Document and Entity Information - USD ($) $ in Millions	12 Months Ended
Document and Entity Information - USD ($) $ in Millions	Dec. 31, 2018	Feb. 28, 2019	Jun. 29, 2018
Document And Entity Information [Abstract]
Document Type	10-K
Amendment Flag	false
Document Period End Date	Dec. 31, 2018
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	FY
Trading Symbol	NSTG
Entity Registrant Name	NANOSTRING TECHNOLOGIES INC
Entity Central Index Key	0001401708
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		31,085,236
Entity Public Float			$ 295.2

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Current assets:
Cash and cash equivalents	$ 24,356	$ 26,136
Short-term investments	69,641	51,419
Accounts receivable, net	17,279	19,564
Inventory, net	13,173	20,057
Prepaid expenses and other current assets	7,258	4,745
Total current assets	131,707	121,921
Restricted cash	0	143
Property and equipment, net	15,171	14,057
Other assets	680	641
Total assets	147,558	136,762
Current liabilities:
Accounts payable	8,636	4,092
Accrued liabilities	3,705	4,507
Employee-related Liabilities, Current	12,060	8,634
Customer Deposits	8,167	8,945
Deferred revenue, current portion	9,890	9,229
Deferred rent, current portion	657	512
Total current liabilities	43,115	35,919
Deferred revenue, net of current portion	1,620	3,304
Deferred rent and other liabilities, net of current portion	7,558	8,499
Long-term debt, net of discounts	58,396	48,931
Total liabilities	110,689	96,653
Commitments and contingencies (Note 14)
Stockholders’ equity
Preferred stock, $0.0001 par value, 15,000 shares authorized; none issued	0	0
Common stock, $0.0001 par value, 150,000 shares authorized; 30,913 and 25,421 shares issued and outstanding at December 31, 2018 and 2017, respectively	3	2
Additional paid-in-capital	428,162	353,308
Other comprehensive loss	(40)	(99)
Accumulated deficit	(391,256)	(313,102)
Total stockholders’ equity	36,869	40,109
Total liabilities and stockholders’ equity	$ 147,558	$ 136,762

Consolidated Balance Sheets (Parenthetical) - $ / shares	Dec. 31, 2018	Dec. 31, 2017
Statement of Financial Position [Abstract]
Preferred stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Preferred stock, shares authorized (in shares)	15,000,000	15,000,000
Preferred stock, shares issued (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized (in shares)	150,000,000	150,000,000
Common stock, shares issued (in shares)	30,913,397	25,420,526
Common stock, shares outstanding (in shares)	30,913,397	25,420,526

Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Revenue:
Revenue	$ 106,732	$ 114,905	$ 86,489
Total revenue	106,732	114,905	86,489
Costs and expenses:
Cost of product and service revenue	36,331	31,880	30,245
Research and development	61,599	46,888	34,720
Selling, general and administrative	78,195	74,334	62,700
Total costs and expenses	176,125	153,102	127,665
Loss from operations	(69,393)	(38,197)	(41,176)
Other income (expense):
Interest income	1,331	809	390
Interest expense	(7,431)	(6,153)	(5,672)
Other income (expense)	(1,658)	183	(515)
Total other income (expense)	(7,758)	(5,161)	(5,797)
Net loss before provision for income taxes	(77,151)	(43,358)	(46,973)
Provision for income taxes	(249)	(204)	(116)
Net loss	$ (77,400)	$ (43,562)	$ (47,089)
Net loss per share-basic and diluted (in dollars per share)	$ (2.78)	$ (1.84)	$ (2.34)
Weighted average shares used in computing basic and diluted net loss per share (in shares)	27,883	23,731	20,116

Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Statement of Comprehensive Income [Abstract]
Net loss	$ (77,400)	$ (43,562)	$ (47,089)
Other comprehensive income (loss):
Change in unrealized gain (loss) on short-term investments	59	(42)	(28)
Comprehensive loss	$ (77,341)	$ (43,604)	$ (47,117)

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References + Details

Consolidated Statements of Changes in Stockholders' Equity - USD ($)
$ in Thousands

Total

Common Stock

Additional Paid-in Capital

Other Comprehensive Loss

Accumulated Deficit

Balance at (in shares) at Dec. 31, 2015

19,570,000

Balances at at Dec. 31, 2015

$ 20,215

$ 2

$ 242,693

$ (29)

$ (222,451)

Increase (Decrease) in Stockholders' Equity [Roll Forward]

Issuance of common stock net of issuance costs (in shares)

1,333,000

Issuance of common stock net of issuance costs

26,073

$ 0

26,073

Issuance of common stock for employee stock purchase plan (in shares)

139,000

Issuance of common stock for employee stock purchase plan

1,489

Exercise of stock options (in shares)

349,000

Exercise of stock options

2,607

Exercise of common stock warrant, net (in shares)

133,000

Exercise of common stock warrants, net

Vesting of restricted stock units (in shares)

5,000

Stock-based compensation

9,038

Net loss

(47,089)

Other comprehensive (income) loss

(28)

Balance at (in shares) at Dec. 31, 2016

21,529,000

Balances at at Dec. 31, 2016

12,305

$ 2

281,900

(57)

(269,540)

Increase (Decrease) in Stockholders' Equity [Roll Forward]

Issuance of common stock net of issuance costs (in shares)

3,450,000

Issuance of common stock net of issuance costs

56,486

Issuance of common stock for employee stock purchase plan (in shares)

139,000

Issuance of common stock for employee stock purchase plan

1,793

Issuance of common stock warrants

674

Exercise of stock options (in shares)

228,000

Exercise of stock options

1,086

Exercise of common stock warrant, net (in shares)

29,000

Exercise of common stock warrants, net

Vesting of restricted stock units (in shares)

46,000

Stock-based compensation

11,369

Net loss

(43,562)

Other comprehensive (income) loss

(42)

Balance at (in shares) at Dec. 31, 2017

25,421,000

Balances at at Dec. 31, 2017

40,109

$ 2

353,308

(99)

(313,102)

Increase (Decrease) in Stockholders' Equity [Roll Forward]

Issuance of common stock net of issuance costs (in shares)

4,600,000

Issuance of common stock net of issuance costs

53,829

$ 1

53,828

Issuance of common stock for employee stock purchase plan (in shares)

257,000

Issuance of common stock for employee stock purchase plan

1,451

Issuance of common stock warrants

$ 4,593

4,593

Exercise of stock options (in shares)

430,602

431,000

Exercise of stock options

$ 3,507

3,507

Exercise of common stock warrant, net (in shares)

118,000

Exercise of common stock warrants, net

Vesting of restricted stock units (in shares)

86,000

Stock-based compensation

11,475

Net loss

(77,400)

Other comprehensive (income) loss

Balance at (in shares) at Dec. 31, 2018

30,913,000

Balances at at Dec. 31, 2018

36,869

$ 3

$ 428,162

$ (40)

(391,256)

Increase (Decrease) in Stockholders' Equity [Roll Forward]

Impact of accounting policy change

^[1]

$ (754)

[1]	Effective January 1, 2018, we adopted Accounting Standard Update No. 2014-09, Revenue from Contracts with Customers. See Note 2. Significant Accounting Policies and Note 3. Revenue from Contracts with Customers for more information.

Consolidated Statements of Cash Flows $ in Thousands	12 Months Ended
Consolidated Statements of Cash Flows $ in Thousands	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)
Operating activities
Net loss	$ (77,400)	$ (43,562)	$ (47,089)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation and amortization	4,070	3,354	2,977
Stock-based compensation expense	11,475	11,369	9,038
Paid in-kind interest on term loan agreements	(5,446)	0	0
Loss on extinguishment of long-term debt	842	0	0
Amortization (accretion) of discount or premium on short-term investments	278	198	(20)
Amortization of debt issuance costs and discounts	438	171	158
Conversion of accrued interest to long-term debt	1,530	1,472	1,357
(Gain) loss on disposal of property and equipment	97	15	(2)
Provision for bad debt	467	361	0
Provision for inventory obsolescence	691	866	822
Changes in operating assets and liabilities
Accounts receivable	1,807	2,277	(2,476)
Inventory	5,251	(8,742)	(5,857)
Prepaid expenses and other assets	(2,714)	(1,278)	109
Accounts payable	4,640	(110)	869
Accrued liabilities	(494)	1,312	(40)
Accrued compensation and other employee benefits	3,463	295	281
Customer deposits	(778)	8,335	610
Deferred revenue	(1,779)	(29,161)	29,948
Deferred rent and other liabilities	(503)	1,171	3,236
Net cash used in operating activities	(54,065)	(51,657)	(6,079)
Investing activities
Purchases of property and equipment	(4,485)	(4,284)	(3,991)
Proceeds from sale of property and equipment	0	0	4
Proceeds from sale of short-term investments	7,910	3,600	4,700
Proceeds from maturity of short-term investments	51,300	79,599	34,800
Purchases of short-term investments	(77,650)	(81,405)	(65,774)
Net cash used in investing activities	(22,925)	(2,490)	(30,261)
Financing activities
Proceeds from long-term debt	60,000	0	5,000
Deferred costs related to long-term debt	500	0	0
Repayment of long-term debt and lease financing obligations	(45,000)	(58)	(226)
Debt Instrument, Fee Amount	(1,009)	0	0
Proceeds from sale of common stock, net	53,829	56,486	26,223
Issuance of common stock for employee stock purchase plan	3,010	674	0
Proceeds from issuance of common stock for employee stock purchase plan	1,451	1,793	1,489
Tax withholdings related to net share settlements of restricted stock units	(207)	(313)	0
Proceeds from exercise of stock options	3,507	1,086	2,607
Net cash provided by financing activities	75,081	59,668	35,093
Net increase (decrease) in cash and cash equivalents	(1,909)	5,521	(1,247)
Effect of exchange rate changes on cash and cash equivalents	(14)	32	(26)
Cash and cash equivalents and restricted cash
Beginning of year	26,279	20,726	21,999
End of year	24,356	26,279	20,726
Cash and cash equivalents	24,356	26,136	20,583
Restricted Cash	0	143	143
Supplemental disclosures
Cash paid for interest	6,213	4,416	4,071
Fair value of warrants issued with long-term debt	1,583	0	0
Issuance of common stock warrants	4,593	674
Cash paid for taxes	231	154	217
Purchases of property and equipment, accrued but not paid	0	0	275
Rental instruments reclassified from inventory	585	1,023	801
Non-cash inventory exchanged for services	$ 106	$ 0	$ 28

Description of the Business	12 Months Ended
Description of the Business	Dec. 31, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Description of the Business	Description of the Business NanoString Technologies, Inc. (the “Company”) was incorporated in the state of Delaware on June 20, 2003. The Company’s headquarters is located in Seattle, Washington. The Company’s proprietary optical barcoding chemistry enables direct detection, identification and quantification of individual target molecules in a biological sample by attaching a unique color coded fluorescent reporter to each target molecule of interest. The Company markets its proprietary nCounter Analysis System, consisting of instruments and consumables, including its Prosigna Breast Cancer Assay, to academic, government, biopharmaceutical and clinical laboratory customers. The Company has incurred losses to date and expects to incur additional losses for the foreseeable future. The Company continues to invest the majority of its resources in the development and growth of its business, including significant investments in new product development and sales and marketing efforts. The Company’s activities have been financed primarily through the sale of equity securities and incurrence of indebtedness, cash received by the Company pursuant to certain product development collaborations, and, to a lesser extent, through the incurrence of capital leases and other borrowings.

Significant Accounting Policies	12 Months Ended
Significant Accounting Policies	Dec. 31, 2018
Accounting Policies [Abstract]
Significant Accounting Policies	Significant Accounting Policies Accounting Principles and Principles of Consolidation The consolidated financial statements and accompanying notes were prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The accompanying consolidated financial statements reflect the accounts of the Company and its wholly-owned subsidiaries. Each of the subsidiaries operates as a sales and support office. The functional currency of each subsidiary is the U.S. dollar. All significant intercompany balances and transactions have been eliminated. Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and that affect the reported amounts of revenue and expenditures during the reporting period. Actual results could differ from those estimates. Significant estimates inherent in the preparation of the accompanying consolidated financial statements include the estimation of the valuation of inventory, the fair value of the Company’s equity securities, the calculation of stock-based compensation and the estimated future cost of ongoing collaboration agreements, for which revenues are recognized on a proportional performance basis. Cash and Cash Equivalents The Company considers all highly-liquid investments with purchased maturities of three months or less to be cash equivalents. The Company’s cash equivalents consist principally of funds maintained in depository accounts. The Company invests its cash and cash equivalents with major financial institutions; at times these investments exceed federally insured limits. Investments The Company classifies its securities as available-for-sale, which are reported at estimated fair value with unrealized gains and losses included in accumulated other comprehensive loss in stockholders’ equity. Realized gains, realized losses and declines in the value of securities judged to be other-than-temporary, are included in other income (expense). The cost of investments for purposes of computing realized and unrealized gains and losses is based on the specific identification method. Amortization of premiums and accretion of discounts are included in other income (expense). Interest and dividends earned on all securities are included in other income (expense). Investments in securities with maturities of less than one year, or where management’s intent is to use the investments to fund current operations, or to make them available for current operations, are classified as short-term investments. If the estimated fair value of a security is below its carrying value, the Company evaluates whether it is more likely than not that it will sell the security before its anticipated recovery in market value and whether evidence indicating that the cost of the investment is recoverable within a reasonable period of time outweighs evidence to the contrary. The Company also evaluates whether or not it intends to sell the investment. If the impairment is considered to be other-than-temporary, the security is written down to its estimated fair value. In addition, the Company considers whether credit losses exist for any securities. A credit loss exists if the present value of cash flows expected to be collected is less than the amortized cost basis of the security. Other-than-temporary declines in estimated fair value and credit losses are charged against other income (expense). Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are stated at the amount management expects to collect from customers based on their outstanding invoices. Management reviews accounts receivable regularly to determine if any receivable will potentially be uncollectible and to estimate the amount of allowance for doubtful accounts necessary to reduce accounts receivable to its estimated net realizable value by analyzing the status of significant past due receivables. The allowance for doubtful accounts was $0.7 million as of December 31, 2018, $0.5 million as of December 31, 2017, and $0.1 million as of December 31, 2016 and 2015. Additions to the allowance were $0.5 million, $0.4 million, and $0 for the years ended December 31, 2018, 2017, and 2016, respectively. There were write-offs of uncollectible accounts of approximately $0.2 million, $1,200, and $5,000 during the years ended December 31, 2018, 2017, and 2016 respectively. Concentration of Credit Risks Financial instruments that potentially expose the Company to concentrations of credit risk consist principally of cash and cash equivalents, short-term investments and accounts receivable. Cash is invested in accordance with the Company’s investment policy, which includes guidelines intended to minimize and diversify credit risk. Most of the Company’s investments are not federally insured. The Company has credit risk related to the collectability of its accounts receivable. The Company performs initial and ongoing evaluations of its customers’ credit history or financial position and generally extends credit on account without collateral. The Company has not experienced any significant credit losses to date. The Company had one customer/collaborator, Lam Research Corporation (“Lam”), that represented 17% of total revenue for the year ended December 31, 2018 and two customers/collaborators, (1) Merck Sharp & Dohme Corp., a subsidiary of Merck & Co., Inc. (“Merck”), and (2) Medivation, Inc. and Astellas Pharma Inc., that represented 25% and 10%, respectively, of total revenue for the year ended December 31, 2017. The Company had one customer/collaborator, Merck, that represented 13% of total revenue for the year 2016. The Company had no customers or collaborators that represented more than 10% of total accounts receivable as of December 31, 2018 and 2017. The Company is also subject to supply chain risks related to the outsourcing of the manufacturing and production of its instruments to sole suppliers. Although there are a limited number of manufacturers for instruments of this type, the Company believes that other suppliers could provide similar products on comparable terms. Similarly, the Company sources certain raw materials used in the manufacture of consumables from certain sole suppliers. A change in suppliers, however, could cause a delay in manufacturing and a possible loss of sales, which would adversely affect operating results. Fair value of financial instruments The recorded amounts of certain financial instruments, including cash and cash equivalents, accounts receivable, prepaid expenses and other assets, accounts payable and accrued liabilities approximate fair value due to their relatively short maturities. Investments that are classified as available-for-sale are recorded at fair value. The fair value for securities held is determined using quoted market prices, broker or dealer quotations, or alternative pricing sources with reasonable levels of price transparency. The recorded amount of the Company’s long-term debt approximates fair value because the related interest rates approximate rates currently available to the Company. Inventory Inventory consists of finished goods, work in process, raw materials and certain component parts to be used in manufacturing or servicing the Company’s products. Inventory is stated at the lower of cost or net realizable value. Cost is determined using a standard cost system, whereby the standard costs are updated periodically to reflect current costs and market represents the lower of cost or market (replacement cost or estimated net realizable value). The Company’s policy is to establish inventory reserves when conditions exist that suggest that inventory may be in excess of anticipated demand, obsolete, slow moving or impaired. In the event that the Company identifies these conditions exist in its inventory, its carrying value is reduced to its net realizable value. Inventory reserves were $3.2 million as of December 31, 2018, $2.7 million as of December 31, 2017, and $2.2 million as of December 31, 2016. Additions to the reserves were $0.7 million, $0.9 million, and $0.8 million for the years ended December 31, 2018, 2017, and 2016, respectively. Write-offs of inventory reserves for the years ended December 31, 2018, 2017, and 2016 were $0.3 million, $0.4 million, and $0.7 million, respectively. The Company outsources the manufacturing of its instruments to third-party contract manufacturers who manufacture them to certain specifications and source certain raw materials from sole source providers. Major delays in shipments, inferior quality, insufficient quantity or any combination of these or other factors may harm the Company’s business and results of operations. In addition, the inability of one or more of these suppliers to provide the Company with an adequate supply of its products or raw materials or the loss of one or more of these suppliers may cause a delay in the Company’s ability to fulfill orders while it obtains a replacement supplier and may harm the Company’s business and results of operations. Property and Equipment Property and equipment are recorded at cost, net of accumulated depreciation and amortization. Depreciation and amortization are computed using the straight-line method over the estimated useful lives of the assets. Manufacturing equipment is depreciated over five years, lease and loaner instruments are depreciated over one to five years, prototype systems are depreciated over two years, computer equipment is generally depreciated over three years, furniture and fixtures are depreciated over five years and leasehold improvements are amortized over the life of the related assets or the term of the lease, whichever is shorter. Expenditures for additions are capitalized and expenditures for maintenance and repairs are expensed as incurred. Gains and losses from the disposal of property and equipment are reflected in the consolidated statements of operations in the period of disposition. Leases and Leasehold Improvements Rent expense for leases that provide for scheduled rent increases during the lease term is recognized on a straight-line basis over the term of the related lease. Leasehold improvements that are funded by landlord incentives or allowances are recorded in property and equipment and as a component of deferred rent and are amortized as a reduction of rent expense over the term of the related lease. Impairment of Long-Lived Assets The Company recognizes impairment losses on long-lived assets when indicators of impairment are present and the anticipated undiscounted cash flows to be generated by those assets are less than the asset’s carrying values. The Company has not experienced any impairment losses on its long-lived assets during the periods presented. Segments Operating segments are defined as components of an entity for which separate financial information is available and evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. The Company’s chief operating decision maker is the chief executive officer, who manages the operations and evaluates the financial performance on a total Company basis. The Company’s principal operations and decision-making functions are located at its corporate headquarters in the United States and the Company operates as a single operating and reporting segment. Revenue Recognition The Company recognizes revenue when control of the promised goods or services is transferred to its customers, in an amount that reflects the consideration expected to be received in exchange for those products and services. This process involves identifying the contract with a customer, determining the performance obligations in the contract, determining the contract price, allocating the contract price to the distinct performance obligations in the contract, and recognizing revenue when the performance obligations have been satisfied. A performance obligation is considered distinct from other obligations in a contract when it provides a benefit to the customer either on its own or together with other resources that are readily available to the customer and is separately identified in the contract. Performance obligations are considered satisfied once the Company has transferred control of a product or service to the customer, meaning the customer has the ability to use and obtain the benefit of the product or service. The Company recognizes revenue for satisfied performance obligations only when there are no uncertainties regarding payment terms or transfer of control. The Company generates the majority of its revenue from the sale of products and services. The Company’s products consist of its proprietary nCounter Analysis Systems and related consumables. Services consist of instrument service contracts and service fees for assay processing. Revenues are presented net of the taxes that are collected from customers and remitted to governmental authorities. Revenue from instruments, consumables and in vitro diagnostic kits is recognized generally upon shipment to the end customer, which is when title of the product has been transferred to the customer. Instrument revenue related to installation and calibration services is recognized when the customer has possession of the instrument and the services have been performed. Such services can also be provided by the Company’s distribution partners and other third parties. For instruments sold solely to run Prosigna assays, an initial training course must be provided by the Company prior to instrument revenue recognition. Instrument service contracts are sold with contract terms ranging from 12-36 months and cover periods after the end of the initial 12-month warranty. These contracts include services to maintain performance within the Company’s designed specifications and a minimum of one preventative maintenance service procedure during the contract term. Revenue from services to maintain designed specifications is considered a stand-ready obligation and recognized evenly over the contract term. Revenue from service fees for assay processing is recognized upon the rendering of the related performance obligation. For arrangements with multiple performance obligations, the Company allocates the contract price in proportion to its stand-alone selling price. The Company uses its best estimate of stand-alone selling price for its products and services based on average selling prices over a 12-month period and reviews its stand-alone prices annually. Product and service revenues from sales to customers through distributors are recognized consistent with the policies and practices for direct sales to customers, as described above. The Company enters into collaboration agreements that may generate upfront fees, and in some cases subsequent milestone payments that may be earned upon completion of certain product development milestones or other designated activities. The Company estimates the expected total cost of product development and other services under these arrangements and recognizes collaboration revenue using a contingency-adjusted proportional performance model. Costs incurred to date compared to total expected costs are used to determine proportional performance, as this is considered to be representative of the delivery of outputs under the arrangements. Revenue recognized at any point in time is limited to cash received, amounts contractually due, or the amounts of any product development or other contractual milestone payments when achievement of a milestone is deemed to be probable. Changes in estimates of total expected collaboration product development or other costs are accounted for prospectively as a change in estimate. From period to period, collaboration revenue can fluctuate substantially based on the achievement or probable achievement of product development or other milestones, or as estimates of total expected collaboration product development or other costs are changed or updated. The Company may recognize revenue from collaboration agreements that do not include upfront or milestone-based payments. Amounts due to collaboration partners are recognized when the related activities have occurred and are classified in the statement of operations, generally as research and development expense, based on the nature of the related activities. For the years ending December 31, 2017 and 2016, the Company recognized revenue related to its products and services based on the applicable accounting standards for revenue recognition which were in effect for those periods. The accounting standards in effect for years prior to 2018 allowed revenue to be recognized when (1) persuasive evidence of an arrangement existed, (2) delivery occurred or services had been rendered, (3) the price to the customer was fixed or determinable and (4) collectability was reasonably assured. A delivered product or service was considered to be a separate unit of accounting when it had value to the customer on a stand-alone basis. Products or services had value on a stand-alone basis if they were sold separately by any vendor or the customer could resell the delivered product. Instruments, consumables and in vitro diagnostic kits were considered to be separate units of accounting as they were sold separately and revenue was recognized upon transfer of ownership, which was generally upon shipment. Instrument revenue related to installation and calibration services was recognized when services were rendered by the Company. Service revenue is recognized when earned, which is generally upon the rendering of the related services. Service agreements and service fees for assay processing are each considered separate units of accounting as they are sold separately. Service agreements are generally separately priced. Revenue from service agreements is deferred and recognized on a straight-line basis over the service period. For arrangements with multiple deliverables, the Company allocated the agreement consideration at the inception of the agreement to the deliverables based upon their relative selling prices. Selling prices were established by reference to vendor specific objective evidence based on stand-alone sales transactions for each deliverable. Vendor specific objective evidence was considered to have been established when a substantial majority of individual sales transactions within the previous 12-month period fall within a reasonably narrow range, which the Company defined to be plus or minus 15% of the median sales price of actual stand-alone sales transactions. The Company used its best estimate of selling price for individual deliverables when vendor specific objective evidence or third-party evidence was unavailable. Allocated revenue was only recognized for each deliverable when the revenue recognition criteria was met. Cost of Revenue Cost of revenue consists primarily of costs incurred in the production process, including costs of purchasing instruments from third-party contract manufacturers, consumable component materials and assembly labor and overhead, installation, warranty, service and packaging and delivery costs. In addition, cost of revenue includes royalty costs for licensed technologies included in the Company’s products, provisions for slow-moving and obsolete inventory and stock-based compensation expense. Cost of revenue for instruments and consumables is recognized in the period the related revenue is recognized. Shipping and handling costs incurred for product shipments are included in cost of revenue in the consolidated statements of operations. Reserve for Product Warranties The Company generally provides a one-year warranty on its nCounter Analysis Systems and establishes a reserve for future warranty costs based on historical product failure rates and actual warranty costs incurred. Warranty expense is recorded as a component of cost of revenue in the consolidated statements of operations. Research and Development Research and development expenses, consisting primarily of salaries and benefits, occupancy costs, laboratory supplies, clinical study costs, contracted services, consulting fees and related costs, are expensed as incurred. Selling, General and Administrative Selling expenses consist primarily of personnel related costs for sales and marketing, contracted services and service fees and are expensed as the related costs are incurred. Advertising costs are expensed as incurred and are included in sales and marketing expenses. Advertising costs totaled approximately $4.8 million, $5.9 million, and $5.3 million during the years ended December 31, 2018, 2017, and 2016, respectively. General and administrative expenses consist primarily of personnel related costs for the Company’s finance, human resources, business development, legal, information technology and general management, as well as professional fees for legal, accounting, and other consulting services. General and administrative expenses are expensed as they are incurred. Income Taxes The Company accounts for income taxes under the liability method. Under the liability method, deferred tax assets and liabilities are determined based on the differences between the financial reporting and income tax bases of assets and liabilities and are measured using the tax rates that will be in effect when the differences are expected to reverse. A valuation allowance is recorded when it is more likely than not that some of the deferred tax assets will not be realized. The Company determines whether a tax position is more likely than not to be sustained upon examination based on the technical merits of the position. For tax positions meeting the more-likely-than-not threshold, the tax amount recognized in the financial statements is reduced by the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the relevant tax authority. Stock-Based Compensation The Company accounts for stock-based compensation under the fair value method. Stock-based compensation costs are based on option awards granted and vested based on their grant-date fair value, estimated using the Black-Scholes option pricing model. The Company uses the straight-line attribution method for recognizing compensation expense. Guarantees and Indemnifications In the normal course of business, the Company guarantees and/or indemnifies other parties, including vendors, lessors and parties to transactions with the Company, with respect to certain matters. The Company has agreed to hold the other parties harmless against losses arising from breach of representations or covenants, or out of intellectual property infringement or other claims made against certain parties. It is not possible to determine the maximum potential amount the Company could be required to pay under these indemnification agreements, since the Company has not had any prior indemnification claims, and each claim would be based upon the unique facts and circumstances of the claim and the particular provisions of each agreement. In the opinion of management, any such claims would not be expected to have a material adverse effect on the Company’s consolidated results of operations, financial condition or cash flows. The Company did not have any related liabilities recorded at December 31, 2018 and 2017. Comprehensive Loss Comprehensive loss includes certain changes in equity that are excluded from net loss. Specifically, unrealized gains and losses on short-term investments are included in comprehensive (income) loss. Recently Adopted Accounting Pronouncement In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) entitled “ASU 2014-09, Revenue from Contracts with Customers.” The standard requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to a customer. In March 2016, the FASB issued “ASU 2016-08, Principal vs Agent Considerations (Reporting Revenue Gross versus Net)” which clarifies the implementation guidance on principal versus agent considerations. In April 2016, the FASB issued “ASU 2016-10, Identifying Performance Obligations and Licensing” which clarifies the implementation guidance on identifying performance obligations and the licensing implementation guidance. In May 2016, the FASB issued “ASU 2016-12, Narrow-Scope Improvements and Practical Expedients” which provides practical expedients for contract modifications and clarification on assessing the collectability criterion, presentation of sales taxes, measurement date for non-cash consideration and completed contracts at transition. The standards require an entity to recognize the amount of revenue which it expects to be entitled for the transfer of promised goods or services to a customer. This guidance replaces most existing revenue recognition guidance and requires more extensive disclosures related to revenue recognition, particularly in quarterly financial statements. A cumulative effect of applying the new revenue standard has been recognized as an adjustment to the opening balance of retained earnings as of January 1, 2018, using the modified retrospective transition method. The comparative information has not been restated and continues to be reported under the accounting standards in effect for the period presented. See Note 3. Revenue from Contracts with Customers, for additional accounting policy and transition disclosures. In January 2016, FASB issued “ASU 2016-01, Financial Instruments: Overall.” The standard addresses certain aspects of recognition, measurement, presentation and disclosure of financial instruments. The Company adopted the standard in the first quarter of 2018 and adoption did not have a material impact on its consolidated results of operations, financial condition, cash flows, and financial statement disclosures. In August 2016, FASB issued “ASU No. 2016-15, Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments.” The standard provides guidance on the presentation of certain cash receipts and cash payments in the statement of cash flows in order to reduce diversity in existing practice. The Company adopted the standard in the first quarter of 2018 and there was no material impact on its consolidated results of operations, financial condition, cash flows, and financial statement disclosures. In November 2016, FASB issued “ASU 2016-18, Statement of Cash Flows: Restricted Cash.” The standard requires companies to include amounts generally described as restricted cash and restricted cash equivalents, along with cash and cash equivalents, when reconciling the beginning-of-period and end-of-period amounts shown on the statement of cash flows. The Company adopted the standard in the first quarter of 2018 using the retrospective transition method and reflected the impact of this standard in its consolidated cash flows. In May 2017, FASB issued “ASU 2017-09, Compensation - Stock Compensation: Scope of Modification Accounting.” The standard clarifies which changes to the terms or conditions of a share-based payment award are required to be accounted for as modifications. The Company adopted the standard in the first quarter of 2018 prospectively and adoption did not have an impact on its consolidated results of operations, financial condition, cash flows, and financial statement disclosures. Recent Accounting Pronouncements In February 2016, FASB issued “ASU 2016-02, Leases – Recognition and Measurement of Financial Assets and Financial Liabilities.” The standard requires the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition. In August 2018, FASB issued “ASU 2018-11, Leases (Topic 842): Targeted Improvements,” which allows the cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. In December 2018, FASB issued “ASU-2018-20, Leases (Topic 842): Narrow Scope Improvements for Lessors,” which provides an election for lessors to exclude sales and related taxes collected from lessees from consideration in the contract, requires lessors to exclude from revenue and expense lessor costs paid directly to third parties by lessees, and clarifies lessors accounting for variable payments related to both lease and nonlease components. The Company will adopt the standard as of January 1, 2019, using the modified retrospective transition approach to be applied to leases existing as of, or entered into after, January 1, 2019. The Company is in the process of evaluating the impact of this standard and expects it to primarily relate to its operating leases for office and laboratory space noted in “Part 1. Item 2. Properties” of this Annual Report on Form 10-K, for which the Company will record a lease liability and corresponding right-of-use asset upon adoption. Future undiscounted obligations related to the Company’s facility leases in effect as of December 31, 2018, are included in the table of future minimum lease payments disclosed in Note 14. The Company does not expect the impact of adoption to have a significant impact on its consolidated results of operations or cash flows, but does anticipate significant new disclosure requirements. In June 2016, FASB issued “ASU 2016-13, Financial Instruments — Credit Losses (Topic 326)” and subsequently in November 2018, “ASU 2018-19, Codification Improvements to Topic 326, Financial Instruments - Credit Losses.” The standard requires disclosure regarding expected credit losses on financial instruments at each reporting date, and changes how other than temporary impairments on investments securities are recorded. The standard will become effective for the Company beginning January 1, 2020 with early adoption permitted. The Company is currently assessing the impact adoption of this standard will have on its consolidated results of operations, financial condition, cash flows, and financial statement disclosures. In February 2018, FASB issued “ASU 2018-02, Income Statement — Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income.” The new guidance permits companies to reclassify the stranded tax effects of the Tax Cuts and Jobs Act (the “Act”) on items within accumulated other comprehensive income to retained earnings. The Company will adopt the standard as of January 1, 2019 and is currently assessing the impact adoption of this standard will have on its consolidated results of operations, financial condition, cash flows, and financial statement disclosures. In August 2018, FASB issued “ASU 2018-15, Intangibles — Goodwill and other — Internal-use software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract.” The standard aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The standard will become effective for the Company beginning on January 1, 2020, with early adoption permitted. The Company is currently assessing the impact adoption of this standard will have on its consolidated results of operations, financial condition, cash flows, and financial statement disclosures. In November 2018, the FASB issued “ASU 2018-18, Collaborative Arrangements (Topic 808): Clarifying the Interaction between Topic 808 and Topic 606.” The new guidance clarifies when certain transactions between collaborative arrangement participants which should be accounted for as revenue under Topic 606. The standard will become effective for the Company beginning on January 1, 2020, with early adoption permitted. The Company is currently assessing the impact adoption of this standard will have on its consolidated results of operations, financial condition, cash flows, and financial statement disclosures.

Revenue from Contracts with Customers (Notes)

12 Months Ended

Dec. 31, 2018

Revenue from Contract with Customer [Abstract]

Revenue from Contract with Customer

Revenue from Contracts with Customers

On January 1, 2018, the Company adopted the new standard for revenue recognition provided in “ASU 2014-09, Revenue from Contracts with Customers” and has applied the modified retrospective transition method to all contracts that were not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018 are presented under the new standard, while prior period amounts are not adjusted and continue to be reported under the accounting standards in effect for the prior period. The Company recorded a transition adjustment which reduced opening retained earnings by $0.8 million as of January 1, 2018 due to the cumulative impact of adopting the new revenue standard. The Company's revenues for the twelve months ended December 31, 2018 included the recognition of $0.8 million, as a result of adopting the new revenue standard and satisfying certain performance obligations during the period.

The Company has determined that its collaborative agreements fall within the scope of ASC 808, Collaborative Arrangements, and applies the principles of ASC 606, Revenue from Contracts with Customers, in the measurement and recognition of revenue. In addition, the Company has concluded that when service contracts are sold as part of a bundled arrangement with other products and services, these contracts will no longer be accounted for under separate accounting guidance, but rather included as a separate performance obligation within a contract subject to the new standard, which includes their inclusion in the determination and allocation of the aggregate transaction price, and recognition of revenue upon the delivery of the performance obligation.

Performance obligations

Performance obligations related to instrument sales are reviewed on a contract-by-contract basis, as individual contract terms may vary, and may include installation and calibration services. For instruments sold solely to run Prosigna assays, training to the customer is a required performance obligation prior to any revenue recognition related to the instrument sale. Performance obligations for the Company's consumable products are generally completed upon shipment to the customer.

Disaggregated Revenues

The following table provides information about disaggregated revenue by major product line and primary geographic market (in thousands):



	Year Ended December 31, 2018
	Americas		Europe and Middle East		Asia Pacific		Total
Product revenue:
Instruments	$	12,033	$	6,677	$	2,731	$	21,441
Consumables	29,653		10,847		3,347		43,847
In vitro diagnostic kits	3,014		6,094		337		9,445
Total product revenue	44,700		23,618		6,415		74,733
Service revenue	6,228		2,097		465		8,790
Total product and service revenue	50,928		25,715		6,880		83,523
Collaboration revenue	23,209		—		—		23,209
Total revenues	$	74,137	$	25,715	$	6,880	$	106,732



	Year Ended December 31, 2017⁽¹⁾
	Americas		Europe and Middle East		Asia Pacific		Total
Product revenue:
Instruments	$	10,556	$	6,561	$	3,722	$	20,839
Consumables	25,583		9,934		2,794		38,311
In vitro diagnostic kits	2,473		3,982		290		6,745
Total product revenue	38,612		20,477		6,806		65,895
Service revenue	4,592		1,314		209		6,115
Total product and service revenue	43,204		21,791		7,015		72,010
Collaboration revenue	42,895		—		—		42,895
Total revenues	$	86,099	$	21,791	$	7,015	$	114,905



	Year Ended December 31, 2016⁽¹⁾
	Americas		Europe and Middle East		Asia Pacific		Total
Product revenue:
Instruments	$	12,086	$	7,900	$	4,243	$	24,229
Consumables	27,015		7,481		3,049		37,545
In vitro diagnostic kits	1,517		2,476		175		4,168
Total product revenue	40,618		17,857		7,467		65,942
Service revenue	2,357		640		195		3,192
Total product and service revenue	42,975		18,497		7,662		69,134
Collaboration revenue	17,355		—		—		17,355
Total revenues	$	60,330	$	18,497	$	7,662	$	86,489

⁽¹⁾ Amounts have not been retrospectively modified to reflect the adoption of Accounting Standard Update No. 2014-09, Revenue from Contracts with Customers, for the years ended December 31, 2017 and 2016, respectively.

Contract balances and remaining performance obligations

Contract liabilities are included in the current and long-term portions of deferred revenue of $11.5 million and $12.5 million as of December 31, 2018 and December 31, 2017, respectively, and within customer deposits of $8.2 million and $8.9 million as of December 31, 2018 and December 31, 2017, respectively, on the consolidated balance sheets. Total contract liabilities decreased by $1.8 million for the twelve months ended December 31, 2018 as a result of cash payments received of $29.0 million related to our collaborations and service contracts, partially offset by the recognition of previously deferred revenue of $30.8 million for the completion of certain performance obligations during the period. The Company did not record any contract assets as of December 31, 2018.

Unsatisfied or partially unsatisfied performance obligations related to collaboration agreements as of December 31, 2018 were $13.4 million and are expected to be completed over the period of each collaboration agreement, through June 2020. Performance obligations related to product and service contracts as of December 31, 2018 were $6.3 million and are expected to be completed over the term of the related contract, through August 2023.

Practical expedients

The Company generally recognizes expense related to the acquisition of contracts, such as sales commissions, at the time of revenue recognition, which is generally in the same period products are sold, and in the case of services, revenue is recognized as services are rendered or over the period of time covered by the service contract, which is typically 12-months from the sale. The Company has not established any contract assets or liabilities related to contract acquisition costs as of December 31, 2018. The Company records commission expenses within selling, general and administrative expenses.

Impact of new revenue standard

In accordance with the new revenue guidance, which the Company adopted effective January 1, 2018, the disclosure of the impact of adoption of this new standard to our consolidated statements of operations was as follows:



	Year Ended December 31, 2018
(in thousands, except per share amounts)	As Reported			Amounts under previous revenue standard			Effect of Change
Revenue:
Product and service	$	83,523		$	82,769		$	754
Collaboration	23,209			23,209			—
Total revenue	106,732			105,978			754
Net loss	$	(77,400	)	$	(78,154	)	$	754
Net loss per share - basic and diluted	$	(2.78	)	$	(2.80	)	$	0.02

The adoption of the new revenue standard did not have an aggregate impact on the Company’s net cash provided by operating activities, but resulted in offsetting changes in certain liabilities presented within net cash provided by operating activities in the Company’s consolidated statement of cash flows, as reflected in the above tables.

Short-term Investments

12 Months Ended

Dec. 31, 2018

Investments, Debt and Equity Securities [Abstract]

Short-term Investments

Short-term investments consisted of available-for-sale securities as follows (in thousands):



Type of securities as of December 31, 2018	Amortized cost		Gross unrealized gains		Gross unrealized losses			Fair value
Corporate debt securities	$	47,299	$	1	$	(21	)	$	47,279
U.S. government-related debt securities	14,972		—		(11		)	14,961
Asset-backed securities	$	7,410	$	—	$	(9	)	$	7,401
Total available-for-sale securities	$	69,681	$	1	$	(41	)	$	69,641



Type of securities as of December 31, 2017	Amortized cost		Gross unrealized gains		Gross unrealized losses			Fair value
Corporate debt securities	$	35,567	$	—	$	(53	)	$	35,514
U.S. government-related debt securities	15,951		—		(46		)	15,905
Total available-for-sale securities	$	51,518	$	—	$	(99	)	$	51,419

The fair values of available-for-sale securities by contractual maturity at December 31 were as follows (in thousands):



	2018		2017
Maturing in one year or less	$	69,641	$	39,985
Maturing in one to three years	—		11,434
Total available-for-sale securities	$	69,641	$	51,419

The Company has the ability to sell its available-for-sale investments maturing greater than one year within 12 months from the balance sheet date and, accordingly, has classified these securities as current in the consolidated balance sheet.

The following table summarizes investments that have been in a continuous unrealized loss position as of December 31, 2018 (in thousands).



	Less Than 12 Months					12 Months or Greater					Total
	Fair value		Gross unrealized losses			Fair value		Gross unrealized losses			Fair value		Gross unrealized losses
Corporate debt securities	$	14,957	$	(15	)	$	2,516	$	(6	)	$	17,473	$	(21	)
U.S. government-related debt securities	14,961		(11		)	—		—			14,961		(11		)
Asset-backed securities	7,401		(9		)	—		—			7,401		(9		)
Total	$	37,319	$	(35	)	$	2,516	$	(6	)	$	39,835	$	(41	)

The Company invests in securities that are rated investment grade or better. The unrealized losses on investments as of December 31, 2018 and December 31, 2017 were primarily caused by interest rate increases.

The Company reviews the individual securities in its portfolio to determine whether a decline in a security’s fair value below the amortized cost basis is other-than-temporary. The Company determined that as of December 31, 2018, there were no investments in its portfolio that were other-than-temporarily impaired.

Fair Value Measurements

12 Months Ended

Dec. 31, 2018

Fair Value Disclosures [Abstract]

Fair Value Measurements

The Company establishes the fair value of its assets and liabilities using the price that would be received to sell an asset or paid to transfer a financial liability in an orderly transaction between market participants at the measurement date. A fair value hierarchy is used to measure fair value. The three levels of the fair value hierarchy are as follows:


•	Level 1 — Quoted prices in active markets for identical assets and liabilities.


•	Level 2 — Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets.


•	Level 3 — Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

The Company’s available-for-sale securities by level within the fair value hierarchy were as follows (in thousands):



Type of securities as of December 31, 2018	Fair value measurement using:
Type of securities as of December 31, 2018	Level 1		Level 2		Level 3		Total
Cash equivalents:
Money market fund	$	16,293	$	—	$	—	$	16,293
Short-term investments:
Corporate debt securities	—		47,279		—		47,279
U.S. government-related debt securities	—		14,961		—		14,961
Asset-backed securities	—		7,401		—		7,401
Total	$	16,293	$	69,641	$	—	$	85,934



Type of securities as of December 31, 2017	Fair value measurement using:
Type of securities as of December 31, 2017	Level 1		Level 2		Level 3		Total
Cash equivalents:
Money market fund	$	22,398	$	—	$	—	$	22,398
Short-term investments:
Corporate debt securities	—		35,514		—		35,514
U.S. government-related debt securities	—		15,905		—		15,905
Total	$	22,398	$	51,419	$	—	$	73,817

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Property and Equipment

12 Months Ended

Dec. 31, 2018

Property, Plant and Equipment [Abstract]

Property and Equipment

Property and equipment consisted of the following at December 31 (in thousands):



	Useful Life (Years)	2018			2017
Manufacturing equipment	5	$	10,625		$	8,395
Lease and loaner instruments	1 - 5	4,305			4,106
Prototype instruments	2	975			2,938
Computer equipment	3	2,095			2,067
Furniture and fixtures	5	1,456			1,670
Leasehold improvements	Various	11,960			11,971
Construction in progress		685			158
Total property and equipment, gross		32,101			31,305
Less: Accumulated depreciation and amortization		(16,930		)	(17,248		)
Total property and equipment, net		$	15,171		$	14,057

Prototype instruments consist of nCounter instruments used in internal testing and other development activities. Accumulated depreciation on lease and loaner instruments was $2.4 million and $1.9 million at December 31, 2018 and 2017, respectively.

Depreciation and amortization expense related to property and equipment for the years ended December 31, 2018, 2017, and 2016 totaled approximately $4.0 million, $3.3 million, and $2.9 million, respectively.

Long-Term Debt

12 Months Ended

Dec. 31, 2018

Debt Disclosure [Abstract]

Long-Term Debt

Term Loan Agreements

In April 2014, the Company entered into a term loan agreement (“2014 Term Loan”), under which it could borrow up to $45.0 million. In October 2015, the Company amended the 2014 Term Loan primarily to increase the maximum borrowing capacity to $60.0 million, excluding deferred interest, reduce the applicable interest rate from 12.5% to 12.0%, extend the interest-only period through March 2021, and extend the final maturity to March 2022. Under the 2014 Term Loan, borrowings accrued interest at 12.0% annually, payable quarterly, of which 3.0% could be deferred during the first six years of the amended term at the Company’s option and paid together with the principal at maturity. The Company borrowed a total of $45.0 million under the 2014 Term Loan through June 2016, excluding deferred interest. On December 31, 2016, the Company’s option to borrow the remaining $15.0 million under the 2014 Term Loan expired. Total borrowings and deferred interest under the 2014 Term Loan were $49.3 million as of December 31, 2017.

In October 2018, the Company entered into an amended and restated term loan agreement (“2018 Term Loan”), under which it may borrow up to $100.0 million, which is due and payable in September 2024. At closing, the Company received net proceeds of approximately $7.8 million, pursuant to borrowings of $60.0 million under the new facility, net of repayment of the Company's 2014 Term Loan of $50.4 million, including deferred interest and transaction-related fees and expenses. Of the $40.0 million in additional borrowing capacity under the 2018 Term Loan, the Company has the option to borrow up to $20.0 million until June 2019 subject to no further terms and conditions, and up to an additional $20.0 million until March 2020, subject to the achievement of annual revenue thresholds as at or prior to December 31, 2019.

The term loan agreements involved multiple lenders who were considered members of a loan syndicate. In determining whether the most recent amendment was to be accounted for as a debt extinguishment or a debt modification, the Company considered whether lenders remained the same or changed. As all the lenders who were members of the loan syndicate changed as part of the amended and restated loan agreement, the 2014 Term Loan was extinguished, and the 2018 Term Loan was treated as a new borrowing. The extinguishment resulted in a loss of approximately $0.8 million for the year ended December 31, 2018, which was included in interest expense in the accompanying consolidated statements of operations.

The 2018 Term Loan accrues interest at a rate of 10.5%, payable quarterly, of which 3.0% may be deferred during the six-year term at the Company’s option and repaid at maturity together with the principal. The Company paid an upfront fee of 0.5% of the aggregate principal amount of the initial borrowing under the 2018 Term Loan, and will pay a facility fee equal to 2.0% of the total amount borrowed including any deferred interest at the time the principal is repaid. A long-term liability of $1.4 million is being accreted using the effective interest method for the facility fee over the term of the 2018 Term Loan. Additional borrowings under the 2018 Term Loan will bear the same upfront and facility fees as the initial borrowing.

In connection with 2018 Term Loan, warrants to purchase an aggregate of 341,578 shares of common stock with an exercise price per share of $21.12 were issued to the lenders, and, in the event additional amounts are drawn under the 2018 Term Loan, additional warrants will be issued on each subsequent draw date for 0.3% of the fully-diluted shares then outstanding. The exercise price for additional warrants will be set at a 25.0% premium to the average closing trading price for the 30-day trading period as of the date immediately before the applicable draw date. The warrants issued in conjunction with the initial borrowing under the 2018 Term Loan were determined to be closely linked to the Company’s stock, and as such, were recorded as an equity security in additional paid in capital at their relative fair value of $1.6 million with a corresponding debt discount recorded against the 2018 Term Loan balance outstanding.

Total borrowings and deferred interest under the 2018 Term Loan were $60.4 million as of December 31, 2018. The balance of the 2018 Term Loan as of December 31, 2018 is net of discounts related to the warrants, debt issuance costs and other upfront fees of $2.0 million.

The Company has the option to prepay the 2018 Term Loan, in whole or part, at any time subject to payment of a redemption fee of up to 4.0%, which declines 1.0% after the first year of the term, with no redemption fee payable if prepayment occurs after the second year of the loan.

Obligations under the 2018 Term Loan are collateralized by substantially all of the Company’s assets. The 2018 Term Loan contains customary conditions to borrowings, events of default and negative covenants, including covenants that could limit the Company’s ability to, among other things, incur additional indebtedness, liens or other encumbrances, make dividends or other distributions; buy, sell or transfer assets; engage in any new line of business; and enter into certain transactions with affiliates. The 2018 Term Loan also includes a $2.0 million minimum liquidity covenant and minimum annual revenue-based financial covenants. If the Company’s actual revenues are below the minimum annual revenue requirement for any given year, it may avoid a related default by generating proceeds from an equity or subordinated debt issuance equal to the shortfall between its actual revenues and the minimum revenue requirement.

The Company incurred $7.4 million, $6.2 million, and $5.7 million of interest expense under the term loan agreements for the years ended December 31, 2018, 2017, and 2016, respectively.

2018 Revolving Loan Facility

In January 2018, the Company entered into a $15.0 million secured revolving loan facility, with availability subject to a borrowing base consisting of eligible accounts receivable. In November 2018, the Company entered into an amended and restated loan and security agreement to increase the borrowing capacity under the facility to $20.0 million, amend the borrowing base to include finished goods inventory, and extend the final maturity under the facility to November 2021. As of December 31, 2018, no amounts had been drawn on the facility.

Interest on borrowings is payable monthly and accrues at a yearly rate equal to the greater of the prime rate as reported in the Wall Street Journal plus 0.50%, or 4.75%. During an event of default, amounts drawn accrue interest at a yearly rate equal to 8.75%. Obligations under the agreement are secured by the Company’s cash and cash equivalents, accounts receivable and proceeds thereof, and inventory and proceeds from the sale thereof. The lender’s interest in the collateral under the loan facility is senior to the lender’s interest in such collateral under the term loan agreement. The loan facility contains various customary representations and warranties, conditions to borrowing, events of default, including cross default provisions with respect to the loan facility, and covenants, including financial covenants requiring the maintenance of minimum annual revenue and liquidity. The Company incurred $0.1 million of interest expense under the revolving loan facility for the year ended December 31, 2018.

The Company was in compliance with its financial covenants under the 2018 Term Loan and the secured revolving loan facility as of December 31, 2018.

Long-term debt consisted of the following at December 31 (in thousands):



	2018			2017
Borrowings under term loan agreements	$	60,000		$	45,000
Paid in-kind interest on term loan agreements	400			4,315
Unamortized debt discounts	(2,004		)	(384		)
Long-term debt, net of discounts	$	58,396		$	48,931

Scheduled future payments of principal for outstanding debt were as follows at December 31:



2019	$	—
2020	—
2021	—
2022	—
2023	—
Thereafter	60,400
	$	60,400

Collaboration Agreements	12 Months Ended
Collaboration Agreements	Dec. 31, 2018
Deferred Revenue Disclosure [Abstract]
Collaboration Agreements	Collaboration Agreements The Company evaluates the statement of operations classification of payments between the participants in each of its collaboration agreements at inception based on the nature of the arrangement, the nature of its business operations and the contractual terms of the arrangement. The Company has determined that amounts to be received from collaborators in connection with the collaboration agreements entered into through December 31, 2018 are related to revenue generating activities. The Company uses a contingency-adjusted proportional performance model to recognize revenue over the Company’s performance period for each collaboration agreement that includes up front, or milestone-based or other contractual payments. Costs incurred to date compared to total expected costs are used to determine proportional performance, as this is considered to be representative of the delivery of outputs under the arrangement. Revenue recognized at any point in time is a factor of and limited to cash received and amounts contractually due. Changes in estimates of total expected costs are accounted for prospectively in the period of change. The Company recognizes revenue from collaboration agreements that do not include up front, milestone-based, or other contractual payments when earned, which is generally in the same period that related costs are incurred. Amounts due to collaboration partners are recognized when the related activities have occurred and are classified in the statement of operations, generally as research and development expense, based on the nature of the related activities. Lam Research Corporation In August 2017, the Company entered into a collaboration agreement with Lam Research Corporation (“Lam”) with respect to the development of the Company’s Hyb & Seq platform product candidate. Pursuant to the terms of the collaboration agreement, Lam will contribute up to an aggregate of $50.0 million, with amounts thereunder payable quarterly, to be applied to the research and development of the Company’s Hyb & Seq platform, based on allowable development costs. Lam is eligible to receive certain single-digit percentage royalty payments from the Company on net sales of certain products and technologies developed under the collaboration agreement, if any such net sales are ever achieved. The maximum amount of royalties payable to Lam will be capped at an amount up to three times the amount of development funding actually provided by Lam. The Company retains exclusive rights to obtain regulatory approval, manufacture and commercialize the Hyb & Seq products. Lam participates in research and product development through a joint steering committee. The Company will reimburse Lam for the cost of up to 10 full-time Lam employees each year in accordance with the product development plan. In connection with the execution of the collaboration agreement, the Company issued Lam a warrant to purchase up to 1.0 million shares of the Company’s common stock with the number of underlying shares exercisable at any time proportionate to the amount of the $50.0 million commitment that has been provided by Lam. The exercise price of the warrant is $16.75 per share, and the warrant will expire on the seventh anniversary of the issuance date. The warrant was determined to have a fair value of $6.7 million upon issuance, and such amount will be recorded as additional paid in capital proportionately from the quarterly collaboration payments made by Lam. The Company recognized revenue related to the Lam agreement of $18.6 million and $3.7 million for the years ended December 31, 2018 and 2017, respectively. The Company received development funding of $21.7 million and $13.4 million related to the Lam collaboration for the years ended December 31, 2018 and 2017, respectively. At December 31, 2018, the Company had recorded $1.9 million of deferred revenue related to the Lam collaboration, of which $1.2 million is estimated to be recognizable as revenue within one year. In addition, $7.3 million and $8.3 million are included in customer deposits in the consolidated balance sheets as of December 31, 2018 and 2017, respectively, which represents amounts received in advance. The Company incurred costs of $0.3 million for the year ended December 31, 2018 related to services provided by Lam employees under the terms of the agreement. As of December 31, 2018, Lam had not exercised any warrants. Celgene Corporation In March 2014, the Company entered into a collaboration agreement with Celgene Corporation (“Celgene”) to develop, seek regulatory approval for, and commercialize a companion diagnostic using the nCounter Analysis System to identify a subset of patients with Diffuse Large B-Cell Lymphoma. In February 2018, the Company and Celgene entered into an amendment to their collaboration agreement in which Celgene agreed to provide the Company additional funding for work intended to enable a subtype and prognostic indication for the test being developed under the agreement for Celgene’s drug REVLIMID. In connection with this amendment, the Company agreed to remove the right to receive payments from Celgene in the event commercial sales of the companion diagnostic test do not exceed certain pre-specified minimum annual revenues during the first three years following regulatory approval. In addition, the amendment allows Celgene, at its election, to use trial samples with additional technologies for companion diagnostics. Pursuant to the Company’s agreement as amended in February 2018, the Company is eligible to receive payments from Celgene totaling up to $24.8 million, of which $5.8 million was received as an upfront payment upon delivery of certain information to Celgene and $19.0 million is for development funding and potential success-based development and regulatory milestones. There have been several amendments to the collaboration agreement and in return the Company has received additional payments totaling $2.1 million. The Company will retain all commercial rights to the diagnostic test developed under this collaboration, subject to certain backup rights granted to Celgene to commercialize the diagnostic test in a particular country if the Company elects to cease distribution or elects not to distribute the diagnostic in such country. Assuming success in the clinical trial process, and subject to regulatory approval, the Company will market and sell the diagnostic assay. The process of successfully developing a product candidate, obtaining regulatory approval and ultimately commercializing a product candidate is highly uncertain and the attainment of any additional milestones is therefore uncertain and difficult to predict. In addition, certain milestones are outside the Company’s control and are dependent on the performance of Celgene and the outcome of a clinical trial and related regulatory processes. Accordingly, the Company is not able to reasonably estimate when, if at all, any additional milestone payments may be payable to the Company by Celgene. The Company recognized revenue related to the Celgene agreement of $2.6 million, $0.2 million, and $3.2 million for the years ended December 31, 2018, 2017, and 2016, respectively. At December 31, 2018, the Company had recorded $4.0 million of deferred revenue related to the Celgene collaboration, all of which is estimated to be recognizable as revenue within one year. Merck & Co., Inc. In May 2015, the Company entered into a clinical research collaboration agreement with Merck Sharp & Dohme Corp., a subsidiary of Merck & Co., Inc. (“Merck”), to develop an assay intended to optimize immune-related gene expression signatures and evaluate the potential to predict benefit from Merck’s anti-PD-1 therapy, KEYTRUDA. Under the terms of the collaboration agreement, the Company received $3.9 million in payments during 2015. In connection with the execution of the development collaboration agreement, the Company and Merck terminated the May 2015 clinical research collaboration and moved all remaining activities under the related work plan to the new development collaboration agreement. In February 2016, the Company expanded its collaboration with Merck by entering into a new development collaboration agreement to clinically develop, seek regulatory approval for, and commercialize a companion diagnostic test to predict response to KEYTRUDA in multiple tumor types. During 2016, the Company received $12.0 million upfront as a technology access fee and $8.5 million of preclinical milestone payments. In October 2017, Merck notified the Company of its decision not to pursue regulatory approval of the companion diagnostic test for KEYTRUDA and, in August 2018, the Company and Merck agreed to mutually terminate their development collaboration agreement, effective as of September 30, 2018, following the completion of certain close-out activities. As part of the mutual termination agreement, Merck granted to the Company a non-exclusive license to certain intellectual property that relates to Merck’s tumor inflammation signature. The Company recognized revenue related to the Merck agreement of $1.6 million, $27.0 million, and $8.6 million for the years ended December 31, 2018, 2017, and 2016, respectively. The Company received development funding of $1.1 million, $6.8 million, and $8.7 million for the years ended December 31, 2018, 2017, and 2016, respectively. As of December 31, 2018, there is no remaining deferred revenue related to the Merck collaboration. Medivation, Inc. and Astellas Pharma, Inc. In January 2016, the Company entered into a collaboration agreement with Medivation, Inc. (“Medivation”) and Astellas Pharma Inc. (“Astellas”) to pursue the translation of a novel gene expression signature algorithm discovered by Medivation into a companion diagnostic assay using the nCounter Analysis System. In September 2016, Medivation was acquired by Pfizer, Inc. (“Pfizer”) and became a wholly owned subsidiary of Pfizer. In May 2017, the Company received notification from Pfizer and Astellas terminating the collaboration agreement as a result of a decision to discontinue the related clinical trial. The Company recognized revenue related to the Medivation/Astellas agreement of $11.5 million and $4.8 million for the years ended December 31, 2017 and 2016, respectively, including the favorable impact of a $1.0 million termination penalty during 2017. The Company achieved and was paid for milestones totaling $6.0 million during 2016. The Company received development funding of $0.9 million, and $2.4 million for the years ended December 31, 2017 and 2016, respectively.

Common Stock and Preferred Stock	12 Months Ended
Common Stock and Preferred Stock	Dec. 31, 2018
Equity [Abstract]
Common Stock and Preferred Stock	Common Stock and Preferred Stock Public Offerings In May 2015, the Company entered into a sales agreement with a sales agent to sell shares of the Company’s common stock through an “at the market” equity offering program for up to $40.0 million in total sales proceeds. Pursuant to the sales agreement, the Company sold 1,331,539 and 960,400 shares during 2016 and 2015, respectively, for net proceeds of $26.1 million and $12.5 million, respectively. The Sales Agreement automatically terminated when the Company sold the maximum number of shares allowed under the agreement. In June 2017, the Company completed an underwritten public offering of 3,450,000 shares of common stock, including the exercise by the underwriter of an over-allotment option for 450,000 shares of common stock, for total gross proceeds of $57.8 million. After underwriter’s fees and commissions and other expenses of the offering, the Company’s aggregate net proceeds were approximately $56.5 million. In January 2018, the Company entered into a Sales Agreement with a sales agent to sell shares of the Company's common stock through an “at the market” equity offering program for up to $40.0 million in gross cash proceeds. The Sales Agreement allows the Company to set the parameters for the sale of shares, including the number of shares to be issued, the time period during which sales are requested to be made, limits on the number of shares that may be sold in any one trading day and a minimum price below which sales may not be made. Under the terms of the Sales Agreement, commission expenses to the sales agent will be 3% of the gross sales price per share sold through the sales agent. The Sales Agreement shall automatically terminate upon the issuance and sale of shares that provide gross proceeds of $40.0 million and may be terminated earlier by either the Company or the sales agent upon five days’ notice. In July 2018, the Company completed an underwritten public offering of 4,600,000 shares of common stock, including the exercise in full by the underwriters of their option to purchase 600,000 additional shares of common stock in August 2018, for total gross proceeds of $57.5 million. After underwriter’s commissions and other expenses of the offering, the Company’s aggregate net proceeds were approximately $53.8 million. Common Stock Each share of common stock is entitled to one vote. The holders of common stock are also entitled to receive dividends whenever funds are legally available and when declared by the board of directors, subject to the prior rights of holders of other classes of stock outstanding. Preferred Stock Pursuant to the amended and restated certificate of incorporation filed by the Company immediately prior to the completion of its initial public offering, the Company’s board of directors is authorized to issue up to 15,000,000 shares of preferred stock in one or more series and to fix the rights, preferences, privileges and restrictions thereof. These rights, preferences and privileges could include dividend rights, conversion rights, voting rights, redemption rights, liquidation preferences, sinking fund terms and the number of shares constituting any series or the designation of such series, any or all of which may be greater than the rights of common stock. The issuance of preferred stock could adversely affect the voting power of holders of common stock and the likelihood that such holders will receive dividend payments and payments upon liquidation. In addition, the issuance of preferred stock could have the effect of delaying, deferring or preventing change in the Company’s control or other corporate action. As of December 31, 2018, no shares of preferred stock were issued or outstanding, and the board of directors has not authorized or designated any rights, preferences, privileges and restrictions for any class of preferred stock. Warrants Prior to the Company’s initial public offering, warrants to purchase preferred stock were issued related to certain financing transactions. All preferred stock warrants were converted into warrants to purchase common stock upon the effectiveness of the initial public offering. In addition, the Company has issued common stock warrants to third parties in accordance with the provisions of certain debt and collaboration agreements. As of December 31, 2018, there were 905,798 common stock warrants outstanding with a weighted average exercise price of $18.38 per share and expiration dates ranging from 2022 to 2025.

Stock-based Compensation

12 Months Ended

Dec. 31, 2018

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-based Compensation

2004 Stock Option Plan and 2013 Equity Incentive Plan

The Company’s 2004 Stock Option Plan, 2013 Equity Incentive Plan, and the 2018 Inducement Equity Incentive Plan (the “Plans”) authorize the grant of options, restricted stock units (“RSUs”) and other equity awards to employees, directors and consultants. As of December 31, 2018, there were 9,022,827 shares authorized under the Plans. All options granted have a ten-year term and generally vest and become exercisable over four years of continued employment or service as defined in each option agreement. The Board of Directors determines the option exercise price and may designate stock options granted as either incentive or nonstatutory stock options. The Company generally grants stock options to employees with exercise prices equal to the estimated fair value of the Company’s common stock on the date of grant.

Stock Option Activity

A summary of the Company’s stock option activity under the Plans is as follows:



	Shares		Weighted- average exercise price per share		Weighted- average remaining contractual term (in years)	Aggregate intrinsic value (in thousands)
Outstanding at January 1,2018	5,196,253		$	13.32	6.98	$	3,861
Granted	1,186,944		8.69
Canceled and forfeited	(910,243	)	14.48
Exercised	(430,602	)	8.14
Outstanding at December 31, 2018	5,042,352		$	12.46	6.49	$	18,255

December 31, 2018:
Options vested and expected to vest	5,042,352		$	12.46	6.49	$	18,255
Options exercisable	3,381,664		$	12.48	5.49	$	12,099

The weighted-average grant-date fair value per share of options granted with exercise prices equal to the market price on the date of the grant were $4.78, $9.08, and $6.79 for the years ended December 31, 2018, 2017, and 2016, respectively. The aggregate intrinsic value in the table above is calculated as the difference between the exercise price of the underlying options and the quoted price of the Company’s common stock for all options that were in-the-money at December 31, 2018. The aggregate intrinsic value of options exercised was $2.2 million during 2018, $2.4 million during 2017, and $5.0 million during 2016, determined as of the option exercise date. The fair value of options vested was $6.8 million, $8.9 million, and $6.8 million for the years ended December 31, 2018, 2017, and 2016, respectively.

The following table summarizes information about the Company’s stock options outstanding at December 31, 2018:



	Outstanding		Exercisable
Exercise Price	Number of Shares	Weighted- Average Remaining Contractual Life in Years	Number of Shares	Weighted- Average Remaining Contractual Life in Years
$1.92	357,609	3.22	357,609	3.22
$2.24 – $6.72	344,531	2.62	336,231	2.46
$6.80 – $12.56	1,225,090	7.94	462,948	6.15
$12.77	484,976	5.83	463,659	5.82
$12.89 – $12.94	436,867	6.90	298,921	6.73