FAIR VALUE MEASUREMENTS (Tables)

9 Months Ended

Sep. 30, 2014

Schedule of cash equivalents, restricted cash and marketable securities by security type

Cash equivalents, restricted cash and marketable securities by security type at September 30, 2014 were as follows:

			Gross		Gross
	Amortized		Unrealized		Unrealized			Estimated
	Cost		Gains		Losses			Fair Value
	(In thousands)
Included in cash and cash equivalents:
Money market funds	$	5,445	$	—	$	—		$	5,445
Restricted cash:
Certificate of deposit	$	265	$	—	$	—		$	265
Marketable securities:
Government-sponsored enterprise securities (due in less than 1 year)	$	1,909	$	1	$	(1	)	$	1,909
Government-sponsored enterprise securities (due in 1 to 2 years)	3,751		—		(3		)	3,748
Commercial paper (due in less than 1 year)	12,981		18		—			12,999
Corporate notes (due in less than 1 year)	103,927		4		(38		)	103,893
Corporate notes (due in 1 to 2 years)	12,070		1		(18		)	12,053
	$	134,638	$	24	$	(60	)	$	134,602

Cash equivalents, restricted cash and marketable securities by security type at December 31, 2013 were as follows:

			Gross		Gross
	Amortized		Unrealized		Unrealized			Estimated
	Cost		Gains		Losses			Fair Value
	(In thousands)
Included in cash and cash equivalents:
Money market funds	$	8,079	$	—	$	—		$	8,079
Corporate notes	2,206		—		—			2,206
	$	10,285	$	—	$	—		$	10,285
Restricted cash:
Certificates of deposit	$	795	$	—	$	—		$	795
Marketable securities:
Government-sponsored enterprise securities (due in less than 1 year)	$	7,369	$	1	$	(1	)	$	7,369
Commercial paper (due in less than 1 year)	5,496		3		—			5,499
Corporate notes (due in less than 1 year)	39,383		1		(18		)	39,366
	$	52,248	$	5	$	(19	)	$	52,234

Schedule of marketable securities with unrealized losses

	Less Than 12 Months					12 Months or Greater				Total
			Gross					Gross				Gross
	Estimated		Unrealized			Estimated		Unrealized		Estimated		Unrealized
	Fair Value		Losses			Fair Value		Losses		Fair Value		Losses
	(In thousands)
As of September 30, 2014:
Government-sponsored enterprise securities (due in less than 1 year)	$	401	$	(1	)	$	—	$	—	$	401	$	(1	)
Government-sponsored enterprise securities (due in 1 to 2 years)	3,748		(3		)	—		—		3,748		(3		)
Corporate notes (due in less than 1 year)	77,087		(38		)	—		—		77,087		(38		)
Corporate notes (due in 1 to 2 years)	11,222		(18		)	—		—		11,222		(18		)
	$	92,458	$	(60	)	$	—	$	—	$	92,458	$	(60	)
	Less Than 12 Months					12 Months or Greater				Total
			Gross					Gross				Gross
	Estimated		Unrealized			Estimated		Unrealized		Estimated		Unrealized
	Fair Value		Losses			Fair Value		Losses		Fair Value		Losses
As of December 31, 2013:
Government-sponsored enterprise securities (due in less than 1 year)	$	3,947	$	(1	)	$	—	$	—	$	3,947	$	(1	)
Corporate notes (due in less than 1 year)	37,060		(18		)	—		—		37,060		(18		)
	$	41,007	$	(19	)	$	—	$	—	$	41,007	$	(19	)

Schedule of non-employee options to purchase common stock considered as derivatives and classified as current liabilities

September 30, 2014

December 31, 2013

Issuance

Exercise

Exercisable

Expiration

Number

Fair Value

Number

Fair Value

Date

Price

Date

of Shares

(In thousands)

of Shares

(In thousands)

March 2005

6.39

January 2007

March 2015

284,600

367

Schedule of assumptions used to estimate the fair value of derivatives

	September 30, 2014	December 31, 2013
Dividend yield	0%	0%
Expected volatility	0.635	0.844
Risk-free interest rate	0.03%	0.13%
Expected term	0.5 yr	1 yr

Schedule of financial instruments measured at fair value on recurring basis

The following table presents information about our financial instruments that are measured at fair value on a recurring basis as of September 30, 2014 and indicates the fair value category assigned.

	Fair Value Measurements at Reporting Date Using
	Quoted Prices in		Significant
	Active Markets		Other		Significant
	for Identical		Observable		Unobservable
	Assets / Liabilities		Inputs		Inputs
(In thousands)	Level 1		Level 2		Level 3		Total
Assets
Money market funds (1)	$	5,445	$	—	$	—	$	5,445
Government-sponsored enterprise securities (2)(3)	—		5,657		—		5,657
Commercial paper (2)	—		12,999		—		12,999
Corporate notes (2)(3)	—		115,946		—		115,946
Total	$	5,445	$	134,602	$	—	$	140,047

Liabilities
Derivatives (4)	$	—	$	—	$	1	$	1

The following table presents information about our financial instruments that are measured at fair value on a recurring basis as of December 31, 2013 and indicates the fair value category assigned.

	Fair Value Measurements at Reporting Date Using
	Quoted Prices in		Significant
	Active Markets		Other		Significant
	for Identical		Observable		Unobservable
	Assets / Liabilities		Inputs		Inputs
(In thousands)	Level 1		Level 2		Level 3		Total
Assets
Money market funds (1)	$	8,079	$	—	$	—	$	8,079
Government-sponsored enterprise securities (2)	—		7,369		—		7,369
Commercial paper (2)	—		5,499		—		5,499
Corporate notes (1)(2)	—		41,572		—		41,572
Total	$	8,079	$	54,440	$	—	$	62,519

Liabilities
Derivatives (4)	$	—	$	—	$	367	$	367

(1)

Included in cash and cash equivalents on our condensed balance sheets.

(2)

Included in current portion of marketable securities on our condensed balance sheets.

(3)

Included in noncurrent portion of marketable securities on our condensed balance sheets.

(4)

Included in fair value of derivatives on our condensed balance sheets.

Schedule of rollforward of the balance sheet amounts for financial instruments in Level 3 category

Fair Value Measurements Using Significant Unobservable Inputs (Level 3)

Three Months Ended September 30, 2014

Change in

Unrealized Gain

Total

Related to

Unrealized

Transfers

Financial

Fair Value at

Gain

Purchases

In and/or

Fair Value at

Instruments

June 30,

Included in

and

Sales and

Out of

September 30,

Held at

(In thousands)

2014

Earnings (1)

Issuances

Settlements

Level 3

2014

September 30, 2014 (1)

Derivative liabilities

290

(289

)

—

(289

)

Fair Value Measurements Using Significant Unobservable Inputs (Level 3)

Nine Months Ended September 30, 2014

Change in

Unrealized Gain

Total

Related to

Unrealized

Transfers

Financial

Fair Value at

Gain

Purchases

In and/or

Fair Value at

Instruments

December 31,

Included in

and

Sales and

Out of

September 30,

Held at

(In thousands)

2013

Earnings (1)

Issuances

Settlements

Level 3

2014

September 30, 2014 (1)

Derivative liabilities

367

(366

)

—

(366

)

(1)

Reported as unrealized gain on derivatives on our condensed statements of operations.

- Definition

Tabular disclosure of the fair value of financial instruments, including financial assets and financial liabilities, and the measurements of those instruments, assets, and liabilities.

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- Definition

Tabular disclosure of the fair value measurement of liabilities using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets), and gains or losses recognized in other comprehensive income (loss) and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs) by class of liability.

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