Quarterly report pursuant to Section 13 or 15(d)

Revenue and Accounts Receivable

v3.5.0.2
Revenue and Accounts Receivable
9 Months Ended
Sep. 30, 2016
Receivables [Abstract]  
Revenue and Accounts Receivable
Revenue and Accounts Receivable

Revenue by service type for the three and nine months ended September 30, 2016 and 2015 is comprised of the following (in thousands): 
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2016
 
2015
 
2016
 
2015
Biopharma Services
$
3,805

 
$
2,608

 
11,374

 
$
8,614

Clinical Services
2,687

 
1,150

 
7,685

 
3,274

Discovery Services
258

 
243

 
760

 
668

 
$
6,750

 
$
4,001

 
$
19,819

 
$
12,556



The table above includes approximately $522,000 of biopharma revenue and approximately $1,481,000 of clinical services revenue from our acquisition of Response Genetics for the three months ended September 30, 2016. The table above includes approximately $1,600,000 of biopharma revenue and approximately $4,610,000 of clinical services revenue from our acquisition of Response Genetics for the nine months ended September 30, 2016.

Accounts receivable by service type at September 30, 2016 and December 31, 2015 consists of the following (in thousands): 

September 30,
2016
 
December 31,
2015
Biopharma Services
$
5,369

 
$
3,238

Clinical Services
8,607

 
3,733

Discovery Services
375

 
314

Allowance for doubtful accounts
(672
)
 
(664
)

$
13,679

 
$
6,621


Allowance for Doubtful Accounts (in thousands)
Balance, December 31, 2015
$
664

Bad debt expense
8

Balance, September 30, 2016
$
672



Revenue for Biopharma Services are customized solutions for patient stratification and treatment selection through an extensive suite of DNA-based testing services. Clinical Services are tests performed to provide information on diagnosis, prognosis and theranosis of cancers to guide patient management. These tests can be billed to Medicare, another third party insurer or the referring community hospital or other healthcare facility. Discovery Services are services that provide the tools and testing methods for companies and researchers seeking to identify new DNA-based biomarkers for disease. The breakdown of our Clinical Services revenue (as a percent of total revenue) is as follows:
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2016
 
2015
 
2016
 
2015
Medicare
14%
 
12%
 
13%
 
8%
Other insurers
21%
 
7%
 
20%
 
7%
Other healthcare facilities
5%
 
9%
 
6%
 
8%
 
40%
 
28%
 
39%
 
23%


We have historically derived a significant portion of our revenue from a limited number of test ordering sites. Test ordering sites account for all of our Clinical Services and Biopharma Services revenue. Our test ordering sites are largely hospitals, cancer centers, reference laboratories, physician offices and biopharmaceutical companies. Oncologists and pathologists at these sites order the tests on behalf of the needs of their oncology patients or as part of a clinical trial sponsored by a biopharmaceutical company in which the patient is being enrolled. We generally do not have formal, long-term written agreements with such test ordering sites, and, as a result, we may lose a significant test ordering site at any time.

The top five test ordering sites during the three months ended September 30, 2016 and 2015 accounted for 39% and 59%, respectively, of our testing volumes, with 6% and 27%, respectively, of the volume coming from community hospitals. During the three months ended September 30, 2016, there was one biopharmaceutical company which accounted for approximately 18% of our total revenue. During the three months ended September 30, 2015, there were two biopharmaceutical companies which accounted for approximately 15% and 11% of our total revenue, respectively.

The top five test ordering sites during the nine months ended September 30, 2016 and 2015 accounted for 31% and 80% respectively, of our testing volumes, with 7% and 31%, respectively, of the volume coming from community hospitals. During the nine months ended September 30, 2016, there was one biopharmaceutical company which accounted for approximately 10% of our total revenue. During the nine months ended September 30, 2015, there were two biopharmaceutical companies which accounted for approximately 23% and 11% of our total revenue, respectively.