0001603756-20-000079 | 10-Q | XBRL Viewer | Axonics Modulation Technologies INC

Cover Page - shares	9 Months Ended
Cover Page - shares	Sep. 30, 2020	Nov. 02, 2020
Cover [Abstract]
Amendment Flag	false
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q3
Entity Central Index Key	0001603756
Current Fiscal Year End Date	--12-31
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2020
Document Transition Report	false
Entity File Number	001-38721
Entity Registrant Name	Axonics Modulation Technologies, Inc.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	45-4744083
Entity Address, Address Line One	26 Technology Drive
Entity Address, City or Town	Irvine,
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	92618
City Area Code	(949)
Local Phone Number	396-6322
Title of 12(b) Security	Common stock, par value $0.0001 per share
Trading Symbol	AXNX
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition period	true
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		39,809,412

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Current assets
Cash and cash equivalents	$ 269,280	$ 171,082
Short-term investments	0	12,592
Accounts receivable, net of allowance for doubtful accounts of $465 and $75 at September 30, 2020 and December 31, 2019, respectively	17,650	7,879
Inventory, net	44,308	15,659
Prepaid expenses and other current assets	3,220	4,468
Total current assets	334,458	211,680
Property and equipment, net	5,792	3,047
Intangible asset, net	225	311
Other assets	7,196	4,784
Total assets	347,671	219,822
Current liabilities
Accounts payable	9,415	5,882
Accrued liabilities	5,977	2,174
Accrued compensation and benefits	7,516	3,375
Operating lease liability, current portion	908	602
Debt, current portion	15,000	0
Total current liabilities	38,816	12,033
Operating lease liability, net of current portion	9,027	4,450
Debt, net of unamortized debt issuance costs, net of current portion	5,930	20,336
Total liabilities	53,773	36,819
Stockholders’ equity
Preferred stock, par value $0.0001 per share; 10,000,000 shares authorized, no shares issued and outstanding at September 30, 2020 and December 31, 2019	0	0
Common stock, par value $0.0001, 50,000,000 shares authorized at September 30, 2020 and December 31, 2019; 39,753,638 and 34,110,995 shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively	4	3
Additional paid-in capital	517,659	363,012
Accumulated deficit	(223,151)	(179,584)
Accumulated other comprehensive loss	(614)	(428)
Total stockholders’ equity	293,898	183,003
Total liabilities and stockholders’ equity	$ 347,671	$ 219,822

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Statement of Financial Position [Abstract]
Allowance for doubtful accounts	$ 465	$ 75
Preferred stock, par value (USD per share)	$ 0.0001	$ 0.0001
Preferred stock authorized (shares)	10,000,000	10,000,000
Preferred stock issued (shares)	0	0
Preferred stock outstanding (shares)	0	0
Common stock, par value (USD per share)	$ 0.0001	$ 0.0001
Common stock authorized (shares)	50,000,000	50,000,000
Common stock issued (shares)	39,753,638	34,110,995
Common stock outstanding (shares)	39,753,638	34,110,995

Condensed Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Statement of Comprehensive Income [Abstract]
Net revenue	$ 35,243	$ 1,309	$ 76,752	$ 3,874
Cost of goods sold	13,434	632	31,792	1,952
Gross profit	21,809	677	44,960	1,922
Operating Expenses
Research and development	7,748	4,855	21,030	13,948
General and administrative	5,773	5,162	18,963	13,539
Sales and marketing	17,057	15,707	47,846	32,371
Total operating expenses	30,578	25,724	87,839	59,858
Loss from operations	(8,769)	(25,047)	(42,879)	(57,936)
Other Income (Expense)
Interest income	35	627	742	2,500
Interest and other expense	(434)	(586)	(1,429)	(1,747)
Other income (expense), net	(399)	41	(687)	753
Loss before income tax expense	(9,168)	(25,006)	(43,566)	(57,183)
Income tax expense	0	0	1	1
Net loss	(9,168)	(25,006)	(43,567)	(57,184)
Foreign currency translation adjustment	99	(112)	(186)	(165)
Comprehensive loss	$ (9,069)	$ (25,118)	$ (43,753)	$ (57,349)
Net loss per share, basic and diluted (USD per share)	$ (0.24)	$ (0.89)	$ (1.20)	$ (2.05)
Weighted-average shares used to compute basic and diluted net loss per share (shares)	38,830,924	28,098,564	36,312,984	27,958,376

Condensed Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-in Capital	Accumulated Deficit	Accumulated Other Comprehensive Loss
Balance at beginning of period (shares) at Dec. 31, 2018		27,806,934
Balance at beginning of period at Dec. 31, 2018	$ 143,275	$ 3	$ 243,337	$ (99,649)	$ (416)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock for employee stock option exercises for cash (shares)		41,740
Issuance of common stock for employee stock option exercises for cash	44		44
Restricted Shares Award (RSA) issuances and forfeitures for terminations, net and stock-based compensation (shares)		352,417
Restricted Shares Award (RSA) issuances and forfeitures for terminations, net and stock-based compensation	977		977
Restricted Stock Units (RSU) issuances and forfeitures for terminations, net and stock-based compensation	165		165
Foreign currency translation adjustment	(10)				(10)
Net loss	(13,117)			(13,117)
Balance at end of period (shares) at Mar. 31, 2019		28,201,091
Balance at end of period at Mar. 31, 2019	131,334	$ 3	244,523	(112,766)	(426)
Balance at beginning of period (shares) at Dec. 31, 2018		27,806,934
Balance at beginning of period at Dec. 31, 2018	143,275	$ 3	243,337	(99,649)	(416)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Foreign currency translation adjustment	(165)
Net loss	(57,184)
Balance at end of period (shares) at Sep. 30, 2019		28,633,911
Balance at end of period at Sep. 30, 2019	92,188	$ 3	249,599	(156,833)	(581)
Balance at beginning of period (shares) at Mar. 31, 2019		28,201,091
Balance at beginning of period at Mar. 31, 2019	131,334	$ 3	244,523	(112,766)	(426)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock for employee stock option exercises for cash (shares)		136,164
Issuance of common stock for employee stock option exercises for cash	308		308
Restricted Shares Award (RSA) issuances and forfeitures for terminations, net and stock-based compensation (shares)		112,417
Restricted Shares Award (RSA) issuances and forfeitures for terminations, net and stock-based compensation	1,629		1,629
Restricted Stock Units (RSU) issuances and forfeitures for terminations, net and stock-based compensation	246		246
Issuance of common stock for warrant exercise (shares)		31,071
Foreign currency translation adjustment	(43)				(43)
Net loss	(19,061)			(19,061)
Balance at end of period (shares) at Jun. 30, 2019		28,480,743
Balance at end of period at Jun. 30, 2019	114,413	$ 3	246,706	(131,827)	(469)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock for employee stock option exercises for cash (shares)		82,756
Issuance of common stock for employee stock option exercises for cash	111		111
Restricted Shares Award (RSA) issuances and forfeitures for terminations, net and stock-based compensation (shares)		37,883
Restricted Shares Award (RSA) issuances and forfeitures for terminations, net and stock-based compensation	2,534		2,534
Restricted Stock Units (RSU) issuances and forfeitures for terminations, net and stock-based compensation	248		248
Issuance of common stock for warrant exercise (shares)		32,529
Foreign currency translation adjustment	(112)				(112)
Net loss	(25,006)			(25,006)
Balance at end of period (shares) at Sep. 30, 2019		28,633,911
Balance at end of period at Sep. 30, 2019	$ 92,188	$ 3	249,599	(156,833)	(581)
Balance at beginning of period (shares) at Dec. 31, 2019	34,110,995	34,110,995
Balance at beginning of period at Dec. 31, 2019	$ 183,003	$ 3	363,012	(179,584)	(428)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock for employee stock option exercises for cash (shares)		181,456
Issuance of common stock for employee stock option exercises for cash	344		344
Restricted Shares Award (RSA) issuances and forfeitures for terminations, net and stock-based compensation (shares)		171,875
Restricted Shares Award (RSA) issuances and forfeitures for terminations, net and stock-based compensation	3,039		3,039
Restricted Stock Units (RSU) issuances and forfeitures for terminations, net and stock-based compensation (shares)		46,336
Restricted Stock Units (RSU) issuances and forfeitures for terminations, net and stock-based compensation	883		883
Foreign currency translation adjustment	(177)				(177)
Net loss	(14,616)			(14,616)
Balance at end of period (shares) at Mar. 31, 2020		34,510,662
Balance at end of period at Mar. 31, 2020	$ 172,476	$ 3	367,278	(194,200)	(605)
Balance at beginning of period (shares) at Dec. 31, 2019	34,110,995	34,110,995
Balance at beginning of period at Dec. 31, 2019	$ 183,003	$ 3	363,012	(179,584)	(428)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Foreign currency translation adjustment	(186)
Net loss	$ (43,567)
Balance at end of period (shares) at Sep. 30, 2020	39,753,638	39,753,638
Balance at end of period at Sep. 30, 2020	$ 293,898	$ 4	517,659	(223,151)	(614)
Balance at beginning of period (shares) at Mar. 31, 2020		34,510,662
Balance at beginning of period at Mar. 31, 2020	172,476	$ 3	367,278	(194,200)	(605)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock for employee stock option exercises for cash (shares)		319,680
Issuance of common stock for employee stock option exercises for cash	1,008		1,008
Restricted Shares Award (RSA) issuances and forfeitures for terminations, net and stock-based compensation (shares)		32,063
Restricted Shares Award (RSA) issuances and forfeitures for terminations, net and stock-based compensation	2,969		2,969
Restricted Stock Units (RSU) issuances and forfeitures for terminations, net and stock-based compensation	847		847
Follow-on offering - issuance, less closing costs (shares)		4,600,000
Follow-on offering - issuance, less closing costs	140,487	$ 1	140,486
Foreign currency translation adjustment	(108)				(108)
Net loss	(19,783)			(19,783)
Balance at end of period (shares) at Jun. 30, 2020		39,462,405
Balance at end of period at Jun. 30, 2020	297,896	$ 4	512,588	(213,983)	(713)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock for employee stock option exercises for cash (shares)		164,233
Issuance of common stock for employee stock option exercises for cash	1,296		1,296
Restricted Shares Award (RSA) issuances and forfeitures for terminations, net and stock-based compensation (shares)		127,000
Restricted Shares Award (RSA) issuances and forfeitures for terminations, net and stock-based compensation	2,920		2,920
Restricted Stock Units (RSU) issuances and forfeitures for terminations, net and stock-based compensation	855		855
Foreign currency translation adjustment	99				99
Net loss	$ (9,168)			(9,168)
Balance at end of period (shares) at Sep. 30, 2020	39,753,638	39,753,638
Balance at end of period at Sep. 30, 2020	$ 293,898	$ 4	$ 517,659	$ (223,151)	$ (614)

Condensed Consolidated Statements of Stockholders' Equity (Parenthetical) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Jun. 30, 2020	Sep. 30, 2020	Sep. 30, 2019
Statement of Stockholders' Equity [Abstract]
Offering price per share (USD per share)	$ 32.50
Closing costs	$ 9,013	$ 9,013	$ 0

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Cash Flows from Operating Activities
Net loss	$ (43,567)	$ (57,184)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation and amortization	1,253	880
Stock-based compensation	11,513	5,799
Amortization of debt issuance costs	594	659
Provision for doubtful accounts	390	0
Other items, net	142	0
Changes in operating assets and liabilities
Accounts receivable	(10,161)	(527)
Inventory	(28,600)	(9,030)
Prepaid expenses and other current assets	1,352	1,091
Other assets	16	(327)
Accounts payable	3,533	796
Accrued liabilities	3,508	532
Accrued compensation and benefits	4,141	2,089
Lease liability	458	(96)
Net cash used in operating activities	(55,428)	(55,318)
Cash Flows from Investing Activities
Purchases of property and equipment	(1,915)	(962)
Purchases of short-term investments	0	(35,210)
Proceeds from sales and maturities of short-term investments	12,592	69,117
Net cash provided by investing activities	10,677	32,945
Cash Flows from Financing Activities
Proceeds from issuance of common stock upon follow-on public offering	149,500	0
Payment of common stock issuance costs upon follow-on public offering	(9,013)	0
Proceeds from exercise of stock options	2,648	463
Net cash provided by financing activities	143,135	463
Effect of exchange rate changes on cash and cash equivalents	(186)	(165)
Net increase (decrease) in cash and cash equivalents	98,198	(22,075)
Cash and cash equivalents, beginning of year	171,082	98,306
Cash and cash equivalents, end of period	269,280	76,231
Supplemental Disclosure of Cash Flow Information
Cash paid for interest	849	1,097
Cash paid for taxes	$ 0	$ 1

Nature of Operations and Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Nature of Operations and Summary of Significant Accounting Policies

Nature of Operations

Axonics Modulation Technologies, Inc. (the Company), formerly American Restorative Medicine, Inc., was incorporated in the state of Delaware on March 2, 2012. The Company had no operations until October 1, 2013, when the license agreement between Alfred E. Mann Foundation for Scientific Research (AMF) and the Company (the License Agreement) was entered into. The Company is a medical technology company that has developed and is commercializing innovative and minimally invasive implantable neurostimulation systems. The Company has designed and developed the rechargeable sacral neuromodulation (SNM) system (r-SNM System), which delivers mild electrical pulses to the targeted sacral nerve in order to restore normal communication to and from the brain to reduce the symptoms of overactive bladder (OAB), urinary retention (UR) and fecal incontinence (FI). The r-SNM System is protected by intellectual property based on Company-generated innovations and patents and other intellectual property licensed from AMF. The Company has marketing approvals in the United States, Europe, Canada, and Australia for all relevant clinical indications. On September 6, 2019, the premarket approval (PMA) application for the r-SNM System for the treatment of FI was approved by the U.S. Food and Drug Administration (FDA) and on November 13, 2019, the PMA application for the r-SNM System for the treatment of OAB and UR was approved by the FDA. Accordingly, the Company began U.S. commercialization of its r-SNM System in the fourth quarter of 2019. Prior to the fourth quarter of 2019, the Company derived revenue only from its international operations in select markets including England, the Netherlands and Canada, and its activities have consisted primarily of developing the r-SNM System, conducting its RELAX-OAB post-market clinical follow-up study in Europe, its ARTISAN-SNM pivotal clinical study in the United States and hiring and training its U.S. commercial team in preparation for the launch of the r-SNM System in the United States.

Initial Public Offering

On November 2, 2018, the Company completed its initial public offering (IPO) by issuing 9,200,000 shares of common stock, at an offering price of $15.00 per share, inclusive of 1,200,000 shares of the Company’s common stock issued upon the exercise by the underwriters of their option to purchase additional shares. The net proceeds were approximately $126.0 million, after deducting underwriting discounts, commissions and offering expenses payable by the Company. In connection with the IPO, the Company’s outstanding shares of convertible preferred stock were automatically converted into an aggregate of 15,813,297 shares of common stock, and the Company’s outstanding warrants to purchase shares of Series C convertible preferred stock were automatically converted into warrants to purchase up to an aggregate of 80,000 shares of common stock (see Note 5).

November 2019 Follow-On Offering

On November 22, 2019, the Company completed a follow-on offering by issuing 5,345,000 shares of common stock, at an offering price of $22.00 per share, inclusive of 750,000 shares of the Company’s common stock issued upon the exercise by the underwriters of their option to purchase additional shares. The net proceeds to the Company were approximately $110.4 million, after deducting underwriting discounts, commissions and offering expenses payable by the Company.

May 2020 Follow-On Offering

On May 12, 2020, the Company completed a follow-on offering by issuing 4,600,000 shares of common stock, at an offering price of $32.50 per share, inclusive of 600,000 shares of the Company’s common stock issued upon the exercise by the underwriters of their option to purchase additional shares. The net proceeds to the Company were approximately $140.5 million, after deducting underwriting discounts, commissions and offering expenses payable by the Company.

Principles of Consolidation

The accompanying unaudited interim condensed consolidated financial statements include the accounts of the Company, its wholly-owned subsidiaries, Axonics Europe, S.A.S., Axonics Modulation Technologies U.K. Limited and Axonics Modulation Technologies Australia Pty Ltd. Intercompany accounts and transactions have been eliminated in consolidation.

Basis of Presentation

Interim Financial Statements

The interim condensed consolidated financial statements and related footnote disclosures as of and for the three and nine months ended September 30, 2020 are unaudited, and are not necessarily indicative of the Company’s operating results for a full year. The unaudited interim condensed consolidated financial statements include all normal and recurring adjustments necessary for a fair presentation of the Company’s financial results for the three and nine months ended September 30, 2020 in accordance with United States (U.S.) generally accepted accounting principles (GAAP), however, certain information and footnote disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to the U.S. Securities and Exchange Commission (SEC) rules and regulations relating to interim financial statements. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto included within the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019 (filed with the SEC on March 4, 2020).

COVID-19

The recent COVID-19 outbreak, and the resulting restrictions intended to slow the spread of COVID-19, including stay-at-home orders, business shutdowns and other restrictions, has adversely affected the Company’s business in several ways. The primary impact on the Company’s business was the cancellation or delay of elective procedures in certain areas to allow health care facilities to prioritize the treatment of COVID-19 patients during the initial stages of the pandemic or because patients are avoiding health care facilities that they feel are unsafe. These developments materially reduced the number of procedures using the Company’s r-SNM System. If governmental authorities recommend that it is deemed advisable for health care facilities to not perform outpatient elective procedures as was the case in late March and April of 2020, the Company expects it would materially harm the Company’s revenues and potentially increase the Company’s operating loss. These challenges will likely continue for the duration of the pandemic and could reduce our revenue and negatively impact our business, financial condition and results of operations while the pandemic continues. If these delays in procedures occur in the future, the Company may have to scale back its business, including reducing headcount, which could have a negative impact on the Company’s long-term operations. The Company could also experience other negative impacts of the COVID-19 outbreak such as the lack of availability of the Company’s key personnel, temporary closures of the Company’s office or the facilities of the Company’s business partners, customers, third party service providers or other vendors, and the interruption of the Company’s supply chain, distribution channels, liquidity and capital or financial markets.

Any disruption and volatility in the global capital markets as a result of the pandemic may increase the Company’s cost of capital and adversely affect the Company’s ability to access financing when and on terms that the Company desires. In addition, a recession resulting from the spread of COVID-19 could materially affect the Company’s business, especially if a recession results in higher unemployment causing potential patients to not have access to health insurance.

The ultimate extent to which the COVID-19 pandemic and its repercussions impact the Company’s business will depend on future developments, which are highly uncertain. However, the foregoing and other continued disruptions to the Company’s business as a result of COVID-19 could result in a material adverse effect on the Company’s business, results of operations, financial condition and cash flows.

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with GAAP requires the Company’s management to make estimates and judgments that affect the reported amounts of assets, liabilities, and expenses, and related disclosure of contingent assets and liabilities. The Company bases its estimates on historical experience and on various other assumptions that it believes to be reasonable under the circumstances. The results of this evaluation then form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions, and such differences may be material to the consolidated financial statements.

Revenue Recognition

Revenue recognized during the three and nine months ended September 30, 2020 and 2019 relates entirely to the sale of our r-SNM System. In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-09 “Revenue from Contracts with Customers” (ASU 2014-09) as Accounting Standards Codification (ASC) Topic 606. The objective of Topic 606 is to establish a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and superseded most of the existing revenue recognition guidance, including industry-specific guidance. The core principle is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Topic 606 applies to all contracts with customers except those that are within the scope of other topics in the FASB ASC.

The Company has revenue arrangements that consist of a single performance obligation. The Company recognizes revenue at the point in time when it transfers control of promised goods to its customers. Revenue is measured as the amount of consideration it expects to receive in exchange for transferring goods. The amount of revenue that is recognized is based on the transaction price, which represents the invoiced amount and includes estimates of variable consideration such as discounts, where applicable. The Company does not offer rights of return or price protection. The amount of variable consideration included in the transaction price may be constrained and is included only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognized under the contract will not occur in a future period. Payment terms, typically less than three months, are offered to the Company’s customers and do not include a significant financing component. The Company extends credit to its customers based upon an evaluation of the customer’s financial condition and credit history and generally requires no collateral. The Company does not have any contract balances related to product sales. The Company also does not have significant contract acquisition costs related to product sales.

In accordance with Company policy and based on the Company’s historical experience, the allowance for product returns was $0.3 million and zero at September 30, 2020 and December 31, 2019, respectively. Damaged or defective products are replaced at no charge under the Company’s standard warranty. For the nine months ended September 30, 2020, the replacement costs were $0.1 million. For the three months ended September 30, 2020 and three and nine months ended September 30, 2019, the replacement costs were minimal.

The following table provides additional information pertaining to net revenue disaggregated by geographic market for the three and nine months ended September 30, 2020 and 2019 (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
United States	$	34,139	$	—	$	73,833	$	—
International markets	1,104		1,309		2,919		3,874
Total net revenue	$	35,243	$	1,309	$	76,752	$	3,874

Allowance for Doubtful Accounts

The Company makes estimates of the collectability of accounts receivable. In doing so, the Company analyzes historical bad debt trends, customer credit worthiness, current economic trends and changes in customer payment patterns when evaluating the adequacy of the allowance for doubtful accounts. Despite the Company’s efforts to minimize credit risk exposure, clients could be adversely affected if future economic and industry trends, including those related to COVID-19, change in such a manner as to negatively impact their cash flows. The full effects of COVID-19 on the Company’s clients are highly uncertain and cannot be predicted. As a result, the Company’s future collection experience can differ significantly from historical collection trends. If the Company’s clients experience a negative impact on their cash flows, it could have a material adverse effect on the Company’s results of operations and financial condition.

Cash and Cash Equivalents

Cash equivalents consist of short-term, highly liquid investments purchased with an original maturity of three months or less. Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash and cash equivalents. At times, the cash and cash equivalent balances may exceed federally insured limits. The Company does not believe that this results in any significant credit risk.

Fair Value of Financial Instruments

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A three-level fair value hierarchy prioritizes the inputs used to measure fair value. The hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows:

•Level 1: Inputs are unadjusted quoted prices in active markets for identical assets or liabilities.

•Level 2: Inputs are quoted prices for similar assets and liabilities in active markets or 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: Inputs are unobservable inputs based on the Company’s assumptions and valuation techniques used to measure assets and liabilities at fair value. The inputs require significant management judgment or estimation.

The Company’s assessment of the significance of an input to the fair value measurement requires judgment, which may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy levels. The carrying amounts reported in the condensed consolidated financial statements approximate the fair value for cash and cash equivalents, accounts receivable, accounts payables, and accrued expenses, due to their short-term nature. The carrying amount of the Company’s term loan, which is described below, approximates fair value, considering the interest rates are based on the prime interest rate.

Investment Securities

The Company classifies its investment securities as available-for-sale. Those investments in debt securities with maturities less than 12 months at the date of purchase are considered short-term investments. Those investments in debt securities with maturities greater than 12 months at the date of purchase are considered long-term investments. The Company’s investment securities classified as available-for-sale are recorded at fair value based on the fair value hierarchy (Level 1 and Level 2 inputs in the fair value hierarchy), and consists primarily of commercial paper, corporate notes and U.S. government and agency securities. Unrealized gains or losses, deemed temporary in nature, are reported as other comprehensive income within the condensed consolidated statement of comprehensive income (loss). There were no unrealized gains or losses during the three and nine months ended September 30, 2020 and 2019.

A decline in the fair value of any security below cost that is deemed other than temporary results in a charge to net income (loss) and the corresponding establishment of a new cost basis for the security. Premiums (discounts) are amortized (accreted) over the life of the related security as an adjustment to yield using the straight-line interest method. Dividend and interest income are recognized when earned. Realized gains or losses are included in net income (loss) and are derived using the specific identification method for determining the cost of securities sold.

The following table presents the fair value hierarchy for those assets measured at fair value on a recurring basis as of September 30, 2020 and December 31, 2019 (in thousands):

Fair Value Measurements at September 30, 2020

Assets:

Level 1

Level 2

Level 3

Total

Commercial paper

—

Corporate notes

—

U.S. government and agency securities

—


	Fair Value Measurements at December 31, 2019
Assets:	Level 1		Level 2		Level 3		Total
Commercial paper	$	—	$	7,195	$	—	$	7,195
Corporate notes	2,018		—		—		2,018
U.S. government and agency securities	3,379		—		—		3,379
	$	5,397	$	7,195	$	—	$	12,592

Foreign Currency Translation

The functional currencies of the Company’s subsidiaries are currencies other than the U.S. dollar. The Company translates assets and liabilities of the foreign subsidiaries into U.S. dollars at the exchange rate in effect on the balance sheet date. Costs and expenses of the subsidiaries are translated into U.S. dollars at the average exchange rate during the period. Gains or losses from these translation adjustments are reported as a separate component of stockholders’ equity in accumulated other comprehensive loss until there is a sale or complete or substantially complete liquidation of the Company’s investment in the foreign subsidiary at which time the gains or losses will be realized and included in net income (loss). As of September 30, 2020 and December 31, 2019, all foreign currency translation gains (losses) have been unrealized and included in accumulated other comprehensive loss. Accumulated other comprehensive loss consists entirely of losses or gains from translation of foreign subsidiaries at September 30, 2020 and December 31, 2019. Foreign currency transaction gains and losses are included in results of operations and have not been significant for the periods presented.

Inventory, Net

Inventories are stated at the lower of cost or net realizable value, with cost computed on a first-in, first-out basis. The Company reduces the carrying value of inventories for items that are potentially excess, obsolete, or slow-moving based on changes in customer demand, technology developments, or other economic factors.

The Company capitalizes inventory produced for commercial sale. The Company capitalizes manufacturing costs as inventory following both the receipt of regulatory approval from regulatory bodies and the Company’s intent to commercialize. Costs associated with developmental products prior to satisfying the Company’s inventory capitalization criteria are charged to research and development expense as incurred.

Products that have been approved by certain regulatory authorities are also used in clinical programs to assess the safety and efficacy of the products for usage that have not been approved by the FDA or other regulatory authorities. The form of product utilized for both commercial and certain clinical programs is identical and, as a result, the inventory has an “alternative future use” as defined in authoritative guidance. Component materials and purchased products associated with clinical development programs are included in inventory and charged to research and development expense when the product enters the research and development process and no longer can be used for commercial purposes and, therefore, does not have an “alternative future use.”

For products that are under development and have not yet been approved by regulatory authorities, purchased component materials are charged to research and development expense when the inventory ownership transfers to the Company.

The Company analyzes inventory levels to identify inventory that may expire prior to sale, inventory that has a cost basis in excess of its net realizable value, or inventory in excess of expected sales requirements. Although the manufacturing of the r-SNM System is subject to strict quality control, certain batches or units of product may no longer meet quality specifications or may expire, which would require adjustments to the Company’s inventory values. The Company also applies judgment related to the results of quality tests that are performed throughout the production process, as well as the understanding of regulatory guidelines, to determine if it is probable that inventory will be saleable. These quality tests are performed throughout the pre- and post-production processes, and the Company continually gathers information regarding product quality for periods after the manufacturing date. The r-SNM System currently has a maximum estimated shelf life range of 12 to 27 months and, based on sales forecasts, the Company expects to realize the carrying value of the product inventory. In the future, reduced demand, quality issues, or excess supply beyond those anticipated by management may result in a material adjustment to inventory levels, which would be recorded as an increase to cost of sales.

The determination of whether or not inventory costs will be realizable requires estimates by the Company’s management. A critical input in this determination is future expected inventory requirements based on internal sales forecasts. Management then compares these requirements to the expiry dates of inventory on hand. To the extent that inventory is expected to expire prior to being sold, management will write down the value of inventory.

As of September 30, 2020, the Company had $23.0 million, $6.1 million and $15.2 million of finished goods inventory, work-in-process inventory and raw materials inventory, respectively, on hand net of reserves that were minimal. As of December 31, 2019, the Company had $7.0 million, $1.5 million and $7.2 million of finished goods inventory, work-in-process inventory and raw materials inventory, respectively, on hand net of reserves of $0.1 million.

Vendor Concentration

As of September 30, 2020 and December 31, 2019, there was one and no vendor, respectively, who accounted for over 10% of the Company’s consolidated accounts payable.

Property and Equipment

Property and equipment are stated at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, generally between three and seven years. Leasehold improvements are amortized over the lesser of the life of the lease or the useful life of the improvements. Maintenance and repairs are charged to expense as incurred. When assets are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the balance sheet and any resulting gain or loss is reflected in operations.

Intangible Asset

The intangible asset represents exclusive rights to an additional field-of-use on the patent suite within the License Agreement with AMF. The additional field-of-use was provided in exchange for 50,000 shares of Series A preferred stock, the fair value of which was $1.0 million in 2013. The intangible asset was recorded at its fair value of $1.0 million at the date contributed. In connection with the IPO, such shares of Series A preferred stock were converted into common stock. Amortization of this asset is recorded over the shorter of the patent or legal life on a straight-line basis. The weighted-average amortization period is 8.71 years. Accumulated amortization of the intangible asset is $0.8 million and $0.7 million at September 30, 2020 and December 31, 2019, respectively. The Company recorded expense for the amortization of intangible assets of $0.1 million during the nine months ended September 30, 2020 and 2019. The amortization of the intangible asset was minimal during the three months ended September 30, 2020 and 2019. The Company will review the intangible asset for impairment whenever an impairment indicator exists. There have been no intangible asset impairment charges to date.

Impairment of Long-Lived Assets

The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability is measured by comparing the carrying amount to the future net cash flows that the assets are expected to generate. If said assets are considered to be impaired, the impairment that would be recognized is measured by the amount by which the carrying amount of

the assets exceeds the projected discounted future net cash flows arising from the asset. There have been no such impairments of long-lived assets to date.

Leases

Effective January 1, 2018, the Company early adopted ASU No. 2016-02, “Leases (Topic 842)”, the comprehensive new lease standard issued by the FASB. The most significant impact was the recognition of right-of-use (ROU) assets and lease liabilities for operating leases. The Company determines if an arrangement is a lease at inception and includes operating leases on the Company’s consolidated balance sheets. The operating lease ROU asset is included within the Company’s other non-current assets, and lease liabilities are included in current or noncurrent liabilities on the Company’s condensed consolidated balance sheets.

The Company has made certain policy elections to apply to its leases executed post-adoption, or subsequent to January 1, 2018. In accordance with Topic 842, components of a lease should be split into three categories: lease components, non-lease components, and non-components. The fixed and in-substance fixed contract consideration (including any consideration related to non-components) must be allocated based on the respective relative fair values to the lease components and non-lease components. Entities may elect not to separate lease and non-lease components. Rather, entities would account for each lease component and related non-lease component together as a single lease component. The Company has elected to account for lease and non-lease components together as a single lease component for all underlying assets and allocate all of the contract consideration to the lease component only. Topic 842 allows for the use of judgment in determining whether the assumed lease term is for a major part of the remaining economic life of the underlying asset and whether the present value of lease payments represents substantially all of the fair value of the underlying asset. The Company applies the bright line thresholds referenced in Topic 842 to assist in evaluating leases for appropriate classification. The aforementioned bright lines are applied consistently to the Company’s entire portfolio of leases.

Operating lease ROU asset and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As the Company’s lease does not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. The operating lease ROU asset also includes any lease payments made and excludes lease incentives and initial direct costs incurred. The lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. As of September 30, 2020 and December 31, 2019, the weighted-average remaining lease terms for the Company’s operating leases were 7.2 years and 7.8 years, respectively. The weighted-average discount rate used to determine the present value of the Company’s operating leases’ future payments was 6.9% and 7.25% as of September 30, 2020 and December 31, 2019, respectively (see Note 3 regarding leases).

Research and Development

Research and development costs are charged to operations as incurred. Research and development costs include salary and personnel-related costs, costs of clinical studies and testing, supplies and materials, and outside consultant costs.

Income Taxes

The Company accounts for income taxes using the asset and liability method to compute the difference between the tax basis of assets and liabilities and the related financial amounts, using currently enacted tax rates. The Company has deferred tax assets. The realization of these deferred tax assets is dependent upon the Company’s ability to generate sufficient taxable income in future years. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount that more likely than not will be realized. The Company evaluates the recoverability of the deferred tax assets annually, and maintains a full valuation allowance on its deferred tax assets. The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position. The Company has determined that it has no uncertain tax positions.

Stock-Based Compensation

The Company measures the cost of employee and non-employee services in exchange for an award of equity instruments based on the grant-date fair value of the award and recognizes compensation cost over the requisite service period (typically the vesting period), generally four years. Forfeitures are estimated at the time of the grant and revised in subsequent periods to reflect differences between the estimates and the number of shares that actually become exercisable.

The Company uses the Black-Scholes option pricing model to determine the fair value of stock options (as of the date of grant) that have service conditions for vesting. Stock options and restricted shares awards vest based on service conditions, typically over four years.

The Company also grants shares of performance-based restricted stock units that typically vest after one year only if the Company has also achieved certain performance objectives as defined and approved by the Company’s board of directors. Performance awards are expensed over the performance period based on the probability of achieving the performance objectives. In addition, the Company also grants market-based restricted stock units that have combined market conditions and service conditions for vesting, for which the Company uses the Monte Carlo valuation model to value equity awards (as of the date of grant).

Net Loss per Share of Common Stock

Basic net loss per share of common stock is calculated by dividing the net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period, without consideration for potentially dilutive securities. Diluted net loss per share is computed by dividing the net loss attributable to common stockholders by the weighted-average number of shares of common stock and potentially dilutive securities outstanding for the period. For purposes of the diluted net loss per share calculation, convertible preferred stock, common and preferred stock warrants, common stock options, unvested RSAs and RSUs are considered to be potentially dilutive securities. Because the Company has reported a net loss in all periods presented, diluted net loss per share of common stock is the same as basic net loss per share of common stock for those periods.

For the three and nine months ended September 30, 2020, there were 2,279,353 and 2,251,155 potentially dilutive weighted-average shares, respectively, that were not included in the computation of diluted weighted-average shares of common stock and common stock equivalent shares outstanding because their effect would have been antidilutive given the Company’s net loss. For the three and nine months ended September 30, 2019, there were 2,286,802 and 1,812,578 potentially dilutive weighted-average shares, respectively, that were not included in the computation of diluted weighted-average shares of common stock and common stock equivalent shares outstanding because their effect would have been antidilutive given the Company’s net loss.

Recent Accounting Pronouncements

In August 2018, the FASB issued ASU No. 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,” which 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 (and hosting arrangements that include an internal-use software license). This guidance is effective for annual periods beginning after December 15, 2019, which was the Company’s first quarter of fiscal year 2020, with early adoption permitted. The adoption of this guidance did not have an impact on the Company’s consolidated financial statements or related disclosures.

In August 2018, the FASB issued ASU No. 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement,” which modifies the disclosure requirements on fair value measurements and is intended to improve the effectiveness of disclosures, including the consideration of costs and benefits. This guidance is effective for annual periods beginning after December 15, 2019, which was the Company’s first quarter of fiscal year 2020, with early adoption permitted. The adoption of this guidance did not have an impact on the Company’s consolidated financial statements or related disclosures.

In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” which updates the methodology used to measure current

expected credit losses (CECL). This guidance applies to financial assets measured at amortized cost, including loans, held-to-maturity debt securities, net investments in leases, and trade accounts receivable as well as certain off-balance sheet credit exposures, such as loan commitments. This guidance replaces the current incurred loss impairment methodology with a methodology to reflect CECL and requires consideration of a broader range of reasonable and supportable information to explain credit loss estimates. The guidance must be adopted using a modified retrospective transition method through a cumulative-effect adjustment to retained earnings (deficit) in the period of adoption. This guidance is expected to be effective for the Company at December 31, 2020, with early adoption permitted. The Company is currently evaluating the impact this guidance will have on the Company’s consolidated financial statements or related disclosures as well as the timing of adoption.

Property and Equipment

9 Months Ended

Sep. 30, 2020

Property, Plant and Equipment [Abstract]

Property and Equipment

Property and equipment, net consists of the following (in thousands) at:


	September 30,		December 31,
	2020		2019
Research and development equipment	$	1,422	$	1,086
Computer hardware and software	1,744		1,418
Tools and molds	1,668		1,303
Leasehold improvements	3,749		1,500
Furniture and fixtures	1,331		624
Construction in progress	105		176
	10,019		6,107
Less: accumulated depreciation and amortization	(4,227)		(3,060)
	$	5,792	$	3,047

Depreciation and amortization expense of property and equipment was $0.5 million and $1.2 million for the three and nine months ended September 30, 2020, respectively. Depreciation and amortization expense of property and equipment was $0.3 million and $0.8 million for the three and nine months ended September 30, 2019, respectively.

Commitments and Contingencies

9 Months Ended

Sep. 30, 2020

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Operating Leases

In August 2014, the Company entered into a five-year operating lease for approximately 12,215 square feet of office space beginning on November 1, 2014, and expiring on October 31, 2019. In June 2019, the lease was amended to extend the expiration date to October 31, 2020. Upon the execution of the amendment, which was deemed to be a lease modification, the Company reassessed the lease liability using the discount rate at the modification date and recorded ROU assets for the same amount. The Company also reassessed the lease classification and concluded that the lease continues to be an operating lease. Under the terms of the lease, the Company is responsible for taxes, insurance, and maintenance expense. The lease contains certain scheduled rent increases. Rent expense is recognized on a straight-line basis over the expected lease term.

In November 2017, the Company entered into a seven-year operating lease for approximately 25,548 square feet of office space beginning on August 1, 2018, and expiring on August 31, 2025. In June 2019, the lease was amended to extend the expiration date to October 31, 2027. Upon the execution of the amendment, which was deemed to be a lease modification, the Company reassessed the lease liability using the discount rate at the modification date and recorded ROU assets for the same amount. The Company also reassessed the lease classification and concluded that the lease continues to be an operating lease. Under the terms of the lease, the Company is responsible for taxes, insurance, and maintenance expense. The lease contains certain scheduled rent increases. Rent expense is recognized on a straight-line basis over the expected lease term. The Company has a renewal option to extend the term of the lease for a period of five years beyond the initial term. Under the terms of the lease, the base rent payable with respect to each renewal term will be equal to the prevailing market rental rent as

of the commencement of the applicable renewal term. In the event of a default of certain of the Company’s obligations under the lease, the Company’s landlord would have the right to terminate the lease.

In June 2019, the Company entered into an eight-year operating lease for approximately 32,621 square feet of office space beginning on January 15, 2020 and expiring on January 31, 2028. The Company uses these premises as its new principal executive offices and for general office space. The Company is utilizing its other currently-leased spaces through the lease expiration dates to conduct the training of its sales team and for manufacturing purposes. Under the terms of the lease, the Company is responsible for taxes, insurance, and maintenance expense. The lease contains certain scheduled rent increases. Rent expense is recognized on a straight-line basis over the expected lease term. The Company has a renewal option to extend the term of the lease for a period of five years beyond the initial term. Under the terms of the lease, the base rent payable with respect to each renewal term will be equal to the prevailing market rental rent as of the commencement of the applicable renewal term. In the event of a default of certain of the Company’s obligations under the lease, the Company’s landlord would have the right to terminate the lease.

In August 2020, the Company entered into a 38-month operating lease (the New Lease) for approximately 5,693 square feet of warehouse space beginning on October 15, 2020 and expiring on December 31, 2023 (the Initial Term). The Company intends to use these premises for general warehouse space.

The Company did not control the leased premises under the New Lease before the commencement date. The aggregate base rent due over the Initial Term under the terms of the New Lease is approximately $0.3 million (without giving effect to certain rent abatement terms). The Company is also responsible for the payment of additional rent to cover certain costs, taxes, and insurance (Additional Rent). The estimated Additional Rent during the Initial Term of the New Lease is approximately $0.1 million. The Company also paid minimal amounts for leasehold improvements, net of the minimal tenant improvement allowance provided in the New Lease.

During the three and nine months ended September 30, 2020, ROU assets obtained in exchange for new operating lease liabilities were none and $3.0 million, respectively. During the three and nine months ended September 30, 2019, ROU assets obtained in exchange for new operating lease liabilities were none and $1.5 million, respectively. As of September 30, 2020 and December 31, 2019, the ROU asset has a balance of $6.6 million and $4.2 million, respectively. The operating lease ROU asset is included within the Company’s other non-current assets, and lease liabilities are included in current or noncurrent liabilities on the Company’s condensed consolidated balance sheets. During the three and nine months ended September 30, 2020, cash paid for amounts included in operating lease liabilities were $0.4 million and $1.0 million, respectively. During the three and nine months ended September 30, 2019, cash paid for amounts included in operating lease liabilities were $0.3 million and $0.7 million, respectively. Amortization of the ROU asset was $0.2 million and $0.6 million for the three and nine months ended September 30, 2020, respectively. Amortization of the ROU asset was $0.2 million and $0.3 million for the three and nine months ended September 30, 2019, respectively.

As of September 30, 2020 and December 31, 2019, the weighted-average remaining lease term for the Company’s operating leases were 7.2 years and 7.8 years, respectively. The weighted-average discount rate used to determine the present value of the Company’s operating leases’ future payments was 6.9% and 7.25% as of September 30, 2020 and December 31, 2019, respectively.

Total lease cost for the three and nine months ended September 30, 2020 and 2019 are as follows (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Lease cost
Operating lease cost	$	491	$	281	$	1,472	$	761
Short-term lease cost	51		43		119		150
Variable lease cost	65		55		123		98
Total lease cost	$	607	$	379	$	1,714	$	1,009

License Agreement

In October 2013, the Company entered into the License Agreement, pursuant to which AMF licensed the Company certain patents and know-how (collectively, the AMF IP) relating to, in relevant part, an implantable pulse generator and related system components in development by AMF as of that date, in addition to any peripheral or auxiliary devices, including all components, that when assembled, comprise such device, excluding certain implantable pulse generators (collectively, the AMF Licensed Products). Under the License Agreement, for each calendar year beginning in 2018, the Company is obligated to pay AMF a royalty on an AMF Licensed Product-by-AMF Licensed Product basis if one of the following conditions applies: (i) one or more valid claims within any of the patents licensed to the Company by AMF covers such AMF Licensed Products or the manufacture of such AMF Licensed Products or (ii) for a period of 12 years from the first commercial sale anywhere in the world of such AMF Licensed Product, in each case. The foregoing royalty is calculated as the greater of (a) 4% of all net revenue derived from the AMF Licensed Products, and (b) the Minimum Royalty, payable quarterly. The Minimum Royalty will automatically increase each year after 2018, subject to a maximum amount of $200,000 per year. The Company generated net revenue of $35.2 million and $76.8 million during the three and nine months ended September 30, 2020, respectively, and recorded related royalties of $1.4 million and $3.0 million during the three and nine months ended September 30, 2020, respectively. The Company generated net revenue of $1.3 million and $3.9 million during the three and nine months ended September 30, 2019, respectively, and recorded related royalties of $0.1 million and $0.2 million during the three and nine months ended September 30, 2019, respectively. Royalty expense is included in operating expenses in the condensed consolidated statements of comprehensive loss. Accrued royalty of $1.4 million and $0.4 million as of September 30, 2020 and December 31, 2019, respectively, is included within accrued liabilities on the Company’s condensed consolidated balance sheets.

Legal Matters

On November 4, 2019, Medtronic, Inc., Medtronic Puerto Rico Operations Co., Medtronic Logistics LLC and Medtronic USA, Inc. (collectively, the Medtronic Affiliates) filed an initial complaint against the Company in the United States District Court for the Central District of California, Case No. 8:19-cv-2115, and amended the complaint on November 26, 2019. The Company refers to this matter as the Medtronic Litigation. The complaint asserts that the Company’s r-SNM System infringes U.S. Patent Nos. 8,036,756, 8,626,314, 9,463,324 and 9,821,112 held by the Medtronic Affiliates, and the amended complaint further includes the additional patents 8,738,148; 8,457,758; and 7,774,069 (collectively, the Medtronic Patents). The Medtronic Litigation requests customary remedies for patent infringement, including (i) a judgment that the Company has infringed and is infringing the Medtronic Patents, (ii) damages, including treble damages for willful infringement, (iii) a permanent injunction preventing the Company from infringing the Medtronic Patents, (iv) attorneys’ fees, and (v) costs and expenses. The Company believes the allegations are without merit and is vigorously defending itself against them. Given the early stage of the Medtronic Litigation, the Company is unable to predict the likelihood of success of the claims of the Medtronic Affiliates against the Company or to quantify any risk of loss. The Medtronic Litigation could last for an extended period of time and require the Company to dedicate significant financial resources and management resources to its defense. An adverse ruling against the Company could materially and adversely affect its business, financial position, results of operations or cash flows and could also result in reputational harm. Even if

the Company is successful in defending against these claims, the Medtronic Litigation could result in significant costs, delays in future product developments, reputational harm or other collateral consequences.

On March 16, 2020, the Company filed seven petitions before the United States Patent and Trademark Office (USPTO) requesting inter partes review (IPR) to contest the validity of each of the Medtronic patents that Medtronic has alleged are being infringed by the Company. In September 2020, the USPTO decided that it will accept or “institute” the IPR process for six of the seven patents, finding that Axonics had demonstrated a reasonable likelihood that at least one, if not all, of the claims of these six patents are invalid. The USPTO will usually render a decision on the validity of contested patents within twelve months of instituting the review. The Company filed a motion to stay the proceedings before the United States District Court for the Central District of California pending resolution of the IPR process. The Company’s motion was granted by the court on May 8, 2020.

In addition to the Medtronic Litigation, the Company is involved in claims, legal proceedings, and investigations arising out of its operations in the normal course of business.

Long-Term Debt

9 Months Ended

Sep. 30, 2020

Debt Disclosure [Abstract]

Long-Term Debt

In February 2018, the Company entered into the Loan and Security Agreement (the Loan Agreement), with Silicon Valley Bank, providing for a term loan (the Term Loan). Pursuant to the Loan Agreement, the Company may request up to $20.0 million in three tranches of term loans with such drawn obligations maturing on June 1, 2021. The Company requested $10.0 million from the first tranche, simultaneously with the entry into the Loan Agreement, which is currently outstanding. The Company may request (a) an additional $5.0 million (Tranche B), after the date commencing on the later of (i) the date that the Company achieves positive three-month results in the Company’s ARTISAN-SNM pivotal study, as confirmed to Silicon Valley Bank by a member of the Company’s management team and a member of its board of directors, and (ii) July 1, 2018, and ending on December 31, 2018 and (b) another $5.0 million (Tranche C), after the date commencing on the later of (i) the date that Silicon Valley Bank receives evidence, in form and substance reasonably satisfactory to Silicon Valley Bank, that the Company has received its PMA in the United States for its r-SNM System or gross proceeds from the sale of its equity securities of not less than $20.0 million, and (ii) January 1, 2019, and ending on March 31, 2019, subject to certain terms and conditions. If either Tranche B or Tranche C is drawn, then the maturity of the Term Loan is automatically extended to December 1, 2021.

The Loan Agreement provides for monthly interest payments through December 31, 2018; provided that, (i) if the Company requests and Silicon Valley Bank funds Tranche B or Tranche C, this interest-only period automatically extends through June 30, 2019, and (ii) if the Company has received a PMA in the United States for its r-SNM System and the Company requests and Silicon Valley Bank funds Tranche C, the interest-only period automatically extends through December 31, 2019. On the first day of the end of the interest-only period, the Company will be required to repay the Term Loan in equal monthly installments of principal plus interest through maturity. Outstanding principal balances under the Term Loan bear interest at the prime rate plus 1.75%.

In October 2018, the Company and Silicon Valley Bank entered into an amendment to the Loan Agreement (the Loan Amendment) in connection with which the Company requested the full $5.0 million from Tranche B and the full $5.0 million from Tranche C. The Company received the $10.0 million from both tranches in October 2018. Pursuant to the Loan Amendment, Silicon Valley Bank agreed to (i) extend the interest only period from June 30, 2019 to December 31, 2019, without requiring the receipt of the Company’s PMA in the United States for the r-SNM System, and (ii) make Tranche C available immediately instead of January 1, 2019. In addition, as a result of the Company’s request of the full $5.0 million from Tranche B and the full $5.0 million from Tranche C, the maturity of the Term Loan has been automatically extended to December 1, 2021. The transaction was accounted for as a debt modification. See Note 5 for discussion regarding stock warrants granted in connection with the Term Loan.

In December 2019, the Company and Silicon Valley Bank entered into a second amendment to the Loan Agreement (the Second Amendment). Pursuant to the Second Amendment, Silicon Valley Bank agreed to extend the interest only period from December 31, 2019 to December 31, 2020. In connection with the Second Amendment, the Company paid Silicon Valley Bank a non-refundable fee of $0.2 million. The transaction was accounted for as a debt modification.

The Company may prepay amounts outstanding under the Term Loan in increments of $5.0 million at any time with 30 days prior written notice to Silicon Valley Bank. However, all prepayments of the Term Loan prior to maturity, whether voluntary or mandatory (acceleration or otherwise), are also subject to the payment of a prepayment fee equal to (i) for a prepayment made on or after the closing date through and including the first anniversary of the closing date, 3.00% of the principal amount of the Term Loan being prepaid, (ii) for a prepayment made after the date which is the first anniversary of the closing date through and including the second anniversary of the closing date, 2.00% of the principal amount of the Term Loan being prepaid, and (iii) for a prepayment made after the date which is the second anniversary of the closing date and before the maturity date, 1.00% of the principal amount of the Term Loan being prepaid. Additionally, on the earliest to occur of (i) the maturity date of the Term Loan, (ii) the acceleration of the Term Loan, or (iii) the prepayment of the Term Loan, the Company will be required to make a final payment equal to the original principal amount of such tranche multiplied by 7.50%. The Company is currently accruing the portion of the final payment calculated based on the amount outstanding under the Term Loan.

All obligations under the Term Loan are secured by a first priority lien on substantially all of the Company’s assets, excluding intellectual property assets and more than 65% of the shares of voting capital stock of any of its foreign subsidiaries. The Company has agreed with Silicon Valley Bank not to encumber its intellectual property assets without Silicon Valley Bank’s prior written consent unless a security interest in the underlying intellectual property is necessary to have a security interest in the accounts and proceeds that are part of the assets securing the Term Loan, in which case the Company’s intellectual property shall automatically be included within the assets securing the Term Loan. As of September 30, 2020, the Company was in compliance with all debt covenant requirements under the Term Loan.

Debt, net of unamortized debt issuance costs, consists of the following (in thousands) at:


	September 30,		December 31,
	2020		2019
Debt, principal	$	20,000	$	20,000
Accrued loan fees	1,500		1,500
Debt, total	21,500		21,500
Less: unamortized debt issuance costs	(570)		(1,164)
Debt, net of unamortized debt issuance costs	20,930		20,336
Less: debt, current portion	(15,000)		—
Debt, net of unamortized debt issuance costs, net of current portion	$	5,930	$	20,336

Stock-based Compensation

9 Months Ended

Sep. 30, 2020

Equity [Abstract]

Stock-based Compensation

Stock-based compensation expense included in the Company’s unaudited condensed consolidated statements of comprehensive loss is allocated as follows (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Research and development	$	882	$	477	$	2,493	$	1,170
General and administrative	1,448		1,267		4,726		2,688
Sales and marketing	1,445		1,038		4,294		1,941
	$	3,775	$	2,782	$	11,513	$	5,799

Stock Option Activity

The option awards issued under the 2014 Stock Option Plan (the 2014 Plan) and the 2018 Omnibus Incentive Plan (the 2018 Plan) were measured based on fair value. The Company’s fair value calculations were made using the Black-Scholes option pricing model with the following assumptions:


	Three Months Ended September 30,		Nine Months Ended September 30,
	2020	2019	2020	2019
Expected term (in years)	—	5.50 - 6.08	6.05	5.07 - 6.16
Stock volatility	—	71.22% - 73.76%	72.01%	70.02% - 73.76%
Risk-free interest rate	—	1.42% - 1.87%	1.37%	1.42% - 2.56%
Dividend rate	—	—	—	—

The Company used the simplified method of determining the expected term of stock options. The expected stock price volatility assumption was determined by examining the historical volatilities for industry peers, as the Company did not have sufficient trading history for the Company’s common stock. The Company will continue to analyze the historical stock price volatility and expected term assumption as more historical data for the Company’s common stock becomes available. The risk-free interest rate assumption is based on the U.S. Treasury instruments, whose term was consistent with the expected term of the Company’s stock options. The expected dividend assumption is based on the Company’s history and expectation of dividend payouts. The assumptions regarding the expected term of the options and the expected volatility of the stock price are subjective, and these assumptions have a significant effect on the estimated fair value amounts. There were no stock option grants for the three months ended September 30, 2020. The weighted-average grant date fair value of options granted was $18.56 for the nine months ended September 30, 2020. The weighted-average grant date fair value of options granted was $26.23 and $15.75 for the three and nine months ended September 30, 2019, respectively.

As of September 30, 2020 and December 31, 2019, there was $13.5 million and $19.5 million, respectively, of total unrecognized compensation cost related to unvested stock options that is expected to be recognized over a weighted-average period of approximately 2.6 years and 3.2 years, respectively.

The following table summarizes stock option activity for the nine months ended September 30, 2020 under the 2014 and 2018 Plans (in thousands, except share and per share data):


	Number of Options	Weighted-Average Exercise Price Per Share		Aggregate Intrinsic Value
Outstanding at December 31, 2019	2,847,101	$	13.22
Options granted	5,000	29.03
Options exercised	(665,369)	3.98		$	21,467	(1)
Options forfeited	(62,766)	25.46
Outstanding at September 30, 2020	2,123,966	$	15.79	$	74,867	(2)

_____________________________________________

(1) Represents the total difference between the Company’s closing stock price at the time of exercise and the stock option exercise price, multiplied by the number of options exercised.

(2) Represents the total difference between the Company’s closing stock price on the last trading day of the third quarter of 2020 and the stock option exercise price, multiplied by the number of in-the-money options as of September 30, 2020. The amount of intrinsic value will change based on the fair market value of the Company’s stock.

The weighted-average remaining contractual term of options outstanding and exercisable is 7.8 years and 7.6 years at September 30, 2020 and December 31, 2019, respectively.

Restricted Shares Awards Activity

As of September 30, 2020 and December 31, 2019, there was $19.8 million and $11.8 million, respectively, of total unrecognized compensation cost related to unvested restricted shares awards that is expected to be recognized over a weighted-average period of approximately 3.2 years and 3.3 years, respectively.

The following table summarizes restricted shares awards activity for the nine months ended September 30, 2020:


	Number of Restricted Shares Awards	Weighted-Average Fair Value Per Share at Grant Date
Outstanding at December 31, 2019	586,166	$	23.59
Restricted shares awards granted	371,250	34.22
Restricted shares awards vested	(137,609)	23.23
Restricted shares awards forfeited	(40,312)	25.33
Outstanding at September 30, 2020	779,495	$	28.63

Restricted Stock Units Activity

As of September 30, 2020 and December 31, 2019, there was $1.9 million and $4.3 million, respectively, of total unrecognized compensation cost related to unvested restricted stock units that is expected to be recognized over a weighted-average period of approximately 0.9 years and 1.5 years, respectively.

The following table summarizes restricted stock units activity for the nine months ended September 30, 2020:


	Number of Restricted Stock Units	Weighted-Average Fair Value Per Share at Grant Date
Outstanding at December 31, 2019	248,104	$	21.48
Restricted stock units granted	8,000	29.03
Restricted stock units vested	(46,336)	14.19
Outstanding at September 30, 2020	209,768	$	23.37

Warrant Exercise

On July 16, 2019, the Company issued and sold 32,529 shares of its common stock to SVB Financial Group (SVB) in connection with the exercise by SVB of its right to purchase 40,000 shares of common stock under that certain warrant, dated as of February 6, 2018. The exercise price per share was $7.50, and was paid by SVB via forfeiture of shares pursuant to a cashless exercise provision in the warrant.

On May 29, 2019, the Company issued and sold 31,071 shares of its common stock to Life Science Loans II, LLC (Life Science Loans) in connection with the exercise by Life Science Loans of its right to purchase 40,000 shares of common stock under that certain warrant, dated as of February 6, 2018. The exercise price per share was $7.50, and was paid by Life Science Loans via forfeiture of shares pursuant to a cashless exercise provision in the warrant.

No warrants were outstanding at September 30, 2020.

Income Taxes	9 Months Ended
Income Taxes	Sep. 30, 2020
Income Tax Disclosure [Abstract]
Income Taxes	Income Taxes The Company used an annual effective tax rate approach to calculate income taxes for the three and nine months ended September 30, 2020 and 2019. The annual effective tax rate of approximately 0% differs from the federal statutory tax rate due primarily to providing a full valuation allowance on net deferred tax assets. At December 31, 2019, the Company had federal and California net operating loss (NOL) carryforwards of approximately $162.5 million. Pursuant to Sections 382 and 383 of the Internal Revenue Code of 1986, as amended (the Internal Revenue Code), use of the Company’s NOL carryforwards may be limited if the Company experiences a cumulative change in ownership of greater than 50% in a rolling three-year period. The Company has not performed an analysis of changes in ownership for purposes of these Internal Revenue Code sections. Ownership changes could impact the Company’s ability to utilize NOL carryforwards remaining at an ownership change date. The Company’s NOL carryforwards were generated from domestic operations. The federal NOLs from the 2013-2017 tax years will expire between 2033 and 2037 and NOLs from 2018-2019 will carryover indefinitely. The state NOLs will expire between 2033 and 2039. Under California Assembly Bill 85, effective June 29, 2020, net operating loss deductions were suspended for tax years beginning in 2019, 2020, and 2021 and the carry forward periods of any net operating losses not utilized due to such suspension were extended. At December 31, 2019, the Company also had research and development tax credit carryforwards of approximately $2.0 million, which will expire in 2036 to 2039. Approximately $0.9 million of these research and development tax credit carryforwards are included in prepaid expenses and other current assets on the Company’s consolidated balance sheets at September 30, 2020 and December 31, 2019, as they are expected to be utilized in 2020 as a credit to offset payroll taxes. The remaining amount of research and development tax credit carryforwards are included in net deferred tax assets. CARES Act The CARES Act includes provisions to support businesses in the form of loans, grants, and tax changes, among other types of relief. The Company has reviewed the income tax changes included in the CARES Act, which primarily includes the expansion of the carryback period for NOLs, changes to the deduction and limitation on interest, and acceleration of depreciation for Qualified Improvement Property. The Company has analyzed these changes and does not believe there will be a material effect on the Company’s income tax provision.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References + Details

Employee Benefit Plan	9 Months Ended
Employee Benefit Plan	Sep. 30, 2020
Retirement Benefits [Abstract]
Employee Benefit Plan	Employee Benefit PlanThe Company sponsors a defined contribution retirement savings plan under Section 401(k) of the Internal Revenue Code. This plan covers all employees who meet minimum age and service requirements, and allows participants to defer a portion of their annual compensation on a pre- or post-tax basis. Contributions to the plan by the Company may be made at the discretion of the board of directors. During the three and nine months ended September 30, 2020, the Company contributions to the plan amounted to $0.4 million and $1.2 million, respectively. During the three and nine months ended September 30, 2019, the Company contributions to the plan amounted to and $0.4 million and $0.8 million, respectively.

- Definition

The entire disclosure for retirement benefits.

+ References

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+ Details

Related Party Transactions	9 Months Ended
Related Party Transactions	Sep. 30, 2020
Related Party Transactions [Abstract]
Related Party Transactions	Related Party TransactionsThe Company has a License Agreement and corresponding royalties incurred with AMF, which is also a stockholder of the Company. For additional information, see Note 3.

Nature of Operations and Summary of Significant Accounting Policies (Policies)	9 Months Ended
	Sep. 30, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Principles of Consolidation	Principles of Consolidation The accompanying unaudited interim condensed consolidated financial statements include the accounts of the Company, its wholly-owned subsidiaries, Axonics Europe, S.A.S., Axonics Modulation Technologies U.K. Limited and Axonics Modulation Technologies Australia Pty Ltd. Intercompany accounts and transactions have been eliminated in consolidation.
Basis of Presentation	Basis of Presentation Interim Financial Statements The interim condensed consolidated financial statements and related footnote disclosures as of and for the three and nine months ended September 30, 2020 are unaudited, and are not necessarily indicative of the Company’s operating results for a full year. The unaudited interim condensed consolidated financial statements include all normal and recurring adjustments necessary for a fair presentation of the Company’s financial results for the three and nine months ended September 30, 2020 in accordance with United States (U.S.) generally accepted accounting principles (GAAP), however, certain information and footnote disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to the U.S. Securities and Exchange Commission (SEC) rules and regulations relating to interim financial statements. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto included within the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019 (filed with the SEC on March 4, 2020).
Use of Estimates	Use of Estimates The preparation of condensed consolidated financial statements in conformity with GAAP requires the Company’s management to make estimates and judgments that affect the reported amounts of assets, liabilities, and expenses, and related disclosure of contingent assets and liabilities. The Company bases its estimates on historical experience and on various other assumptions that it believes to be reasonable under the circumstances. The results of this evaluation then form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions, and such differences may be material to the consolidated financial statements.
Revenue Recognition	Revenue Recognition Revenue recognized during the three and nine months ended September 30, 2020 and 2019 relates entirely to the sale of our r-SNM System. In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-09 “Revenue from Contracts with Customers” (ASU 2014-09) as Accounting Standards Codification (ASC) Topic 606. The objective of Topic 606 is to establish a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and superseded most of the existing revenue recognition guidance, including industry-specific guidance. The core principle is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Topic 606 applies to all contracts with customers except those that are within the scope of other topics in the FASB ASC. The Company has revenue arrangements that consist of a single performance obligation. The Company recognizes revenue at the point in time when it transfers control of promised goods to its customers. Revenue is measured as the amount of consideration it expects to receive in exchange for transferring goods. The amount of revenue that is recognized is based on the transaction price, which represents the invoiced amount and includes estimates of variable consideration such as discounts, where applicable. The Company does not offer rights of return or price protection. The amount of variable consideration included in the transaction price may be constrained and is included only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognized under the contract will not occur in a future period. Payment terms, typically less than three months, are offered to the Company’s customers and do not include a significant financing component. The Company extends credit to its customers based upon an evaluation of the customer’s financial condition and credit history and generally requires no collateral. The Company does not have any contract balances related to product sales. The Company also does not have significant contract acquisition costs related to product sales.
Allowance for Doubtful Accounts	Allowance for Doubtful Accounts The Company makes estimates of the collectability of accounts receivable. In doing so, the Company analyzes historical bad debt trends, customer credit worthiness, current economic trends and changes in customer payment patterns when evaluating the adequacy of the allowance for doubtful accounts. Despite the Company’s efforts to minimize credit risk exposure, clients could be adversely affected if future economic and industry trends, including those related to COVID-19, change in such a manner as to negatively impact their cash flows. The full effects of COVID-19 on the Company’s clients are highly uncertain and cannot be predicted. As a result, the Company’s future collection experience can differ significantly from historical collection trends. If the Company’s clients experience a negative impact on their cash flows, it could have a material adverse effect on the Company’s results of operations and financial condition.
Cash and Cash Equivalents	Cash and Cash Equivalents Cash equivalents consist of short-term, highly liquid investments purchased with an original maturity of three months or less. Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash and cash equivalents. At times, the cash and cash equivalent balances may exceed federally insured limits. The Company does not believe that this results in any significant credit risk.
Fair Value of Financial Instruments	Fair Value of Financial Instruments Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A three-level fair value hierarchy prioritizes the inputs used to measure fair value. The hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows: •Level 1: Inputs are unadjusted quoted prices in active markets for identical assets or liabilities. •Level 2: Inputs are quoted prices for similar assets and liabilities in active markets or 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: Inputs are unobservable inputs based on the Company’s assumptions and valuation techniques used to measure assets and liabilities at fair value. The inputs require significant management judgment or estimation. The Company’s assessment of the significance of an input to the fair value measurement requires judgment, which may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy levels. The carrying amounts reported in the condensed consolidated financial statements approximate the fair value for cash and cash equivalents, accounts receivable, accounts payables, and accrued expenses, due to their short-term nature. The carrying amount of the Company’s term loan, which is described below, approximates fair value, considering the interest rates are based on the prime interest rate.
Investment Securities	Investment Securities The Company classifies its investment securities as available-for-sale. Those investments in debt securities with maturities less than 12 months at the date of purchase are considered short-term investments. Those investments in debt securities with maturities greater than 12 months at the date of purchase are considered long-term investments. The Company’s investment securities classified as available-for-sale are recorded at fair value based on the fair value hierarchy (Level 1 and Level 2 inputs in the fair value hierarchy), and consists primarily of commercial paper, corporate notes and U.S. government and agency securities. Unrealized gains or losses, deemed temporary in nature, are reported as other comprehensive income within the condensed consolidated statement of comprehensive income (loss). There were no unrealized gains or losses during the three and nine months ended September 30, 2020 and 2019. A decline in the fair value of any security below cost that is deemed other than temporary results in a charge to net income (loss) and the corresponding establishment of a new cost basis for the security. Premiums (discounts) are amortized (accreted) over the life of the related security as an adjustment to yield using the straight-line interest method. Dividend and interest income are recognized when earned. Realized gains or losses are included in net income (loss) and are derived using the specific identification method for determining the cost of securities sold.
Foreign Currency Translation	Foreign Currency Translation The functional currencies of the Company’s subsidiaries are currencies other than the U.S. dollar. The Company translates assets and liabilities of the foreign subsidiaries into U.S. dollars at the exchange rate in effect on the balance sheet date. Costs and expenses of the subsidiaries are translated into U.S. dollars at the average exchange rate during the period. Gains or losses from these translation adjustments are reported as a separate component of stockholders’ equity in accumulated other comprehensive loss until there is a sale or complete or substantially complete liquidation of the Company’s investment in the foreign subsidiary at which time the gains or losses will be realized and included in net income (loss). As of September 30, 2020 and December 31, 2019, all foreign currency translation gains (losses) have been unrealized and included in accumulated other comprehensive loss. Accumulated other comprehensive loss consists entirely of losses or gains from translation of foreign subsidiaries at September 30, 2020 and December 31, 2019. Foreign currency transaction gains and losses are included in results of operations and have not been significant for the periods presented.
Inventory, Net	Inventory, Net Inventories are stated at the lower of cost or net realizable value, with cost computed on a first-in, first-out basis. The Company reduces the carrying value of inventories for items that are potentially excess, obsolete, or slow-moving based on changes in customer demand, technology developments, or other economic factors. The Company capitalizes inventory produced for commercial sale. The Company capitalizes manufacturing costs as inventory following both the receipt of regulatory approval from regulatory bodies and the Company’s intent to commercialize. Costs associated with developmental products prior to satisfying the Company’s inventory capitalization criteria are charged to research and development expense as incurred. Products that have been approved by certain regulatory authorities are also used in clinical programs to assess the safety and efficacy of the products for usage that have not been approved by the FDA or other regulatory authorities. The form of product utilized for both commercial and certain clinical programs is identical and, as a result, the inventory has an “alternative future use” as defined in authoritative guidance. Component materials and purchased products associated with clinical development programs are included in inventory and charged to research and development expense when the product enters the research and development process and no longer can be used for commercial purposes and, therefore, does not have an “alternative future use.” For products that are under development and have not yet been approved by regulatory authorities, purchased component materials are charged to research and development expense when the inventory ownership transfers to the Company. The Company analyzes inventory levels to identify inventory that may expire prior to sale, inventory that has a cost basis in excess of its net realizable value, or inventory in excess of expected sales requirements. Although the manufacturing of the r-SNM System is subject to strict quality control, certain batches or units of product may no longer meet quality specifications or may expire, which would require adjustments to the Company’s inventory values. The Company also applies judgment related to the results of quality tests that are performed throughout the production process, as well as the understanding of regulatory guidelines, to determine if it is probable that inventory will be saleable. These quality tests are performed throughout the pre- and post-production processes, and the Company continually gathers information regarding product quality for periods after the manufacturing date. The r-SNM System currently has a maximum estimated shelf life range of 12 to 27 months and, based on sales forecasts, the Company expects to realize the carrying value of the product inventory. In the future, reduced demand, quality issues, or excess supply beyond those anticipated by management may result in a material adjustment to inventory levels, which would be recorded as an increase to cost of sales. The determination of whether or not inventory costs will be realizable requires estimates by the Company’s management. A critical input in this determination is future expected inventory requirements based on internal sales forecasts. Management then compares these requirements to the expiry dates of inventory on hand. To the extent that inventory is expected to expire prior to being sold, management will write down the value of inventory.
Property and Equipment	Property and Equipment Property and equipment are stated at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, generally between three and seven years. Leasehold improvements are amortized over the lesser of the life of the lease or the useful life of the improvements. Maintenance and repairs are charged to expense as incurred. When assets are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the balance sheet and any resulting gain or loss is reflected in operations.
Intangible Asset	Intangible AssetThe intangible asset represents exclusive rights to an additional field-of-use on the patent suite within the License Agreement with AMF. The additional field-of-use was provided in exchange for 50,000 shares of Series A preferred stock, the fair value of which was $1.0 million in 2013. The intangible asset was recorded at its fair value of $1.0 million at the date contributed. In connection with the IPO, such shares of Series A preferred stock were converted into common stock. Amortization of this asset is recorded over the shorter of the patent or legal life on a straight-line basis. The weighted-average amortization period is 8.71 years. Accumulated amortization of the intangible asset is $0.8 million and $0.7 million at September 30, 2020 and December 31, 2019, respectively. The Company recorded expense for the amortization of intangible assets of $0.1 million during the nine months ended September 30, 2020 and 2019. The amortization of the intangible asset was minimal during the three months ended September 30, 2020 and 2019. The Company will review the intangible asset for impairment whenever an impairment indicator exists.
Impairment of Long-Lived Assets	Impairment of Long-Lived Assets The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability is measured by comparing the carrying amount to the future net cash flows that the assets are expected to generate. If said assets are considered to be impaired, the impairment that would be recognized is measured by the amount by which the carrying amount of the assets exceeds the projected discounted future net cash flows arising from the asset.
Leases	Leases Effective January 1, 2018, the Company early adopted ASU No. 2016-02, “Leases (Topic 842)”, the comprehensive new lease standard issued by the FASB. The most significant impact was the recognition of right-of-use (ROU) assets and lease liabilities for operating leases. The Company determines if an arrangement is a lease at inception and includes operating leases on the Company’s consolidated balance sheets. The operating lease ROU asset is included within the Company’s other non-current assets, and lease liabilities are included in current or noncurrent liabilities on the Company’s condensed consolidated balance sheets. The Company has made certain policy elections to apply to its leases executed post-adoption, or subsequent to January 1, 2018. In accordance with Topic 842, components of a lease should be split into three categories: lease components, non-lease components, and non-components. The fixed and in-substance fixed contract consideration (including any consideration related to non-components) must be allocated based on the respective relative fair values to the lease components and non-lease components. Entities may elect not to separate lease and non-lease components. Rather, entities would account for each lease component and related non-lease component together as a single lease component. The Company has elected to account for lease and non-lease components together as a single lease component for all underlying assets and allocate all of the contract consideration to the lease component only. Topic 842 allows for the use of judgment in determining whether the assumed lease term is for a major part of the remaining economic life of the underlying asset and whether the present value of lease payments represents substantially all of the fair value of the underlying asset. The Company applies the bright line thresholds referenced in Topic 842 to assist in evaluating leases for appropriate classification. The aforementioned bright lines are applied consistently to the Company’s entire portfolio of leases. Operating lease ROU asset and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As the Company’s lease does not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. The operating lease ROU asset also includes any lease payments made and excludes lease incentives and initial direct costs incurred. The lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term.
Research and Development	Research and Development Research and development costs are charged to operations as incurred. Research and development costs include salary and personnel-related costs, costs of clinical studies and testing, supplies and materials, and outside consultant costs.
Income Taxes	Income Taxes The Company accounts for income taxes using the asset and liability method to compute the difference between the tax basis of assets and liabilities and the related financial amounts, using currently enacted tax rates. The Company has deferred tax assets. The realization of these deferred tax assets is dependent upon the Company’s ability to generate sufficient taxable income in future years. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount that more likely than not will be realized. The Company evaluates the recoverability of the deferred tax assets annually, and maintains a full valuation allowance on its deferred tax assets. The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position. The Company has determined that it has no uncertain tax positions.
Stock-Based Compensation	Stock-Based Compensation The Company measures the cost of employee and non-employee services in exchange for an award of equity instruments based on the grant-date fair value of the award and recognizes compensation cost over the requisite service period (typically the vesting period), generally four years. Forfeitures are estimated at the time of the grant and revised in subsequent periods to reflect differences between the estimates and the number of shares that actually become exercisable. The Company uses the Black-Scholes option pricing model to determine the fair value of stock options (as of the date of grant) that have service conditions for vesting. Stock options and restricted shares awards vest based on service conditions, typically over four years. The Company also grants shares of performance-based restricted stock units that typically vest after one year only if the Company has also achieved certain performance objectives as defined and approved by the Company’s board of directors. Performance awards are expensed over the performance period based on the probability of achieving the performance objectives. In addition, the Company also grants market-based restricted stock units that have combined market conditions and service conditions for vesting, for which the Company uses the Monte Carlo valuation model to value equity awards (as of the date of grant).
Net Loss per Share of Common Stock	Net Loss per Share of Common Stock Basic net loss per share of common stock is calculated by dividing the net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period, without consideration for potentially dilutive securities. Diluted net loss per share is computed by dividing the net loss attributable to common stockholders by the weighted-average number of shares of common stock and potentially dilutive securities outstanding for the period. For purposes of the diluted net loss per share calculation, convertible preferred stock, common and preferred stock warrants, common stock options, unvested RSAs and RSUs are considered to be potentially dilutive securities. Because the Company has reported a net loss in all periods presented, diluted net loss per share of common stock is the same as basic net loss per share of common stock for those periods. For the three and nine months ended September 30, 2020, there were 2,279,353 and 2,251,155 potentially dilutive weighted-average shares, respectively, that were not included in the computation of diluted weighted-average shares of common stock and common stock equivalent shares outstanding because their effect would have been antidilutive given the Company’s net loss. For the three and nine months ended September 30, 2019, there were 2,286,802 and 1,812,578 potentially dilutive weighted-average shares, respectively, that were not included in the computation of diluted weighted-average shares of common stock and common stock equivalent shares outstanding because their effect would have been antidilutive given the Company’s net loss.
Recent Accounting Pronouncements	Recent Accounting Pronouncements In August 2018, the FASB issued ASU No. 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,” which 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 (and hosting arrangements that include an internal-use software license). This guidance is effective for annual periods beginning after December 15, 2019, which was the Company’s first quarter of fiscal year 2020, with early adoption permitted. The adoption of this guidance did not have an impact on the Company’s consolidated financial statements or related disclosures. In August 2018, the FASB issued ASU No. 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement,” which modifies the disclosure requirements on fair value measurements and is intended to improve the effectiveness of disclosures, including the consideration of costs and benefits. This guidance is effective for annual periods beginning after December 15, 2019, which was the Company’s first quarter of fiscal year 2020, with early adoption permitted. The adoption of this guidance did not have an impact on the Company’s consolidated financial statements or related disclosures. In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” which updates the methodology used to measure current expected credit losses (CECL). This guidance applies to financial assets measured at amortized cost, including loans, held-to-maturity debt securities, net investments in leases, and trade accounts receivable as well as certain off-balance sheet credit exposures, such as loan commitments. This guidance replaces the current incurred loss impairment methodology with a methodology to reflect CECL and requires consideration of a broader range of reasonable and supportable information to explain credit loss estimates. The guidance must be adopted using a modified retrospective transition method through a cumulative-effect adjustment to retained earnings (deficit) in the period of adoption. This guidance is expected to be effective for the Company at December 31, 2020, with early adoption permitted. The Company is currently evaluating the impact this guidance will have on the Company’s consolidated financial statements or related disclosures as well as the timing of adoption.

Nature of Operations and Summary of Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of Revenue Disaggregated by Geographic Market

The following table provides additional information pertaining to net revenue disaggregated by geographic market for the three and nine months ended September 30, 2020 and 2019 (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
United States	$	34,139	$	—	$	73,833	$	—
International markets	1,104		1,309		2,919		3,874
Total net revenue	$	35,243	$	1,309	$	76,752	$	3,874

Schedule of Fair Value Hierarchy for Assets Measured on Recurring Basis

The following table presents the fair value hierarchy for those assets measured at fair value on a recurring basis as of September 30, 2020 and December 31, 2019 (in thousands):

Fair Value Measurements at September 30, 2020

Assets:

Level 1

Level 2

Level 3

Total

Commercial paper

—

Corporate notes

—

U.S. government and agency securities

—


	Fair Value Measurements at December 31, 2019
Assets:	Level 1		Level 2		Level 3		Total
Commercial paper	$	—	$	7,195	$	—	$	7,195
Corporate notes	2,018		—		—		2,018
U.S. government and agency securities	3,379		—		—		3,379
	$	5,397	$	7,195	$	—	$	12,592

Property and Equipment (Tables)

9 Months Ended

Sep. 30, 2020

Property, Plant and Equipment [Abstract]

Schedule of Property and Equipment, Net

Property and equipment, net consists of the following (in thousands) at:


	September 30,		December 31,
	2020		2019
Research and development equipment	$	1,422	$	1,086
Computer hardware and software	1,744		1,418
Tools and molds	1,668		1,303
Leasehold improvements	3,749		1,500
Furniture and fixtures	1,331		624
Construction in progress	105		176
	10,019		6,107
Less: accumulated depreciation and amortization	(4,227)		(3,060)
	$	5,792	$	3,047

Commitments and Contingencies (Tables)

9 Months Ended

Sep. 30, 2020

Commitments and Contingencies Disclosure [Abstract]

Schedule of Total Lease Cost

Total lease cost for the three and nine months ended September 30, 2020 and 2019 are as follows (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Lease cost
Operating lease cost	$	491	$	281	$	1,472	$	761
Short-term lease cost	51		43		119		150
Variable lease cost	65		55		123		98
Total lease cost	$	607	$	379	$	1,714	$	1,009

Long-Term Debt (Tables)

9 Months Ended

Sep. 30, 2020

Debt Disclosure [Abstract]

Schedule of Debt, Net of Unamortized Debt Issuance Costs

Debt, net of unamortized debt issuance costs, consists of the following (in thousands) at:


	September 30,		December 31,
	2020		2019
Debt, principal	$	20,000	$	20,000
Accrued loan fees	1,500		1,500
Debt, total	21,500		21,500
Less: unamortized debt issuance costs	(570)		(1,164)
Debt, net of unamortized debt issuance costs	20,930		20,336
Less: debt, current portion	(15,000)		—
Debt, net of unamortized debt issuance costs, net of current portion	$	5,930	$	20,336

- Definition

Tabular disclosure of long-debt instruments or arrangements, including identification, terms, features, collateral requirements and other information necessary to a fair presentation. These are debt arrangements that originally required repayment more than twelve months after issuance or greater than the normal operating cycle of the entity, if longer.

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+ Details

Stock-based Compensation (Tables)

9 Months Ended

Sep. 30, 2020

Equity [Abstract]

Schedule of Stock-based Compensation Expense

Stock-based compensation expense included in the Company’s unaudited condensed consolidated statements of comprehensive loss is allocated as follows (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Research and development	$	882	$	477	$	2,493	$	1,170
General and administrative	1,448		1,267		4,726		2,688
Sales and marketing	1,445		1,038		4,294		1,941
	$	3,775	$	2,782	$	11,513	$	5,799

Schedule of Option Awards Fair Valuation Assumptions


	Three Months Ended September 30,		Nine Months Ended September 30,
	2020	2019	2020	2019
Expected term (in years)	—	5.50 - 6.08	6.05	5.07 - 6.16
Stock volatility	—	71.22% - 73.76%	72.01%	70.02% - 73.76%
Risk-free interest rate	—	1.42% - 1.87%	1.37%	1.42% - 2.56%
Dividend rate	—	—	—	—

Schedule of Stock Option Activity

The following table summarizes stock option activity for the nine months ended September 30, 2020 under the 2014 and 2018 Plans (in thousands, except share and per share data):


	Number of Options	Weighted-Average Exercise Price Per Share		Aggregate Intrinsic Value
Outstanding at December 31, 2019	2,847,101	$	13.22
Options granted	5,000	29.03
Options exercised	(665,369)	3.98		$	21,467	(1)
Options forfeited	(62,766)	25.46
Outstanding at September 30, 2020	2,123,966	$	15.79	$	74,867	(2)

_____________________________________________

(1) Represents the total difference between the Company’s closing stock price at the time of exercise and the stock option exercise price, multiplied by the number of options exercised.

Schedule of Restricted Shares Awards Activity

The following table summarizes restricted shares awards activity for the nine months ended September 30, 2020:


	Number of Restricted Shares Awards	Weighted-Average Fair Value Per Share at Grant Date
Outstanding at December 31, 2019	586,166	$	23.59
Restricted shares awards granted	371,250	34.22
Restricted shares awards vested	(137,609)	23.23
Restricted shares awards forfeited	(40,312)	25.33
Outstanding at September 30, 2020	779,495	$	28.63

Schedule of Restricted Stock Units Activity

The following table summarizes restricted stock units activity for the nine months ended September 30, 2020:


	Number of Restricted Stock Units	Weighted-Average Fair Value Per Share at Grant Date
Outstanding at December 31, 2019	248,104	$	21.48
Restricted stock units granted	8,000	29.03
Restricted stock units vested	(46,336)	14.19
Outstanding at September 30, 2020	209,768	$	23.37

Nature of Operations and Summary of Significant Accounting Policies - Narrative (Details) - USD ($)				3 Months Ended		9 Months Ended		12 Months Ended	93 Months Ended
	May 12, 2020	Nov. 22, 2019	Nov. 02, 2018	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2013	Sep. 30, 2020	Jun. 30, 2020	Dec. 31, 2019
Initial Public Offering:
Sale of stock, price per share (USD per share)										$ 32.50
Revenue Recognition
Allowance for product returns				$ 300,000		$ 300,000			$ 300,000		$ 0
Replacement costs				0	$ 0	100,000	$ 0
Investment Securities:
Unrealized gain (loss) on investment securities				0	0	0	0
Inventory:
Finished goods inventory				23,000,000.0		23,000,000.0			23,000,000.0		7,000,000.0
Work-in-process inventory				6,100,000		6,100,000			6,100,000		1,500,000
Raw materials inventory				15,200,000		15,200,000			15,200,000		7,200,000
Inventory reserves				0		0			0		100,000
Intangible Asset:
Finite-lived intangible asset acquired								$ 1,000,000.0
Finite-lived intangible assets, weighted-average amortization period								8 years 8 months 15 days
Accumulated amortization on intangible assets				800,000		800,000			800,000		$ 700,000
Amortization of intangible assets				$ 0	$ 0	100,000	$ 100,000
Impairment of finite-lived intangible asset									$ 0
Impairment of Long-Lived Assets:
Impairment of long-lived assets						$ 0
Leases:
Weighted-average remaining lease terms for operating leases				7 years 2 months 12 days		7 years 2 months 12 days			7 years 2 months 12 days		7 years 9 months 18 days
Weighted-average discount rate on operating leases (as a percent)				6.90%		6.90%			6.90%		7.25%
Stock-Based Compensation:
Requisite service period of recognition of compensation cost						4 years
Net Loss per Share of Common Stock:
Potentially dilutive weighted-average shares not included in computation of diluted weighted average shares (in shares)				2,279,353	2,286,802	2,251,155	1,812,578
Minimum
Inventory:
Inventory shelf life						12 months
Property and Equipment:
Property and equipment useful life						3 years
Maximum
Inventory:
Inventory shelf life						27 months
Property and Equipment:
Property and equipment useful life						7 years
IPO
Initial Public Offering:
Stock issued (shares)			9,200,000
Sale of stock, price per share (USD per share)			$ 15.00
Net proceeds from sale of stock			$ 126,000,000.0
Exercise of Underwriters Option
Initial Public Offering:
Stock issued (shares)	600,000	750,000	1,200,000
Follow-on Offering
Initial Public Offering:
Stock issued (shares)	4,600,000	5,345,000
Sale of stock, price per share (USD per share)	$ 32.50	$ 22.00
Net proceeds from sale of stock	$ 140,500,000	$ 110,400,000
Common Stock
Initial Public Offering:
Conversion of preferred stock to common stock (shares)			15,813,297
Number of common stock warrants converted from preferred stock warrants (shares)			80,000
Preferred Stock
Intangible Asset:
Shares issued for purchase of intangible asset								50,000
Fair value of shares issued for purchase of intangible asset								$ 1,000,000.0
Stock Option and Restricted Stock-Based Awards
Stock-Based Compensation:
Vesting period						4 years
Restricted Stock Units
Stock-Based Compensation:
Vesting period						1 year

Nature of Operations and Summary of Significant Accounting Policies - Revenue Disaggregated by Geographic Market (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Disaggregation of Revenue [Line Items]
Net revenue	$ 35,243	$ 1,309	$ 76,752	$ 3,874
United States
Disaggregation of Revenue [Line Items]
Net revenue	34,139	0	73,833	0
International markets
Disaggregation of Revenue [Line Items]
Net revenue	$ 1,104	$ 1,309	$ 2,919	$ 3,874

- Definition

Amount, excluding tax collected from customer, of revenue from satisfaction of performance obligation by transferring promised good or service to customer. Tax collected from customer is tax assessed by governmental authority that is both imposed on and concurrent with specific revenue-producing transaction, including, but not limited to, sales, use, value added and excise.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-SubTopic 10
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-Paragraph 30
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+ Details

Nature of Operations and Summary of Significant Accounting Policies - Fair Value Hierarchy (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	$ 0	$ 12,592
Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	0	5,397
Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	0	7,195
Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	0	0
Commercial paper
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	0	7,195
Commercial paper \| Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	0	0
Commercial paper \| Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	0	7,195
Commercial paper \| Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	0	0
Corporate notes
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	0	2,018
Corporate notes \| Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	0	2,018
Corporate notes \| Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	0	0
Corporate notes \| Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	0	0
U.S. government and agency securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	0	3,379
U.S. government and agency securities \| Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	0	3,379
U.S. government and agency securities \| Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	0	0
U.S. government and agency securities \| Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	$ 0	$ 0

Property and Equipment - Summary (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 10,019	$ 6,107
Less: accumulated depreciation and amortization	(4,227)	(3,060)
Property and equipment, net	5,792	3,047
Research and development equipment
Property, Plant and Equipment [Line Items]
Property and equipment, gross	1,422	1,086
Computer hardware and software
Property, Plant and Equipment [Line Items]
Property and equipment, gross	1,744	1,418
Tools and molds
Property, Plant and Equipment [Line Items]
Property and equipment, gross	1,668	1,303
Leasehold improvements
Property, Plant and Equipment [Line Items]
Property and equipment, gross	3,749	1,500
Furniture and fixtures
Property, Plant and Equipment [Line Items]
Property and equipment, gross	1,331	624
Construction in progress
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 105	$ 176

Property and Equipment - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Property, Plant and Equipment [Line Items]
Depreciation and amortization expense			$ 1,253	$ 880
Property and Equipment
Property, Plant and Equipment [Line Items]
Depreciation and amortization expense	$ 500	$ 300	$ 1,200	$ 800

Commitments and Contingencies - Narrative (Details)		1 Months Ended	3 Months Ended		9 Months Ended		39 Months Ended
Commitments and Contingencies - Narrative (Details)	Mar. 16, 2020 petition	Sep. 30, 2020 USD ($) petition	Sep. 30, 2020 USD ($)	Sep. 30, 2019 USD ($)	Sep. 30, 2020 USD ($)	Sep. 30, 2019 USD ($)	Dec. 31, 2023 USD ($)	Aug. 31, 2020 ft²	Dec. 31, 2019 USD ($)	Jun. 30, 2019 ft²	Nov. 30, 2017 ft²	Aug. 31, 2014 ft²
Loss Contingencies [Line Items]
Variable lease cost			$ 65,000	$ 55,000	$ 123,000	$ 98,000
Right-of-use assets obtained in exchange for operating lease liabilities			0	0	3,000,000.0	1,500,000
Right-of-use asset		$ 6,600,000	6,600,000		6,600,000				$ 4,200,000
Cash paid for operating lease liabilities			400,000	300,000	1,000,000.0	700,000
Amortization of the ROU asset			$ 200,000	200,000	$ 600,000	300,000
Weighted-average remaining lease terms for operating leases		7 years 2 months 12 days	7 years 2 months 12 days		7 years 2 months 12 days				7 years 9 months 18 days
Weighted-average discount rate on operating leases (as a percent)		6.90%	6.90%		6.90%				7.25%
Period after first sale royalty is due					12 years
Net revenue due as royalty (as a percent)					4.00%
Revenues			$ 35,243,000	1,309,000	$ 76,752,000	3,874,000
Royalty expense			1,400,000	$ 100,000	3,000,000.0	$ 200,000
Accrued royalty expense		$ 1,400,000	1,400,000		1,400,000				$ 400,000
Medtronic Patents \| Pending Litigation
Loss Contingencies [Line Items]
Petitions filed regarding patents allegedly infringed upon \| petition	7
Gain Contingency, Patents Allegedly Infringed upon, Number Accepted/ Instituted \| petition		6
Maximum
Loss Contingencies [Line Items]
Royalty commitments		$ 200,000	$ 200,000		$ 200,000
First Lease
Loss Contingencies [Line Items]
Term of operating lease contract												5 years
Net rentable area (square feet) \| ft²												12,215
Second Lease
Loss Contingencies [Line Items]
Term of operating lease contract											7 years
Net rentable area (square feet) \| ft²											25,548
Renewal term of operating lease											5 years
Third Lease
Loss Contingencies [Line Items]
Term of operating lease contract										8 years
Net rentable area (square feet) \| ft²										32,621
Renewal term of operating lease										5 years
Fourth Lease
Loss Contingencies [Line Items]
Term of operating lease contract								38 months
Net rentable area (square feet) \| ft²								5,693
Fourth Lease \| Forecast
Loss Contingencies [Line Items]
Operating lease rent expense							$ 300,000
Variable lease cost							$ 100,000

Commitments and Contingencies - Total Lease Cost (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Commitments and Contingencies Disclosure [Abstract]
Operating lease cost	$ 491	$ 281	$ 1,472	$ 761
Short-term lease cost	51	43	119	150
Variable lease cost	65	55	123	98
Total lease cost	$ 607	$ 379	$ 1,714	$ 1,009

Long-Term Debt - Narrative (Details)	9 Months Ended
Long-Term Debt - Narrative (Details)	Sep. 30, 2020 USD ($)	Dec. 31, 2019 USD ($)	Oct. 31, 2018 USD ($)	Feb. 28, 2018 USD ($) tranche
Debt Instrument [Line Items]
Face amount of debt instrument	$ 20,000,000	$ 20,000,000
Voting capital stock of foreign subsidiaries excluded from first priority lien (more than) (as a percent)	65.00%
Term Loans \| Term Loan
Debt Instrument [Line Items]
Face amount of debt instrument				$ 20,000,000.0
Number of tranches \| tranche				3
Maximum prepayments of amounts outstanding allowed	$ 5,000,000.0
Period of prior written notice before prepayment of amounts outstanding	30 days
Final payment fee (as a percent)	7.50%
Term Loans \| Term Loan \| Period One
Debt Instrument [Line Items]
Prepayment fee (as a percent)	3.00%
Term Loans \| Term Loan \| Period Two
Debt Instrument [Line Items]
Prepayment fee (as a percent)	2.00%
Term Loans \| Term Loan \| Period Three
Debt Instrument [Line Items]
Prepayment fee (as a percent)	1.00%
Term Loans \| Term Loan \| Prime Rate
Debt Instrument [Line Items]
Basis spread on variable rate (as a percent)	1.75%
Term Loans \| Term Loan - Tranche A
Debt Instrument [Line Items]
Face amount of debt instrument				$ 10,000,000.0
Term Loans \| Term Loan - Tranche B & C
Debt Instrument [Line Items]
Face amount of debt instrument			$ 10,000,000.0
Term Loans \| Term Loan - Tranche B
Debt Instrument [Line Items]
Face amount of debt instrument			5,000,000.0
Long-term debt issuable				5,000,000.0
Term Loans \| Term Loan - Tranche C
Debt Instrument [Line Items]
Face amount of debt instrument			$ 5,000,000.0
Long-term debt issuable				5,000,000.0
Minimum gross proceeds from sale of equity securities				$ 20,000,000.0
Term Loans \| Second Amendment to the Loan Agreement
Debt Instrument [Line Items]
Non-refundable fee		$ 200,000

Long-Term Debt - Debt, Net of Unamortized Debt Issuance Costs (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Debt Disclosure [Abstract]
Debt, principal	$ 20,000	$ 20,000
Accrued loan fees	1,500	1,500
Debt, total	21,500	21,500
Less: unamortized debt issuance costs	(570)	(1,164)
Debt, net of unamortized debt issuance costs	20,930	20,336
Less: debt, current portion	(15,000)	0
Debt, net of unamortized debt issuance costs, net of current portion	$ 5,930	$ 20,336

Stock-based Compensation - Summary (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense	$ 3,775	$ 2,782	$ 11,513	$ 5,799
Research and development
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense	882	477	2,493	1,170
General and administrative
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense	1,448	1,267	4,726	2,688
Sales and marketing
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense	$ 1,445	$ 1,038	$ 4,294	$ 1,941

Stock-based Compensation - Fair Value Assumptions (Details)	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected term (in years)	0 years		6 years 18 days
Stock volatility, minimum (as a percent)	0.00%	71.22%	72.01%	70.02%
Stock volatility, maximum (as a percent)	0.00%	73.76%	72.01%	73.76%
Risk-free interest rate, minimum (as a percent)	0.00%	1.42%	1.37%	1.42%
Risk-free interest rate, maximum (as a percent)	0.00%	1.87%	1.37%	2.56%
Dividend rate (as a percent)	0.00%	0.00%	0.00%	0.00%
Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected term (in years)		5 years 6 months		5 years 25 days
Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected term (in years)		6 years 29 days		6 years 1 month 28 days

Stock-based Compensation - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions			3 Months Ended		9 Months Ended		12 Months Ended
	Jul. 16, 2019	May 29, 2019	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted-average grant date fair value of options granted				$ 26.23	$ 18.56	$ 15.75
Stock Option
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock options granted during period (shares)			0		5,000
Unrecognized compensation cost related to unvested stock options			$ 13.5		$ 13.5		$ 19.5
Weighted-average period of recognition of compensation cost					2 years 7 months 6 days		3 years 2 months 12 days
Weighted-average remaining contractual term of options outstanding and exercisable					7 years 9 months 18 days		7 years 7 months 6 days
Restricted Shares Awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted-average period of recognition of compensation cost					3 years 2 months 12 days		3 years 3 months 18 days
Unrecognized compensation cost related to unvested RSAs or RSUs			19.8		$ 19.8		$ 11.8
Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted-average period of recognition of compensation cost					10 months 24 days		1 year 6 months
Unrecognized compensation cost related to unvested RSAs or RSUs			$ 1.9		$ 1.9		$ 4.3
Warrants
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock issued upon exercise of warrants (shares)	32,529	31,071
Number of warrants exercised (shares)	40,000	40,000
Exercise price of warrants (USD per share)	$ 7.50	$ 7.50
Warrants outstanding (shares)			0		0

Stock-based Compensation - Stock Option Activity (Details) - Stock Option $ / shares in Units, $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2020 USD ($) $ / shares shares	Sep. 30, 2020 USD ($) $ / shares shares
Number of Options
Outstanding at beginning of period (shares) \| shares		2,847,101
Options granted (shares) \| shares	0	5,000
Options exercised (shares) \| shares		(665,369)
Options forfeited (shares) \| shares		(62,766)
Outstanding at end of period (shares) \| shares	2,123,966	2,123,966
Weighted-Average Exercise Price Per Share
Outstanding at beginning of period (USD per share) \| $ / shares		$ 13.22
Options granted (USD per share) \| $ / shares		29.03
Options exercised (USD per share) \| $ / shares		3.98
Options forfeited (USD per share) \| $ / shares		25.46
Outstanding at end of period (USD per share) \| $ / shares	$ 15.79	$ 15.79
Aggregate Intrinsic Value
Intrinsic value of options exercised \| $		$ 21,467
Intrinsic value of options outstanding \| $	$ 74,867	$ 74,867

Stock-based Compensation - Restricted Shares Awards Activity (Details) - Restricted Shares Awards	9 Months Ended
	Sep. 30, 2020 $ / shares shares
Number of Restricted Shares Awards
Outstanding at beginning of period (shares) \| shares	586,166
Granted (shares) \| shares	371,250
Vested (shares) \| shares	(137,609)
Forfeited (shares) \| shares	(40,312)
Outstanding at end of period (shares) \| shares	779,495
Weighted-Average Fair Value Per Share at Grant Date
Outstanding at beginning of period (USD per share) \| $ / shares	$ 23.59
Granted (USD per share) \| $ / shares	34.22
Vested (USD per share) \| $ / shares	23.23
Forfeited (USD per share) \| $ / shares	25.33
Outstanding at end of period (USD per share) \| $ / shares	$ 28.63

Stock-based Compensation - Restricted Stock Units Activity (Details) - Restricted Stock Units	9 Months Ended
	Sep. 30, 2020 $ / shares shares
Number of Restricted Stock Units
Outstanding at beginning of period (shares) \| shares	248,104
Granted (shares) \| shares	8,000
Vested (shares) \| shares	(46,336)
Outstanding at end of period (shares) \| shares	209,768
Weighted-Average Fair Value Per Share at Grant Date
Outstanding at beginning of period (USD per share) \| $ / shares	$ 21.48
Granted (USD per share) \| $ / shares	29.03
Vested (USD per share) \| $ / shares	14.19
Outstanding at end of period (USD per share) \| $ / shares	$ 23.37

Income Taxes - Narrative (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
Income Taxes - Narrative (Details) - USD ($) $ in Millions	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019
Income Tax Contingency [Line Items]
Annual effective tax rate (as a percent)	0.00%	0.00%	0.00%	0.00%
Operating loss carryforwards					$ 162.5
Research Tax Credit Carryforward
Income Tax Contingency [Line Items]
Tax credit carryforwards					2.0
Research Tax Credit Carryforward \| Prepaid Expenses and Other Current Assets
Income Tax Contingency [Line Items]
Tax credit carryforwards	$ 0.9		$ 0.9		$ 0.9

Employee Benefit Plan - Narrative (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Retirement Benefits [Abstract]
Contributions by employer	$ 0.4	$ 0.4	$ 1.2	$ 0.8