Investments and Fair Value Measurements

9 Months Ended

Sep. 30, 2021

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 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, 2021
				Gross		Gross
		Amortized		Unrealized		Unrealized		Estimated
(In thousands)		Cost		Gains		Losses		Fair Value
US government securities	Level 1	$	5,000	$	—	$	—	$	5,000
Corporate notes	Level 2		4,800		6		—		4,806
Commercial paper	Level 2		94,978		4		—		94,982
Marketable securities			104,778		10		—		104,788
Money market funds	Level 1		80,836		—		—		80,836
Total		$	185,614	$	10	$	—	$	185,624

		December 31, 2020
				Gross		Gross
		Amortized		Unrealized		Unrealized		Estimated
(In thousands)		Cost		Gains		Losses		Fair Value
US government securities	Level 1	$	75,036	$	34	$	—	$	75,070
US government agency securities	Level 2		74,971		18		—		74,989
Corporate notes	Level 2		5,046		—		(1)		5,045
Commercial paper	Level 2		56,374		1		(5)		56,370
Marketable securities			211,427		53		(6)		211,474
Money market funds	Level 1		—		—		—		—
Total		$	211,427	$	53	$	(6)	$	211,474

As of September 30, 2021, all of the Company’s available-for-sale securities had contractual maturities within 6 months and the weighted-average maturity of marketable securities was approximately one month. There were no transfers between Level 1 and Level 2 during the periods presented, and there have been no material changes to the Company’s valuation techniques during the three and nine months ended September 30, 2021.

As of September 30, 2021, the Company did not have any available-for-sale debt securities with material unrealized losses. Available-for-sale debt securities with unrealized losses as of December 31, 2020 are summarized below:

	December 31, 2020
	Less than 12 Months				Greater than 12 Months				Total
			Gross				Gross				Gross
	Estimated		Unrealized		Estimated		Unrealized		Estimated		Unrealized
(In thousands)	Fair Value		Losses		Fair Value		Losses		Fair Value		Losses
Corporate notes	$	5,045	$	(1)	$	—	$	—	$	5,045	$	(1)
Commercial paper		39,375		(5)		—		—		39,375		(5)
Total	$	44,420	$	(6)	$	—	$	—	$	44,420	$	(6)

The Company invests primarily in high credit quality and short-term maturity 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 at maturity. The Company reviewed its available-for-sale debt securities and determined that there were no credit-related losses to be recognized as of September 30, 2021.

As of September 30, 2021, the Company’s accumulated other comprehensive income on its condensed consolidated balance sheets consisted of net unrealized gains on available-for-sale investments. For the three and nine months ended September 30, 2021, the Company did not sell any marketable securities, and for the nine months ended September 30, 2020, the Company sold marketable securities for total proceeds of $19.9 million and recognized a minimal net realized gain from the sales based on the specific identification method.