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Fair Value Measurements | 12 Months Ended
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Dec. 31, 2019
Fair Value Disclosures [Abstract] |
Fair Value Measurements | Fair Value Measurements The tables below present information about our assets and liabilities that are regularly measured and carried at fair value and indicate the level within the fair value hierarchy of the valuation techniques we utilized to determine such fair value:
As of December 31, 2019 (In millions) | Total |  | Quoted Prices in Active Markets (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3)
Assets: |  |  |  |  |  |  |
Cash equivalents | $ | 2,541.1 |  |  | $ | — |  |  | $ | 2,541.1 |  |  | $ | — |
Marketable debt securities: |  |  |  |  |  |  |
Corporate debt securities | 1,695.1 |  |  | — |  |  | 1,695.1 |  |  | — |
Government securities | 1,013.9 |  |  | — |  |  | 1,013.9 |  |  | — |
Mortgage and other asset backed securities | 261.3 |  |  | — |  |  | 261.3 |  |  | — |
Marketable equity securities | 337.5 |  |  | 7.9 |  |  | 329.6 |  |  | — |
Derivative contracts | 43.8 |  |  | — |  |  | 43.8 |  |  | — |
Plan assets for deferred compensation | 27.7 |  |  | — |  |  | 27.7 |  |  | — |
Total | $ | 5,920.4 |  |  | $ | 7.9 |  |  | $ | 5,912.5 |  |  | $ | — |
Liabilities: |  |  |  |  |  |  |
Derivative contracts | $ | 8.3 |  |  | $ | — |  |  | $ | 8.3 |  |  | $ | — |
Contingent consideration obligations | 346.1 |  |  | — |  |  | — |  |  | 346.1 |
Total | $ | 354.4 |  |  | $ | — |  |  | $ | 8.3 |  |  | $ | 346.1 |
As of December 31, 2018 (In millions) | Total |  | Quoted Prices in Active Markets (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3)
Assets: |  |  |  |  |  |  |
Cash equivalents | $ | 705.5 |  |  | $ | — |  |  | $ | 705.5 |  |  | $ | — |
Marketable debt securities: |  |  |  |  |  |  |
Corporate debt securities | 2,459.2 |  |  | — |  |  | 2,459.2 |  |  | — |
Government securities | 969.6 |  |  | — |  |  | 969.6 |  |  | — |
Mortgage and other asset backed securities | 260.5 |  |  | — |  |  | 260.5 |  |  | — |
Marketable equity securities | 615.4 |  |  | 51.7 |  |  | 563.7 |  |  | — |
Derivative contracts | 66.9 |  |  | — |  |  | 66.9 |  |  | — |
Plan assets for deferred compensation | 25.4 |  |  | — |  |  | 25.4 |  |  | — |
Total | $ | 5,102.5 |  |  | $ | 51.7 |  |  | $ | 5,050.8 |  |  | $ | — |
Liabilities: |  |  |  |  |  |  |
Derivative contracts | $ | 24.6 |  |  | $ | — |  |  | $ | 24.6 |  |  | $ | — |
Contingent consideration obligations | 409.8 |  |  | — |  |  | — |  |  | 409.8 |
Total | $ | 434.4 |  |  | $ | — |  |  | $ | 24.6 |  |  | $ | 409.8 |
There have been no changes in valuation techniques or transfers between fair value measurement levels during the years ended December 31, 2019 and 2018. The fair value of Level 2 instruments classified as cash equivalents, marketable debt securities and our marketable equity security investment in Ionis Pharmaceuticals, Inc. (Ionis) were determined through third-party pricing services or an option pricing valuation model. For additional information on our collaboration arrangements with Ionis, please read Note 18, Collaborative and Other Relationships, to these consolidated financial statements. For a description of our validation procedures related to prices provided by third-party pricing services and our option pricing valuation model, please read Note 1, Summary of Significant Accounting Policies - Fair Value Measurements, to these consolidated financial statements. Debt Instruments The fair values of our debt instruments, which are Level 2 liabilities, are summarized as follows:
| As of December 31,
(In millions) | 2019 |  | 2018
2.900% Senior Notes due September 15, 2020 | $ | 1,509.6 |  |  | $ | 1,489.5 |
3.625% Senior Notes due September 15, 2022 | 1,038.9 |  |  | 1,000.4 |
4.050% Senior Notes due September 15, 2025 | 1,897.2 |  |  | 1,745.1 |
5.200% Senior Notes due September 15, 2045 | 2,107.9 |  |  | 1,802.6 |
Total | $ | 6,553.6 |  |  | $ | 6,037.6 |
Contingent Consideration Obligations In connection with our acquisitions of Convergence, Stromedix and BIN in 2015, 2012 and 2010, respectively, we agreed to make additional payments based upon the achievement of certain milestone events. The following table provides a roll forward of the fair values of our contingent consideration obligations, which includes Level 3 measurements:
| As of December 31,
(In millions) | 2019 |  | 2018
Fair value, beginning of year | $ | 409.8 |  |  | $ | 523.6 |
Changes in fair value | (63.7 | ) |  | (12.3 | )
Payments and other | — |  |  | (101.5 | )
Fair value, end of year | $ | 346.1 |  |  | $ | 409.8 |
As of December 31, 2019 and 2018, approximately $197.7 million and $265.0 million, respectively, of the fair value of our total contingent consideration obligations was reflected as a component of other long-term liabilities in our consolidated balance sheets with the remaining balance reflected as a component of accrued expenses and other. For the year ended December 31, 2019, changes in the fair value of our contingent consideration obligations were primarily due to the discontinuation of the Phase 2b study of BG00011 for the potential treatment of IPF resulting in a reduction of our contingent consideration obligations of $61.2 million, partially offset by changes in the probability and expected timing of achievement of certain developmental milestones, a decrease in interest rates used to revalue our contingent consideration liabilities and the passage of time. For the year ended December 31, 2018, changes in the fair value of our contingent consideration obligations were primarily due to delays in the expected timing of achievement of milestones related to the TGN program and an increase in discount rates used to revalue our contingent consideration liabilities, partially offset by the passage of time. For the year ended December 31, 2018, payments and other reflects an $81.5 million milestone payment made to the former shareholders of Stromedix. The fair values of the contingent consideration liabilities were based on a probability-adjusted discounted cash flow calculation using Level 3 fair value measurements and inputs including estimated revenues and probabilities of success. For additional information on the valuation techniques and inputs utilized in the valuation of our financial assets and liabilities, please read Note 1, Summary of Significant Accounting Policies, to these consolidated financial statements. Convergence Pharmaceuticals Holdings Limited In connection with our acquisition of Convergence in February 2015 we recorded a contingent consideration obligation of $274.5 million. As of December 31, 2019 and 2018, the fair value of this contingent consideration obligation was $244.6 million and $246.6 million, respectively. Our most recent valuation was determined based upon net cash flow projections of $400.0 million, probability weighted and discounted using a rate of 2.1%, which is a measure of the credit risk associated with settling the liability. For 2019 compared to 2018, the net decrease in our contingent consideration obligation was primarily due to changes in the expected timing and probabilities of success related to the achievement of certain developmental milestones, partially offset by a decrease in discount rates used to revalue our contingent consideration liabilities and the passage of time. Accrued expenses and other in our consolidated balances sheets include $148.5 million as we expect to make the payment within one year. Stromedix Inc. In connection with our acquisition of Stromedix in March 2012 we recorded a contingent consideration obligation of $122.2 million. During the third quarter of 2019 we discontinued the Phase 2b study of BG00011 for the potential treatment of IPF due to safety concerns. As a result, we adjusted the fair value of this contingent consideration obligation to zero, resulting in a gain of $61.2 million in the third quarter of 2019. As of December 31, 2018, the fair value of this contingent consideration obligation was $83.0 million. Biogen Idec International Neuroscience GmbH In connection with our acquisition of BIN in December 2010 we recorded a contingent consideration obligation of $81.2 million. As of December 31, 2019 and 2018, the fair value of this contingent consideration obligation was $101.5 million and $80.2 million, respectively. Our most recent valuation was determined based upon net cash outflow projections of $335.0 million, probability weighted and discounted using a rate of 2.3%, which is a measure of the credit risk associated with settling the liability. For 2019 compared to 2018, the net increase in our contingent consideration obligation was primarily due to changes in the expected timing and probabilities of success related to the achievement of certain developmental milestones, a decrease in discount rates used to revalue our contingent consideration liabilities and the passage of time. No amounts are reflected as a current liability in our consolidated balance sheets at December 31, 2019, as we do not expect to make a payment in the next year. Acquired IPR&D The fair values of the acquired IPR&D assets were based on a probability-adjusted discounted cash flow calculation using Level 3 fair value measurements and inputs including estimated revenues and probabilities of success. These assets are tested for impairment annually until commercialization, after which time the acquired IPR&D will be amortized over its estimated useful life using the economic consumption method. In connection with our acquisition of Stromedix, we recognized a $219.2 million acquired IPR&D intangible asset. During the third quarter of 2019 we discontinued the Phase 2b study of BG00011 for the potential treatment of IPF due to safety concerns and recognized an impairment charge of $215.9 million to reduce the fair value of the IPR&D intangible asset to zero. In connection with our acquisition of Convergence we recognized a $424.6 million acquired IPR&D intangible asset. During the third quarter of 2018 we recognized impairment charges related to certain IPR&D assets associated with our vixotrigine program totaling $189.3 million. For additional information on our IPR&D intangible assets, including a discussion of our most significant assumptions, please read Note 6, Intangible Assets and Goodwill, to these consolidated financial statements.

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- 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. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=117815213&loc=d3e19207-110258 + Details
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