Marketable Securities and Fair Value Measurements (Tables)

9 Months Ended

Dec. 31, 2016

The Company’s marketable securities at December 31, 2016 and March 31, 2016 are invested in the following:

	Amortized		Gross Unrealized		Gross Unrealized			Fair Market
	Cost		Gains		Losses			Value
	(in $000's)
December 31, 2016:
Short-term US Treasury mutual fund securities	$	44,181	$	1	$	(5	)	$	44,177
Short-term government-backed securities		86,070		5		(29	)		86,046
Short-term corporate debt securities		49,454		3		(40	)		49,417
Long-term government-backed securities		18,248		-		(8	)		18,240
	$	197,953	$	9	$	(82	)	$	197,880

	Amortized		Gross Unrealized		Gross Unrealized			Fair Market
	Cost		Gains		Losses			Value
	(in $000's)
March 31, 2016:
Short-term US Treasury mutual fund securities	$	45,635	$	21	$	—		$	45,656
Short-term government-backed securities		118,125		45		(4	)		118,166
Long-term government-backed securities		999		1		-			1,000
	$	164,759	$	67	$	(4	)	$	164,822

Financial Instruments Recorded at Fair Value

The following table presents the Company’s financial instruments recorded at fair value in the condensed consolidated balance sheets, classified according to the three categories described above:

	Level 1		Level 2		Level 3		Total
December 31, 2016:	(in $000's)
Assets
Short-term U.S. Treasury mutual fund securities	$	—	$	44,177	$	—	$	44,177
Short-term government-backed securities		—		86,046		—		86,046
Short-term corporate debt securities		—		49,417		—		49,417
Long-term government-backed securities		—		18,240		—		18,240
Liabilities
Contingent consideration		—		—		8,175		8,175

	Level 1		Level 2		Level 3		Total
March 31, 2016:	(in $000's)
Assets
Short-term U.S. Treasury mutual fund securities	$	—	$	45,656	$	—	$	45,656
Short-term government-backed securities		—		118,166		—		118,166
Long-term government-backed securities		—		1,000		—		1,000
Liabilities
Contingent consideration		—		—		7,563		7,563

Valuation Method Used to Calculate Level 3 Liabilities Measured at Estimated Fair Value of Contingent Consideration Related to Acquisition

This liability is reported as Level 3 as the estimated fair value of the contingent consideration related to the acquisition of the ECP requires significant management judgment or estimation and is calculated using the following valuation methods:

Fair Value at

Significant

Weighted Average

December 31, 2016

Valuation

Unobservable

(range, if

(in $000's)

Methodologies

Input

applicable)

Clinical and regulatory milestone

4,607

Probability

weighted income approach

Projected fiscal year of payments

2019 to 2022

Discount rate

Probability of occurrence

Probability adjusted level of 50% for the base case scenario and 5% to 20% for various upside and downside scenarios

Revenue-based milestone

3,568

Monte Carlo simulation model

Expected volatility for forecasted ECP revenues

50%

Discount rate

18%

Projected fiscal year of payments

2023 to 2035

8,175

Change in Fair Value of Contingent Consideration as Determined by Level 3 Inputs

The following table summarizes the change in fair value, as determined by Level 3 inputs, of the contingent consideration for the three and nine months ended December 31, 2016 and 2015:

	For the Three Months Ended December 31,				For the Nine Months Ended December 31,
		2016		2015		2016		2015
	(in $000's)				(in $000's)
Level 3 liabilities, beginning balance	$	7,749	$	6,817	$	7,563	$	6,510
Additions		—		—		—		—
Payments		—		—		—		—
Change in fair value		426		575		612		882
Level 3 liabilities, ending balance	$	8,175	$	7,392	$	8,175	$	7,392