
$
|
140.2
|
|
|
$
|
84.1
|
|
(1)
|
See Note 2 of the notes to our consolidated financial statements for a description of the method used to compute basic and diluted net loss per share attributable to common stockholders.
|
|
Twelve Months Ended
December 31, |
|
Change
|
||||||||
|
2017
|
|
2016
|
|
|
||||||
Net cash provided by operating activities
|
$
|
92.0
|
|
|
$
|
56.2
|
|
|
$
|
35.8
|
|
Net cash used in investing activities
|
$
|
(144.4
|
)
|
|
$
|
(55.9
|
)
|
|
$
|
(88.5
|
)
|
Net cash provided by financing activities
|
$
|
399.1
|
|
|
$
|
8.1
|
|
|
$
|
391.0
|
|
•
|
Net cash provided by operating activities of
$92.0 million
comprised of net loss of
$50.2 million
, offset by
$139.6 million
of net non-cash expenses and
$2.6 million
of changes in working capital balances. Net non-cash expenses of
$139.6 million
were primarily related to share-based compensation, depreciation and amortization, and non-cash interest expense related to our senior convertible notes.
|
•
|
Proceeds from issuance of common stock of
$10.1 million
pursuant to the exercise of then-outstanding stock options and purchases of stock under our employee stock purchase plan.
|
•
|
Proceeds from short-term borrowings of
$75.0 million
.
|
•
|
Proceeds from issuance of senior convertible notes, net of issuance costs, of
$389.0 million
.
|
•
|
Capital expenditures of
$66.0 million
primarily related to purchase of facility related build-outs, office equipment and machinery and equipment.
|
•
|
Net cash outflow of
$78.4 million
as a result of marketable securities transactions.
|
•
|
Repayment of short-term borrowings of
$75.0 million
.
|
•
|
the revenue generated by sales of our approved products and other future products;
|
•
|
the expenses we incur in manufacturing, developing, selling and marketing our products;
|
•
|
the quality levels of our products and services;
|
•
|
the third-party reimbursement of our products for our customers;
|
•
|
our ability to efficiently scale our manufacturing operations to meet demand for our current and any future products;
|
•
|
the costs, timing and risks of delays of additional regulatory approvals;
|
•
|
the costs of filing, prosecuting, defending and enforcing any patent claims and other intellectual property rights;
|
•
|
the rate of progress and cost of our clinical trials and other development activities;
|
•
|
the success of our research and development efforts;
|
•
|
the emergence of competing or complementary technological developments;
|
•
|
the terms and timing of any collaborative, licensing and other arrangements that we may establish; and
|
•
|
the acquisition of businesses, products and technologies and our ability to integrate and manage any acquired businesses, products and technologies.
|
Contractual Obligations:
|
|
Total
|
|
Less
than
1 Year
|
|
1-3
Years
|
|
3-5
Years
|
|
More
than
5 Years
(1)
|
||||||||||
Operating leases
|
|
$
|
57.3
|
|
|
$
|
10.1
|
|
|
$
|
22.4
|
|
|
$
|
15.4
|
|
|
$
|
9.4
|
|
Senior convertible notes
(1)
|
|
413.5
|
|
|
3.0
|
|
|
9.0
|
|
|
401.5
|
|
|
—
|
|
|||||
Purchase commitments
|
|
71.7
|
|
|
71.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total
|
|
$
|
542.5
|
|
|
$
|
84.8
|
|
|
$
|
31.4
|
|
|
$
|
416.9
|
|
|
$
|
9.4
|
|
(1)
|
Senior convertible notes were issued in May and June 2017 which are due in May 2022, obligations include both principal and interest. Although these notes mature in 2022, they may be converted into cash and shares of our common stock prior to maturity if certain conditions are met. Any conversion prior to maturity can result in repayment of the principal amounts sooner than scheduled repayment as indicated in the table. See Note 4 to our Consolidated Financial Statements for further discussion of the terms of the senior convertible notes.
|
ITEM 7A.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
ITEM 8.
|
CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
ITEM 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
ITEM 9A.
|
CONTROLS AND PROCEDURES
|
ITEM 9B.
|
OTHER INFORMATION
|
ITEM 10.
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
ITEM 11.
|
EXECUTIVE COMPENSATION
|
ITEM 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|
ITEM 13.
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
|
ITEM 14.
|
PRINCIPAL ACCOUNTING FEES AND SERVICES
|
ITEM 15.
|
EXHIBITS, FINANCIAL STATEMENT SCHEDULES
|
(a)
|
The following documents are filed as part of this Annual Report:
|
Exhibit
Number
|
|
Exhibit Description
|
|
Incorporated by Reference
|
|
Provided
Herewith
|
|
||||||||
Form
|
|
File No.
|
|
Date of
First Filing
|
|
Exhibit
Number |
|
||||||||
|
|
S-1/A
|
|
333-122454
|
|
March 3, 2005
|
|
3.03
|
|
|
|
|
|||
|
|
8-K
|
|
000-51222
|
|
November 25, 2014
|
|
3.01
|
|
|
|
|
|||
|
|
S-1/A
|
|
333-122454
|
|
March 24, 2005
|
|
4.01
|
|
|
|
|
|||
|
|
8-K
|
|
000-51222
|
|
May 12, 2017
|
|
4.1
|
|
|
|
|
|||
|
|
S-1
|
|
333-122454
|
|
February 1, 2005
|
|
10.01
|
|
|
|
|
|||
|
|
S-1
|
|
333-122454
|
|
February 1, 2005
|
|
10.02
|
|
|
|
|
|||
|
|
S-1/A
|
|
000-51222
|
|
March 24, 2005
|
|
10.03
|
|
|
|
|
|||
|
|
S-1/A
|
|
000-51222
|
|
March 24, 2005
|
|
10.04
|
|
|
|
|
|||
|
|
10-K
|
|
000-51222
|
|
February 27, 2006
|
|
10.14
|
|
|
|
|
|||
|
|
8-K
|
|
000-51222
|
|
April 7, 2006
|
|
99.01
|
|
|
|
|
Exhibit
Number
|
|
Exhibit Description
|
|
Incorporated by Reference
|
|
Provided
Herewith
|
|
||||||||
Form
|
|
File No.
|
|
Date of
First Filing
|
|
Exhibit
Number |
|
||||||||
|
|
8-K
|
|
000-51222
|
|
April 13, 2006
|
|
99.01
|
|
|
|
|
|||
|
|
8-K/A
|
|
000-51222
|
|
January 28, 2009
|
|
10.1
|
|
|
|
|
|||
|
|
8-K/A
|
|
000-51222
|
|
January 28, 2009
|
|
10.2
|
|
|
|
|
|||
|
|
10-K
|
|
000-51222
|
|
March 5, 2009
|
|
10.20
|
|
|
|
|
|||
|
|
10-K
|
|
000-51222
|
|
March 5, 2009
|
|
10.21
|
|
|
|
|
|||
|
|
10-Q
|
|
000-51222
|
|
August 3, 2009
|
|
10.23
|
|
|
|
|
|||
|
|
10-Q
|
|
000-51222
|
|
November 4, 2009
|
|
10.24
|
|
|
|
|
|||
|
|
10-Q
|
|
000-51222
|
|
November 4, 2009
|
|
10.25
|
|
|
|
|
|||
|
|
10-K
|
|
000-51222
|
|
March 9, 2010
|
|
10.25
|
|
|
|
|
|||
|
|
10-Q
|
|
000-51222
|
|
May 5, 2010
|
|
10.26
|
|
|
|
|
|||
|
|
10-Q
|
|
000-51222
|
|
November 4, 2010
|
|
10.27
|
|
|
|
|
|||
|
|
10-Q
|
|
000-51222
|
|
May 3, 2011
|
|
10.25
|
|
|
|
|
|||
|
|
10-Q/A
|
|
000-51222
|
|
July 1, 2011
|
|
10.26
|
|
|
|
|
|||
|
|
10-Q
|
|
000-51222
|
|
August 3, 2011
|
|
10.27
|
|
|
|
|
|||
|
|
10-Q
|
|
000-51222
|
|
August 3, 2011
|
|
10.28
|
|
|
|
|
|||
|
|
10-K
|
|
000-51222
|
|
February 23, 2012
|
|
10.26
|
|
|
|
|
Exhibit
Number
|
|
Exhibit Description
|
|
Incorporated by Reference
|
|
Provided
Herewith
|
|
||||||||
Form
|
|
File No.
|
|
Date of
First Filing
|
|
Exhibit
Number |
|
||||||||
|
|
10-K
|
|
000-51222
|
|
February 21, 2013
|
|
10.26
|
|
|
|
|
|||
|
|
10-Q
|
|
000-51222
|
|
May 1, 2013
|
|
10.27
|
|
|
|
|
|||
|
|
10-K
|
|
000-51222
|
|
February 20, 2014
|
|
10.28
|
|
|
|
|
|||
|
|
10-K
|
|
000-51222
|
|
February 20, 2014
|
|
10.29
|
|
|
|
|
|||
|
|
10-Q
|
|
000-51222
|
|
May 1, 2014
|
|
10.30
|
|
|
|
|
|||
|
|
10-Q
|
|
000-51222
|
|
August 6, 2014
|
|
10.31
|
|
|
|
|
|||
|
|
10-Q
|
|
000-51222
|
|
August 6, 2014
|
|
10.32
|
|
|
|
|
|||
|
|
10-K
|
|
000-51222
|
|
February 25, 2015
|
|
10.32
|
|
|
|
|
|||
|
|
DEF 14A
|
|
000-51222
|
|
April 13, 2015
|
|
Appendix A
|
|
|
|
|
|||
|
|
8-K
|
|
000-51222
|
|
June 2, 2015
|
|
10.2
|
|
|
|
|
|||
|
|
10-Q
|
|
000-51222
|
|
November 4, 2015
|
|
10.32
|
|
|
|
|
|||
|
|
10-Q
|
|
000-51222
|
|
April 27, 2016
|
|
10.36
|
|
|
|
|
|||
|
|
10-Q
|
|
000-51222
|
|
April 27, 2016
|
|
10.37
|
|
|
|
|
|||
|
|
10-Q
|
|
000-51222
|
|
August 2, 2016
|
|
10.38
|
|
|
|
|
|||
|
|
10-Q
|
|
000-51222
|
|
August 2, 2016
|
|
10.39
|
|
|
|
|
|||
|
|
10-Q
|
|
000-51222
|
|
August 2, 2016
|
|
10.40
|
|
|
|
|
Exhibit
Number
|
|
Exhibit Description
|
|
Incorporated by Reference
|
|
Provided
Herewith
|
|
||||||||
Form
|
|
File No.
|
|
Date of
First Filing
|
|
Exhibit
Number |
|
||||||||
|
|
10-Q
|
|
000-51222
|
|
August 2, 2016
|
|
10.41
|
|
|
|
|
|||
|
|
10-K
|
|
000-51222
|
|
February 28, 2017
|
|
10.42
|
|
|
|
|
|||
|
|
8-K
|
|
000-51222
|
|
June 6, 2017
|
|
10.20
|
|
10.2
|
|
|
|
||
|
|
8-K
|
|
000-51222
|
|
June 6, 2017
|
|
10.30
|
|
|
|
|
|||
|
|
10-Q
|
|
000-51222
|
|
August 1, 2017
|
|
10.42
|
|
|
|
|
|||
|
|
10-Q
|
|
000-51222
|
|
August 1, 2017
|
|
10.46
|
|
|
|
|
|||
|
|
10-Q
|
|
000-51222
|
|
August 1, 2017
|
|
10.47
|
|
|
|
|
|||
|
|
8-K
|
|
000-51222
|
|
August 1, 2017
|
|
10.10
|
|
|
|
|
|||
|
|
10-Q
|
|
000-51222
|
|
August 1, 2017
|
|
10.43
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
X
|
|
||||
|
|
|
|
|
|
|
|
|
|
X
|
|
||||
|
|
|
|
|
|
|
|
|
|
X
|
|
||||
|
|
|
|
|
|
|
|
|
|
X
|
|
||||
|
|
|
|
|
|
|
|
|
|
X
|
|
||||
|
|
|
|
|
|
|
|
|
|
X
|
|
||||
|
|
|
|
|
|
|
|
|
|
X
|
|
||||
|
|
|
|
|
|
|
|
|
|
X
|
|
||||
|
|
|
|
|
|
|
|
|
|
X
|
|
||||
|
|
|
|
|
|
|
|
|
|
X
|
|
||||
|
|
|
|
|
|
|
|
|
|
X
|
|
||||
|
|
|
|
|
|
|
|
|
|
X
|
|
||||
|
|
|
|
|
|
|
|
|
|
X
|
|
Exhibit
Number
|
|
Exhibit Description
|
|
Incorporated by Reference
|
|
Provided
Herewith
|
|
||||||||
Form
|
|
File No.
|
|
Date of
First Filing
|
|
Exhibit
Number |
|
||||||||
|
|
|
|
|
|
|
|
|
|
X
|
|
||||
|
|
|
|
|
|
|
|
|
|
X
|
|
||||
|
|
|
|
|
|
|
|
|
|
X
|
|
||||
101.INS
|
|
XBRL Instance Document
|
|
|
|
|
|
|
|
|
|
X
|
|
||
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
|
|
|
|
|
|
X
|
|
||
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
|
|
|
|
|
|
X
|
|
||
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
|
|
|
|
|
|
X
|
|
||
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
|
|
|
|
|
|
X
|
|
||
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
|
|
|
|
|
|
|
X
|
|
*
|
Represents a management contract or compensatory plan.
|
**
|
Confidential treatment has been requested for certain portions of this document pursuant to an application for confidential treatment sent to the Securities and Exchange Commission. Such portions are omitted from this filing and were filed separately with the Securities and Exchange Commission.
|
***
|
This certification is not deemed “filed” for purposes of Section 18 of the Securities Exchange Act, or otherwise subject to the liability of that section. Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent that DexCom specifically incorporates it by reference.
|
|
|
|
|
DEXCOM, INC.
(Registrant)
|
||
|
|
|
|
|||
Dated: February 27, 2018
|
|
|
|
By:
|
|
/
S
/ QUENTIN S. BLACKFORD
|
|
|
|
|
|
|
Quentin S. Blackford,
Executive Vice President & Chief Financial Officer (Principal Financial and Accounting Officer)
|
Signature
|
|
Title
|
|
Date
|
|
|
|
||
/S/ KEVIN R. SAYER
|
|
President, Chief Executive Officer, and Director (Principal Executive Officer)
|
|
February 27, 2018
|
Kevin R. Sayer
|
|
|
|
|
|
|
|
||
/S/ QUENTIN S. BLACKFORD
|
|
Executive Vice President & Chief Financial Officer (Principal Financial and Accounting Officer)
|
|
February 27, 2018
|
Quentin S. Blackford
|
|
|
|
|
|
|
|
||
/S/ TERRANCE GREGG
|
|
Executive Chairman of the Board of Directors
|
|
February 27, 2018
|
Terrance Gregg
|
|
|
|
|
|
|
|
||
/S/ MARK FOLETTA
|
|
Lead Independent Director
|
|
February 27, 2018
|
Mark Foletta
|
|
|
|
|
|
|
|
||
/S/ STEVE ALTMAN
|
|
Director
|
|
February 27, 2018
|
Steve Altman
|
|
|
|
|
|
|
|
||
/S/ NICHOLAS AUGUSTINOS
|
|
Director
|
|
February 27, 2018
|
Nicholas Augustinos
|
|
|
|
|
|
|
|
||
/S/ BARBARA KAHN
|
|
Director
|
|
February 27, 2018
|
Barbara Kahn
|
|
|
|
|
|
|
|
|
|
/S/ JAY SKYLER
|
|
Director
|
|
February 27, 2018
|
Jay Skyler, M.D.
|
|
|
|
|
|
|
|
|
|
/S/ ERIC TOPOL
|
|
Director
|
|
February 27, 2018
|
Eric Topol, M.D.
|
|
|
|
|
|
|
|
||
/S/ RICHARD COLLINS
|
|
Director
|
|
February 27, 2018
|
Richard Collins
|
|
|
|
|
|
|
|
|
Report of Independent Registered Public Accounting Firm
|
|
|
F-2
|
|
Consolidated Balance Sheets
|
|
|
F-3
|
|
Consolidated Statements of Operations
|
|
|
F-4
|
|
Consolidated Statements of Comprehensive Loss
|
|
|
F-5
|
|
Consolidated Statements of Stockholders’ Equity
|
|
|
F-6
|
|
Consolidated Statements of Cash Flows
|
|
|
F-7
|
|
Notes to Consolidated Financial Statements
|
|
|
F-8
|
|
|
As of December 31,
|
||||||
|
2017
|
|
2016
|
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
441.5
|
|
|
$
|
94.5
|
|
Short-term marketable securities, available-for-sale
|
107.1
|
|
|
29.2
|
|
||
Accounts receivable, net
|
134.3
|
|
|
101.7
|
|
||
Inventory
|
45.2
|
|
|
45.4
|
|
||
Prepaid and other current assets
|
16.6
|
|
|
9.2
|
|
||
Total current assets
|
744.7
|
|
|
280.0
|
|
||
Property and equipment, net
|
145.6
|
|
|
109.4
|
|
||
Goodwill
|
12.1
|
|
|
11.3
|
|
||
Other assets
|
1.7
|
|
|
2.1
|
|
||
Total assets
|
$
|
904.1
|
|
|
$
|
402.8
|
|
Liabilities and stockholders’ equity
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable and accrued liabilities
|
$
|
87.2
|
|
|
$
|
68.1
|
|
Accrued payroll and related expenses
|
48.5
|
|
|
33.4
|
|
||
Deferred revenue
|
3.2
|
|
|
0.9
|
|
||
Total current liabilities
|
138.9
|
|
|
102.4
|
|
||
Other liabilities
|
18.2
|
|
|
16.6
|
|
||
Long term senior convertible notes
|
327.6
|
|
|
—
|
|
||
Total liabilities
|
484.7
|
|
|
119.0
|
|
||
Commitments and contingencies (Note 5)
|
|
|
|
||||
Stockholders’ equity:
|
|
|
|
||||
Preferred stock, $0.001 par value, 5.0 shares authorized; no shares issued and outstanding at December 31, 2017 and December 31, 2016, respectively
|
—
|
|
|
—
|
|
||
Common stock, $0.001 par value, 200.0 authorized; 87.3 and 87.0 issued and outstanding, respectively, at December 31, 2017; and 100.0 authorized; 84.9 and 84.6 shares issued and outstanding, respectively, at December 31, 2016
|
0.1
|
|
|
0.1
|
|
||
Additional paid-in capital
|
1,093.7
|
|
|
905.7
|
|
||
Accumulated other comprehensive loss
|
(2.6
|
)
|
|
(1.0
|
)
|
||
Accumulated deficit
|
(671.8
|
)
|
|
(621.0
|
)
|
||
Total stockholders’ equity
|
419.4
|
|
|
283.8
|
|
||
Total liabilities and stockholders’ equity
|
$
|
904.1
|
|
|
$
|
402.8
|
|
|
Years Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Product revenue
|
$
|
718.5
|
|
|
$
|
573.3
|
|
|
$
|
400.7
|
|
Development grant and other revenue
|
—
|
|
|
—
|
|
|
1.3
|
|
|||
Total revenue
|
718.5
|
|
|
573.3
|
|
|
402.0
|
|
|||
Cost of sales
|
226.4
|
|
|
194.9
|
|
|
123.6
|
|
|||
Gross profit
|
492.1
|
|
|
378.4
|
|
|
278.4
|
|
|||
Operating expenses
|
|
|
|
|
|
||||||
Research and development
|
185.4
|
|
|
156.1
|
|
|
137.5
|
|
|||
Selling, general and administrative
|
349.2
|
|
|
286.2
|
|
|
198.0
|
|
|||
Total operating expenses
|
534.6
|
|
|
442.3
|
|
|
335.5
|
|
|||
Operating loss
|
(42.5
|
)
|
|
(63.9
|
)
|
|
(57.1
|
)
|
|||
Other income (expense)
|
3.4
|
|
|
(0.7
|
)
|
|
—
|
|
|||
Interest income
|
3.3
|
|
|
0.4
|
|
|
—
|
|
|||
Interest expense
|
(12.8
|
)
|
|
(0.7
|
)
|
|
(0.4
|
)
|
|||
Loss before income taxes
|
(48.6
|
)
|
|
(64.9
|
)
|
|
(57.5
|
)
|
|||
Income tax expense
|
1.6
|
|
|
0.7
|
|
|
0.1
|
|
|||
Net loss
|
$
|
(50.2
|
)
|
|
$
|
(65.6
|
)
|
|
$
|
(57.6
|
)
|
Basic and diluted net loss per share
|
$
|
(0.58
|
)
|
|
$
|
(0.78
|
)
|
|
$
|
(0.72
|
)
|
Shares used to compute basic and diluted net loss per share
|
86.3
|
|
|
83.6
|
|
|
79.8
|
|
|
|
Years Ended December 31,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
Net loss
|
|
$
|
(50.2
|
)
|
|
$
|
(65.6
|
)
|
|
$
|
(57.6
|
)
|
Unrealized loss on short-term available-for-sale marketable securities
|
|
(0.2
|
)
|
|
—
|
|
|
—
|
|
|||
Foreign currency translation loss
|
|
(1.4
|
)
|
|
(0.7
|
)
|
|
(0.2
|
)
|
|||
Comprehensive loss
|
|
$
|
(51.8
|
)
|
|
$
|
(66.3
|
)
|
|
$
|
(57.8
|
)
|
|
|
Common stock
|
|
Additional
paid-in
capital
|
|
Accumulated
other
comprehensive
loss
|
|
Accumulated
deficit
|
|
Total
stockholders’
equity
|
|||||||||||||
Shares
|
|
Amount
|
|
||||||||||||||||||||
Balance at December 31, 2014
|
|
77.3
|
|
|
$
|
0.1
|
|
|
$
|
638.0
|
|
|
$
|
(0.1
|
)
|
|
$
|
(497.8
|
)
|
|
$
|
140.2
|
|
Issuance of common stock under equity incentive plans
|
|
3.9
|
|
|
—
|
|
|
15.3
|
|
|
—
|
|
|
—
|
|
|
15.3
|
|
|||||
Issuance of common stock for Employee Stock Purchase Plan
|
|
0.1
|
|
|
—
|
|
|
3.8
|
|
|
—
|
|
|
—
|
|
|
3.8
|
|
|||||
Issuance of common stock related to Verily Collaboration Agreement
|
|
0.4
|
|
|
—
|
|
|
36.5
|
|
|
—
|
|
|
—
|
|
|
36.5
|
|
|||||
Share-based compensation for employee stock option and award grants
|
|
—
|
|
|
—
|
|
|
83.2
|
|
|
—
|
|
|
—
|
|
|
83.2
|
|
|||||
Net loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(57.6
|
)
|
|
(57.6
|
)
|
|||||
Other comprehensive loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.2
|
)
|
|
—
|
|
|
(0.2
|
)
|
|||||
Balance at December 31, 2015
|
|
81.7
|
|
|
0.1
|
|
|
776.8
|
|
|
(0.3
|
)
|
|
(555.4
|
)
|
|
221.2
|
|
|||||
Issuance of common stock under equity incentive plans
|
|
2.7
|
|
|
—
|
|
|
4.4
|
|
|
—
|
|
|
—
|
|
|
4.4
|
|
|||||
Issuance of common stock for Employee Stock Purchase Plan
|
|
0.1
|
|
|
—
|
|
|
6.0
|
|
|
—
|
|
|
—
|
|
|
6.0
|
|
|||||
Issuance of common stock in connection with acquisition
|
|
0.1
|
|
|
—
|
|
|
7.2
|
|
|
—
|
|
|
—
|
|
|
7.2
|
|
|||||
Share-based compensation for employee stock option and award grants
|
|
—
|
|
|
—
|
|
|
111.3
|
|
|
—
|
|
|
—
|
|
|
111.3
|
|
|||||
Net loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(65.6
|
)
|
|
(65.6
|
)
|
|||||
Other comprehensive loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.7
|
)
|
|
—
|
|
|
(0.7
|
)
|
|||||
Balance at December 31, 2016
|
|
84.6
|
|
|
0.1
|
|
|
905.7
|
|
|
(1.0
|
)
|
|
(621.0
|
)
|
|
283.8
|
|
|||||
Issuance of common stock under equity incentive plans
|
|
2.3
|
|
|
—
|
|
|
2.7
|
|
|
—
|
|
|
—
|
|
|
2.7
|
|
|||||
Issuance of common stock for Employee Stock Purchase Plan
|
|
0.1
|
|
|
—
|
|
|
7.4
|
|
|
—
|
|
|
—
|
|
|
7.4
|
|
|||||
Share-based compensation for employee stock option and award grants
|
|
—
|
|
|
—
|
|
|
106.7
|
|
|
—
|
|
|
—
|
|
|
106.7
|
|
|||||
Equity component of convertible note issuance, net of issuance costs
|
|
—
|
|
|
—
|
|
|
70.6
|
|
|
—
|
|
|
—
|
|
|
70.6
|
|
|||||
Adoption of ASU 2016-09
|
|
—
|
|
|
—
|
|
|
0.6
|
|
|
—
|
|
|
(0.6
|
)
|
|
—
|
|
|||||
Net loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(50.2
|
)
|
|
(50.2
|
)
|
|||||
Other comprehensive loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1.6
|
)
|
|
—
|
|
|
(1.6
|
)
|
|||||
Balance at December 31, 2017
|
|
87.0
|
|
|
$
|
0.1
|
|
|
$
|
1,093.7
|
|
|
$
|
(2.6
|
)
|
|
$
|
(671.8
|
)
|
|
$
|
419.4
|
|
|
Years Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Operating activities
|
|
|
|
|
|
||||||
Net loss
|
$
|
(50.2
|
)
|
|
$
|
(65.6
|
)
|
|
$
|
(57.6
|
)
|
Adjustments to reconcile net loss to cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
16.1
|
|
|
15.0
|
|
|
10.8
|
|
|||
Share-based compensation
|
106.2
|
|
|
110.8
|
|
|
82.7
|
|
|||
Non-cash interest expense
|
9.4
|
|
|
0.1
|
|
|
0.2
|
|
|||
Non-cash research and development charge through issuance of common stock
|
—
|
|
|
—
|
|
|
36.5
|
|
|||
Other non-cash expenses
|
7.9
|
|
|
2.2
|
|
|
0.8
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||||||
Accounts receivable, net
|
(31.8
|
)
|
|
(27.2
|
)
|
|
(31.7
|
)
|
|||
Inventory
|
0.4
|
|
|
(9.8
|
)
|
|
(19.2
|
)
|
|||
Prepaid and other assets
|
(6.7
|
)
|
|
(3.9
|
)
|
|
(2.5
|
)
|
|||
Restricted cash
|
—
|
|
|
—
|
|
|
1.0
|
|
|||
Accounts payable and accrued liabilities
|
21.1
|
|
|
21.1
|
|
|
17.8
|
|
|||
Accrued payroll and related expenses
|
14.8
|
|
|
8.5
|
|
|
7.7
|
|
|||
Deferred revenue
|
2.2
|
|
|
0.1
|
|
|
0.1
|
|
|||
Deferred rent and other liabilities
|
2.6
|
|
|
4.9
|
|
|
2.4
|
|
|||
Net cash provided by operating activities
|
92.0
|
|
|
56.2
|
|
|
49.0
|
|
|||
Investing activities
|
|
|
|
|
|
||||||
Purchase of available-for-sale marketable securities
|
(171.8
|
)
|
|
(39.2
|
)
|
|
(45.2
|
)
|
|||
Proceeds from the maturity of available-for-sale marketable securities
|
93.4
|
|
|
38.7
|
|
|
27.5
|
|
|||
Purchase of property and equipment
|
(66.0
|
)
|
|
(55.7
|
)
|
|
(33.3
|
)
|
|||
Acquisitions, net of cash acquired
|
—
|
|
|
0.3
|
|
|
(0.5
|
)
|
|||
Net cash used in investing activities
|
(144.4
|
)
|
|
(55.9
|
)
|
|
(51.5
|
)
|
|||
Financing activities
|
|
|
|
|
|
||||||
Net proceeds from issuance of common stock
|
10.1
|
|
|
10.4
|
|
|
19.1
|
|
|||
Proceeds from issuance of convertible debt, net of issuance costs
|
389.0
|
|
|
—
|
|
|
—
|
|
|||
Proceeds from short-term borrowings
|
75.0
|
|
|
—
|
|
|
—
|
|
|||
Repayment of short-term borrowings
|
(75.0
|
)
|
|
—
|
|
|
—
|
|
|||
Repayment of long-term debt
|
—
|
|
|
(2.3
|
)
|
|
(2.3
|
)
|
|||
Net cash provided by financing activities
|
399.1
|
|
|
8.1
|
|
|
16.8
|
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
0.3
|
|
|
—
|
|
|
—
|
|
|||
Increase in cash and cash equivalents
|
347.0
|
|
|
8.4
|
|
|
14.3
|
|
|||
Cash and cash equivalents, beginning of period
|
94.5
|
|
|
86.1
|
|
|
71.8
|
|
|||
Cash and cash equivalents, end of period
|
$
|
441.5
|
|
|
$
|
94.5
|
|
|
$
|
86.1
|
|
Supplemental disclosure of non-cash investing and financing transactions:
|
|
|
|
|
|
||||||
Issuance of common stock in connection with acquisition
|
$
|
—
|
|
|
$
|
7.2
|
|
|
$
|
—
|
|
Acquisition-related holdback liability
|
$
|
—
|
|
|
$
|
1.8
|
|
|
$
|
—
|
|
Assets acquired and financing obligation under build-to-suit leasing arrangement
|
$
|
—
|
|
|
$
|
6.0
|
|
|
$
|
—
|
|
Acquisition of property and equipment included in accounts payable and accrued liabilities
|
$
|
6.3
|
|
|
$
|
10.5
|
|
|
$
|
2.9
|
|
Cash paid during the year for interest
|
$
|
2.4
|
|
|
$
|
0.1
|
|
|
$
|
0.3
|
|
Cash paid during the year for taxes
|
$
|
1.4
|
|
|
$
|
0.1
|
|
|
$
|
0.1
|
|
|
Years Ended December 31,
|
|||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|||||||||||||||
|
Amount
|
|
%
of Total |
|
Amount
|
|
%
of Total |
|
Amount
|
|
%
of Total |
|||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
United States
|
$
|
596.2
|
|
|
83
|
%
|
|
$
|
497.5
|
|
|
87
|
%
|
|
$
|
347.4
|
|
|
86
|
%
|
Outside of the United States
|
122.3
|
|
|
17
|
%
|
|
75.8
|
|
|
13
|
%
|
|
54.6
|
|
|
14
|
%
|
|||
Total
|
$
|
718.5
|
|
|
100
|
%
|
|
$
|
573.3
|
|
|
100
|
%
|
|
$
|
402.0
|
|
|
100
|
%
|
|
Years Ended December 31,
|
|||||||
|
2017
|
|
2016
|
|
2015
|
|||
Options outstanding to purchase common stock
|
0.4
|
|
|
0.7
|
|
|
1.3
|
|
Unvested restricted stock units
|
2.7
|
|
|
3.7
|
|
|
4.1
|
|
Senior convertible notes
|
4.0
|
|
|
—
|
|
|
—
|
|
Total
|
7.1
|
|
|
4.4
|
|
|
5.4
|
|
|
December 31, 2017
|
||||||||||||||
|
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Estimated
Market
Value
|
||||||||
U.S. government agencies
|
$
|
87.5
|
|
|
$
|
—
|
|
|
$
|
(0.2
|
)
|
|
$
|
87.3
|
|
Commercial paper
|
14.7
|
|
|
—
|
|
|
—
|
|
|
14.7
|
|
||||
Corporate debt
|
5.1
|
|
|
—
|
|
|
—
|
|
|
5.1
|
|
||||
Total
|
$
|
107.3
|
|
|
$
|
—
|
|
|
$
|
(0.2
|
)
|
|
$
|
107.1
|
|
|
December 31, 2016
|
||||||||||||||
|
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Estimated
Market
Value
|
||||||||
U.S. government agencies
|
$
|
22.2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
22.2
|
|
Corporate debt
|
3.8
|
|
|
—
|
|
|
—
|
|
|
3.8
|
|
||||
Commercial paper
|
3.2
|
|
|
—
|
|
|
—
|
|
|
3.2
|
|
||||
Total
|
$
|
29.2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
29.2
|
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Accounts receivable
|
$
|
145.8
|
|
|
$
|
114.3
|
|
Less allowance for doubtful accounts, sales returns and discounts
|
(11.5
|
)
|
|
(12.6
|
)
|
||
Total
|
$
|
134.3
|
|
|
$
|
101.7
|
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Raw materials
|
$
|
20.0
|
|
|
$
|
20.1
|
|
Work-in-process
|
8.2
|
|
|
2.3
|
|
||
Finished goods
|
17.0
|
|
|
23.0
|
|
||
Total
|
$
|
45.2
|
|
|
$
|
45.4
|
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Building
(1)
|
$
|
6.0
|
|
|
$
|
6.0
|
|
Furniture and fixtures
|
5.7
|
|
|
5.8
|
|
||
Computer equipment
|
25.6
|
|
|
22.7
|
|
||
Machinery and equipment
|
33.8
|
|
|
31.4
|
|
||
Leasehold improvements
|
41.7
|
|
|
25.6
|
|
||
Construction in progress
(2)
|
87.6
|
|
|
65.1
|
|
||
Total
|
200.4
|
|
|
156.6
|
|
||
Accumulated depreciation
|
(54.8
|
)
|
|
(47.2
|
)
|
||
Property and equipment, net
|
$
|
145.6
|
|
|
$
|
109.4
|
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Accounts payable trade
(1)
|
$
|
46.7
|
|
|
$
|
41.1
|
|
Accrued tax, audit, and legal fees
|
7.1
|
|
|
4.5
|
|
||
Accrued rebates
|
13.9
|
|
|
8.2
|
|
||
Accrued warranty
|
8.8
|
|
|
9.8
|
|
||
Accrued other
(1)
|
10.7
|
|
|
4.5
|
|
||
Total
|
$
|
87.2
|
|
|
$
|
68.1
|
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Accrued paid time off
|
$
|
7.9
|
|
|
$
|
6.4
|
|
Accrued wages, bonus and taxes
|
37.6
|
|
|
24.5
|
|
||
Other accrued employee benefits
|
3.0
|
|
|
2.5
|
|
||
Total
|
$
|
48.5
|
|
|
$
|
33.4
|
|
|
Years Ended December 31,
|
||||||
|
2017
|
|
2016
|
||||
Beginning balance
|
$
|
9.8
|
|
|
$
|
3.3
|
|
Charges to costs and expenses
|
18.4
|
|
|
25.0
|
|
||
Costs incurred
|
(19.4
|
)
|
|
(18.5
|
)
|
||
Ending balance
|
$
|
8.8
|
|
|
$
|
9.8
|
|
|
December 31, 2017
|
|
December 31, 2016
|
||||
Financing lease obligations
|
$
|
6.7
|
|
|
$
|
6.7
|
|
Deferred rent
|
8.7
|
|
|
7.3
|
|
||
Other
|
2.8
|
|
|
2.6
|
|
||
Total
|
$
|
18.2
|
|
|
$
|
16.6
|
|
(in millions)
|
December 31, 2017
|
|
December 31, 2016
|
||||
0.75% Senior convertible notes due 2022:
|
|
|
|
||||
Principal amount
|
$
|
400.0
|
|
|
$
|
—
|
|
Unamortized debt discount
|
(64.4
|
)
|
|
—
|
|
||
Unamortized debt issuance costs
|
(8.0
|
)
|
|
—
|
|
||
Net carrying amount of senior convertible notes
|
$
|
327.6
|
|
|
$
|
—
|
|
Fair value of outstanding notes
|
$
|
381.3
|
|
|
$
|
—
|
|
•
|
during any calendar quarter commencing after September 30, 2017 (and only during such calendar quarter), if the last reported sale price of common stock for
|
•
|
at least
20
trading days (whether or not consecutive) during the period of
30
consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to
130%
of the applicable conversion price of the Notes on each such trading day;
|
•
|
during the
five
business day period after any
five
consecutive trading day period in which the trading price per
$1,000
principal amount of the Notes for each day of that
five
day consecutive trading day period was less than
98%
of the product of the last reported sale price of common stock and the applicable conversion rate of the Notes on such trading day;
|
•
|
if we call any or all of the Notes for redemption, at any time prior to the close on business on the scheduled trading day immediately preceding the redemption date; or
|
•
|
upon the occurrence of specified corporate transactions.
|
|
Fair Value Measurements Using
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Cash equivalents
|
$
|
306.6
|
|
|
$
|
38.0
|
|
|
$
|
—
|
|
|
$
|
344.6
|
|
Marketable securities, available for sale
|
|
|
|
|
|
|
|
||||||||
U.S. government agencies
|
—
|
|
|
87.3
|
|
|
—
|
|
|
87.3
|
|
||||
Commercial paper
|
—
|
|
|
14.7
|
|
|
—
|
|
|
14.7
|
|
||||
Corporate debt
|
—
|
|
|
5.1
|
|
|
—
|
|
|
5.1
|
|
||||
Total marketable securities, available for sale
|
$
|
—
|
|
|
$
|
107.1
|
|
|
$
|
—
|
|
|
$
|
107.1
|
|
|
Fair Value Measurements Using
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Cash equivalents
|
$
|
—
|
|
|
$
|
32.3
|
|
|
$
|
—
|
|
|
$
|
32.3
|
|
Marketable securities, available for sale
|
|
|
|
|
|
|
|
||||||||
U.S. government agencies
|
—
|
|
|
22.2
|
|
|
—
|
|
|
22.2
|
|
||||
Corporate debt
|
—
|
|
|
3.8
|
|
|
—
|
|
|
3.8
|
|
||||
Commercial paper
|
—
|
|
|
3.2
|
|
|
—
|
|
|
3.2
|
|
||||
Total marketable securities, available for sale
|
$
|
—
|
|
|
$
|
29.2
|
|
|
$
|
—
|
|
|
$
|
29.2
|
|
|
December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
United States
|
$
|
12.4
|
|
|
$
|
(44.4
|
)
|
|
$
|
(57.8
|
)
|
Outside of the United States
|
(61.0
|
)
|
|
(20.5
|
)
|
|
0.3
|
|
|||
Total
|
$
|
(48.6
|
)
|
|
$
|
(64.9
|
)
|
|
$
|
(57.5
|
)
|
|
December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Current:
|
|
|
|
|
|
||||||
Federal
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
State
|
0.1
|
|
|
0.1
|
|
|
0.1
|
|
|||
Foreign
|
1.5
|
|
|
0.8
|
|
|
—
|
|
|||
Total current income taxes
|
1.6
|
|
|
0.9
|
|
|
0.1
|
|
|||
Deferred:
|
|
|
|
|
|
||||||
Federal
|
—
|
|
|
(0.1
|
)
|
|
—
|
|
|||
State
|
—
|
|
|
—
|
|
|
—
|
|
|||
Foreign
|
—
|
|
|
(0.1
|
)
|
|
—
|
|
|||
Total deferred income taxes
|
—
|
|
|
(0.2
|
)
|
|
—
|
|
|||
Total
|
$
|
1.6
|
|
|
$
|
0.7
|
|
|
$
|
0.1
|
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Deferred tax assets:
|
|
|
|
||||
Net operating loss carryforwards
|
$
|
188.7
|
|
|
$
|
101.9
|
|
Capitalized research and development expenses
|
8.4
|
|
|
14.3
|
|
||
Tax credits
|
47.8
|
|
|
30.7
|
|
||
Share-based compensation
|
13.8
|
|
|
24.9
|
|
||
Fixed and intangible assets
|
0.4
|
|
|
—
|
|
||
Accrued liabilities and reserves
|
20.9
|
|
|
26.0
|
|
||
Total gross deferred tax assets
|
280.0
|
|
|
197.8
|
|
||
Less: valuation allowance
|
(263.5
|
)
|
|
(193.4
|
)
|
||
Deferred tax liability:
|
|
|
|
||||
Fixed assets and acquired intangibles assets
|
(0.1
|
)
|
|
(4.3
|
)
|
||
Convertible debt discount
|
(15.9
|
)
|
|
—
|
|
||
Unrealized exchange gain
|
(0.4
|
)
|
|
—
|
|
||
Net deferred tax asset (liability)
|
$
|
0.1
|
|
|
$
|
0.1
|
|
|
December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Income taxes at statutory rates
|
$
|
(17.0
|
)
|
|
$
|
(22.7
|
)
|
|
$
|
(20.1
|
)
|
State income tax, net of federal benefit
|
(0.7
|
)
|
|
1.2
|
|
|
(1.0
|
)
|
|||
Permanent items
|
0.7
|
|
|
0.8
|
|
|
0.3
|
|
|||
Research and development credits
|
(13.3
|
)
|
|
(11.7
|
)
|
|
(10.0
|
)
|
|||
Foreign rate differential
|
5.4
|
|
|
4.5
|
|
|
—
|
|
|||
Stock and officers compensation
|
(10.4
|
)
|
|
4.0
|
|
|
3.1
|
|
|||
Rate change
|
(0.1
|
)
|
|
(0.1
|
)
|
|
0.2
|
|
|||
Unrecognized tax benefits
|
(15.4
|
)
|
|
27.7
|
|
|
—
|
|
|||
Impact of Tax Cuts and Jobs Act of 2017
|
105.7
|
|
|
—
|
|
|
—
|
|
|||
Other
|
(2.2
|
)
|
|
—
|
|
|
0.2
|
|
|||
Change in valuation allowance
|
(51.1
|
)
|
|
(3.0
|
)
|
|
27.4
|
|
|||
Income taxes at effective rates
|
$
|
1.6
|
|
|
$
|
0.7
|
|
|
$
|
0.1
|
|
Balance at January 1, 2015
|
$
|
7.6
|
|
Increases related to prior year tax positions
|
2.6
|
|
|
Increase related to current year tax positions
|
5.4
|
|
|
Balance at December 31, 2015
|
15.6
|
|
|
Decreases related to prior year tax positions
|
(8.4
|
)
|
|
Increases related to current year tax positions
|
32.6
|
|
|
Balance at December 31, 2016
|
39.8
|
|
|
Decreases related to prior year tax positions
|
(14.9
|
)
|
|
Increases related to current year tax positions
|
3.3
|
|
|
Decrease related to Tax Cuts and Jobs Act of 2017
|
(5.4
|
)
|
|
Balance at December 31, 2017
|
$
|
22.8
|
|
|
Number of
Shares
|
|
Weighted-
Average
Exercise
Price
|
|
Weighted-
Average
Remaining
Contractual
Term
(years)
|
|
Aggregate
Intrinsic
Value
|
|||||
Outstanding at December 31, 2016
|
0.7
|
|
|
$
|
7.40
|
|
|
|
|
|
||
Exercised
|
(0.3
|
)
|
|
8.21
|
|
|
|
|
|
|||
Forfeited
|
—
|
|
|
—
|
|
|
|
|
|
|||
Outstanding at December 31, 2017
|
0.4
|
|
|
$
|
6.71
|
|
|
1.30
|
|
$
|
19.5
|
|
Exercisable at December 31, 2017
|
0.4
|
|
|
$
|
6.71
|
|
|
1.30
|
|
$
|
19.5
|
|
|
Years Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Intrinsic value of options exercised
|
$
|
21.6
|
|
|
$
|
39.9
|
|
|
$
|
125.8
|
|
|
Years Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Cost of sales
|
$
|
9.6
|
|
|
$
|
12.0
|
|
|
$
|
8.1
|
|
Research and development
|
37.5
|
|
|
39.8
|
|
|
28.5
|
|
|||
Selling, general and administrative
|
59.1
|
|
|
59.0
|
|
|
46.1
|
|
|||
Share-based compensation expense included in net loss
|
$
|
106.2
|
|
|
$
|
110.8
|
|
|
$
|
82.7
|
|
|
Years Ended December 31,
|
|||||||
|
2017
|
|
2016
|
|
2015
|
|||
Risk free interest rate
|
0.75 – 1.12
|
|
|
0.46 – 0.57
|
|
|
0.15 – 0.25
|
|
Dividend yield
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
Expected volatility of the Company’s stock
|
0.33 – 0.56
|
|
|
0.33 – 0.57
|
|
|
0.30 – 0.44
|
|
Expected life (in years)
|
1
|
|
|
1
|
|
|
1
|
|
|
Shares
|
|
Weighted
Average
Grant Date
Fair Value
|
|
Aggregate
Intrinsic Value
|
|||||
Nonvested at December 31, 2016
|
3.7
|
|
|
$
|
62.51
|
|
|
|
||
Granted
|
1.3
|
|
|
75.78
|
|
|
|
|||
Vested
|
(1.9
|
)
|
|
58.92
|
|
|
|
|||
Forfeited
|
(0.4
|
)
|
|
67.97
|
|
|
|
|||
Nonvested at December 31, 2017
|
2.7
|
|
|
$
|
70.68
|
|
|
$
|
154.5
|
|
|
December 31,
|
||||
|
2017
|
|
2016
|
||
Stock options and awards under our plans:
|
|
|
|
||
Stock options granted and outstanding
|
0.4
|
|
|
0.7
|
|
Unvested restricted stock units
|
2.7
|
|
|
3.7
|
|
Reserved for future grant
|
4.7
|
|
|
2.0
|
|
Employee Stock Purchase Plan
|
1.3
|
|
|
1.4
|
|
Total
|
9.1
|
|
|
7.8
|
|
|
|
For the Three Months Ended
|
||||||||||||||
|
|
December 31
|
|
September 30
|
|
June 30
|
|
March 31
|
||||||||
Year ended December 31, 2017
|
|
|
|
|
|
|
|
|
||||||||
Revenues
|
|
$
|
221.0
|
|
|
$
|
184.6
|
|
|
$
|
170.6
|
|
|
$
|
142.3
|
|
Gross profit
|
|
153.5
|
|
|
127.0
|
|
|
117.5
|
|
|
94.1
|
|
||||
Total operating expenses
|
|
141.5
|
|
|
127.5
|
|
|
131.1
|
|
|
134.5
|
|
||||
Net income (loss)
|
|
(9.4
|
)
|
|
(2.0
|
)
|
|
2.9
|
|
|
(41.7
|
)
|
||||
Basic and diluted net income (loss) per share
(a)
|
|
$
|
(0.11
|
)
|
|
$
|
(0.02
|
)
|
|
$
|
0.03
|
|
|
$
|
(0.49
|
)
|
Year ended December 31, 2016
|
|
|
|
|
|
|
|
|
||||||||
Revenues
|
|
$
|
171.2
|
|
|
$
|
148.6
|
|
|
$
|
137.3
|
|
|
$
|
116.2
|
|
Gross profit
|
|
116.7
|
|
|
101.1
|
|
|
85.5
|
|
|
75.1
|
|
||||
Total operating expenses
|
|
122.8
|
|
|
119.6
|
|
|
105.6
|
|
|
94.3
|
|
||||
Net loss
|
|
(7.4
|
)
|
|
(18.8
|
)
|
|
(20.2
|
)
|
|
(19.2
|
)
|
||||
Basic and diluted net loss per share
(a)
|
|
$
|
(0.09
|
)
|
|
$
|
(0.22
|
)
|
|
$
|
(0.24
|
)
|
|
$
|
(0.23
|
)
|
|
|
||
Allowance for doubtful accounts
|
|
||
Balance December 31, 2014
|
$
|
4.3
|
|
Provision for doubtful accounts
|
7.8
|
|
|
Write-off and adjustments
|
(4.5
|
)
|
|
Recoveries
|
0.2
|
|
|
Balance December 31, 2015
|
$
|
7.8
|
|
|
|
||
Allowance for doubtful accounts
|
|
||
Balance December 31, 2015
|
$
|
7.8
|
|
Provision for doubtful accounts
|
9.5
|
|
|
Write-off and adjustments
|
(5.6
|
)
|
|
Recoveries
|
0.7
|
|
|
Balance December 31, 2016
|
$
|
12.4
|
|
|
|
||
Allowance for doubtful accounts
|
|
||
Balance December 31, 2016
|
$
|
12.4
|
|
Provision for doubtful accounts
|
5.3
|
|
|
Write-off and adjustments
|
(7.0
|
)
|
|
Recoveries
|
0.7
|
|
|
Balance December 31, 2017
|
$
|
11.4
|
|
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