Fair Value Measurements and Marketable Securities

9 Months Ended

Sep. 30, 2019

Fair Value Measurements and Marketable Securities

3. Fair Value Measurements and Marketable Securities

Fair Value Measurements

The following tables present information about the Company’s financial assets that have been measured at fair value as of September 30, 2019 and December 31, 2018 and indicate the fair value of the hierarchy of the valuation inputs utilized to determine such fair value. In general, fair values determined by Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities. Fair value determined by Level 2 inputs utilize observable inputs other than Level 1 prices, such as quoted prices, for similar assets or liabilities, quoted market 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 related assets or liabilities. Fair values determined by Level 3 inputs are unobservable data points for the asset or liability, and include situations where there is little, if any, market activity for the asset or liability. During the three and nine months ended September 30, 2019 and the year ended December 31, 2018, there were no transfers between Level 1 and Level 2 financial assets.

The following tables summarize the Company’s cash equivalents and marketable securities as of September 30, 2019 and December 31, 2018:

	September 30, 2019
			Quoted		Significant
			Prices in		Other		Significant
			Active		Observable		Unobservable
			Markets		Inputs		Inputs
	Total		(Level 1)		(Level 2)		(Level 3)
	(in thousands)
Cash equivalents:
Money market funds	$	33,344	$	33,344	$	—	$	—
Commercial paper		700		—		700		—
Total cash equivalents		34,044		33,344		700		—

Marketable securities:
Commercial paper		13,479		—		13,479		—
Corporate bonds		13,169		—		13,169		—
U.S. Government securities		12,021		—		12,021		—
Total marketable securities		38,669		—		38,669		—
Total cash equivalents and marketable securities	$	72,713	$	33,344	$	39,369	$	—

		December 31, 2018
				Quoted		Significant
				Prices in		Other		Significant
				Active		Observable		Unobservable
				Markets		Inputs		Inputs
		Total		(Level 1)		(Level 2)		(Level 3)
	(in thousands)
Cash equivalents:
Money market funds		$	40,231	$	40,231	$	—	$	—
Commercial paper			4,979		—		4,979		—
Total cash equivalents			45,210		40,231		4,979		—

Marketable securities:
Commercial paper			38,911		—		38,911		—
Corporate bonds			25,830		—		25,830		—
U.S. Government securities			3,994		—		3,994		—
Total marketable securities			68,735		—		68,735		—
Total cash equivalents and marketable securities		$	113,945	$	40,231	$	73,714	$	—

The carrying amounts reflected in the condensed consolidated balance sheets for tax incentive receivable, accounts payable, and accrued expenses and other approximate fair value due to their short-term maturities. The carrying value of the Company’s outstanding notes payable approximates fair value (a Level 2 fair value measurement), reflecting interest rates currently available to the Company.

Marketable Securities

The following tables summarize the Company’s marketable securities as of September 30, 2019 and December 31, 2018:

	September 30, 2019
			Gross		Gross
	Amortized		Unrealized		Unrealized
	Cost		Gains		Losses		Fair Value
	(in thousands)
Assets:
Commercial paper (due within 1 year)	$	13,479	$	—	$	—	$	13,479
Corporate bonds (due within 1 year)		13,137		32		—		13,169
U.S. Government securities (due within 1 year)		12,011		10		—		12,021
	$	38,627	$	42	$	—	$	38,669

	December 31, 2018
			Gross		Gross
	Amortized		Unrealized		Unrealized
	Cost		Gains		Losses			Fair Value
	(in thousands)
Assets:
Commercial paper (due within 1 year)	$	38,921	$	—	$	(10	)	$	38,911
Corporate bonds (due within 1 year)		25,851		3		(24	)		25,830
U.S. Government securities (due within 1 year)		3,995		—		(1	)		3,994
	$	68,767	$	3	$	(35	)	$	68,735

- 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.

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