Investments and Fair Value Measurements

9 Months Ended

Sep. 30, 2019

Investments and Fair Value Measurements

Investments and Fair Value Measurements

5. Investments and Fair Value Measurements

Available-for-Sale Securities

The estimated fair value of marketable securities is based on quoted market prices for these or similar investments obtained from a commercial pricing service. The fair market value of marketable securities classified within Level 1 is based on quoted prices for identical instruments in active markets. The fair value of marketable securities classified within Level 2 is based on quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; or model-driven valuations whose inputs are observable or whose significant value drivers are observable. Observable inputs that may include benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers and reference data including market research publications.

Available-for-sale securities are summarized below:

		September 30, 2019
				Gross		Gross
		Amortized		Unrealized		Unrealized		Estimated
(In thousands)		Cost		Gains		Losses		Fair Value
US government securities	Level 1	$	132,492	$	61	$	(15)	$	132,538
Corporate notes	Level 2		32,227		41		(1)		32,267
Commercial paper	Level 2		122,328		17		(7)		122,338
Marketable securities			287,047		119		(23)		287,143
Money market funds	Level 1		47,626		—		—		47,626
Total		$	334,673	$	119	$	(23)	$	334,769

		December 31, 2018
				Gross		Gross
		Amortized		Unrealized		Unrealized		Estimated
(In thousands)		Cost		Gains		Losses		Fair Value
US government securities	Level 1	$	48,807	$	—	$	(86)	$	48,721
US government agency securities	Level 2		9,852		2		—		9,854
Corporate notes	Level 2		57,508		6		(88)		57,426
Commercial paper	Level 2		90,919		—		—		90,919
Marketable securities			207,086		8		(174)		206,920
Money market funds	Level 1		294,751		—		—		294,751
Total		$	501,837	$	8	$	(174)	$	501,671

As of September 30, 2019, all of the available-for-sale securities had contractual maturities within 19 months and the weighted-average maturity of marketable securities was approximately six months. There were no transfers between Level 1 and Level 2 during the periods presented, and there have been no changes to the Company’s valuation techniques during the three and nine months ended September 30, 2019.

In general, the Company invests in debt securities with the intent to hold such securities until maturity at par value. The Company does not intend to sell the investments that are currently in an unrealized loss position, and it is unlikely that it will be required to sell the investments before recovery of their amortized cost basis, which may be maturity. The Company has determined that the gross unrealized losses on its marketable securities, as of September 30, 2019, were temporary in nature, and there were no material unrealized losses on investments which have been in a loss position for more than twelve months as of September 30, 2019.

As of September 30, 2019, the Company’s accumulated other comprehensive income (loss) on its condensed consolidated balance sheets consisted of unrealized gains or losses on available-for-sale investments. During the three and nine months ended September 30, 2019 and 2018, the Company did not sell any of its marketable securities.