4. Balance Sheet Components

Prepaid Expenses and Other Current Assets

The Company’s prepaid expenses and other current assets as of June 30, 2017 and December 31, 2016 were comprised of the following (in thousands):



	June 30, 2017		December 31, 2016
Prepaid tax	$	1,505	$	4,656
Prepaid expenses	4,729		4,573
Other current assets	8,165		9,498
Prepaid expenses and other current assets	$	14,399	$	18,727

Marketable Investments

The Company’s marketable investments as of June 30, 2017 and December 31, 2016 were as follows (in thousands):



	June 30, 2017
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Commercial paper	$	24,198	$	1	$	(3	)	$	24,196
U.S. Treasury	9,003		—		(6		)	8,997
U.S. agency and government sponsored securities	6,850		—		(13		)	6,837
U.S. states and municipalities	8,263		—		(7		)	8,256
Corporate bonds	93,851		35		(104		)	93,782
Total	$	142,165	$	36	$	(133	)	$	142,068



	December 31, 2016
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Commercial paper	$	4,237	$	1	$	—		$	4,238
U.S. Treasury	4,996		—		—			4,996
U.S. agency and government sponsored securities	8,803		3		(12		)	8,794
U.S. states and municipalities	27,429		1		(75		)	27,355
Corporate bonds	69,009		36		(120		)	68,925
Non-U.S. government debt securities	1,209		—		—			1,209
Total	$	115,683	$	41	$	(207	)	$	115,517

The following tables present the gross unrealized losses and the fair value for those marketable investments that were in an unrealized loss position for less than twelve months as of June 30, 2017 and December 31, 2016 (in thousands):



	June 30, 2017
	Fair Value		Gross Unrealized Losses
Commercial paper	$	19,769	$	(3	)
U.S. Treasury	8,997		(6		)
U.S. agency and government sponsored securities	6,837		(13		)
U.S. states and municipalities	8,256		(7		)
Corporate bonds	51,843		(104		)
Total	$	95,702	$	(133	)



	December 31, 2016
	Fair Value		Gross Unrealized Losses
U.S. agency and government sponsored securities	$	3,291	$	(12	)
U.S. states and municipalities	22,286		(75		)
Corporate bonds	29,748		(120		)
Total	$	55,325	$	(207	)

As of June 30, 2017 and December 31, 2016, there were no securities that had been in a loss position for more than twelve months.

The contractual maturities of the Company’s marketable investments as of June 30, 2017 and December 31, 2016 were as follows (in thousands):



	June 30, 2017		December 31, 2016
	Fair Value		Fair Value
Due in less than one year	$	121,290	$	71,051
Due in one to five years	20,778		44,466
Total	$	142,068	$	115,517

Non-Marketable Equity Investments

In May 2017, the Company and an unrelated third-party formed a privately-held company, MVI Health Inc. (“MVI”), with each party holding 50% of the issued and outstanding equity of MVI. The Company accounted for its investment under the equity method and is not required to consolidate under the voting model. As of June 30, 2017, the Company determined that MVI was not a variable interest entity (“VIE”). The Company will reassess in subsequent periods whether MVI becomes a VIE due to changes in facts and circumstances, including changes to the sufficiency of the equity investment at risk, management and governance structure or capital structure. As of June 30, 2017, the carrying value of the non-marketable equity investment was approximately $4.9 million, representing the Company’s contributions to MVI offset by the Company’s share of equity method investee losses. The non-marketable equity method investment is included in other non-current assets on the condensed consolidated balance sheet. The Company reflects the equity method investee losses as a component of other expense, net, in the condensed consolidated statements of operations and comprehensive (loss) income. The Company held no non-marketable equity investments in 2016.

Inventories

The components of inventories as of June 30, 2017 and December 31, 2016 consisted of the following (in thousands):



	June 30, 2017		December 31, 2016
Raw materials	$	11,068	$	11,367
Work in process	3,747		3,663
Finished goods	66,326		57,982
Inventories	$	81,141	$	73,012

Accrued Liabilities

The following table shows the components of accrued liabilities as of June 30, 2017 and December 31, 2016 (in thousands):



	June 30, 2017		December 31, 2016
Payroll and employee-related cost	$	18,865	$	16,956
Sales return reserve	2,994		2,753
Preclinical and clinical trial cost	1,305		2,054
Royalty	1,165		802
Product warranty	1,037		1,254
Other accrued liabilities	7,811		7,871
Total accrued liabilities	$	33,177	$	31,690

The estimated product warranty accrual as of June 30, 2017 and December 31, 2016 was as follows (in thousands):



	June 30, 2017			December 31, 2016
Balance at the beginning of the period	$	1,254		$	713
Accruals of warranties issued	142			1,176
Settlements of warranty claims	(359		)	(635		)
Balance at the end of the period	$	1,037		$	1,254