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

6 Months Ended

Sep. 30, 2019

Cash Equivalents and Marketable Securities by Balance Sheet Classification

The Company’s cash equivalents and marketable securities at September 30, 2019 and March 31, 2019 are classified on the balance sheet as follows:

	September 30, 2019		March 31, 2019
	(in $000's)
Cash equivalents	$	73,694	$	80,089
Short-term marketable securities		295,041		370,677
Long-term marketable securities		106,025		21,718
	$	474,760	$	472,484

Cash Equivalents and Marketable Securities

The Company’s cash equivalents and marketable securities at September 30, 2019 and March 31, 2019 are invested in the following:

	Amortized		Gross Unrealized		Gross Unrealized			Fair Market
	Cost		Gains		Losses			Value
September 30, 2019:	(in $000's)
Money market funds	$	53,694	$	—	$	—		$	53,694
Repurchase agreements		20,000		—		—			20,000
Short-term U.S. Treasury mutual fund securities		28,012		39		—			28,051
Short-term government-backed securities		124,117		129		(24	)		124,222
Short-term corporate debt securities		92,865		183		—			93,048
Short-term commercial paper		49,230		29		(4	)		49,255
Long-term U.S. Treasury mutual fund securities		6,964		6		—			6,970
Long-term government-backed securities		43,898		28		(18	)		43,908
Long-term corporate debt securities		55,127		486		(1	)		55,612
	$	473,907	$	900	$	(47	)	$	474,760

	Amortized		Gross Unrealized		Gross Unrealized			Fair Market
	Cost		Gains		Losses			Value
March 31, 2019:	(in $000's)
Money market funds	$	60,089	$	—	$	—		$	60,089
Repurchase agreements		20,000		—		—			20,000
Short-term U.S. Treasury mutual fund securities		58,786		13		(12	)		58,787
Short-term government-backed securities		126,336		60		(15	)		126,381
Short-term corporate debt securities		128,626		97		(9	)		128,714
Short-term commercial paper		56,780		16		(1	)		56,795
Long-term corporate debt securities		21,529		189		—			21,718
	$	472,146	$	375	$	(37	)	$	472,484

Financial Instruments Measured at Fair Value

The following tables presents the Company’s fair value hierarchy for its financial instruments measured at fair value as of September 30, 2019 and March 31, 2019:

	Level 1		Level 2		Level 3		Total
September 30, 2019:	(in $000's)
Assets
Money market funds	$	53,694	$	—	$	—	$	53,694
Repurchase agreements		—		20,000		—		20,000
Short-term U.S. Treasury mutual fund securities		—		28,051		—		28,051
Short-term government-backed securities		—		124,222		—		124,222
Short-term corporate debt securities		—		93,048		—		93,048
Short-term commercial paper		—		49,255		—		49,255
Long-term U.S. Treasury mutual fund securities				6,970		—		6,970
Long-term government-backed securities		—		43,908		—		43,908
Long-term corporate debt securities		—		55,612		—		55,612
Investment in Shockwave Medical		50,248		—		—		50,248
Liabilities
Contingent consideration		—		—		10,236		10,236

	Level 1		Level 2		Level 3		Total
March 31, 2019:	(in $000's)
Assets
Money market funds	$	60,089	$	—	$	—	$	60,089
Repurchase agreements		—		20,000		—		20,000
Short-term U.S. Treasury mutual fund securities		—		58,787		—		58,787
Short-term government-backed securities		—		126,381		—		126,381
Short-term corporate debt securities		—		128,714		—		128,714
Short-term commercial paper		—		56,795		—		56,795
Long-term corporate debt securities		—		21,718		—		21,718
Investment in Shockwave Medical		56,195		—		—		56,195
Liabilities
Contingent consideration		—		—		9,575		9,575

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:

Milestone Payment

Fair Value at

September 30, 2019

Valuation Methodology

Significant Unobservable Input

Weighted Average (range, if applicable)

(in $000's)

Clinical and regulatory milestone

7,000

5,544

Probability weighted income approach

Projected fiscal year of milestone payments

2021 to 2023

Discount rate

3.1% to 3.3%

Probability of occurrence

Probability adjusted level of 45% for the base case scenario and 15% to 40% for various downside and upside scenarios

Revenue-based milestone

8,000

4,692

Monte Carlo simulation model

Projected fiscal year of milestone payments

2025 to 2035

Discount rate

17%

Expected volatility for forecasted revenues

50%

Probability of payment (risk-neutral)

73%

15,000

10,236

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 six months ended September 30, 2019 and 2018:

	For the Three Months Ended September 30,				For the Six Months Ended September 30,
		2019		2018		2019		2018
	(in $000's)
Beginning balance	$	9,931	$	10,331	$	9,575	$	10,490
Additions		—		—		—		—
Payments		—		—		—		—
Change in fair value		305		162		661		3
Ending balance	$	10,236	$	10,493	$	10,236	$	10,493