Fair Value Measurements

The Company uses various inputs in determining the fair value of its investments and measures these assets on a recurring basis. Assets and liabilities recorded at fair value in the consolidated balance sheets are categorized by the level of objectivity associated with the inputs used to measure their fair value. The following levels are directly related to the amount of subjectivity associated with the inputs to fair valuation of these assets and liabilities:


•	Level 1 - quoted prices in active markets for identical investments, which include U.S. treasury securities


•	Level 2 - other significant observable inputs (including quoted prices for similar investments, market corroborated inputs, etc.)


•	Level 3 - significant unobservable inputs (including the Company’s own assumptions in determining the fair value of the Symphony Icon purchase consideration liability)

The inputs or methodology used for valuing securities are not necessarily an indication of the credit risk associated with investing in those securities. The following table provides the fair value measurements of applicable Company assets and liabilities that are measured at fair value on a recurring basis according to the fair value levels described above as of March 31, 2015 and December 31, 2014.



	Assets and Liabilities at Fair Value as of March 31, 2015
	Level 1		Level 2		Level 3		Total
	(in thousands)
Assets
Cash and cash equivalents	$	41,960	$	—	$	—	$	41,960
Short-term investments	272,585		552		—		273,137
Total cash and cash equivalents and investments	$	314,545	$	552	$	—	$	315,097
Liabilities
Other long-term liabilities	$	—	$	—	$	18,641	$	18,641
Total liabilities	$	—	$	—	$	18,641	$	18,641



	Assets and Liabilities at Fair Value as of December 31, 2014
	Level 1		Level 2		Level 3		Total
	(in thousands)
Assets
Cash and cash equivalents	$	137,266	$	—	$	—	$	137,266
Short-term investments	201,521		552		—		202,073
Total cash and cash equivalents and investments	$	338,787	$	552	$	—	$	339,339
Liabilities
Other long-term liabilities	$	—	$	—	$	17,638	$	17,638
Total liabilities	$	—	$	—	$	17,638	$	17,638

The Company’s Level 3 liabilities, which consists of the Symphony Icon purchase consideration liability, is estimated using a probability-based income approach utilizing an appropriate discount rate. Subsequent changes in the fair value of the Symphony Icon purchase consideration liability are recorded as an increase or decrease in Symphony Icon purchase liability expense in the accompanying consolidated statements of comprehensive loss. The following table summarizes the change in consolidated balance sheet carrying value associated with Level 3 liabilities for the three months ended March 31, 2015 and 2014.



	Other Long-term Liabilities
	(in thousands)
Balance at December 31, 2014	$	17,638
Change in valuation of purchase consideration payable to former Symphony Icon stockholders	1,753
Reclassification to accounts payable for payment due of contingent payment obligation with cash	(750		)
Balance at March 31, 2015	$	18,641

Balance at December 31, 2013	$	27,710
Change in valuation of purchase consideration payable to former Symphony Icon stockholders	1,142
Balance at March 31, 2014	$	28,852

The Company also has assets that under certain conditions are subject to measurement at fair value on a non-recurring basis. These assets include goodwill associated with the acquisitions of Coelacanth Corporation in 2001 and Symphony Icon in 2010 and intangible assets associated with the acquisition of Symphony Icon in 2010. For these assets, measurement at fair value in periods subsequent to their initial recognition is applicable if one or more is determined to be impaired.