Cash Equivalents, Marketable Securities and Fair Value Measurements (Tables)

12 Months Ended

Mar. 31, 2018

Cash Equivalents and Marketable Securities by Balance Sheet Classification

The Company’s cash equivalents and marketable securities at March 31, 2018 and 2017 are classified on the balance sheet as follows:

	March 31, 2018		March 31, 2017
	(in $000's)
Cash equivalents (within 90 days at the time of purchase to maturity)	$	22,595	$	23,975
Short-term marketable securities (within one year to maturity)		319,274		190,908
Long-term marketable securities (one to two years to maturity)		37,502		47,143
	$	379,371	$	262,026

Cash Equivalents and Marketable Securities

The Company’s cash equivalents and marketable securities at March 31, 2018 and 2017 are invested in the following:


	Amortized		Gross Unrealized		Gross Unrealized			Fair Market
	Cost		Gains		Losses			Value
	(in $000's)
March 31, 2018:
Money market funds	$	5,845	$	—	$	—		$	5,845
Repurchase agreements		16,750		—		—			16,750
Short-term U.S. Treasury mutual fund securities		18,132		—		(29	)		18,103
Short-term government-backed securities		212,255		3		(538	)		211,720
Short-term corporate debt securities		52,737		—		(161	)		52,576
Short-term commercial paper		36,936		2		(63	)		36,875
Long-term U.S. Treasury mutual fund securities		10,953		—		(16	)		10,937
Long-term government-backed securities		24,798		1		(12	)		24,787
Long-term corporate debt securities		1,777		1		—			1,778
	$	380,183	$	7	$	(819	)	$	379,371


	Amortized		Gross Unrealized		Gross Unrealized			Fair Market
	Cost		Gains		Losses			Value
	(in $000's)
March 31, 2017:
Money market funds	$	11,975	$	—	$	—		$	11,975
Repurchase agreements		12,000		—		—			12,000
Short-term U.S. Treasury mutual fund securities		45,199		—		(13	)		45,186
Short-term government-backed securities		90,199		1		(87	)		90,113
Short-term corporate debt securities		13,161		—		(6	)		13,155
Short-term commercial paper		42,304		—		(25	)		42,279
Long-term U.S. Treasury mutual fund securities		1,998		—		(3	)		1,995
Long-term government-backed securities		43,484		5		(18	)		43,471
Long-term corporate debt securities		1,853		—		(1	)		1,852
	$	262,173	$	6	$	(153	)	$	262,026

Financial Instruments Measured at Fair Value

The following table presents the Company’s fair value hierarchy for its financial instruments measured at fair value as of March 31, 2018 and 2017:

	Level 1		Level 2		Level 3		Total
March 31, 2018:	(in $000's)
Assets
Money market funds	$	5,845	$	—	$	—	$	5,845
Repurchase agreements		—		16,750		—		16,750
Short-term U.S. Treasury mutual fund securities		—		18,103		—		18,103
Short-term government-backed securities		—		211,720		—		211,720
Short-term corporate debt securities		—		52,576		—		52,576
Short-term commercial paper		—		36,875		—		36,875
Long-term U.S. Treasury mutual fund securities		—		10,937		—		10,937
Long-term government-backed securities		—		24,787		—		24,787
Long-term corporate debt securities		—		1,778		—		1,778
Liabilities
Contingent consideration		—		—		10,490		10,490

	Level 1		Level 2		Level 3		Total
March 31, 2017:	(in $000's)
Assets
Money market funds	$	11,975	$	—	$	—	$	11,975
Repurchase agreements		—		12,000		—		12,000
Short-term U.S. Treasury mutual fund securities		—		45,186		—		45,186
Short-term government-backed securities		—		90,113		—		90,113
Short-term corporate debt securities		—		13,155		—		13,155
Short-term commercial paper		—		42,279		—		42,279
Long-term U.S. Treasury mutual fund securities		—		1,995		—		1,995
Long-term government-backed securities		—		43,471		—		43,471
Long-term corporate debt securities		—		1,852		—		1,852
Liabilities
Contingent consideration		—		—		9,153		9,153

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 ECP requires significant management judgment or estimation and is calculated using the following valuation methods:

Fair Value at

March 31, 2018

(in $000's)

Valuation Methodology

Significant

Unobservable Input

Weighted Average

(range, if applicable)

Clinical and regulatory milestone

5,631

Probability

weighted income approach

Projected fiscal year of milestone payments

2019 to 2022

Discount rate

3.2% to 3.8%

Probability of occurrence

Probability adjusted level of 40% for the base case scenario and 12% to 30% for various upside and downside scenarios

Revenue-based milestone

4,859

Monte Carlo simulation model

Projected fiscal year of milestone payments

2023 to 2035

Discount rate

18%

Expected volatility for forecasted revenues

50%

Probability of payment (risk-neutral)

78.5%

10,490

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 fiscal years ended March 31, 2018, 2017 and 2016:

	Fiscal Years Ended March 31,
		2018		2017		2016
	(in $000's)
Level 3 liabilities, beginning balance	$	9,153	$	7,563	$	6,510
Additions		—		—		—
Payments		—		—		—
Change in fair value		1,337		1,590		1,053
Level 3 liabilities, ending balance	$	10,490	$	9,153	$	7,563