Fair Value Measurements

6 Months Ended

Jun. 30, 2018

The Company determines the fair value of its financial instruments based upon the fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Below are the three levels of inputs that may be used to measure fair value:


•	Level 1—Quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.


•	Level 2—Observable inputs other than Level 1 prices, 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.

Transfers into or out of any hierarchy level are recognized at the end of the reporting period in which the transfers occurred. There were no material transfers between any levels during the six months ended June 30, 2018. There were no material transfers between any levels during 2017.

The following table summarizes the financial instruments measured at fair value on a recurring basis in the accompanying condensed consolidated balance sheets as of June 30, 2018 and December 31, 2017 (in thousands):



	As of June 30, 2018
	Level 1		Level 2		Level 3		Total
Assets
Cash and cash equivalents:
Cash	$	19,018	$	—	$	—	$	19,018
Money market funds (1)	32,423		—		—		32,423
Total	$	51,441	$	—	$	—	$	51,441
Marketable Securities
Domestic corporate debt securities (2)	$	—	$	206,881	$	—	$	206,881
Agency bonds (2)	—		59,612		—		59,612
Total	$	—	$	266,493	$	—	$	266,493



	As of December 31, 2017
	Level 1		Level 2		Level 3		Total
Assets
Cash and cash equivalents:
Cash	$	73,302	$	—	$	—	$	73,302
Money market funds (1)	325		—		—		325
Domestic corporate commercial paper (2)	—		44,937		—		44,937
Total	$	73,627	$	44,937	$	—	$	118,564
Marketable Securities
Domestic corporate debt securities (2)	$	—	$	207,086	$	—	$	207,086
Domestic corporate commercial paper (2)	—		29,837		—		29,837
Agency bonds (2)	—		74,769		—		74,769
Total	$	—	$	311,692	$	—	$	311,692

(1) Fair value is based upon quoted market prices.

(2) Fair value is based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets. Inputs are obtained from various sources, including market participants, dealers and brokers.

- 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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