Fair Value Measurements

3 Months Ended

Mar. 31, 2016

The following table presents the Company’s hierarchy for its assets and liabilities measured at fair value on a recurring basis as of the following periods (in thousands):



	March 31, 2016								December 31, 2015
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Assets:
Cash equivalents	$	133,249	$	—	$	—	$	133,249	$	133,147	$	—	$	—	$	133,147
Total assets measured at fair value	$	133,249	$	—	$	—	$	133,249	$	133,147	$	—	$	—	$	133,147
Liabilities:
Contingent consideration	—		—		5,676		5,676		—		—		5,516		5,516
Total liabilities measured at fair value	$	—	$	—	$	5,676	$	5,676	$	—	$	—	$	5,516	$	5,516

There were no transfers of assets or liabilities between Level 1, Level 2 and Level 3 categories of the fair value hierarchy during the three month periods ended March 31, 2016 and the year ended December 31, 2015.

The Company used Level 1 inputs to determine the fair value of its cash equivalents, which primarily consist of funds held in a money market account, and as such, the carrying value of cash equivalents approximates fair value. As of March 31, 2016 and December 31, 2015, the carrying value of cash equivalents was $133.2 million and $133.1 million, respectively.

The Company assesses the fair value of contingent consideration to be settled in cash related to acquisitions using the Monte Carlo Simulation Model. Significant assumptions used in the measurement include revenue projections and discount rates. This fair value measurement of contingent consideration is based on significant inputs not observed in the market and thus represent Level 3 measurements. For the three months ended March 31, 2016, the Company recorded an additional contingent liability of $0.4 million for the acquisition of Immutopics (see Note 11). There were no changes to the fair value of the contingent consideration for the three months ended March 31, 2015.

Changes in estimated fair value of contingent consideration liabilities from December 31, 2015 through March 31, 2016 are as follows (in thousands):



	Contingent consideration liabilities (Level 3 measurement)
Balance at December 31, 2015	$	5,516
Cash payments	(195		)
Additional liability recorded for current period acquisition	353
Unrealized gain on foreign currency translation	2
Balance at March 31, 2016	$	5,676

- 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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