Quarterly report pursuant to Section 13 or 15(d)

Revenue and Accounts Receivable

v3.7.0.1
Revenue and Accounts Receivable
6 Months Ended
Jun. 30, 2017
Receivables [Abstract]  
Revenue and Accounts Receivable
Revenue and Accounts Receivable

Revenue by service type for the three and six months ended June 30, 2017 and 2016 is comprised of the following (in thousands): 

 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2017
 
2016
 
2017
 
2016
Biopharma Services
$
3,288

 
$
4,219

 
7,007

 
$
7,569

Clinical Services
3,053

 
2,542

 
6,007

 
4,998

Discovery Services
263

 
240

 
556

 
502

 
$
6,604

 
$
7,001

 
$
13,570

 
$
13,069



Accounts receivable by service type at June 30, 2017 and December 31, 2016 consists of the following (in thousands): 


June 30,
2017
 
December 31,
2016
Biopharma Services
$
2,588

 
$
3,683

Clinical Services
11,783

 
8,972

Discovery Services
407

 
480

Allowance for doubtful accounts
(1,623
)
 
(1,387
)

$
13,155

 
$
11,748



Allowance for Doubtful Accounts (in thousands)
Balance, December 31, 2016
$
1,387

Bad debt expense
236

Balance, June 30, 2017
$
1,623



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 June 30,
 
Six Months Ended June 30,
 
2017
 
2016
 
2017
 
2016
Medicare
16%
 
12%
 
15%
 
13%
Other insurers
24%
 
17%
 
23%
 
19%
Other healthcare facilities
6%
 
7%
 
6%
 
6%
 
46%
 
36%
 
44%
 
38%


We have historically derived a significant portion of our revenue from a limited number of test ordering sites, although the test ordering sites that generate a significant portion of our revenue have changed from period to period. Test ordering sites account for all of our Clinical Services along with a portion of the 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 June 30, 2017 and 2016 accounted for approximately 45% and 40% of our testing volumes, respectively. During the three months ended June 30, 2017, there was one biopharmaceutical company which accounted for approximately 12% of our total revenue. During the three months ended June 30, 2016, 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 six months ended June 30, 2017 and 2016 accounted for approximately 39% and 38% of our testing volumes, respectively. During the six months ended June 30, 2017, there was one biopharmaceutical company which accounted for approximately 11% of our total revenue. During the six months ended June 30, 2016, there were two biopharmaceutical companies which accounted for approximately 13% and 11% of our total revenue, respectively.