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 December 31, 2016 and 2015, 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.

The following tables summarize the Company’s cash equivalents and marketable securities as of December 31, 2016 and 2015:

 

		December 31, 2016
		Total				Quoted Prices in Active Markets (Level 1)				Significant Other Observable Inputs (Level 2)				Significant Unobservable Inputs (Level 3)
		(in thousands)
Cash equivalents:
Money market funds		$	22,091			$	22,091			$	—			$	—
Commercial paper			2,997				—				2,997				—
Corporate bonds			1,500				—				1,500				—
Total cash equivalents			26,588				22,091				4,497				—
Marketable securities:
Corporate bonds			69,622				—				69,622				—
Commercial paper			27,220				—				27,220				—
Total marketable securities			96,842				—				96,842				—
Total cash equivalents and marketable securities		$	123,430			$	22,091			$	101,339			$	—

 

		December 31, 2015
		Total				Quoted Prices in Active Markets (Level 1)				Significant Other Observable Inputs (Level 2)				Significant Unobservable Inputs (Level 3)
		(in thousands)
Cash equivalents:
Money market funds		$	13,231			$	13,231			$	—			$	—
U.S. government securities			4,999				—				4,999				—
Commercial paper			4,697				—				4,697				—
Corporate bonds			3,000				—				3,000				—
Total cash equivalents			25,927				13,231				12,696				—
Marketable securities:
Corporate bonds			125,516				—				125,516				—
Commercial paper			19,468				—				19,468				—
U.S. government securities			4,500				—				4,500				—
Total marketable securities			149,484				—				149,484				—
Total cash equivalents and marketable securities		$	175,411			$	13,231			$	162,180			$	—

The carrying amounts reflected in the consolidated balance sheets for tax incentive receivable, accounts payable, and accrued expenses 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 December 31, 2016 and 2015:

 

		December 31, 2016
		Amortized Cost				Gross Unrealized Gains				Gross Unrealized Losses				Fair Value
		(in thousands)
Assets:
Corporate bonds (due within 1 year)		$	68,777			$	—			$	(54	)		$	68,723
Corporate bonds (due after 1 year through 2 years)			901				—				(2	)			899
Commercial paper (due within 1 year)			27,244				—				(24	)			27,220
		$	96,922			$	—			$	(80	)		$	96,842

 

		December 31, 2015
		Amortized Cost				Gross Unrealized Gains				Gross Unrealized Losses				Fair Value
		(in thousands)
Assets:
Corporate bonds (due within 1 year)		$	112,828			$	1			$	(169	)		$	112,660
Corporate bonds (due after 1 year through 2 years)			12,885				3				(32	)			12,856
Commercial paper (due within 1 year)			19,478				—				(10	)			19,468
U.S. government securities (due within 1 year)			4,500				—				—				4,500
		$	149,691			$	4			$	(211	)		$	149,484