Stock-Based Compensation

12 Months Ended

Dec. 31, 2021

Share-based Payment Arrangement [Abstract]

STOCK-BASED COMPENSATIONOn November 30, 2017, the Company’s stockholders approved the adoption of the 2017 Employee, Director and Consultant Equity Incentive Plan, as amended (the “2017 Plan”). The 2017 Plan allows the Company, under the direction of the Compensation and Human Capital Committee of the Board of Directors, to make grants of restricted and unrestricted stock and stock unit awards to employees, consultants and directors. Stockholders have approved amendments to the 2017 Plan increasing the shares available to grant under the 2017 Plan. The 2017 Plan allows for issuance of up to 4.6 million shares of common stock, with 3.6 million shares available for grant as of December 31, 2021. If an RSU awarded under the 2017 Plan is cancelled or forfeited without the issuance of shares of common stock, the unissued or reacquired shares that were subject to the RSU will again be available for issuance pursuant to the 2017 Plan. To the extent that awards outstanding under the Company's prior equity plans expire or are cancelled without delivery of shares of common stock, they will also be available for issuance pursuant to the 2017 Plan.

The number of shares, terms, and vesting periods are determined by the Company’s Board of Directors or a committee thereof on an award-by-award basis. RSUs granted to employees generally vest ratably over four years either on the anniversary of the date on which the RSUs were granted or during the month in which the anniversary occurs. The number of RSUs awarded to certain employees may be increased or reduced based on certain additional performance metrics. Options and RSUs granted to our non-employee directors vest in full upon the earlier of the completion of one year of service following the date of the grant or the date of the next annual meeting of stockholders following such grant. Options generally vest ratably over service periods of four years. Options granted generally expire ten years from the date of grant. Options granted to the Company's President and Chief Executive Officer as an inducement to his employment expire seven years from the grant date.

The number of RSUs awarded to certain executive officers and other senior positions that ultimately vest may be increased or reduced based on certain additional performance and market conditions. The performance and market conditions associated with awards granted during the year ended December 31, 2021 include vesting that is based 50% on achieving certain levels of earnings per share targets, and 50% based on achieving certain performance targets compared to the performance of the Nasdaq Health Care Index. The Company estimates the likelihood of achievement of performance conditions at the end of each period. During the transition period ended December 31, 2020, the Company granted stock-based awards to the Company's President and Chief Executive Officer as an inducement material to his commencement of employment and entry into an employment agreement with the Company. The inducement awards are included in the tables presented below.

Stock Options

A summary of option activity under the Company's equity plans, including the Company's inducement awards, is as follows for the year ended December 31, 2021:


(number of shares in millions)	Number of shares	Weighted average exercise price		Weighted average remaining contractual life (years)
Options outstanding at beginning of period	5.2	$	23.24
Options granted	—	—
Less:
Options exercised	(3.7)	24.26
Options canceled or expired	(0.1)	25.18
Options outstanding at end of period	1.4	20.36		3.08
Options exercisable at end of period	1.0	23.07		2.09
Options vested and expected to vest	1.4	20.36		3.08

There were no options granted during the years ended December 31, 2021, June 30, 2020, and June 30, 2019. During the transition period ended December 31, 2020, 0.7 million options were granted to the Company's President and Chief Executive Officer, with a weighted average grant fair value of $13.38.

The following table summarizes information about stock options outstanding at December 31, 2021 (number of shares in millions):


	Options outstanding
Range of exercise prices	Number outstanding at December 31, 2021	Weighted average remaining contractual life (years)	Weighted average exercise price
$13.38	0.7	5.62	$	13.38
$23.98	0.1	0.18	23.98
$27.07 - 36.55	0.6	0.74	27.25
	1.4	3.08	$	20.38

Restricted Stock Units

A summary of the RSU activity under the Company's equity plans, including the Company's inducement awards and RSU awards with performance metrics, is as follows for the year ended December 31, 2021:


	2021
(number of shares in millions)	Number of shares	Weighted average grant date fair value
RSUs unvested and outstanding at beginning of period	3.2	$	20.56
RSUs granted	1.8	29.83
Less:
RSUs vested	(1.1)	21.32
RSUs canceled	(0.8)	24.48
RSUs unvested and outstanding at end of period	3.1	$	24.96

The weighted average grant-date fair value of restricted stock units granted during the year ended December 31, 2021, the transition period ended December 31, 2020, and the years ended June 30, 2020, and June 30, 2019 was $29.83, $13.69, $27.96 and $46.62, respectively.

The fair value of restricted stock units that vested during the year ended December 31, 2021, the transition period ended December 31, 2020, and the years ended June 30, 2020, and June 30, 2019 was $22.6 million, $29.1 million, $32.4 million and $27.6 million, respectively.

Stock-based compensation expense recognized and included in the Consolidated Statements of Operations was allocated as follows:


	Year Ended December 31,		Six-month Transition Period Ended December 31,		Years Ended June 30,
(in millions)	2021		2020		2020		2019
Cost of molecular diagnostic testing	$	1.5	$	0.6	$	1.2	$	0.8
Cost of pharmaceutical and clinical services	0.1		0.1		0.3		0.2
Research and development expense	4.2		2.4		5.0		5.4
Selling, general, and administrative expense	30.5		11.8		18.7		27.1
Total stock-based compensation expense	$	36.3	$	14.9	$	25.2	$	33.5

As of December 31, 2021, there was $61.7 million of total unrecognized stock-based compensation expense that will be recognized over a weighted-average period of 2.3 years. We expect all unvested awards to vest, and we recognize forfeitures as they occur.

The aggregate intrinsic value of options outstanding, aggregate intrinsic value of options that are fully vested and aggregate intrinsic value of RSUs vested and expected to vest is as follows:


(in millions)	As of December 31, 2021
Aggregate intrinsic value of options outstanding	$	10.2
Aggregate intrinsic value of options fully vested	4.6
Aggregate intrinsic value of RSUs outstanding	86.3

The total intrinsic value of options exercised was as follows:


	Year Ended December 31,		Six-month Transition Period Ended December 31,		Years Ended June 30,
(in millions)	2021		2020		2020		2019
Total intrinsic value of options exercised	$	29.2	$	0.5	$	8.8	$	0.4

Employee Stock Purchase Plan

The Company also has an Employee Stock Purchase Plan that was approved by stockholders in 2012 (the “2012 Purchase Plan”), under which 2.0 million shares of common stock have been authorized. On September 23, 2021, the Board of Directors of the Company approved an amended and restated 2012 Employee Stock Purchase Plan, which authorizes an additional 2.0 million shares of common stock and extends the term of the 2012 Purchase Plan to November 30, 2032, subject in each case to obtaining stockholder approval. The amended and restated 2012 Employee Stock Purchase Plan also amended certain provisions of the 2012 Purchase Plan effective upon approval by the Board of Directors, including expanding the definition of "offering period" to provide that the Board of Directors may determine the period in accordance with the terms of the plan, and capping the number of shares that may be purchased by any participant during an offering period at 5,000 shares. Shares are issued under the 2012 Purchase Plan twice yearly at the end of each offering period. At December 31, 2021, a total of approximately 2.0 million shares of common stock had been purchased under the 2012 Purchase Plan. Shares purchased under and compensation expense associated with the 2012 Purchase Plan for the years reported are as follows:


	Year Ended December 31,		Six-month Transition Period Ended December 31,		Years Ended June 30,
(in millions)	2021		2020		2020		2019
Shares purchased under the plans	0.2		0.1		0.3		0.2
Plan compensation expense	$	1.5	$	0.6	$	1.7	$	1.0

The fair value of shares issued under the Plan that was in effect for each period reported was calculated using the Black‑Scholes option-pricing model using the following weighted-average assumptions:


	Year Ended December 31,	Six-month Transition Period Ended December 31,	Years Ended June 30,
	2021	2020	2020	2019
Risk-free interest rate	0.1%	0.2%	1.8%	2.1%
Expected dividend yield	—%	—%	—%	—%
Expected life (in years)	0.5	0.5	0.5	0.5
Expected volatility	60%	94%	99%	55%