View Filing Data

Document and Entity Information - shares	6 Months Ended
Document and Entity Information - shares	Jun. 30, 2012	Jul. 31, 2012
Document and Entity Information [Abstract]
Entity Registrant Name	PACIFIC BIOSCIENCES OF CALIFORNIA INC
Entity Central Index Key	0001299130
Document Type	10-Q
Document Period End Date	Jun. 30, 2012
Amendment Flag	false
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q2
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		55,760,380

Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Jun. 30, 2012	Dec. 31, 2011
Current assets
Cash and cash equivalents	$ 33,623	$ 58,865
Investments	103,485	118,569
Accounts receivable	3,371	4,557
Inventory, net	10,271	15,517
Prepaid expenses and other current assets	1,893	2,093
Total current assets	152,643	199,601
Property and equipment, net	16,937	18,398
Other long-term assets	350	317
Total assets	169,930	218,316
Current liabilities
Accounts payable	4,061	4,742
Accrued expenses and other current liabilities	6,539	10,258
Deferred revenue	4,170	4,236
Facility financing obligation	156	140
Total current liabilities	14,926	19,376
Deferred revenue, non-current	1,478	1,616
Deferred rent and other long-term liabilities	2,617	3,075
Facility financing obligation, less current portion	2,705	2,786
Total liabilities	21,726	26,853
Stockholders' equity
Convertible Preferred Stock, $0.001 par value: Authorized 50,000 shares; No shares issued or outstanding at June 30, 2012 and December 31, 2011
Common Stock and additional paid-in-capital, $0.001 par value: Authorized 1,000,000 shares; Issued and outstanding 55,751 shares at June 30, 2012 and 54,964 shares at December 31, 2011	639,751	632,961
Accumulated other comprehensive income	75	57
Accumulated deficit	(491,622)	(441,555)
Total stockholders' equity	148,204	191,463
Total liabilities and stockholders' equity	$ 169,930	$ 218,316

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares shares in Thousands	Jun. 30, 2012	Dec. 31, 2011
Condensed Consolidated Balance Sheets [Abstract]
Convertible Preferred Stock, par value	$ 0.001	$ 0.001
Convertible Preferred Stock, shares authorized	50,000	50,000
Convertible Preferred Stock, shares issued	0	0
Convertible Preferred Stock, shares outstanding	0	0
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	1,000,000	1,000,000
Common stock, shares issued	55,751	54,964
Common stock, shares outstanding	55,751	54,964

Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Revenues:
Product revenue	$ 5,827	$ 10,148	$ 14,542	$ 10,148
Service and other revenue	1,284	192	2,337	192
Grant revenue	180	290	450	560
Total revenue	7,291	10,630	17,329	10,900
Cost of Revenue:
Cost of product revenue	5,382	2,537	13,989	2,537
Cost of service and other revenue	1,634	194	3,217	194
Total cost of revenue	7,016	2,731	17,206	2,731
Gross profit	275	7,899	123	8,169
Operating Expense:
Research and development	11,272	19,546	23,345	43,664
Sales, general and administrative	11,558	11,016	26,843	22,135
Total operating expense	22,830	30,562	50,188	65,799
Operating loss	(22,555)	(22,663)	(50,065)	(57,630)
Other income (expense), net	68	188	(2)	346
Net loss	$ (22,487)	$ (22,475)	$ (50,067)	$ (57,284)
Basic and diluted net loss per share	$ (0.40)	$ (0.42)	$ (0.90)	$ (1.08)
Shares used in computing basic and diluted net loss per share	55,658	53,414	55,433	53,057
Comprehensive loss	$ (22,547)	$ (22,297)	$ (50,049)	$ (57,082)

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
Cash flows from operating activities
Net loss	$ (50,067)	$ (57,284)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation	3,353	2,855
Stock-based compensation	4,770	6,111
Other items	53	201
Changes in assets and liabilities
Accounts receivable	1,186	(5,096)
Inventory	4,082	(13,824)
Prepaid expenses and other assets	800	(107)
Accounts payable	(681)	(483)
Accrued expenses and other current liabilities	(3,719)	2,711
Deferred revenue	(204)	(840)
Deferred rent and other long-term liabilities	(523)	1,405
Net cash used in operating activities	(40,950)	(64,351)
Cash flows from investing activities
Purchase of property and equipment	(781)	(5,588)
Purchase of investments	(54,359)	(188,653)
Sales of investments	4,856	36,520
Maturities of investments	63,972	125,285
Net cash provided by (used in) investing activities	13,688	(32,436)
Cash flows from financing activities
Proceeds from issuance of common stock	2,020	3,651
Net cash provided by financing activities	2,020	3,651
Net decrease in cash and cash equivalents	(25,242)	(93,136)
Cash and cash equivalents at beginning of period	58,865	147,650
Cash and cash equivalents at end of period	33,623	54,514
Supplemental disclosure of non-cash investing and financing activities
Inventory transferred to property and equipment for internal use	1,164	1,136
Vesting of stock options related to early exercises		$ 780

Overview

6 Months Ended

Jun. 30, 2012

Overview [Abstract]

Overview

1. Overview

Pacific Biosciences of California, Inc., (“Pacific Biosciences”, the “Company”, “we”, “us”) has commercialized the PacBio RS High Resolution Genetic Analyzer to help scientists solve genetically complex problems. Based on our novel Single Molecule, Real-Time (SMRT) technology, our products enable scientists to increase their understanding of biological systems through targeted sequencing and insight into genetic variations.

The names “Pacific Biosciences,” “PacBio,” “SMRT,” “SMRTbell” and our logo are our trademarks.

- Definition

The entire disclosure for organization, consolidation and basis of presentation of financial statements disclosure.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 275
-SubTopic 10
-URI http://asc.fasb.org/subtopic&trid=2134480

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 852
-SubTopic 10
-URI http://asc.fasb.org/subtopic&trid=2209116

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 205
-SubTopic 10
-URI http://asc.fasb.org/subtopic&trid=2122150

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 810
-SubTopic 10
-URI http://asc.fasb.org/subtopic&trid=2197480

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 810
-SubTopic 10
-Section 50
-Paragraph 8
-URI http://asc.fasb.org/extlink&oid=7880789&loc=SL6228881-111685

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 272
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6373374&loc=d3e70478-108055

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 720
-SubTopic 15
-URI http://asc.fasb.org/subtopic&trid=2122524

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 205
-SubTopic 10
-Section 45
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=7668296&loc=d3e288-107754

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 915
-SubTopic 235
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6472506&loc=d3e38932-110933

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6367646&loc=d3e18780-107790

Reference 11: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 810
-SubTopic 10
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=18733093&loc=d3e5614-111684

Reference 12: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 205
-SubTopic 10
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6359566&loc=d3e326-107755

Reference 13: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Statement of Position (SOP)
-Number 94-6
-Paragraph 10
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 14: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Accounting Research Bulletin (ARB)
-Number 51
-Paragraph 2-6
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 15: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name FASB Interpretation (FIN)
-Number 46R
-Paragraph 4, 14, 15
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 16: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name FASB Staff Position (FSP)
-Number FAS140-4/FIN46(R)-8
-Paragraph 8, C1, C7
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

+ Details

Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2012

Summary of Significant Accounting Policies [Abstract]

Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

Basis of Presentation

In the opinion of management, the accompanying unaudited Condensed Consolidated Financial Statements (“financial statements”) of Pacific Biosciences of California, Inc. and its wholly-owned subsidiaries have been prepared on a consistent basis with the December 31, 2011 audited Consolidated Financial Statements and include all adjustments, consisting of only normal recurring adjustments, necessary to fairly state the information set forth herein. Certain prior year amounts in the financial statements and notes thereto have been reclassified to conform to the current year’s presentation. The financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”), and, therefore, omit certain information and footnote disclosure necessary to present the statements in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). These financial statements should be read in conjunction with the audited Consolidated Financial Statements and Notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2011, which was filed on February 29, 2012. The results of operations for the first six months of fiscal 2012 are not necessarily indicative of the results to be expected for the entire fiscal year or any future periods.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expense during the reporting periods. Our estimates include, but are not limited to, useful lives assigned to long-lived assets, amounts relating to the resolution of legal matters, the valuation of options, assumptions used in computing stock-based compensation expense, provisions for income taxes, inventory valuation and reserves, and contingencies. Actual results could differ from our estimates, and such differences could be material to our financial position and results of operations.

Fair Value of Financial Instruments

The carrying amount of our financial assets and liabilities, including accounts receivable, prepaid expenses, other current assets, accounts payable, accrued expenses and other current liabilities, approximate fair value due to their short maturities. The carrying value of our facility financing obligation approximates fair value based on currently available borrowing rates and after consideration of non-performance risk and credit risk.

The fair value hierarchy established under GAAP requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level input that is significant to the fair value measurement. The three levels of inputs that may be used to measure fair value are as follows:

•

Level 1: quoted prices in active markets for identical assets or liabilities;

•

Level 2: inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and

•

Level 3: unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

We consider an active market as one in which transactions for the asset or liability occurs with sufficient frequency and volume to provide pricing information on an ongoing basis. Conversely, we view an inactive market as one in which there are few transactions for the asset or liability, the prices are not current, or price quotations vary substantially either over time or among market makers. Where appropriate, our non-performance risk, or that of our counterparty, is considered in determining the fair values of liabilities and assets, respectively.

All of our cash and money market funds, which include bank deposits, are classified within Level 1 of the fair value hierarchy because they are valued using bank balances or quoted market prices. Our investments are classified as Level 2 instruments based on market pricing and other observable inputs. None of our investments are classified within Level 3 of the fair value hierarchy.

Assets and liabilities measured at fair value are classified in their entirety based on the lowest level input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the entire fair value measurement requires management to make judgments and consider factors specific to the asset or liability.


(in thousands)	June 30, 2012								December 31, 2011
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Assets
Cash and cash equivalents:
Cash and money market funds	$	13,926	$	—	$	—	$	13,926	$	49,267	$	—	$	—	$	49,267
Commercial paper		—		17,997		—		17,997		—		9,598		—		9,598
Corporate debt securities		—		1,700		—		1,700		—		—		—		—

Investments:
Commercial paper		—		25,973		—		25,973		—		29,772		—		29,772
Corporate debt securities		—		38,932		—		38,932		—		37,387		—		37,387
Asset backed securities		—		6,174		—		6,174		—		9,909		—		9,909
Certificates of deposits		—		4,023		—		4,023		—		4,034		—		4,034
U.S. government and agency securities		—		28,383		—		28,383		—		37,467		—		37,467

Total assets measured at fair value	$	13,926	$	123,182	$	—	$	137,108	$	49,267	$	128,167	$	—	$	177,434

Level 2 inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant inputs are observable in the market or can be corroborated by observable market data for substantially the full term of the assets. Where applicable, these models project future cash flows and discount the future amounts to a present value using market-based observable inputs including rate curves, foreign exchange rates, and forward and spot prices for currencies and commodities. Our Level 2 investments consist primarily of U.S. treasury and U.S. government agency securities, corporate debt securities and commercial paper. For the three- and six-month periods ended June 30, 2012, there were no transfers between Level 1 and Level 2 investments and there were no changes in our valuation technique.

Cash and Cash Equivalents

We consider all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Cash equivalents consist of money market funds, corporate debt securities and commercial paper.

Investments

Our investments consist of U.S. treasury and U.S. government agency securities, corporate debt securities, commercial paper, and cash equivalents. We have designated all investments as available-for-sale and therefore, such investments are reported at fair value, with unrealized gains and losses recorded in accumulated other comprehensive income. For securities sold prior to maturity, the cost of securities sold is based on the specific identification method. Realized gains and losses on the sale of investments are recorded in other income, net.

We periodically review our investments for indicators of impairment and recognize an impairment charge when a decline in the fair value of our investments below the cost basis is judged to be other-than-temporary. Factors considered in determining whether a loss is temporary include the length of time and extent to which the investment’s fair value has been less than the cost basis, the financial condition and near-term prospects of the investee, extent of the loss related to credit of the issuer, the expected cash flows from the security, our intent to sell the security and whether or not we will be required to sell the security before the recovery of its amortized cost. During the three- and six-month periods ended June 30, 2012 and 2011, we did not record impairment charges on our investments as it is more likely than not that we will recover their amortized cost basis upon sale or maturity.

Concentration of Credit Risk

The carrying amounts for financial instruments consisting of cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities approximate fair value due to their short maturities. Investments are stated at their estimated fair values, based on quoted market prices for the same or similar instruments. The counterparties to the agreements relating to our investment securities consist of various major corporations, financial institutions, municipalities and government agencies of high credit standing.

Our accounts receivable are derived from revenue from customers and distributors located in the United States and other countries. We perform credit evaluations of our customers’ financial condition and, generally, require no collateral from our customers. We regularly review our accounts receivable including consideration of factors such as historical experience, credit quality, the age of the accounts receivable balances and current economic conditions that may affect a customer’s ability to pay. We have not provided reserves for potential credit losses to date and there have been no such losses to date.

Inventory

Inventory is valued at the lower of the standard cost, which approximates actual cost, or market. Cost is determined using the FIFO (first-in, first-out) method. Adjustments to reduce the cost of inventory to its net realizable value, if required, are made when carrying cost exceeds net realizable value and for estimated excess or obsolete inventory.

Revenue Recognition

Our revenue is generated primarily from the sale of products and services. Product revenue primarily consists of sales of our PacBio RS instrument and related consumables, and service and other revenue primarily consists of revenue earned from product maintenance agreements. Grant revenue reflects revenue from government grants that generally provide cost reimbursement for certain types of expenditures in return for research and development activities over a contractually defined period. Revenue from grants is recognized in the period during which the related costs are incurred, provided that the conditions under which the grants were provided have been met.

We recognize product and service revenue when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the price is fixed or determinable, and collectability is reasonably assured. In instances where final acceptance of the product or system is required, revenue is deferred until all acceptance criteria have been met. Revenue for product sales is generally recognized upon customer acceptance. Revenue for product maintenance agreements is recognized when earned, which is generally ratably over the service period.

In order to assess whether the price is fixed or determinable, we evaluate whether refund rights exist. If refund rights exist or payment terms are based on future performance, we defer revenue recognition until the price becomes fixed or determinable. We assess collectability based on a number of factors, including customer creditworthiness. If we determine that collection of amounts due is not reasonably assured, revenue recognition is deferred until receipt of payment.

We regularly enter into contracts from which revenue is derived from multiple deliverables including a mix of products and or services. Revenue recognition for contracts with multiple deliverables is based on the individual units of accounting determined to exist in the contract. A delivered item is considered a separate unit of accounting when 1) the delivered item has value to the customer on a stand-alone basis; and 2) when a general right of return exists, the delivery or performance of an undelivered item is considered probable and under our control. Items are considered to have stand-alone value when they are sold separately by any vendor or when the customer could resell the item on a stand-alone basis. Our revenue arrangements generally do not have a general right of return. When a deliverable does not meet the criteria to be considered a separate unit of accounting, we group it with other deliverables that, when combined, meet the criteria, and the appropriate allocation of arrangement consideration and revenue recognition is determined. Consideration is allocated at the inception of the contract to all deliverables based on their relative selling price. In order to determine the relative selling price of a deliverable, we apply, in order, the following hierarchy: 1) vendor-specific objective evidence (“VSOE”); 2) third-party evidence if VSOE is not available; and 3) our best estimate of selling price for the deliverable if neither VSOE nor third-party evidence is available.

In order to establish VSOE, we must regularly sell the product or service on a standalone basis with a substantial majority of sales priced within a relatively narrow range. If an insufficient number of standalone sales exist and VSOE cannot be determined, we then consider whether third party evidence can be used to establish selling price. Due to the lack of similar products and services sold by other companies within our industry, we have not established selling price using third-party evidence. If neither VSOE nor third party evidence of selling price exists, we determine our best estimate of selling price using a combination of prices set by our pricing committee adjusted for applicable discounts and customer orders received to date.

Deferred revenue primarily represents product maintenance agreement revenue that is expected to be recognized over the related service period, generally one to three years.

Stock-based Compensation

Stock-based compensation expense for all stock-based compensation awards is based on the grant date fair value estimated using the Black-Scholes option pricing model. Although we have limited historical information available to support the underlying estimates of certain assumptions required to value stock options, we have considered our historical stock volatility when developing an estimate of expected volatility, and we estimate the term of equity grants using historical data and peer data. We recognize compensation expense on a straight-line basis over the requisite service period. We have elected to use the simplified method to calculate the beginning pool of excess tax benefits.

Employee and director stock option plans are more fully described in Note 6.

Net Loss Per Share

The following table presents the computation of basic and diluted net loss per share (in thousands, except per share amounts):


	Three-Months Ended June 30,						Six-Months Ended June 30,
	2012			2011			2012			2011
Net loss per share:
Numerator
Net loss	$	(22,487	)	$	(22,475	)	$	(50,067	)	$	(57,284	)


Denominator:
Weighted average shares of common stock outstanding		55,658			53,414			55,433			53,159
Less: Shares of common stock subject to repurchase		—			—			—			(102	)

Weighted average shares used in computation of basic and diluted net loss per share		55,658			53,414			55,433			53,057

Basic and diluted net loss per share	$	(0.40	)	$	(0.42	)	$	(0.90	)	$	(1.08	)

The following were excluded from the computation of diluted net loss per share for the periods presented because including them would have had an anti-dilutive effect (in thousands):


	As of June 30,
	2012		2011
Options outstanding		11,976		9,368
Warrants to purchase common stock		10		10

Recent Accounting Pronouncements

In 2011 the FASB issued Accounting Standards Update No. 2011-04, to provide guidance on achieving a consistent definition of and common requirements for measurement of and disclosure concerning fair value as between U.S. GAAP and International Financial Reporting Standards. ASU 2011-04 is required to be applied prospectively in interim and annual periods beginning after December 15, 2011. We adopted this guidance beginning January 1, 2012. The adoption of this amendment had no impact on our financial position or results of operations.

In 2011 the FASB issued Accounting Standards Update No. 2011-05, requiring companies to present the components of other comprehensive income (“OCI”) either in a single continuous statement of comprehensive income or in two separate but consecutive statements of net income and other comprehensive income. We adopted this guidance during the first quarter of 2012 and elected to disclose the OCI in a single continuous statement during interim reporting periods.

Cash and Cash Equivalents and Investments

6 Months Ended

Jun. 30, 2012

Cash and Cash Equivalents and Investments [Abstract]

Cash and Cash Equivalents and Investments

3. Cash, Cash Equivalents and Investments

Our investments consist of marketable debt securities, including U.S. Government and Agency securities; corporate debt securities, bonds and asset-backed securities; and publicly traded equity securities. We report all securities with stated maturities of 90 days or less at the date of purchase that are readily convertible into cash and have insignificant interest rate risk as cash equivalents. Our investments are carried at fair value with unrealized gains and losses reported in accumulated other comprehensive income (loss) (“OCI”) in stockholders’ equity. The cost of marketable securities is adjusted for the amortization of premiums and discounts to expected maturity. Premium and discount amortization is included in other income (expense), net. Realized gains and losses, as well as interest income, on available-for-sale securities are also included in other income (expense), net. The cost of securities sold is based on the specific identification method. The fair values of securities are based on quoted market prices. We include all of our available-for-sale securities in current assets.

The following table summarizes our investments as of June 30, 2012 and December 31, 2011 (in thousands):


	As of June 30, 2012
	Amortized Cost		Gross unrealized gains		Gross unrealized losses			Fair Value
Cash and cash equivalents:
Cash and money market funds	$	13,926	$	—	$	—		$	13,926
Commercial paper		17,997		1		(1	)		17,997
Corporate debt securities		1,700		—		—			1,700

Total cash and cash equivalents		33,623		1		(1	)		33,623

Investments:
Commercial paper		25,971		2		—			25,973
Corporate debt securities		38,878		58		(4	)		38,932
Asset backed securities		6,170		4		—			6,174
Certificates of deposit		4,016		7		—			4,023
U.S. government and agency securities		28,375		10		(2	)		28,383

Total investments		103,410		81		(6	)		103,485

Total cash, cash equivalents and investments	$	137,033	$	82	$	(7	)	$	137,108


	As of December 31, 2011
	Amortized Cost		Gross unrealized gains		Gross unrealized losses			Fair Value
Cash and cash equivalents:
Cash and money market funds	$	49,267	$	—	$	—		$	49,267
Commercial paper		9,599		—		(1	)		9,598

Total cash and cash equivalents		58,866		—		(1	)		58,865

Investments:
Commercial paper		29,767		5		—			29,772
Corporate debt securities		37,379		65		(57	)		37,387
Asset backed securities		9,904		7		(2	)		9,909
Certificates of deposit		4,026		9		(1	)		4,034
U.S. government and agency securities		37,435		35		(3	)		37,467

Total investments		118,511		121		(63	)		118,569

Total cash, cash equivalents and investments	$	177,377	$	121	$	(64	)	$	177,434

The estimated fair value of marketable debt securities (corporate debt securities, municipal bonds, U.S. government and agency securities, and U.S. treasury securities) as of June 30, 2012, by contractual maturity, are as follows:


	Fair Value
Due in one year or less	$	117,008
Due after one year through 3 years		6,174

Total investments in debt securities	$	123,182

Actual maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations without call or prepayment penalties.

Balance Sheet Components

6 Months Ended

Jun. 30, 2012

Balance Sheet Components [Abstract]

Balance Sheet Components

4. Balance Sheet Components

As of June 30, 2012 and December 31, 2011 our inventory, net, consisted of the following components (in thousands):


	June 30, 2012		December 31, 2011
Purchased materials, net	$	4,649	$	5,273
Work in process, net		3,348		5,347
Finished goods, net		2,274		4,897

Inventory, net	$	10,271	$	15,517

As of June 30, 2012 and December 31, 2011, our accrued expenses and other current liabilities consisted of the following (in thousands):


	June 30, 2012		December 31, 2011
Salaries and benefits	$	4,299	$	5,284
Legal services and matters		72		770
Customer deposits		152		1,503
Short-term portion of deferred rent		890		844
Other professional services		359		1,145
Other		767		712

Accrued expenses and other current liabilities	$	6,539	$	10,258

Contingencies

6 Months Ended

Jun. 30, 2012

Contingencies [Abstract]

Contingencies

5. Contingencies

We may become subject to claims and assessments from time to time in the ordinary course of business. We accrue liabilities for such matters when it is probable that future expenditures will be made and such expenditures can be reasonably estimated.

On October 21, 2011, and October 24, 2011, we and certain of our officers and directors were named in two identical putative class action lawsuits filed in the Superior Court of the State of California, County of San Mateo (Young v. Pacific Biosciences of California, Inc., et al., Case No. CIV509210 and Sandnas v. Pacific Biosciences of California, Inc., et al., Case No. CIV509259). On April 4, 2012, we and certain of our officers and directors were named in another putative class action lawsuit filed in the Superior Court of the State of California, County of San Mateo (Oklahoma Firefighters Pension and Retirement System v. Pacific Biosciences of California, Inc., et al., Case No. CIV512976). The Young, Sandnas and Oklahoma Firefighters Actions have since been consolidated as In re Pacific Biosciences of California Inc. S’holder Litig., Case No. CIV509210 (the “State Court Action”). The State Court Action is a putative class action brought on behalf of all persons or entities who purchased or otherwise acquired our common stock pursuant or traceable to our initial public offering (“IPO”) of common stock in October 2010. The plaintiffs in the State Court Action seek to allege on behalf of the putative class violations of several provisions of the federal securities laws in connection with our August 16, 2010, registration statement (effective, as amended, on October 26, 2010). The plaintiffs in the State Court Action seek, among other things, compensatory damages, rescission, and attorneys’ fees and costs on behalf of the putative class. Defendants in the State Court Action filed a motion to stay that lawsuit in deference to the Primo action pending in federal district court. On May 25, 2012, the Superior Court denied Defendants’ motion to stay. Defendants in the State Court Action have filed a demurrer to certain of plaintiffs’ claims. A hearing on Defendants’ demurrer is presently scheduled for August 20, 2012.

On December 21, 2011, we and certain of our officers and directors were named in a putative class action lawsuit filed in United States District Court for the Northern District of California (Primo v. Pacific Biosciences of California, Inc., et al., Case No. 4:11-CV-06599). On April 11, 2012, an amended complaint was filed in the Primo action, which added another plaintiff, Evan Powell. As amended, the complaint alleges violations of several provisions of the federal securities laws arising out of alleged misstatements or omissions in our August 16, 2010 registration statement (effective, as amended, on October 26, 2010), and by us and/or our employees during the class period. The complaint seeks, among other things, compensatory damages, rescission, and attorneys’ fees and costs on behalf of the putative class. On April 6, 2012, Mr. Primo was appointed lead plaintiff in the action. Defendants in the Primo action have filed a motion to dismiss the amended complaint. A hearing on Defendants’ motion to dismiss is presently scheduled for October 11, 2012.

On December 29, 2011, we were named as a nominal defendant, along with certain of our directors as individual defendants, in a purported shareholder derivative lawsuit filed in United States District Court for the Northern District of California (Burlingame v. Martin et al., Case No. 4:11-CV-06703). The complaint alleges that the director defendants breached various fiduciary duties owed to us, engaged in waste of corporate assets, and were, as a result, unjustly enriched. The complaint seeks, among other things, restitution of director profits allegedly obtained as a result of the aforesaid conduct, improvement of our corporate governance procedures, and attorneys’ fees and costs. On February 28, 2012, the Burlingame action was related to the Primo action and transferred to the same judge hearing the Primo action.

Pursuant to Delaware law, we may have obligations, under certain circumstances, to hold harmless and indemnify each of our directors and certain officers, including those named in the State Court Action or the Primo or Burlingame actions, against judgments, fines, settlements and expenses related to claims arising against such directors and officers to the fullest extent permitted under Delaware law, our bylaws and certificate of incorporation. Such obligations for indemnification may apply to these lawsuits. In addition, we may have obligations, under certain circumstances, to hold harmless and indemnify each of the underwriters from our IPO and their respective affiliates, directors and officers against any and all losses, claims, damages and liabilities related to claims arising against such parties pursuant to the terms of the underwriting agreement between the underwriters and the Company.

We believe that the allegations in each of these pending actions are without merit and intend to vigorously contest the actions. However, there can be no assurance that we will be successful in our defense.

In addition, from time to time, we are a party to litigation and subject to claims incident to the ordinary course of business.

We cannot determine the ultimate outcome of these lawsuits. We cannot provide an estimate of the possible loss or possible range of loss associated with the resolution of these contingencies with certainty or confidence; therefore we have not provided an estimate and we have not recorded a liability.

- Definition

The entire disclosure for loss and gain contingencies. Describes any existing condition, situation, or set of circumstances involving uncertainty as of the balance sheet date (or prior to issuance of the financial statements) as to a probable or reasonably possible loss incurred by an entity that will ultimately be resolved when one or more future events occur or fail to occur, and typically discloses the amount of loss recorded or a range of possible loss, or an assertion that no reasonable estimate can be made.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 450
-SubTopic 20
-Section 50
-Paragraph 6
-URI http://asc.fasb.org/extlink&oid=6952336&loc=d3e14472-108349

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 460
-SubTopic 10
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6851643&loc=d3e12021-110248

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 450
-SubTopic 20
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6952336&loc=d3e14326-108349

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 450
-SubTopic 20
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6952336&loc=d3e14394-108349

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 450
-SubTopic 20
-Section 50
-Paragraph 9
-URI http://asc.fasb.org/extlink&oid=6952336&loc=d3e14557-108349

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 450
-SubTopic 20
-Section 50
-Paragraph 5
-URI http://asc.fasb.org/extlink&oid=6952336&loc=d3e14453-108349

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 450
-SubTopic 20
-Section 50
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=6952336&loc=d3e14435-108349

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 460
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6851643&loc=d3e12053-110248

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 450
-SubTopic 20
-Section 50
-Paragraph 10
-URI http://asc.fasb.org/extlink&oid=6952336&loc=d3e14615-108349

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name FASB Interpretation (FIN)
-Number 14
-Paragraph 3
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 11: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 5
-Paragraph 9, 10, 11, 12
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

+ Details

Stock Option Plans

6 Months Ended

Jun. 30, 2012

Stock Option Plans [Abstract]

Stock Option Plans

6. Stock Option Plans

As of June 30, 2012, we had three active equity compensation plans, the 2010 Equity Incentive Plan, or 2010 Plan, the 2010 Outside Director Equity Incentive Plan, or 2010 Director Plan, and the 2010 Employee Stock Purchase Plan, or ESPP. Prior to the adoption of these plans, we granted options pursuant to the 2004 Equity Incentive Plan, through August 2005, and the 2005 Stock Plan, through October 2010. Upon termination of the predecessor plans, the shares available for grant at the time of termination, and shares subsequently returned to the plans upon forfeiture or option termination, were transferred to the successor plan in effect at the time of share return.

As of June 30, 2012, 800,247 shares of our common stock have been reserved for issuance under the ESPP. Our ESPP permits eligible employees to purchase common stock at a discount through payroll deductions during defined offering periods. Each offering period generally consists of four purchase periods, each purchase period being approximately six months. The price at which the stock is purchased is equal to the lower of 85% of the fair market value of the common stock at the beginning of an offering period or at the end of a purchase period. Shares issued under the ESPP totaled 428,604 shares during the six-month period ended June 30, 2012, and no shares were issued during the three-month period ended June 30, 2011. We estimate the value of the employee stock purchase rights on the date of grant using the Black-Scholes model.

The following table summarizes stock option activity for all stock option plans (in thousands, except per share amounts):


				Common Stock Options Outstanding
	Shares available for grant			Number of shares			Exercise price per share		Weighted average exercise price per share
Balances, December 31, 2011		1,441			10,522		$	0.20 – 16.00	$	6.69

Additional shares reserved		3,298
Options granted		(3,070	)		3,070		$	1.89 – 4.79	$	4.07
Options exercised		—			(359	)	$	0.20 – 3.86	$	1.56


			Common Stock Options Outstanding
	Shares available for grant		Number of shares			Exercise price per share		Weighted average exercise price per share
Options canceled		1,257		(1,257	)	$	1.96 – 16.00	$	8.37

Balances, June 30, 2012		2,926		11,976		$	0.20 – 16.00	$	5.99

Stock-based Compensation

Total stock-based compensation expense for employee stock options and stock purchases under the ESPP consists of the following (in thousands):


	Three-Month Periods Ended June 30,				Six-Month Periods Ended June 30,
	2012		2011		2012		2011
Cost of revenue	$	143	$	125	$	309	$	125
Research and development		1,069		1,537		2,202		3,285
Sales, general and administrative		1,371		1,345		2,259		2,701

Total stock-based compensation expense	$	2,583	$	3,007	$	4,770	$	6,111

We estimated the fair value of employee stock options using the Black-Scholes option pricing model. The fair value of employee stock options is being amortized on a straight-line basis over the requisite service period of the awards.

The fair values of the common stock underlying stock options granted through the date of our initial public offering, (“IPO”), were estimated by our board of directors, which intended all options granted to be exercisable at a price per share not less than the per share fair value of our common stock underlying those options on the date of grant. The fair value of the shares of common stock underlying the stock options has historically been the responsibility of and determined by our board of directors. Because there was no public market for our common stock, our board of directors determined fair value of the common stock at the time of grant of the option by considering a number of objective and subjective factors including independent third-party valuations of our common stock, sales of convertible preferred stock to unrelated third parties, operating and financial performance, the lack of liquidity of capital stock and general and industry specific economic outlook, amongst other factors. The fair value of the underlying common stock was determined by our board of directors until such time as our common stock was publicly traded. Our common stock became publicly listed upon our IPO from which time options granted are issued with a strike price equal to the closing price on the date of grant.

The fair value of employee stock options was estimated using the following weighted average assumptions:


	Three-Month Periods Ended June 30,						Six-Month Periods Ended June 30,
	2012			2011			2012			2011
Expected term in years		6.1			6.1			6.1			6.1
Expected volatility		65.0	%		56.0	%		65.0	%		56.7	%
Risk-free interest rate		1.0	%		1.9	%		1.1	%		2.1	%
Dividend yield		—			—			—			—

Expected term — Expected term represents the period that our stock-based awards are expected to be outstanding. Our assumptions about the expected term have been on our historic cancellation and exercise experience and trends as well as our expectations for future periods.

Expected volatility — We do not have sufficient trading history to solely rely on the volatility of our own common stock for establishing expected volatility. Therefore, we based our expected volatility on the historical stock volatilities of our common stock as well as several comparable publicly listed companies over a period equal to the expected terms of the options.

Risk-free interest rate — The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for zero coupon U.S. Treasury notes with maturities approximately equal to the option’s expected term.

Expected dividend yield — We have never paid dividends and do not expect to pay dividends in the foreseeable future.

Expected forfeiture rate — We estimate our forfeiture rate based on an analysis of our actual forfeitures and will continue to evaluate the adequacy of the forfeiture rate based on actual forfeiture experience, analysis of employee turnover behavior and other factors. The impact from a forfeiture rate adjustment will be recognized in full in the period of adjustment, and if the actual number of future forfeitures differs from that estimated, we may be required to record adjustments to stock-based compensation expense in future periods.

- Definition

The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 50
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6406099&loc=d3e25284-112666

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 718
-SubTopic 40
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6418621&loc=d3e17540-113929

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 718
-SubTopic 10
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5070-113901

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 718
-SubTopic 10
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5047-113901

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 718
-SubTopic 10
-Section 50
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5444-113901

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Staff Accounting Bulletin (SAB)
-Number Topic 14

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 123R
-Paragraph 64, 65, A240
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Statement of Position (SOP)
-Number 93-6
-Paragraph 53
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

+ Details

Segment Reporting and Geographic Information

6 Months Ended

Jun. 30, 2012

Segment Reporting and Geographical Information [Abstract]

Segment Reporting and Geographic Information

7. Segment Reporting and Geographic Information

We are organized as, and operate in, one reportable segment: the development, manufacturing and marketing of an integrated platform for genetic analysis. Our chief operating decision-maker is our Chief Executive Officer. The Chief Executive Officer reviews financial information presented on a consolidated basis for purposes of evaluating financial performance and allocating resources, accompanied by information about revenue by geographic regions. Our assets are primarily located in the United States of America and not allocated to any specific region and we do not measure the performance of our geographic regions based upon asset-based metrics. Therefore, geographic information is presented only for revenue. Revenue by geographic region is based on the ship to address on the customer order.

As of June 30, 2012 and December 31, 2011, approximately 66% and 62%, respectively, of our accounts receivable were from domestic customers. As of June 30, 2012 and December 31, 2011, approximately 78% and 85%, respectively, of our net accounts receivable were from three and five individual customers, respectively, each representing at least 10% of our accounts receivable.

During the three- and six-month periods ended June 30, 2012, domestic revenue accounted for 52% and 34%, respectively, of total revenue. For the three- and six-month periods ended June 30, 2011, domestic revenue accounted for 87% of total revenue in both periods.

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 34
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8981-108599

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 41
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e9038-108599

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 33
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8971-108599

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 12
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8595-108599

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8380-108599

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8933-108599

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 26
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8844-108599

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 35
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8984-108599

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 40
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e9031-108599

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 42
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e9054-108599

Reference 11: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 10
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8538-108599

Reference 12: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 29
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8864-108599

Reference 13: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 31
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8924-108599

Reference 14: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 30
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8906-108599

Reference 15: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 131
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

+ Details

Litigation Settlements

6 Months Ended

Jun. 30, 2012

Litigation Settlements [Abstract]

Litigation Settlements

8. Litigation Settlements

In April 2012, the Company entered into a settlement agreement with Life Technologies Corporation to settle a complaint filed by Life Technologies Corporation seeking review of a patent interference decision of the U.S. Patent and Trademark Office. Additionally, in April 2012, the Company entered into a settlement and release agreement with Helicos Biosciences Corporation, or Helicos, and Arizona Science and Technology Enterprises LLC d/b/a Arizona Technology Enterprises, or AzTE, to resolve all existing patent litigation between the parties. The settlement terms with Helicos and AzTE also include other features such as worldwide, non-exclusive limited licenses for the Company to all patents owned by Helicos and the two asserted patents in-licensed by Helicos from AzTE in the field relevant to the Company’s current products, and a perpetual covenant not to sue. The Company determined the principal benefit of the settlement with Helicos and AzTE was the economic benefit of avoiding litigation expenses and that the value attributable to other settlement features was believed to be de minimus. No value was assigned to the licenses from Helicos and AzTE as the Company does not believe any of our current or future products would fall under any valid and enforceable claims in the licensed applications and patents.

As a result of these settlement agreements, we recorded a $1.8 million charge to selling, general and administrative expense during the first quarter of fiscal 2012. The payment of the $1.8 million was made during the six-month period ended June 30, 2012.

Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2012

Summary of Significant Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

Use of Estimates

Use of Estimates

Fair Value of Financial Instruments

Fair Value of Financial Instruments

•

Level 1: quoted prices in active markets for identical assets or liabilities;

•

Level 3: unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.


(in thousands)	June 30, 2012								December 31, 2011
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Assets
Cash and cash equivalents:
Cash and money market funds	$	13,926	$	—	$	—	$	13,926	$	49,267	$	—	$	—	$	49,267
Commercial paper		—		17,997		—		17,997		—		9,598		—		9,598
Corporate debt securities		—		1,700		—		1,700		—		—		—		—

Investments:
Commercial paper		—		25,973		—		25,973		—		29,772		—		29,772
Corporate debt securities		—		38,932		—		38,932		—		37,387		—		37,387
Asset backed securities		—		6,174		—		6,174		—		9,909		—		9,909
Certificates of deposits		—		4,023		—		4,023		—		4,034		—		4,034
U.S. government and agency securities		—		28,383		—		28,383		—		37,467		—		37,467

Total assets measured at fair value	$	13,926	$	123,182	$	—	$	137,108	$	49,267	$	128,167	$	—	$	177,434

Cash and Cash Equivalents

Cash and Cash Equivalents

Investments

Investments

Concentration of Credit Risk

Concentration of Credit Risk

Inventory

Inventory

Revenue Recognition

Revenue Recognition

Deferred revenue primarily represents product maintenance agreement revenue that is expected to be recognized over the related service period, generally one to three years.

Stock-based Compensation

Stock-based Compensation

Employee and director stock option plans are more fully described in Note 6.

Net Loss Per Share

Net Loss Per Share

The following table presents the computation of basic and diluted net loss per share (in thousands, except per share amounts):


	Three-Months Ended June 30,						Six-Months Ended June 30,
	2012			2011			2012			2011
Net loss per share:
Numerator
Net loss	$	(22,487	)	$	(22,475	)	$	(50,067	)	$	(57,284	)


Denominator:
Weighted average shares of common stock outstanding		55,658			53,414			55,433			53,159
Less: Shares of common stock subject to repurchase		—			—			—			(102	)

Weighted average shares used in computation of basic and diluted net loss per share		55,658			53,414			55,433			53,057

Basic and diluted net loss per share	$	(0.40	)	$	(0.42	)	$	(0.90	)	$	(1.08	)

The following were excluded from the computation of diluted net loss per share for the periods presented because including them would have had an anti-dilutive effect (in thousands):


	As of June 30,
	2012		2011
Options outstanding		11,976		9,368
Warrants to purchase common stock		10		10

Recent Accounting Pronouncements

Recent Accounting Pronouncements

Summary of Significant Accounting Policies (Tables)

6 Months Ended

Jun. 30, 2012

Summary of Significant Accounting Policies [Abstract]

Summary of assets and liabilities measured at fair value classified based on level input


(in thousands)	June 30, 2012								December 31, 2011
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Assets
Cash and cash equivalents:
Cash and money market funds	$	13,926	$	—	$	—	$	13,926	$	49,267	$	—	$	—	$	49,267
Commercial paper		—		17,997		—		17,997		—		9,598		—		9,598
Corporate debt securities		—		1,700		—		1,700		—		—		—		—

Investments:
Commercial paper		—		25,973		—		25,973		—		29,772		—		29,772
Corporate debt securities		—		38,932		—		38,932		—		37,387		—		37,387
Asset backed securities		—		6,174		—		6,174		—		9,909		—		9,909
Certificates of deposits		—		4,023		—		4,023		—		4,034		—		4,034
U.S. government and agency securities		—		28,383		—		28,383		—		37,467		—		37,467

Total assets measured at fair value	$	13,926	$	123,182	$	—	$	137,108	$	49,267	$	128,167	$	—	$	177,434

Computation of basic and diluted net loss per share

The following table presents the computation of basic and diluted net loss per share (in thousands, except per share amounts):


	Three-Months Ended June 30,						Six-Months Ended June 30,
	2012			2011			2012			2011
Net loss per share:
Numerator
Net loss	$	(22,487	)	$	(22,475	)	$	(50,067	)	$	(57,284	)


Denominator:
Weighted average shares of common stock outstanding		55,658			53,414			55,433			53,159
Less: Shares of common stock subject to repurchase		—			—			—			(102	)

Weighted average shares used in computation of basic and diluted net loss per share		55,658			53,414			55,433			53,057

Basic and diluted net loss per share	$	(0.40	)	$	(0.42	)	$	(0.90	)	$	(1.08	)

Anti-dilutive excluded from computation of diluted net loss per share

The following were excluded from the computation of diluted net loss per share for the periods presented because including them would have had an anti-dilutive effect (in thousands):


	As of June 30,
	2012		2011
Options outstanding		11,976		9,368
Warrants to purchase common stock		10		10

- Definition

Tabular disclosure related to assets and liabilities by class, including financial instruments measured at fair value that are classified in shareholders' equity, if any, that are measured at fair value on a recurring and/or nonrecurring basis in periods after initial recognition. Disclosures include, but are not limited to: (a) the fair value measurements recorded and the reasons for the measurements and (b) the level within the fair value hierarchy in which the fair value measurements are categorized in their entirety (levels 1, 2, 3) as well as transfers between levels 1 and 2.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 820
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=7578670&loc=d3e19279-110258

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 820
-SubTopic 10
-Section 50
-Paragraph 2
-Subparagraph (a,b,bb)
-URI http://asc.fasb.org/extlink&oid=7578670&loc=d3e19207-110258

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 820
-SubTopic 10
-Section 50
-Paragraph 2C
-URI http://asc.fasb.org/extlink&oid=7578670&loc=SL7498348-110258

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 820
-SubTopic 10
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=7578670&loc=d3e19190-110258

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 157
-Paragraph 32
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 157
-Paragraph 33
-Subparagraph a, b
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 157
-Paragraph 6
-Footnote 4
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

+ Details

Cash and Cash Equivalents and Investments (Tables)

6 Months Ended

Jun. 30, 2012

Cash and Cash Equivalents and Investments [Abstract]

Summary of cash and cash equivalents and investments

The following table summarizes our investments as of June 30, 2012 and December 31, 2011 (in thousands):


	As of June 30, 2012
	Amortized Cost		Gross unrealized gains		Gross unrealized losses			Fair Value
Cash and cash equivalents:
Cash and money market funds	$	13,926	$	—	$	—		$	13,926
Commercial paper		17,997		1		(1	)		17,997
Corporate debt securities		1,700		—		—			1,700

Total cash and cash equivalents		33,623		1		(1	)		33,623

Investments:
Commercial paper		25,971		2		—			25,973
Corporate debt securities		38,878		58		(4	)		38,932
Asset backed securities		6,170		4		—			6,174
Certificates of deposit		4,016		7		—			4,023
U.S. government and agency securities		28,375		10		(2	)		28,383

Total investments		103,410		81		(6	)		103,485

Total cash, cash equivalents and investments	$	137,033	$	82	$	(7	)	$	137,108


	As of December 31, 2011
	Amortized Cost		Gross unrealized gains		Gross unrealized losses			Fair Value
Cash and cash equivalents:
Cash and money market funds	$	49,267	$	—	$	—		$	49,267
Commercial paper		9,599		—		(1	)		9,598

Total cash and cash equivalents		58,866		—		(1	)		58,865

Investments:
Commercial paper		29,767		5		—			29,772
Corporate debt securities		37,379		65		(57	)		37,387
Asset backed securities		9,904		7		(2	)		9,909
Certificates of deposit		4,026		9		(1	)		4,034
U.S. government and agency securities		37,435		35		(3	)		37,467

Total investments		118,511		121		(63	)		118,569

Total cash, cash equivalents and investments	$	177,377	$	121	$	(64	)	$	177,434

Estimated fair value of marketable debt securities


	Fair Value
Due in one year or less	$	117,008
Due after one year through 3 years		6,174

Total investments in debt securities	$	123,182

Balance Sheet Components (Tables)

6 Months Ended

Jun. 30, 2012

Balance Sheet Components [Abstract]

Components of Inventory

As of June 30, 2012 and December 31, 2011 our inventory, net, consisted of the following components (in thousands):


	June 30, 2012		December 31, 2011
Purchased materials, net	$	4,649	$	5,273
Work in process, net		3,348		5,347
Finished goods, net		2,274		4,897

Inventory, net	$	10,271	$	15,517

Schedule of Accrued Expenses and Other Current Liabilities

As of June 30, 2012 and December 31, 2011, our accrued expenses and other current liabilities consisted of the following (in thousands):


	June 30, 2012		December 31, 2011
Salaries and benefits	$	4,299	$	5,284
Legal services and matters		72		770
Customer deposits		152		1,503
Short-term portion of deferred rent		890		844
Other professional services		359		1,145
Other		767		712

Accrued expenses and other current liabilities	$	6,539	$	10,258

Stock Option Plans (Tables)

6 Months Ended

Jun. 30, 2012

Stock Option Plans [Abstract]

Summary of Stock Option Activity

The following table summarizes stock option activity for all stock option plans (in thousands, except per share amounts):


				Common Stock Options Outstanding
	Shares available for grant			Number of shares			Exercise price per share		Weighted average exercise price per share
Balances, December 31, 2011		1,441			10,522		$	0.20 – 16.00	$	6.69

Additional shares reserved		3,298
Options granted		(3,070	)		3,070		$	1.89 – 4.79	$	4.07
Options exercised		—			(359	)	$	0.20 – 3.86	$	1.56


			Common Stock Options Outstanding
	Shares available for grant		Number of shares			Exercise price per share		Weighted average exercise price per share
Options canceled		1,257		(1,257	)	$	1.96 – 16.00	$	8.37

Balances, June 30, 2012		2,926		11,976		$	0.20 – 16.00	$	5.99

Schedule of Stock-Based Compensation Expense

Stock-based Compensation

Total stock-based compensation expense for employee stock options and stock purchases under the ESPP consists of the following (in thousands):


	Three-Month Periods Ended June 30,				Six-Month Periods Ended June 30,
	2012		2011		2012		2011
Cost of revenue	$	143	$	125	$	309	$	125
Research and development		1,069		1,537		2,202		3,285
Sales, general and administrative		1,371		1,345		2,259		2,701

Total stock-based compensation expense	$	2,583	$	3,007	$	4,770	$	6,111

Schedule of Fair Value of Employee Stock Options

The fair value of employee stock options was estimated using the following weighted average assumptions:


	Three-Month Periods Ended June 30,						Six-Month Periods Ended June 30,
	2012			2011			2012			2011
Expected term in years		6.1			6.1			6.1			6.1
Expected volatility		65.0	%		56.0	%		65.0	%		56.7	%
Risk-free interest rate		1.0	%		1.9	%		1.1	%		2.1	%
Dividend yield		—			—			—			—

Summary of Significant Accounting Policies (Details 1) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Computation of basic and diluted net loss per share
Net loss	$ (22,487)	$ (22,475)	$ (50,067)	$ (57,284)
Weighted average shares of common stock outstanding	55,658	53,414	55,433	53,159
Less: Shares of common stock subject to repurchase				(102)
Weighted average shares used in computation of basic and diluted net loss per share	55,658	53,414	55,433	53,057
Basic and diluted net loss per share	$ (0.40)	$ (0.42)	$ (0.90)	$ (1.08)

- Definition

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

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Glossary Net Income
-URI http://asc.fasb.org/extlink&oid=6518256

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 230
-SubTopic 10
-Section 45
-Paragraph 28
-URI http://asc.fasb.org/extlink&oid=6943989&loc=d3e3602-108585

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 944
-SubTopic 225
-Section S99
-Paragraph 1
-Subparagraph (SX 210.7-04.19)
-URI http://asc.fasb.org/extlink&oid=6879464&loc=d3e573970-122913

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 260
-SubTopic 10
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6371337&loc=d3e3550-109257

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 225
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SX 210.5-03.18)
-URI http://asc.fasb.org/extlink&oid=6880815&loc=d3e20235-122688

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 944
-SubTopic 225
-Section S99
-Paragraph 1
-Subparagraph (SX 210.7-04.22)
-URI http://asc.fasb.org/extlink&oid=6879464&loc=d3e573970-122913

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Glossary Other Comprehensive Income
-URI http://asc.fasb.org/extlink&oid=6519514

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section 45
-Paragraph 6
-URI http://asc.fasb.org/extlink&oid=20435746&loc=d3e565-108580

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Accounting Research Bulletin (ARB)
-Number 51
-Paragraph 38
-Subparagraph d
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 130
-Paragraph 10, 15
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 11: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Accounting Research Bulletin (ARB)
-Number 51
-Paragraph A7
-Appendix A

Reference 12: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Emerging Issues Task Force (EITF)
-Number 87-21
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 13: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 03
-Paragraph 19
-Article 5

Reference 14: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Accounting Research Bulletin (ARB)
-Number 51
-Paragraph 38
-Subparagraph a
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 15: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 95
-Paragraph 28, 29, 30
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 16: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 04
-Paragraph 20
-Article 9

+ Details

- Definition

This element represents the weighted average total number of shares issued throughout the period including the first (beginning balance outstanding) and last (ending balance outstanding) day of the period before considering any reductions (for instance, shares held in treasury) to arrive at the weighted average number of shares outstanding. Weighted average relates to the portion of time within a reporting period that common shares have been issued and outstanding to the total time in that period. Such concept is used in determining the weighted average number of shares outstanding for purposes of calculating earnings per share (basic).

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 260
-SubTopic 10
-Section 45
-Paragraph 10
-URI http://asc.fasb.org/extlink&oid=7655603&loc=d3e1448-109256

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 260
-SubTopic 10
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6371337&loc=d3e3550-109257

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 260
-SubTopic 10
-Section 45
-Paragraph 13
-URI http://asc.fasb.org/extlink&oid=7655603&loc=d3e2646-109256

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 128
-Paragraph 10
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 128
-Paragraph 40
-Subparagraph a
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 128
-Paragraph 8
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

+ Details

Summary of Significant Accounting Policies (Details 2) - shares	6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
Summary of Significant Accounting Policies (Textual) [Abstract]
Product maintenance agreement service period, Minimum	1 year
Product maintenance agreement service period, Maximum	3 years
Options outstanding [Member]
Anti-dilutive excluded from computation of diluted net loss per share
Stock excluded from the computation of diluted net loss per share	11,976	9,368
Warrants to purchase common stock [Member]
Anti-dilutive excluded from computation of diluted net loss per share
Stock excluded from the computation of diluted net loss per share	10	10

- Definition

Securities (including those issuable pursuant to contingent stock agreements) that could potentially dilute basic earnings per share (EPS) or earnings per unit (EPU) in the future that were not included in the computation of diluted EPS or EPU because to do so would increase EPS or EPU amounts or decrease loss per share or unit amounts for the period presented.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Glossary Antidilution
-URI http://asc.fasb.org/extlink&oid=6505113

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Glossary Diluted Earnings Per Share
-URI http://asc.fasb.org/extlink&oid=6510752

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Glossary Contingent Stock Agreement
-URI http://asc.fasb.org/extlink&oid=6508534

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 260
-SubTopic 10
-Section 50
-Paragraph 1
-Subparagraph (c)
-URI http://asc.fasb.org/extlink&oid=6371337&loc=d3e3550-109257

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 128
-Paragraph 40
-Subparagraph c
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 128
-Paragraph 13, 14
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Emerging Issues Task Force (EITF)
-Number 07-4
-Paragraph 4
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 128
-Paragraph 171
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

+ Details

Cash and Cash Equivalents and Investments (Details) - USD ($) $ in Thousands	Jun. 30, 2012	Dec. 31, 2011
Summary of cash and cash equivalents and investments
Amortized Cost	$ 33,623	$ 58,866
Gross unrealized gains	1
Gross unrealized losses	(1)	(1)
Fair Value	33,623	58,865
Cash and cash equivalents [Member]
Summary of cash and cash equivalents and investments
Amortized Cost	137,033	177,377
Gross unrealized gains	82	121
Gross unrealized losses	(7)	(64)
Fair Value	137,108	177,434
Cash and cash equivalents [Member] \| Commercial paper [Member]
Summary of cash and cash equivalents and investments
Amortized Cost	17,997	9,599
Gross unrealized gains	1
Gross unrealized losses	(1)	(1)
Fair Value	17,997	9,598
Cash and cash equivalents [Member] \| Cash and money market funds [Member]
Summary of cash and cash equivalents and investments
Amortized Cost	13,926	49,267
Gross unrealized gains
Fair Value	13,926	49,267
Cash and cash equivalents [Member] \| Corporate debt securities [Member]
Summary of cash and cash equivalents and investments
Amortized Cost	1,700
Fair Value	1,700
Investments [Member]
Summary of cash and cash equivalents and investments
Amortized Cost	103,410	118,511
Gross unrealized gains	81	121
Gross unrealized losses	(6)	(63)
Fair Value	103,485	118,569
Investments [Member] \| Commercial Paper [Member]
Summary of cash and cash equivalents and investments
Amortized Cost	25,971	29,767
Gross unrealized gains	2	5
Fair Value	25,973	29,772
Investments [Member] \| Corporate debt securities [Member]
Summary of cash and cash equivalents and investments
Amortized Cost	38,878	37,379
Gross unrealized gains	58	65
Gross unrealized losses	(4)	(57)
Fair Value	38,932	37,387
Investments [Member] \| Asset backed securities [Member]
Summary of cash and cash equivalents and investments
Amortized Cost	6,170	9,904
Gross unrealized gains	4	7
Gross unrealized losses		(2)
Fair Value	6,174	9,909
Investments [Member] \| Certificates of deposits [Member]
Summary of cash and cash equivalents and investments
Amortized Cost	4,016	4,026
Gross unrealized gains	7	9
Gross unrealized losses		(1)
Fair Value	4,023	4,034
Investments [Member] \| U.S. Government and agency securities [Member]
Summary of cash and cash equivalents and investments
Amortized Cost	28,375	37,435
Gross unrealized gains	10	35
Gross unrealized losses	(2)	(3)
Fair Value	$ 28,383	$ 37,467

Cash and Cash Equivalents and Investments (Details1) $ in Thousands	Jun. 30, 2012 USD ($)
Estimated fair value of marketable debt securities
Total investments in debt securities	$ 123,182
Due in one year or less [Member]
Estimated fair value of marketable debt securities
Total investments in debt securities	117,008
Due after one year through 3 years [Member]
Estimated fair value of marketable debt securities
Total investments in debt securities	$ 6,174

Cash and Cash Equivalents and Investments (Details Textual)	6 Months Ended
	Jun. 30, 2012
Cash and Cash Equivalents and Investments (Textual) [Abstract]
Securities with stated maturities, maximum	90 days

Balance Sheet Components (Details) - USD ($) $ in Thousands	Jun. 30, 2012	Dec. 31, 2011
Components of inventory
Purchased materials, net	$ 4,649	$ 5,273
Work in process, net	3,348	5,347
Finished goods, net	2,274	4,897
Inventory, net	$ 10,271	$ 15,517

Balance Sheet Components (Details 1) - USD ($) $ in Thousands	Jun. 30, 2012	Dec. 31, 2011
Schedule of accrued expenses and other current liabilities
Salaries and benefits	$ 4,299	$ 5,284
Legal services and matters	72	770
Customer deposits	152	1,503
Short-term portion of deferred rent	890	844
Other professional services	359	1,145
Other	767	712
Accrued expenses and other current liabilities	$ 6,539	$ 10,258

- Definition

Carrying value as of the balance sheet date of obligations incurred through that date and payable for professional fees, such as for legal and accounting services received. Used to reflect the current portion of the liabilities (due within one year or within the normal operating cycle if longer).

+ References + Details

- Definition

Carrying value as of the balance sheet date of obligations incurred through that date and payable for contractual rent under lease arrangements. Used to reflect the current portion of the liabilities (due within one year or within the normal operating cycle if longer).

+ References + Details

Stock Option Plans (Details) - $ / shares	6 Months Ended	12 Months Ended
Stock Option Plans (Details) - $ / shares	Jun. 30, 2012	Dec. 31, 2011
Summary of stock option activity
Balances, December 31, 2011, Shares available for grant	1,441
Additional shares reserved, Shares available for grant	3,298
Options granted, Shares available for grant	(3,070)
Options exercised, Shares available for grant
Options cancelled, Shares available for grant	1,257
Balances, June 30, 2012, Shares available for grant	2,926	1,441
Balances, December 31, 2011, Number of shares	10,522
Options granted, Number of shares	3,070
Options exercised, Number of shares	(359)
Options cancelled, Number of shares	(1,257)
Balances, June 30, 2012, Number of shares	11,976	10,522
Balances, December 31, 2011, Weighted average exercise price per share	$ 6.69
Options granted, Weighted average exercise price per share	4.07
Options exercised, Weighted average exercise price per share	1.56
Options cancelled, Weighted average exercise price per share	8.37
Balances, June 30, 2012, Weighted average exercise price per share	5.99	$ 6.69
0.20 - 16.00 [Member]
Summary of stock option activity
Exercise price, lower range	0.20	0.20
Exercise price, upper range	16.00	$ 16.00
3.01- 4.79 [Member]
Summary of stock option activity
Exercise price, lower range	1.89
Exercise price, upper range	4.79
0.20 - 3.86 [Member]
Summary of stock option activity
Exercise price, lower range	0.20
Exercise price, upper range	3.86
1.96 - 16.00 [Member]
Summary of stock option activity
Exercise price, lower range	1.96
Exercise price, upper range	$ 16.00

Stock Option Plans (Details 1) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
Stock Option Plans (Details 1) - USD ($) $ in Thousands	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Schedule of stock-based compensation expense
Stock-based compensation	$ 2,583	$ 3,007	$ 4,770	$ 6,111
Cost of revenue [Member]
Schedule of stock-based compensation expense
Stock-based compensation	143	125	309	125
Research and development [Member]
Schedule of stock-based compensation expense
Stock-based compensation	1,069	1,537	2,202	3,285
Sales, general and administrative [Member]
Schedule of stock-based compensation expense
Stock-based compensation	$ 1,371	$ 1,345	$ 2,259	$ 2,701

Stock Option Plans (Details 2)	3 Months Ended		6 Months Ended
Stock Option Plans (Details 2)	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Schedule of fair value of employee stock options
Expected term in years	6 years 1 month 6 days	6 years 1 month 6 days	6 years 1 month 6 days	6 years 1 month 6 days
Expected volatility	65.00%	56.00%	65.00%	56.70%
Dividend yield
Minimum [Member]
Schedule of fair value of employee stock options
Risk-free interest rate	1.00%	1.90%	1.10%	2.10%

Stock Option Plans (Details Textual)	6 Months Ended
Stock Option Plans (Details Textual)	Jun. 30, 2012 PurchasePeriod CompensationPlan shares	Jun. 30, 2011 shares
Stock Option Plans (Textual) [Abstract]
Number of equity compensation plans \| CompensationPlan	3
Common stock reserved for issuance	800,247
Number of purchase periods \| PurchasePeriod	4
Purchase period of ESPP	6 months
Percentage of fair market value at which stock can be purchased	85.00%
Shares issued under the ESPP	428,604	0

- Definition

Number of shares issued during the period as a result of an employee stock purchase plan.

+ References + Details

Segment Reporting and Geographic Information (Details Textual) - Person	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011	Dec. 31, 2011
Segment Reporting And Geographic Information (Textual) [Abstract]
Net accounts receivable	78.00%		78.00%		85.00%
Net accounts receivable, number of customers			3		5
Company's accounts receivable representing two and five individual customer			10.00%		10.00%
U S
Segment Reporting And Geographic Information (Textual) [Abstract]
Accounts receivable from domestic customers	66.00%		66.00%		62.00%
Domestic revenue accounted of total revenue	52.00%	87.00%	34.00%	87.00%

Litigation Settlements (Details Textual) $ in Millions	6 Months Ended
Litigation Settlements (Details Textual) $ in Millions	Jun. 30, 2012 USD ($)	Apr. 30, 2012 Entity
Litigation Settlements (Textual) [Abstract]
Selling, general and administrative expenses \| $	$ 1.8
Helicos Biosciences Corporation [Member]
Loss Contingencies [Line Items]
Number of patents owned		2
Helicos Arizona Science And Technology Enterprises LLC [Member]
Loss Contingencies [Line Items]
Number of patents owned		2

Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands	Jun. 30, 2012	Dec. 31, 2011
Summary of assets and liabilities measured at fair value classified based on level of input
Total assets measured at fair value	$ 137,108	$ 177,434
Cash and money market funds [Member] \| Cash and cash equivalents [Member]
Summary of assets and liabilities measured at fair value classified based on level of input
Total assets measured at fair value	13,926	49,267
Certificates of deposits [Member] \| Investments [Member]
Summary of assets and liabilities measured at fair value classified based on level of input
Total assets measured at fair value	4,023	4,034
Commercial paper [Member] \| Cash and cash equivalents [Member]
Summary of assets and liabilities measured at fair value classified based on level of input
Total assets measured at fair value	17,997	9,598
Commercial paper [Member] \| Investments [Member]
Summary of assets and liabilities measured at fair value classified based on level of input
Total assets measured at fair value	25,973	29,772
Corporate debt securities [Member] \| Cash and cash equivalents [Member]
Summary of assets and liabilities measured at fair value classified based on level of input
Total assets measured at fair value	1,700
Corporate debt securities [Member] \| Investments [Member]
Summary of assets and liabilities measured at fair value classified based on level of input
Total assets measured at fair value	38,932	37,387
Asset backed securities [Member] \| Investments [Member]
Summary of assets and liabilities measured at fair value classified based on level of input
Total assets measured at fair value	6,174	9,909
U.S. Government and agency securities [Member] \| Investments [Member]
Summary of assets and liabilities measured at fair value classified based on level of input
Total assets measured at fair value	28,383	37,467
Level 1 [Member]
Summary of assets and liabilities measured at fair value classified based on level of input
Total assets measured at fair value	13,926	49,267
Level 1 [Member] \| Cash and money market funds [Member] \| Cash and cash equivalents [Member]
Summary of assets and liabilities measured at fair value classified based on level of input
Total assets measured at fair value	13,926	49,267
Level 2 [Member]
Summary of assets and liabilities measured at fair value classified based on level of input
Total assets measured at fair value	123,182	128,167
Level 2 [Member] \| Certificates of deposits [Member] \| Investments [Member]
Summary of assets and liabilities measured at fair value classified based on level of input
Total assets measured at fair value	4,023	4,034
Level 2 [Member] \| Commercial paper [Member] \| Cash and cash equivalents [Member]
Summary of assets and liabilities measured at fair value classified based on level of input
Total assets measured at fair value	17,997	9,598
Level 2 [Member] \| Commercial paper [Member] \| Investments [Member]
Summary of assets and liabilities measured at fair value classified based on level of input
Total assets measured at fair value	25,973	29,772
Level 2 [Member] \| Corporate debt securities [Member] \| Cash and cash equivalents [Member]
Summary of assets and liabilities measured at fair value classified based on level of input
Total assets measured at fair value	1,700
Level 2 [Member] \| Corporate debt securities [Member] \| Investments [Member]
Summary of assets and liabilities measured at fair value classified based on level of input
Total assets measured at fair value	38,932	37,387
Level 2 [Member] \| Asset backed securities [Member] \| Investments [Member]
Summary of assets and liabilities measured at fair value classified based on level of input
Total assets measured at fair value	6,174	9,909
Level 2 [Member] \| U.S. Government and agency securities [Member] \| Investments [Member]
Summary of assets and liabilities measured at fair value classified based on level of input
Total assets measured at fair value	28,383	37,467
Level 3 [Member]
Summary of assets and liabilities measured at fair value classified based on level of input
Total assets measured at fair value
Level 3 [Member] \| Cash and money market funds [Member]
Summary of assets and liabilities measured at fair value classified based on level of input
Total assets measured at fair value
Level 3 [Member] \| Certificates of deposits [Member]
Summary of assets and liabilities measured at fair value classified based on level of input
Total assets measured at fair value
Level 3 [Member] \| Commercial paper [Member]
Summary of assets and liabilities measured at fair value classified based on level of input
Total assets measured at fair value
Level 3 [Member] \| Corporate debt securities [Member]
Summary of assets and liabilities measured at fair value classified based on level of input
Total assets measured at fair value
Level 3 [Member] \| Asset backed securities [Member]
Summary of assets and liabilities measured at fair value classified based on level of input
Total assets measured at fair value
Level 3 [Member] \| U.S. Government and agency securities [Member]
Summary of assets and liabilities measured at fair value classified based on level of input
Total assets measured at fair value