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Discontinued Operations | 6 Months Ended
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Jun. 30, 2025
Discontinued Operations and Disposal Groups [Abstract] |
Discontinued Operations | 3. Discontinued Operations As described in Note 1, Basis of Presentation and Summary of Significant Accounting Policies, on June 22, 2025, the Company entered into the Purchase Agreement with Illumina for the divestiture of the SomaScan Business. SomaLogic had previously entered into a collaboration agreement with Illumina in December 2021 for the joint development and commercialization of co-branded kits combining Illumina's Next Generation Sequencing technology with SomaScan technology (as amended, the "Collaboration Agreement"). Additionally, on June 22, 2025, SomaLogic and Illumina executed an amendment to the Collaboration Agreement that provides additional non-exclusive, royalty-free licenses to certain intellectual property. The amendment does not impact the transaction price, performance obligations, or timing of revenue recognition under ASC 606. Illumina's acquisition of the SomaScan Business is intended to facilitate more effective execution of this collaboration strategy, and the Collaboration Agreement will be settled upon closing of the Transaction. Illumina has agreed to acquire the SomaScan Business for aggregate cash consideration of up to $425 million, comprising (i) an upfront payment of $350 million in cash, payable at the closing of the Transaction, subject to adjustment as set forth in the Purchase Agreement, and (ii) up to $75 million in earnout payments, payable upon the achievement of specified targets for net revenue generated from SomaScan assay services or any other SOMAmer-based assay services and sales of SOMAmer-based array kits and SOMAmer-based next-generation sequencing library preparation kits in fiscal years 2025 and 2026. In addition, the Purchase Agreement contemplates that, at the closing of the Transaction, as additional consideration, the Company and Illumina will enter into (i) a royalty agreement, pursuant to which the Company will be entitled to a specified royalty stream on net revenues generated from sales of SOMAmer-based next-generation sequencing library preparation kits, (ii) a license agreement, pursuant to which Illumina will provide a specified license to the Company for the intellectual property relating to Single SOMAmers for potential development and commercialization of Single SOMAmer reagents for use in single plex affinity assays and (iii) a royalty agreement, pursuant to which the Company will be entitled to a specified royalty stream on net revenues generated from sales of Single SOMAmers. The royalty rates are expected be low- to mid-single digit percentages. The consummation of the Transaction is subject to customary closing conditions, including, among others, the expiration or termination of the applicable waiting period (and any extension thereof) under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. The Company expects the Transaction to close in the first half of 2026. The Purchase Agreement also includes customary termination provisions, including, among others, the ability of the Company or Illumina to terminate the Purchase Agreement if the Transaction has not been consummated on or before March 23, 2026, subject to up to three automatic three-month extensions under certain circumstances. If the Purchase Agreement is terminated under specified circumstances, Illumina will be required to pay the Company a reverse termination fee in cash equal to $14.5 million. Details of loss from discontinued operations included in the condensed consolidated statements of operations are as follows:
|  | Three Months Ended June 30, |  |  | Six Months Ended June 30, |
|  | 2025 |  |  | 2024 |  |  | 2025 |  |  | 2024 |
Revenue |  | $ | 20,200 |  |  | $ | 14,713 |  |  | $ | 40,773 |  |  | $ | 38,600 |
Cost of revenue |  |  | 11,552 |  |  |  | 10,176 |  |  |  | 23,432 |  |  |  | 20,904 |
Gross profit |  |  | 8,648 |  |  |  | 4,537 |  |  |  | 17,341 |  |  |  | 17,696 |
Selling, general and administrative expenses |  |  | 8,216 |  |  |  | 12,818 |  |  |  | 17,099 |  |  |  | 33,342 |
Research and development |  |  | 5,850 |  |  |  | 11,977 |  |  |  | 11,738 |  |  |  | 20,350 |
Transaction expenses(1) |  |  | 10,507 |  |  |  | - |  |  |  | 10,507 |  |  |  | - |
Other (income) expense, net |  |  | (14 | ) |  |  | - |  |  |  | (3,397 | ) |  |  | - |
Total operating expenses |  | $ | 24,559 |  |  | $ | 24,795 |  |  | $ | 35,947 |  |  | $ | 53,692 |
Loss from discontinued operations before income taxes |  |  | (15,911 | ) |  |  | (20,258 | ) |  |  | (18,606 | ) |  |  | (35,996 | )
Income tax benefit (expense) |  |  | 125 |  |  |  | (16 | ) |  |  | 157 |  |  |  | (31 | )
Loss from discontinued operations, net of tax |  | $ | (15,786 | ) |  | $ | (20,274 | ) |  | $ | (18,449 | ) |  | $ | (36,027 | )
(1) Transaction expenses relate directly to costs that are attributable to the sale of the SomaScan Business. Details of assets and liabilities held for sale included in the condensed consolidated balance sheets are as follows:
|  | June 30, 2025 |  |  | December 31, 2024 |
ASSETS |  |  |  |  |  |
Accounts receivable, net |  | $ | 20,596 |  |  | $ | 18,867 |
Inventory |  |  | 39,746 |  |  |  | 38,520 |
Property, plant and equipment, net |  |  | 16,888 |  |  |  | 19,781 |
Operating lease right-of-use assets, net |  |  | 1,602 |  |  |  | 2,261 |
Intangible assets, net |  |  | 27,239 |  |  |  | 28,954 |
Goodwill(2) |  |  | 111,924 |  |  |  | 111,297 |
Other assets |  |  | 5,094 |  |  |  | 6,715 |
Total assets held for sale |  | $ | 223,089 |  |  | $ | 226,395 |
LIABILITIES |  |  |  |  |  |
Accounts payable |  | $ | 4,150 |  |  | $ | 7,231 |
Accrued liabilities |  |  | 8,530 |  |  |  | 9,307 |
Operating lease liabilities |  |  | 1,604 |  |  |  | 2,301 |
Deferred revenue(1) |  |  | 1,430 |  |  |  | 2,844 |
Other liabilities |  |  | 2,270 |  |  |  | 5,900 |
Total liabilities |  | $ | 17,984 |  |  | $ | 27,583 |
(1) As of June 30, 2025 and December 31, 2024, $30.0 million of deferred revenue related to the Collaboration Agreement was not included in the disposal group held for sale as SomaLogic's obligation to provide SOMAmer reagents under the Collaboration Agreement will be settled upon closing of the Transaction, and will not be transferred to Illumina as a legal obligation. See Note 4 in the 2024 Financial Statements for more details about the deferred revenue related to the Collaboration Agreement. (2) In connection with the classification of the SomaScan Business as discontinued operations, the Company allocated $111.9 million of goodwill, representing 100% of the Company's total goodwill, to the discontinued operations. The allocation was determined based on the relative fair values of the disposal group and the remaining business, consistent with guidance in ASC 350-20. The fair value of the disposal group was determined based on the agreed-upon sale proceeds of $350.0 million plus the estimated fair value of contingent consideration totaling $396.9 million. The fair value of the contingent consideration was estimated using a Monte Carlo simulation model that incorporated probability-weighted scenarios based on the underlying performance metrics and payment terms. The fair value of the remaining business was determined using the Company's market capitalization, adjusted for cash and cash equivalents and short-term investments, as of June 22, 2025, which is supported by Level 1 inputs under the fair value hierarchy in ASC 820. Based on this relative fair value assessment, the disposal group represented more than 100% of the total enterprise value, resulting in the allocation of all goodwill to the discontinued operations. This allocation reflects that the expected transaction proceeds exceed the market's valuation of the Company's total enterprise value, indicating that substantially all of the Company's goodwill should be allocated to the divested business. As a result of allocating 100% of goodwill to the discontinued operations based on the relative fair value analysis described above, the Company performed an impairment assessment of its remaining long-lived assets in accordance with ASC 360-10-35. The Company conducted a recoverability test by comparing the carrying amount of the remaining long-lived assets to the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the Company’s remaining asset group. Based on this analysis, the undiscounted cash flows from the remaining asset group exceeded the carrying value of its long-lived assets, and accordingly, no impairment charge was recognized during the three or six months ended June 30, 2025. Details of non-cash operating expenses and capital expenditures of the discontinued operations are as follows:
|  | Six Months Ended June 30, |
|  | 2025 |  |  | 2024 |
Depreciation and amortization |  | $ | 2,356 |  |  | $ | 4,234 |
Amortization of acquired intangible assets |  |  | 1,715 |  |  |  | 1,415 |
Capital expenditures |  |  | 1,644 |  |  |  | 2,089 |
Stock-based compensation expense |  |  | 1,975 |  |  |  | 11,363 |
Non-cash lease expense |  |  | 649 |  |  |  | 930 |

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- Definition The entire disclosure related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 205 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/205-20/tableOfContent Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 360 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/360/tableOfContent + Details
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