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Cash and Investments in Marketable Securities
 3 Months Ended
Mar. 31, 2015
Fair Value Disclosures [Abstract]  
Cash and Investments in Marketable Securities

Note 2 — Cash and Investments in Marketable Securities

Cash and investments in marketable securities, including cash equivalents and restricted cash, are as follows (in thousands). Cash and cash equivalents at March 31, 2015 includes a $100.0 million U.S. commercial launch milestone payment received on March 31, 2015 from our collaboration agreement with AstraZeneca AB.

 

     Estimated Fair Value at  
     March 31,
2015		      December 31,
2014		  

Cash and cash equivalents

    $ 129,452       $ 12,365   

Short-term investments

      171,353         225,459   

Restricted cash

      25,000         25,000   
  

 

 

     

 

 

  

Total cash and investments in marketable securities

 $ 325,805    $ 262,824   
  

 

 

     

 

 

  

We invest in liquid, high quality debt securities. Our investments in debt securities are subject to interest rate risk. To minimize the exposure due to an adverse shift in interest rates, we invest in securities with maturities of two years or less and maintain a weighted average maturity of one year or less. As of March 31, 2015 and December 31, 2014, all of our investments had maturities of one year or less.

Gross unrealized gains and losses were not significant at either March 31, 2015 or December 31, 2014. During the three month period ended March 31, 2015, we sold available-for-sale securities totaling $5.2 million and gross realized gains and losses on those sales were not significant. During the three month period ended March 31, 2014, we did not sell any of our available-for-sale securities. The cost of securities sold is based on the specific identification method.

 

Restricted cash of $25.0 million is required to be maintained in a separate account until July 1, 2015 under the terms of our 12% senior secured notes due July 2017. Upon release of this restriction on July 1, 2015, a covenant of the senior secured notes requires that the aggregate balance of our unrestricted cash and cash equivalents at the end of any two consecutive fiscal quarters may not be less than $25.0 million, subject to certain conditions.

Our portfolio of cash and investments in marketable securities includes (in thousands):

 

          Estimated Fair Value at  
     Fair Value
Hierarchy
Level		    March 31,
2015		      December 31,
2014		  

Corporate notes and bonds

    2    $ 135,400       $ 182,544   

Corporate commercial paper

    2      35,953         42,915   
     

 

 

     

 

 

  

Available-for-sale investments

   171,353      225,459   

Money market funds

 1   123,558      11,229   

Cash, including restricted cash

 N/A   30,894      26,136   
     

 

 

     

 

 

  

Total cash and investments in marketable securities

 $ 325,805    $ 262,824   
     

 

 

     

 

 

  

 

Level 1 — Quoted prices in active markets for identical assets or liabilities.
Level 2 — Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

All of our investments are categorized as Level 1 or Level 2, as explained in the table above. We use a market approach to value our Level 2 investments. The disclosed fair value related to our investments is based primarily on the reported fair values in our period-end brokerage statements, which are based on market prices from a variety of industry standard data providers and generally represent quoted prices for similar assets in active markets or have been derived from observable market data. We independently validate these fair values using available market quotes and other information. During the three month periods ended March 31, 2015 and 2014, there were no transfers between Level 1 and Level 2 of the fair value hierarchy.

Additionally, as of March 31, 2015, based on a discounted cash flow analysis using Level 3 inputs including financial discount rates, we believe the $125.0 million carrying amount of our 12% Senior Secured Notes due July 2017 is consistent with its fair value.