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)	June 30, 2016		December 31, 2015
Cash and cash equivalents	$	110,228	$	148,673
Short-term marketable securities	40,921		28,103

Total	$	151,149	$	176,776

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:

	June 30, 2016
(In thousands)	Amortized Cost		Gross Unrealized Gains		Estimated Fair Value
U.S. government agencies	$	19,970	$	6	$	19,976
U.S. commercial paper	52,535		—		52,535
Money market funds	78,638		—		78,638

Total	$	151,143	$	6	$	151,149

	December 31, 2015
(In thousands)	Amortized Cost		Gross Unrealized Losses			Estimated Fair Value
U.S. government agencies	$	14,406	$	(1	)	$	14,405
U.S. corporate notes	2,702		(1		)	2,701
U.S. commercial paper	10,997		—			10,997
Money market funds	148,673		—			148,673

Total	$	176,778	$	(2	)	$	176,776

As of June 30, 2016, all of the available-for-sale securities had contractual maturities within one year and the weighted average maturity of marketable securities was approximately four months. We have determined that the gross unrealized gains on our marketable securities as of June 30, 2016 were temporary in nature.

During the six months ended June 30, 2015, we sold all of the ordinary shares of Theravance Biopharma, which resulted in a gain on sale of $1.2 million, which is included in other income (expense), net in the condensed consolidated statement of operations.

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 June 30, 2016 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 agencies	$	—	$	19,976	$	—	$	19,976
U.S. commercial paper	—		52,535		—		52,535
Money market funds	78,638		—		—		78,638

Total assets measured at estimated fair value	$	78,638	$	72,511	$	—	$	151,149

Liabilities
Convertible subordinated notes due 2023	$	—	$	197,825	$	—	$	197,825
Non-recourse notes due 2029	—		494,017		—		494,017

Total fair value of liabilities	$	—	$	691,842	$	—	$	691,842

	Estimated Fair Value Measurements as of December 31, 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 agencies	$	—	$	14,405	$	—	$	14,405
U.S. corporate notes	—		2,701		—		2,701
U.S. commercial paper	—		10,997		—		10,997
Money market funds	148,673		—		—		148,673

Total assets measured at estimated fair value	$	148,673	$	28,103	$	—	$	176,776

Liabilities
Convertible subordinated notes due 2023	$	—	$	189,100	$	—	$	189,100
Non-recourse notes due 2029	—		470,970		—		470,970

Total fair value of liabilities	$	—	$	660,070	$	—	$	660,070

The fair value of our marketable securities classified within Level 2 is based upon 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.