Fair Value Measurements

3 Months Ended

Mar. 31, 2017

Fair Value Disclosures [Abstract]

Fair Value Measurements

4. Fair Value Measurements

The Company determines the fair value of financial assets and liabilities using three levels of inputs as follows:

Level 1—Inputs which include quoted prices in active markets for identical assets and liabilities.

Level 2—Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices 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.

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.

The Company’s financial assets and liabilities subject to fair value measurements on a recurring basis and the level of inputs used in such measurements are as follows (in thousands) as of March 31, 2017 and December 31, 2016:

	March 31, 2017
Description	Level 1		Level 2		Level 3		Total
Money market fund	$	9,650	$	—	$	—		9,650
U.S. treasury securities		—		67,635		—		67,635
Commercial paper		—		29,239		—		29,239
Corporate debt securities		—		42,221		—		42,221
Total assets	$	9,650	$	139,095	$	—	$	148,745
	December 31, 2016
Description	Level 1		Level 2		Level 3		Total
Money market fund	$	9,746	$	—	$	—	$	9,746
U.S. treasury securities		—		49,672		—		49,672
Commercial paper		—		16,183		—		16,183
Corporate debt securities		—		45,882		—		45,882
Total assets	$	9,746	$	111,737	$	—	$	121,483

During the three months ended March 31, 2017, there were no transfers between Level 1 and Level 2 financial assets. When the Company uses observable market prices for identical securities that are traded in less active markets, the Company classifies its marketable debt instruments as Level 2. When observable market prices for identical securities are not available, the Company prices its marketable debt instruments using non-binding market consensus prices that are corroborated with observable market data; quoted market prices for similar instruments; or pricing models, such as a discounted cash flow model, with all significant inputs derived from or corroborated with observable market data. Non-binding market consensus prices are based on the proprietary valuation models of pricing providers or brokers. These valuation models incorporate a number of inputs, including non-binding and binding broker quotes; observable market prices for identical or similar securities; and the internal assumptions of pricing providers or brokers that use observable market inputs and, to a lesser degree, unobservable market inputs. The Company corroborates non-binding market consensus prices with observable market data using statistical models when observable market data exists. The discounted cash flow model uses observable market inputs, such as LIBOR-based yield curves, currency spot and forward rates, and credit ratings.