Fair Value Measurements

3 Months Ended

Mar. 31, 2015

Fair Value Disclosures [Abstract]

Fair Value Measurements

5. Fair Value Measurements

The following table sets forth the fair value of the Company’s financial assets and liabilities measured at fair value on a recurring basis based on the three-tier fair value hierarchy (in thousands):

	March 31, 2015
	Level 1		Level 2		Level 3		Total
Financial Assets:
Money market funds	$	117,556	$	—	$	—	$	117,556
Commerical paper		—		44,540		—		44,540
U.S. government and agency securities		—		203,809		—		203,809
Corporate debt securities		—		75,194		—		75,194
Total financial assets	$	117,556	$	323,543	$	—	$	441,099
Financial Liabilities:
Fair value of success payments liabilities attributable to the elapsed service period	$	—	$	—	$	123,830	$	123,830
Total financial liabilities	$	—	$	—	$	123,830	$	123,830

	December 31, 2014
	Level 1		Level 2		Level 3		Total
Financial Assets:
Money market funds	$	223,745	$	—	$	—	$	223,745
Commerical paper		—		15,293		—		15,293
U.S. government and agency securities		—		90,302		—		90,302
Corporate debt securities		—		35,066		—		35,066
Total financial assets	$	223,745	$	140,661	$	—	$	364,406
Financial Liabilities:
Fair value of success payments liabilities attributable to the elapsed service period	$	—	$	—	$	84,920	$	84,920
Total financial liabilities	$	—	$	—	$	84,920	$	84,920

The Company measures the fair value of money market funds based on quoted prices in active markets for identical assets or liabilities. The Level 2 marketable securities include U.S. government and agency securities, corporate debt securities, and commercial paper and are valued either based on recent trades of securities in inactive markets or based on quoted market prices of similar instruments and other significant inputs derived from or corroborated by observable market data.

The following table sets forth a summary of the changes in the fair value of the Company’s Level 3 financial liabilities (in thousands):

Balance at December 31, 2014	$	84,920
Change in fair value of success payments liabilities attributable to the elapsed service period recorded in research and development expense		38,910
Balance at March 31, 2015	$	123,830

As of March 31, 2015, the estimated fair value of the success payment obligations was approximately $230.3 million, of which $123.8 million represents the portion attributable to the valuation measurement dates and the associated elapsed service period.