Fair Value Measurements

12 Months Ended

Dec. 31, 2016

Fair Value Disclosures [Abstract]

Fair Value Measurements

Note 4. Fair Value Measurements

Assets Measured at Fair Value

Financial assets subject to fair value measurements on a recurring basis and the level of inputs used in such measurements are as follows:

	December 31, 2016
	Fair Value Measurements Using
	Total		Level 1		Level 2		Level 3
	(in thousands)
Money market funds	$	26,439	$	26,439	$	—	$	—
Commercial paper		29,428		—		29,428		—
Corporate securities		19,578		—		19,578		—
Agency discount instruments		2,998		—		2,998		—
U.S. government agency securities		22,015		—		22,015		—
Total financial assets	$	100,458	$	26,439	$	74,019	$	—

	December 31, 2015
	Fair Value Measurements Using
	Total		Level 1		Level 2		Level 3
	(in thousands)
Money market funds	$	19,787	$	19,787	$	—	$	—
Commercial paper		3,996		—		3,996		—
Corporate debt securities		16,540		—		16,540		—
U.S. government agency securities		4,014		—		4,014		—
Total financial assets	$	44,337	$	19,787	$	24,550	$	—

The total financial assets listed above do not included cash held in our primary operating bank accounts of $4.4 million and $54.6 million as of December 31, 2016 and 2015, respectively.

Liabilities Measured at Fair Value

The Company’s financial liabilities are valued based upon observable inputs when available or upon estimates made by management. The following tables set forth the fair value of the Company’s financial liabilities as of December 31, 2016 and 2015:

	December 31, 2016
	Fair Value Measurements Using
	Total		Level 1		Level 2		Level 3
	(in thousands)
Contingent acquisition consideration payable	$	4,380	$	—	$	—	$	4,380
Asset retirement obligation		709		—		—		709
Total financial liabilities	$	5,089	$	—	$	—	$	5,089

	December 31, 2015
	Fair Value Measurements Using
	Total		Level 1		Level 2		Level 3
	(in thousands)
Contingent acquisition consideration payable	$	4,278	$	—	$	—	$	4,278
Asset retirement obligation		136		—		—		136
Total financial liabilities	$	4,414	$	—	$	—	$	4,414

The Company’s contingent acquisition consideration payable, resulting from the acquisition of Cardiogen Sciences, Inc., or Cardiogen, in August 2015, is estimated using a probability-based income approach utilizing an appropriate discount rate. Key assumptions used by management to estimate the fair value of contingent acquisition consideration payable include estimated probability of occurrence, the estimated timing of when the milestone may be attained and assumed discount period and discount rate. Subsequent changes in the fair value of the contingent acquisition consideration payable, resulting from management’s revision of key assumptions will be recorded in research and development expense in the consolidated statement of operations and comprehensive loss. The probability-based income approach used by management to estimate the fair value of the contingent acquisition consideration is most sensitive to changes in the estimated probability of occurrence.

The following is a summary of the contingent acquisition consideration payable, recorded as a non-current liability in the accompanying consolidated balance sheets:

	Amount
	(in thousands)
Balance, December 31, 2015	$	4,278
Change in fair value of contingent acquisition    consideration payable		102
Balance, December 31, 2016	$	4,380

Under the terms of its sublease for manufacturing facilities, the Company assumed an asset restoration obligation from the previous tenant. The liability is being accreted, or increased, and recorded as rent expense throughout the remainder of the lease term until the full estimated obligation to restore the building to its original condition is recognized in the condensed consolidated balance sheet. The asset retirement obligation is included in facilities lease obligations in the accompanying consolidated balance sheets.

	Amount
	(in thousands)
Balance, December 31, 2015	$	136
Asset retirement obligation accretion expense		106
Addition of asset retirement obligation payable		467
Balance, December 31, 2016	$	709