4. Available-for-Sale Securities and Fair Value Measurements

Available-for-Sale Securities

The classification of available-for-sale securities in the condensed consolidated balance sheets is as follows:

(In thousands)	September 30, 2015		December 31, 2014
Cash and cash equivalents	$	76,077	$	95,090
Short-term marketable securities	127,446		143,698
Marketable securities	—		42,856

Total	$	203,523	$	281,644

The estimated fair value of available-for-sale securities is based on quoted market prices for these or similar investments that were based on prices obtained from a commercial pricing service. Available-for-sale securities are summarized below:

	September 30, 2015
(In thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
U.S. government securities	$	7,503	$	3	$	—		$	7,506
U.S. government agencies	69,965		9		(2		)	69,972
Corporate notes	27,485		3		(2		)	27,486
Commercial paper	54,702		—		—			54,702
Money market funds	43,857		—		—			43,857

Total	$	203,512	$	15	$	(4	)	$	203,523

	December 31, 2014
(In thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Other Than Temporary Impairment Loss			Estimated Fair Value
U.S. government securities	$	30,019	$	24	$	—		$	—		$	30,043
U.S. government agencies	34,756		6		(12		)	—			34,750
Corporate notes	80,880		5		(110		)	—			80,775
Commercial paper	34,469		—		—			—			34,469
Ordinary shares of Theravance Biopharma	10,269		—		—			(3,752		)	6,517
Money market funds	95,090		—		—			—			95,090

Total	$	285,483	$	35	$	(122	)	$	(3,752	)	$	281,644

As of September 30, 2015, all of the available-for-sale securities had contractual maturities within one year and the weighted average duration of marketable securities was approximately three months. We do not intend to sell the investments that are in an unrealized loss position, and it is unlikely that we will be required to sell the investments before recovery of their amortized cost basis, which may be maturity. We have determined that the gross unrealized losses on our marketable securities as of September 30, 2015 were temporary in nature. As of September 30, 2015, all marketable securities with unrealized losses have been in a loss position for less than twelve months.

During the nine months ended September 30, 2015, we recognized a gain of $1.2 million from the sale of all of the ordinary shares of Theravance Biopharma that we held as of December 31, 2014, which is included in other income (expense), net in the condensed consolidated statement of operations. In addition, we sold other available-for-sale securities totaling $49.4 million, and the related realized gains and losses were not significant during the nine months ended September 30, 2015.

Fair Value Measurements

Our available-for-sale securities are measured at fair value on a recurring basis and our debt is carried at the amortized cost basis. The estimated fair values were as follows:

	Estimated Fair Value Measurements as of September 30, 2015 Using:
Types of Instruments	Quoted Price in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
(In thousands)	Level 1		Level 2		Level 3		Total
Assets
U.S. government securities	$	7,506	$	—	$	—	$	7,506
U.S. government agencies	—		69,972		—		69,972
Corporate notes	—		27,486		—		27,486
Commercial paper	—		54,702		—		54,702
Money market funds	43,857		—		—		43,857

Total assets measured at estimated fair value	$	51,363	$	152,160	$	—	$	203,523

Liabilities
Convertible subordinated notes due 2023	$	—	$	169,362	$	—	$	169,362
Non-recourse notes due 2029	—		464,527		—		464,527

Total fair value of liabilities	$	—	$	633,889	$	—	$	633,889

	Estimated Fair Value Measurements as of December 31, 2014 Using:
Types of Instruments	Quoted Price in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
(In thousands)	Level 1		Level 2		Level 3		Total
Assets
U.S. government securities	$	30,043	$	—	$	—	$	30,043
U.S. government agencies	—		34,750		—		34,750
Corporate notes	—		80,775		—		80,775
Commercial paper	—		34,469		—		34,469
Ordinary shares of Theravance Biopharma	6,517		—		—		6,517
Money market funds	95,090		—		—		95,090

Total assets measured at estimated fair value	$	131,650	$	149,994	$	—	$	281,644

Liabilities
Convertible subordinated notes due 2023	$	—	$	197,095	$	—	$	197,095
Non-recourse notes due 2029	—		456,411		—		456,411

Total fair value of liabilities	$	—	$	653,506	$	—	$	653,506

The fair value of our marketable securities classified within Level 2 were derived from observable inputs that may include benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers and reference data including market research publications.

The fair value of our convertible subordinated notes due 2023 and non-recourse notes due 2029 is based on recent trading prices of the instruments, if applicable, or pricing models that utilize current observable market characteristics for similar types of instruments.