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Fair Value Measurements
 6 Months Ended
Jun. 30, 2021
Fair Value Disclosures [Abstract]  
Fair Value Measurements Fair Value Measurements
We record cash equivalents and investments in debt securities available-for-sale and equity securities at fair value based on a fair value hierarchy that distinguishes between assumptions based on market data (observable inputs) and our own assumptions (unobservable inputs). The fair value hierarchy consists of the following three levels:
Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 – Quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability.
Level 3 – Unobservable inputs that reflect our own assumptions about the assumptions that market participants would use in pricing the asset or liability when there is little, if any, market activity for the asset or liability at the measurement date.
Investments in debt securities available-for-sale are classified as Level 2 and carried at fair value. We estimate the fair value of debt securities available-for-sale by utilizing third-party pricing services. These pricing services utilize industry standard valuation models, including both income and market-based approaches, for which all significant inputs are observable, either directly or indirectly, to estimate fair value. Such inputs include market pricing based on real-time trade data for similar instruments, issuer credit spreads, benchmark yields, broker/dealer quotes and other observable inputs. We validate valuations obtained from third-party pricing services by understanding the models used, obtaining market values from other pricing sources, and analyzing data in certain instances.
Investments in equity securities of certain companies that are subject to holding period restrictions longer than one year are classified as Level 3 and carried at fair value using an option pricing valuation model. The most significant assumptions within the option pricing valuation model are the stock price volatility, which is based on the historical volatility of similar companies, and the discount for lack of marketability related to the term of the restrictions.
The carrying amounts of accounts receivable and accounts payable and accrued liabilities approximate their fair values due to their short-term maturities.
Investments at June 30, 2021, which were measured at fair value on a recurring basis, consisted of the following:
Fair Value Measurements Using
(in millions)Fair ValueLevel 1Level 2Level 3
Cash and cash equivalents:
Cash and money market funds$368.0 $368.0 $— $— 
Total cash and cash equivalents368.0 368.0 — — 
Restricted cash:
Certificates of deposit3.2 3.2 — — 
Total restricted cash3.2 3.2 — — 
Debt securities available-for-sale:
Commercial paper168.6 — 168.6 — 
Corporate debt securities442.7 — 442.7 — 
Securities of government-sponsored entities243.4 — 243.4 — 
Total debt securities available-for-sale854.7 — 854.7 — 
Equity securities:
Equity securities–biotechnology industry38.9 — — 38.9 
Total equity securities38.9 — — 38.9 
Total recurring fair value measurements$1,264.8 $371.2 $854.7 $38.9 
Investments at December 31, 2020, which were measured at fair value on a recurring basis, consisted of the following:
Fair Value Measurements Using
(in millions)Fair ValueLevel 1Level 2Level 3
Cash and cash equivalents:
Cash and money market funds$187.1 $187.1 $— $— 
Total cash and cash equivalents187.1 187.1 — — 
Restricted cash:
Certificates of deposit3.2 3.2 ——
Total restricted cash3.2 3.2 ——
Debt securities available-for-sale:
Commercial paper82.2 —82.2 —
Corporate debt securities445.9 —445.9 —
Securities of government-sponsored entities312.9 —312.9 —
Total debt securities available-for-sale841.0 — 841.0 — 
Equity securities:
Equity securities–biotechnology industry38.2 ——38.2 
Total equity securities38.2 ——38.2 
Total recurring fair value measurements$1,069.5 $190.3 $841.0 $38.2 
The following table presents a reconciliation of equity security investments, which were measured at fair value on a recurring basis using significant unobservable inputs (Level 3):
Three Months Ended
June 30,		Six Months Ended
June 30,
(in millions)2021202020212020
Balance at beginning of period$38.9 $39.4 $38.2 $55.9 
Unrealized gain (loss) included in earnings— 11.3 0.7 (5.2)
Balance at end of period$38.9 $50.7 $38.9 $50.7 
At June 30, 2021, the discount for lack of marketability used in the valuation analysis of equity security investments ranged from 9.0% to 13.0% (weighted average of 10.5%). The discount for lack of marketability was weighted by the relative fair value of the instruments. A significant increase (decrease) in the discount for lack of marketability in isolation would result in a significantly lower (higher) fair value measurement. Unrealized gains and losses on equity security investments are included in other income (expense), net.