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Fair value of financial instruments and investments | 12 Months Ended
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Dec. 31, 2017
Fair Value Disclosures [Abstract] |
Fair value of financial instruments and investments | Fair value of financial instruments and investments Fair value of certain investments is based upon market prices using quoted prices in active markets for identical assets quoted on the last day of the year. In establishing the estimated fair value of the remaining investments, the Company used the fair value as determined by its investment advisors using observable inputs other than quoted prices. The Company reviews its investments on a periodic basis for other-than-temporary impairments. This review is subjective, as it requires management to evaluate whether an event or change in circumstances has occurred in that period that may have a significant adverse effect on the fair value of the investment. The following represents the fair value using the hierarchy described in Note 2 for the Company’s financial assets and liabilities that are required to be measured at fair value on a recurring basis as of December 31, 2017 and 2016:
|  | December 31, 2017
|  | Total |  | Quoted prices in active markets for identical assets (level 1) |  | Significant other observable inputs (level 2) |  | Significant unobservable inputs (level 3)
Marketable securities |  | $ | 79,454 |  |  | $ | — |  |  | $ | 79,454 |  |  | $ | — |
Warrant liability |  | $ | 1 |  |  | — |  |  | — |  |  | 1 |
Stock appreciation rights liability |  | $ | 1,665 |  |  | — |  |  | — |  |  | 1,665 |
|  | December 31, 2016
|  | Total |  | Quoted prices in active markets for identical assets (level 1) |  | Significant other observable inputs (level 2) |  | Significant unobservable inputs (level 3)
Marketable securities |  | $ | 173,345 |  |  | $ | — |  |  | $ | 173,345 |  |  | $ | — |
Warrant Liability |  | $ | 1 |  |  | — |  |  | — |  |  | 1 |
Stock appreciation rights liability |  | $ | 865 |  |  | — |  |  | — |  |  | 865 |
The Company uses the market approach to measure fair value for its financial assets. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets. The Company’s marketable securities investments classified as Level 2 primarily utilize broker to value these securities. No transfers of assets between Level 1 and Level 2 of the fair value measurement hierarchy occurred during the year ended December 31, 2017. The following is a summary of marketable securities accounted for as available-for-sale securities at December 31, 2017 and 2016:
|  | December 31, 2017
|  | Amortized Cost |  | Gross Unrealized |  | Fair Value
|  |  | Gains |  | Losses |
Commercial paper |  | $ | 13,775 |  |  | $ | 52 |  |  | $ | — |  |  | $ | 13,827 |
Corporate debt securities |  | 65,657 |  |  | — |  |  | (30 | ) |  | 65,627 |
Government obligations |  | — |  |  | — |  |  | — |  |  | — |
|  | $ | 79,432 |  |  | $ | 52 |  |  | $ | (30 | ) |  | $ | 79,454 |
|  | December 31, 2016
|  | Amortized Cost |  | Gross Unrealized |  | Fair Value
|  |  | Gains |  | Losses |
Commercial paper |  | $ | 12,919 |  |  | $ | 47 |  |  | $ | — |  |  | $ | 12,966 |
Corporate debt securities |  | 153,240 |  |  | 52 |  |  | (103 | ) |  | 153,189 |
Government obligations |  | 7,188 |  |  | 2 |  |  | — |  |  | 7,190 |
|  | $ | 173,347 |  |  | $ | 101 |  |  | $ | (103 | ) |  | $ | 173,345 |
Unrealized gains and losses are reported as a component of accumulated other comprehensive (loss) income in stockholders’ equity. During the year ended December 31, 2017, the Company did not have any realized gains or losses from the sale of marketable securities. The cost of securities sold is based on the specific identification method. The Company evaluates investments with unrealized losses to determine if the losses are other than temporary. At December 31, 2017, the Company held securities with an unrealized loss position that were not considered to be other-than-temporarily impaired as the Company has the ability to hold such investments until recovery of their fair value. In addition, the Company considered the financial condition, credit ratings and near-term prospects of the issuers, and the magnitude of the losses as compared to the cost and the length of time the investments have been in an unrealized loss position when determining if the losses are other than temporary. The unrealized losses and fair values of available-for-sale securities that have been in an unrealized loss position for a period of less than and greater than 12 months as of December 31, 2017 are as follows:
|  | December 31, 2017
|  | Securities in an unrealized loss position less than 12 months |  | Securities in an unrealized loss position greater than 12 months |  | Total
|  | Unrealized losses |  | Fair Value |  | Unrealized losses |  | Fair Value |  | Unrealized losses |  | Fair Value
Corporate debt securities |  | $ | (28 | ) |  | $ | 59,108 |  |  | $ | (2 | ) |  | $ | 6,519 |  |  | $ | (30 | ) |  | $ | 65,627 |
The unrealized losses and fair values of available-for-sale securities that have been in an unrealized loss position for a period of less than and greater than 12 months as of December 31, 2016 are as follows:
|  | December 31, 2016
|  | Securities in an unrealized loss position less than 12 months |  | Securities in an unrealized loss position greater than 12 months |  | Total
|  | Unrealized losses |  | Fair Value |  | Unrealized losses |  | Fair Value |  | Unrealized losses |  | Fair Value
Corporate debt securities |  | $ | (85 | ) |  | $ | 45,482 |  |  | $ | (18 | ) |  | $ | 51,243 |  |  | $ | (103 | ) |  | $ | 96,725 |
Marketable securities on the balance sheet at December 31, 2017 and 2016 mature as follows:
|  | December 31, 2017
|  | Less Than 12 Months |  | More Than 12 Months
Commercial paper |  | $ | 13,827 |  |  | $ | — |
Corporate debt securities |  | 55,550 |  |  | 10,077 |
Government obligations |  | — |  |  | — |
Total Marketable securities |  | $ | 69,377 |  |  | $ | 10,077 |
|  | December 31, 2016
|  | Less Than 12 Months |  | More Than 12 Months
Commercial paper |  | $ | 12,966 |  |  | $ | — |
Corporate debt securities |  | 137,196 |  |  | 15,993 |
Government obligations |  | 7,190 |  |  | — |
Total Marketable securities |  | $ | 157,352 |  |  | $ | 15,993 |
The Company classifies all of its securities as current as they are all available for sale and are available for current operations. Convertible 3.0% senior notes In August 2015, the Company issued $150.0 million of 3.0% convertible senior notes due August 15, 2022 (the “Convertible Notes”). Interest is payable semi-annually on February 15 and August 15 of each year, beginning on February 15, 2016. The Company separately accounted for the liability and equity components of the Convertible Notes by allocating the proceeds between the liability component and equity component, as further discussed in Note 7. The fair value of the Convertible Notes, which differs from their carrying values, is influenced by interest rates, the Company’s stock price and stock price volatility and is determined by prices for the Convertible Notes observed in market trading which are Level 2 inputs. The estimated fair value of the Convertible Notes at December 31, 2017 and 2016 was $115.7 million and $85.2 million, respectively. The carrying amounts reported in the consolidated balance sheets for cash and cash equivalents, accounts receivable, accounts payable and borrowings under the credit and security agreement with MidCap Financial Trust and other financial institutions (as further discussed in Note 7) approximate fair value because of the immediate or short-term maturity of these financial instruments. The carrying amounts for the credit and security agreement approximate fair value based on market activity for other debt instruments with similar characteristics and comparable risk. Level 3 valuation The warrant liability is classified in Other long-term liabilities on the Company’s balance sheet. The warrant liability is marked-to-market each reporting period with the change in fair value recorded as a gain or loss within Other income/(expense) on the Company’s statement of operations until the warrants are exercised, expire or other facts and circumstances lead the warrant liability to be reclassified as an equity instrument. The fair value of the warrant liability is determined at each reporting period by utilizing the Black-Scholes option pricing model. The stock appreciation rights (SARs) liability is classified in Other liabilities on the Company’s consolidated balance sheets. The SARs liability is marked-to-market each reporting period with the change in fair value recorded as compensation expense on the Company’s consolidated statements of operations until the SARS vest. The fair value of the SARs liability is determined at each reporting period by utilizing the Black-Scholes option pricing model. The table presented below is a summary of changes in the fair value of the Company’s Level 3 valuation for the warrant liability and SARs liability for the years ended December 31, 2017 and 2016:
|  | Level 3 liabilities
|  | Warrants |  | SARs
Beginning balance as of December 31, 2015 |  | $ | 48 |  |  | $ | — |
Fair value of issuances |  | — |  |  | 140 |
Change in fair value |  | (47 | ) |  | 725 |
Ending balance as of December 31, 2016 |  | $ | 1 |  |  | $ | 865 |
Fair value of issuances |  | — |  |  | — |
Change in fair value |  | — |  |  | 1,864 |
Payments |  | $ | — |  |  | $ | (1,064 | )
Ending balance as of December 31, 2017 |  | $ | 1 |  |  | $ | 1,665 |
Fair value of the warrant liability is estimated using an option-pricing model, which includes variables such as the expected volatility based on guideline public companies, the preferred stock value, and the estimated time to a liquidity event. The significant assumptions used in preparing the option pricing model for valuing the Company’s warrants as of December 31, 2017 include (i) volatility (69%-69%), (ii) risk free interest rate (1.89%-1.89%), (iii) strike price ($128.00-$2,520.00), (iv) fair value of common stock ($16.68) and (v) expected life (1.6-1.7 years). The significant assumptions used in preparing the option pricing model for valuing the Company’s warrants as of December 31, 2016 include (i) volatility (62%-67%), (ii) risk free interest rate (0.62%-1.34%), (iii) strike price ($128.00-$2,520.00), (iv) fair value of common stock ($10.91) and (v) expected life (0.4-2.7 years). Fair value of the SARs liability is estimated using an option-pricing model, which includes variables such as the expected volatility based on guideline public companies, the stock fair value, and the estimated time to a liquidity event. The significant assumptions used in preparing the option pricing model for valuing the Company’s SARs as of December 31, 2017 include (i) volatility (31%-70%), (ii) risk free interest rate (1.28%-1.89%), (iii) strike price ($6.76-$30.86), (iv) fair value of common stock ($16.68), and (v) expected life (0.0-2.0 years). The significant assumptions used in preparing the option pricing model for valuing the Company’s SARs as of December 31, 2016 include (i) volatility (48%-71%), (ii) risk free interest rate (0.44%-1.47%), (iii) strike price ($6.76-$30.86), (iv) fair value of common stock ($10.91), and (v) expected life (0.0-3.0 years).

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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/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -URI http://asc.fasb.org/topic&trid=2155941 + Details
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