Fair Value Measurements

3 Months Ended

Mar. 31, 2020

FAIR VALUE MEASUREMENTS

The following tables present information about our assets and liabilities that we measure at fair value on a recurring basis and indicate the level within the fair value hierarchy of the valuation techniques utilized to determine such fair value as of March 31, 2020 and December 31, 2019 (in thousands):


	Fair Value Measurements at March 31, 2020 Using:
			Quoted Prices in				Significant
			Active Markets for		Significant Other		Unobservable
			Identical Assets		Observable Inputs		Inputs
	Total		(Level 1)		(Level 2)		(Level 3)
Assets:
Cash equivalents	$	1,890	$	1,890	$	—	$	—

Corporate debt securities	63,488		—		63,488		—

Certificates of deposit	5,800		—		5,800		—
Commercial paper	1,000		—		1,000		—

Total assets	$	72,178	$	1,890	$	70,288	$	—


	Fair Value Measurements at December 31, 2019 Using:
			Quoted Prices in				Significant
			Active Markets for		Significant Other		Unobservable
			Identical Assets		Observable Inputs		Inputs
	Total		(Level 1)		(Level 2)		(Level 3)
Assets:
Cash equivalents	$	13,732	$	13,732	$	—	$	—
Corporate debt securities	54,492		—		54,492		—
U.S. treasury and government agency securities	2,750		—		2,750		—
Certificates of deposit	1,500		—		1,500		—

Total assets	$	72,474	$	13,732	$	58,742	$	—
Liabilities:
Contingent consideration - MuGard	$	17	$	—	$	—	$	17
Total liabilities	$	17	$	—	$	—	$	17

Cash Equivalents

Our cash equivalents are classified as Level 1 assets under the fair value hierarchy as these assets have been valued using quoted market prices in active markets and do not have any restrictions on redemption. As of March 31, 2020 and December 31, 2019, cash equivalents were primarily comprised of funds in money market accounts.

Marketable Securities

Our marketable securities are classified as Level 2 assets under the fair value hierarchy as the values of these assets are primarily determined from independent pricing services, which normally derive security prices from recently reported trades for identical or similar securities, making adjustments based upon other significant observable market transactions. At the end of each reporting period, we perform quantitative and qualitative analysis of prices received from third parties to determine whether prices are reasonable estimates of fair value. After completing our analysis, we did not adjust or override any fair value measurements provided by our pricing services as of March 31, 2020. In addition, there were no transfers or reclassifications of any securities between Level 1 and Level 2 during the three months ended March 31, 2020.

Debt

We estimate the fair value of our debt obligations using quoted market prices obtained from third-party pricing services, which are classified as Level 2 inputs. As of March 31, 2020, the estimated fair value of our 2022 Convertible Notes (as defined below) was $247.7 million, which differed from its carrying value. See Note Q, “Debt” for additional information on our debt obligations.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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