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Commitment and Contingencies | 3 Months Ended
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Mar. 31, 2021
Commitments and Contingencies Disclosure [Abstract] |
Commitments and Contingencies | Commitments and Contingencies Leases As of March 31, 2021, the Company leases office and laboratory space in Vista, California, under leases that expire in January 2026, with an option to extend a portion of the lease for an additional 5-year period. In addition, the Company also leases additional office space in Vista, California, under a lease that expires in January 2026 with an option to extend the lease for an additional 5-year period. The Company's lease payments under each of these leases are subject to escalation clauses. For the three months ended March 31, 2021 and 2020, rent expense was $0.2 million and $0.1 million, respectively. Acquisition-related liabilities In connection with the acquisition of the medical diagnostics division of Cypress Bioscience, Inc. in 2010, the Company was required to pay certain amounts in the event that certain revenue milestones were achieved and upon the first commercial sale of a product associated with this acquisition. The acquisition also included amounts that may be due under several licensing agreements. As of March 31, 2021 and December 31, 2020, the remaining milestone obligation is for an additional $2.0 million payment due to Prometheus Laboratories, Inc. (Prometheus) for which the fair value was determined to be zero at March 31, 2021 and December 31, 2020. In addition, the Company has ongoing royalty payment obligations on net sales of products which incorporate certain acquired technologies of 2.5%. Future royalties payable under these arrangements are limited to the lesser of an aggregate of $1.2 million (including an upfront payment of $100,000) or the total royalties earned through January 1, 2024. Licensing Agreements The Company has licensed technology for use in its diagnostic tests. In addition to the milestone payments required by these agreements as described above, individual license agreements generally provide for ongoing royalty payments on net sales of products which incorporate licensed technology, as defined, ranging from 2.0% to 3.0%. Royalties are accrued when earned and recorded in costs of revenue in the accompanying condensed statement of operations. Subsequent to the first quarter of 2021, the Company entered into an exclusive license agreement with Allegheny Health Network Research Institute, or AHN, to obtain an exclusive license to AHN's patent rights in certain inventions, or the AGN Patent Rights, in May 2021, pursuant to which the Company is required to pay AHN an initial license fee of $0.4 million. Supply Agreement In September 2020, the Company entered into an amended supply agreement with one supplier for reagents which includes minimum annual purchase commitments of $4.1 million and $6.0 million for the years ended December 31, 2021 and 2022, respectively, with a 15% annual increase thereafter through the year ended December 31, 2025. Collaboration Obligations Subsequent to the first quarter 2021, the Company entered into a master research collaboration agreement with AHN in May 2021, pursuant to which the Company is required to pay AGN a collaboration fee of $0.4 million for each year during the initial term of the agreement. Contingencies In the normal course of business, the Company enters into contracts and agreements that contain a variety of representations and warranties and provide for general indemnifications; including subpoenas and other civil investigative demands, from governmental agencies, Medicare or Medicaid payors and managed care organizations reviewing billing practices or requesting comment on allegations of billing irregularities that are brought to their attention through billing audits or third parties. The Company's exposure under these agreements is unknown because it involves claims that may be made against the Company in the future, but have not yet been made or of which of the Company believes to be immaterial. The Company accrues a liability for such matters when it is probable that future expenditures will be made and such expenditures can be reasonably estimated. Litigation From time to time, the Company may be subject to various legal proceedings that arise in the ordinary course of business activities.

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