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Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2019

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                    to                   

Commission File Number: 000-30319

INNOVIVA, INC.

(Exact Name of Registrant as Specified in its Charter)

Delaware

94-3265960

(State or Other Jurisdiction of
Incorporation or Organization)

(I.R.S. Employer
Identification No.)

2000 Sierra Point Parkway, Suite 500

Brisbane, CA 94005

(Address of Principal Executive Offices)

(650238-9600

(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.01 per share

INVA

The NASDAQ Global Select Market

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes    No  

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes    No  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Act.

Large accelerated filer 

Accelerated filer 

Non-accelerated filer 

Smaller reporting company 

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).  Yes    No  

The number of shares of registrant’s common stock outstanding on July 17, 2019 was 101,279,669.

Table of Contents

TABLE OF CONTENTS

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

Condensed Consolidated Balance Sheets as of June 30, 2019 (Unaudited) and December 31, 2018

3

Unaudited Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2019 and 2018

4

Unaudited Condensed Consolidated Statements of Comprehensive Income for the Three and Six Months Ended June 30, 2019 and 2018

5

Unaudited Condensed Consolidated Statements of Stockholders’ Equity (Deficit) for the Three and Six Months Ended June 30, 2019 and 2018

6

Unaudited Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2019 and 2018

8

Notes to Unaudited Condensed Consolidated Financial Statements

9

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

18

Item 3. Quantitative and Qualitative Disclosures About Market Risk

24

Item 4. Controls and Procedures

24

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

25

Item 1A. Risk Factors

25

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

25

Item 3. Defaults Upon Senior Securities

25

Item 4. Mine Safety Disclosure

25

Item 5. Other Information

25

Item 6. Exhibits

26

Signatures

27

Exhibits

2

Table of Contents

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

INNOVIVA, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except per share data)

    

June 30, 

    

December 31, 

2019

2018

(unaudited)

*

Assets

Current assets:

Cash and cash equivalents

$

141,952

$

62,417

Short-term marketable securities

 

107,711

 

52,491

Related party receivables from collaborative arrangements

 

67,563

 

83,286

Prepaid expenses and other current assets

 

459

 

849

Total current assets

 

317,685

 

199,043

Property and equipment, net

 

136

 

160

Operating lease right-of-use asset

1,348

Capitalized fees paid to a related party, net

 

145,987

 

152,899

Deferred tax assets

177,114

196,054

Other assets

 

37

 

37

Total assets

$

642,307

$

548,193

Liabilities and Stockholders’ Equity

Current liabilities:

Accounts payable

$

1,139

$

11

Accrued personnel-related expenses

 

371

 

470

Accrued interest payable

 

4,262

 

4,264

Other accrued liabilities

 

1,386

 

955

Operating lease liability, current portion

317

Total current liabilities

 

7,475

 

5,700

Long-term debt, net of discount and issuance costs

 

386,675

 

382,855

Operating lease liability, net of current portion

1,157

Other long-term liabilities

 

298

 

586

Commitments and contingencies

Stockholders’ equity:

Preferred stock: $0.01 par value, 230 shares authorized, no shares issued and outstanding

Common stock: $0.01 par value, 200,000 shares authorized, 101,272 and 101,098 issued and outstanding as of June 30, 2019 and December 31, 2018, respectively

 

1,013

 

1,011

Additional paid-in capital

 

1,257,799

 

1,256,267

Accumulated other comprehensive income (loss)

 

33

 

(3)

Accumulated deficit

 

(1,032,162)

 

(1,103,692)

Total Innoviva stockholders’ equity

226,683

153,583

Noncontrolling interest

20,019

5,469

Total stockholders’ equity

 

246,702

 

159,052

Total liabilities and stockholders’ equity

$

642,307

$

548,193

*Condensed consolidated balance sheet as of December 31, 2018 has been derived from audited consolidated financial statements.

See accompanying notes to condensed consolidated financial statements.

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INNOVIVA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(Unaudited)

Three Months Ended June 30, 

Six Months Ended June 30, 

    

2019

    

2018

    

2019

    

2018

Royalty revenue from a related party, net of amortization of capitalized fees paid to a related party of $3,456 in the three months ended June 30, 2019 and 2018, and $6,912 in the six months ended June 30, 2019 and 2018

$

64,107

$

67,086

$

119,290

$

119,466

Operating expenses:

General and administrative

 

4,347

 

4,411

 

7,362

 

13,396

General and administrative - related party

2,700

Total operating expenses

 

4,347

 

4,411

 

7,362

 

16,096

Income from operations

 

59,760

 

62,675

 

111,928

 

103,370

Other income (expense), net

 

(8)

 

39

 

(7)

 

(3,060)

Interest income

 

1,403

 

380

 

2,378

 

771

Interest expense

 

(4,661)

 

(6,478)

 

(9,278)

 

(14,135)

Income before income taxes

56,494

56,616

105,021

86,946

Income tax expense, net

10,433

18,941

Net income

46,061

56,616

86,080

86,946

Net income attributable to noncontrolling interest

8,321

1,990

14,550

2,739

Net income attributable to Innoviva stockholders

$

37,740

$

54,626

$

71,530

$

84,207

Basic net income per share attributable to Innoviva stockholders

$

0.37

$

0.54

$

0.71

$

0.84

Diluted net income per share attributable to Innoviva stockholders

$

0.34

$

0.49

$

0.65

$

0.77

Shares used to compute Innoviva basic and diluted net income per share:

Shares used to compute basic net income per share

101,151

100,873

101,105

100,739

Shares used to compute diluted net income per share

113,391

113,399

113,384

113,483

See accompanying notes to condensed consolidated financial statements.

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INNOVIVA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands)

(Unaudited)

Three Months Ended June 30, 

Six Months Ended June 30, 

    

2019

    

2018

    

2019

    

2018

Net income

$

46,061

$

56,616

$

86,080

$

86,946

Unrealized gain on marketable securities, net

 

23

 

12

 

36

 

8

Comprehensive income

46,084

56,628

86,116

86,954

Comprehensive income attributable to noncontrolling interest

8,321

1,990

14,550

2,739

Comprehensive income attributable to Innoviva stockholders

$

37,763

$

54,638

$

71,566

$

84,215

See accompanying notes to condensed consolidated financial statements.

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INNOVIVA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

(In thousands)

(Unaudited)

Six Months Ended June 30, 2019

Accumulated Other

Total

Common Stock

Additional Paid-In

Comprehensive

Accumulated

Noncontrolling

Stockholders’

    

Shares

    

Amount

    

Capital

    

Income (Loss)

    

Deficit

    

Interest

    

Equity

Balance as of December 31, 2018

 

101,098

$

1,011

$

1,256,267

$

(3)

$

(1,103,692)

$

5,469

$

159,052

Exercise of stock options, and issuance of common stock units and stock awards, net of repurchase of shares to satisfy tax withholding

 

85

 

1

 

253

 

 

 

 

254

Stock-based compensation

 

 

 

605

 

 

 

 

605

Net income

 

 

 

 

 

33,790

 

6,229

 

40,019

Other comprehensive income

 

 

 

 

13

 

 

 

13

Balance as of March 31, 2019

 

101,183

1,012

1,257,125

10

(1,069,902)

11,698

199,943

Exercise of stock options, and issuance of common stock units and stock awards, net of repurchase of shares to satisfy tax withholding

89

1

200

201

Stock-based compensation

474

474

Net income

37,740

8,321

46,061

Other comprehensive income

23

23

Balance as of June 30, 2019

101,272

$

1,013

$

1,257,799

$

33

$

(1,032,162)

$

20,019

$

246,702

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Six Months Ended June 30, 2018

Accumulated Other

Total

Common Stock

Additional Paid-In

Comprehensive

Accumulated

Treasury Stock

Noncontrolling

Stockholders’

    

Shares

Amount

    

Capital

    

Loss

    

Deficit

    

Shares

    

Amount

    

Interest

    

Deficit

Balance as of December 31, 2017

102,046

$

1,019

$

1,258,151

$

(18)

$

(1,498,748)

(150)

$

(3,263)

$

152

$

(242,707)

Distributions to noncontrolling interest

(90)

(90)

Exercise of stock options, and issuance of common stock units and stock awards, net of cancellation of stock awards and repurchase of shares to satisfy tax withholding

(571)

(5)

(2,492)

(2,497)

Stock-based compensation

2,169

2,169

Cash dividend forfeited

52

52

Net income

29,581

749

30,330

Other comprehensive loss

(4)

(4)

Balance as of March 31, 2018

101,475

1,014

1,257,880

(22)

(1,469,167)

(150)

(3,263)

811

(212,747)

Distributions to noncontrolling interest

(809)

(809)

Exercise of stock options, and issuance of common stock units and stock awards, net of cancellation of stock awards and repurchase of shares to satisfy tax withholding

182

1

110

111

Stock-based compensation

1,452

1,452

Cash dividend forfeited

1

1

Net income

54,626

1,990

56,616

Other comprehensive income

12

12

Balance as of June 30, 2018

101,657

$

1,015

$

1,259,443

$

(10)

$

(1,414,541)

(150)

$

(3,263)

$

1,992

$

(155,364)

See accompanying notes to condensed consolidated financial statements.

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INNOVIVA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

Six Months Ended June 30, 

    

2019

    

2018

Cash flows from operating activities

Net income

$

86,080

$

86,946

Adjustments to reconcile net income to net cash provided by operating activities:

Deferred income taxes

18,940

Depreciation and amortization

 

7,080

 

6,936

Stock-based compensation

 

1,079

 

3,621

Amortization of debt discount and issuance costs

3,820

4,028

Amortization of discount on short-term investments

(1,124)

(160)

Amortization of lease guarantee

 

(162)

 

(162)

Loss on extinguishment of debt

3,137

Changes in operating assets and liabilities:

Receivables from collaborative arrangements

 

15,723

 

(2)

Prepaid expenses and other current assets

 

390

 

178

Accounts payable

 

1,128

 

(543)

Accrued personnel-related expenses and other accrued liabilities

 

343

 

(1,539)

Accrued interest payable

 

(2)

 

(805)

Operating lease liability

(144)

Other long-term liabilities

 

 

4

Net cash provided by operating activities

 

133,151

 

101,639

Cash flows from investing activities

Maturities of marketable securities

 

57,875

 

54,875

Purchases of marketable securities

 

(111,935)

 

(19,284)

Net cash provided by (used in) investing activities

(54,060)

 

35,591

Cash flows from financing activities

Repurchase of shares to satisfy tax withholding

(74)

(2,840)

Payments of principal on senior secured term loans

(120,000)

Payments of cash dividends to stockholders

(11)

(55)

Proceeds from issuances of common stock, net

529

454

Distributions to noncontrolling interest

(899)

Net cash provided by (used in) financing activities

 

444

 

(123,340)

Net increase in cash and cash equivalents

 

79,535

 

13,890

Cash and cash equivalents at beginning of period

 

62,417

 

73,336

Cash and cash equivalents at end of period

$

141,952

$

87,226

Supplemental disclosure of cash flow information

Cash paid for interest

$

5,461

$

10,913

See accompanying notes to condensed consolidated financial statements.

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INNOVIVA, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. Description of Operations and Summary of Significant Accounting Policies

Description of Operations

Innoviva, Inc. (referred to as “Innoviva”, the “Company”, or “we” and other similar pronouns) is focused on royalty management. Innoviva’s portfolio includes the respiratory assets partnered with Glaxo Group Limited (“GSK”), including RELVAR®/BREO®ELLIPTA® (fluticasone furoate/ vilanterol, “FF/VI”), ANORO® ELLIPTA® (umeclidinium bromide/ vilanterol, “UMEC/VI”) and TRELEGY® ELLIPTA® (the combination FF/UMEC/VI). Under the Long-Acting Beta2 Agonist (“LABA”) Collaboration Agreement, Innoviva is entitled to receive royalties from GSK on sales of RELVAR®/BREO® ELLIPTA® as follows: 15% on the first $3.0 billion of annual global net sales and 5% for all annual global net sales above $3.0 billion; and royalties from the sales of and ANORO® ELLIPTA® which tier upward at a range from 6.5% to 10%. Innoviva is also entitled to 15% of royalty payments made by GSK under its agreements originally entered into with us, and since assigned to Theravance Respiratory Company, LLC (“TRC”), including TRELEGY® ELLIPTA® and any other product or combination of products that may be discovered or developed in the future under the LABA Collaboration Agreement and the Strategic Alliance Agreement with GSK (referred to herein as the “GSK Agreements”), which have been assigned to TRC other than RELVAR®/BREO® ELLIPTA® and ANORO® ELLIPTA®.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) for interim financial information. Accordingly, they do not include all of the information and notes required by US GAAP for complete financial statements. In our opinion, the unaudited condensed consolidated financial statements have been prepared on the same basis as audited consolidated financial statements and include all adjustments, consisting of only normal recurring adjustments, necessary for the fair presentation of our financial position, results of operations, comprehensive income and cash flows. The interim results are not necessarily indicative of the results of operations to be expected for the year ending December 31, 2019 or any other period.

The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2018 filed with the Securities and Exchange Commission (“SEC”) on February 19, 2019 (“2018 Form 10-K”).

Variable Interest Entity

We evaluate our ownership, contractual and other interest in entities to determine if they are variable interest entities (“VIE”), whether we have a variable interest in those entities and the nature and extent of those interests. Based on our evaluation, if we determine we are the primary beneficiary of a VIE, we consolidate the entity into our financial statements. We consolidate the financial results of TRC, which we have determined to be a VIE, because we have the power to direct the economically significant activities of TRC and the obligation to absorb losses of, or the right to receive benefits from, TRC. As of June 30, 2019 and December 31, 2018, $9.8 million and $6.4 million, respectively, of the related party receivables from collaborative arrangements were attributable to TRC. The cash balance attributable to TRC as of June 30, 2019 was $13.8 million. Total revenue for TRC related to TRELEGY® ELLIPTA® was $9.8 million and $2.4 million for the three months ended June 30, 2019 and 2018, respectively, and $17.2 million and $3.3 million for the six months ended June 30, 2019 and 2018, respectively.

Accounting Pronouncement Adopted by the Company

In February 2016, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2016 02, Leases (Topic 842), which requires an entity to recognize right of use assets representing its

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right to use the underlying asset for the lease term and lease liabilities representing the present value of the future lease payments for both financing and operating leases on its consolidated balance sheets. For a lease with a term of 12 months or less, the standard allows an entity to elect not to recognize a right-of-use asset and a lease liability and recognize the lease expense on a straight-line basis. We adopted the standard on the effective date of January 1, 2019 using the alternative transition approach. This approach is similar to a prospective transition, which requires the application of ASC 842 at the effective date with a cumulative-effect adjustment recognized through retained earnings. Under this approach, we do not present the adjusted comparative periods. Our pro-rata share of common area expenses are recorded as lease expense when incurred since they are variable and considered nonlease components under the standard. The most significant impact of the adoption to us is that we recognized a right of use asset in the amount of $1.5 million and lease liabilities in the total amount of $1.6 million at January 1, 2019 for the operating lease on our corporate headquarters. The adoption did not have a material impact on our retained earnings and consolidated statements of operations and cash flows.

In August 2018, the U.S. Securities and Exchange Commission (the “SEC”) adopted the final rule under SEC Release No. 33-10532, Disclosure Update and Simplification, amending certain disclosure requirements that were redundant, duplicative, overlapping, outdated or superseded. In addition, the amendments expanded the disclosure requirements relating to the analysis of stockholders’ equity for interim financial statements. Under the amendments, an analysis of changes in each caption of stockholders’ equity presented in the balance sheet must be provided in a note or separate statement. The analysis should present a reconciliation of the beginning balance to the ending balance of each period for which a statement of income is required to be filed. This final rule is effective on November 5, 2018. Effective January 1, 2019, the Company adopted SEC Release No. 33-10532. In accordance with the new guidance, the Company has added a Condensed Consolidated Statement of Changes in Stockholders’ Equity (Deficit) in its Form 10-Q and elected to present a reconciliation in a single statement that shows the changes in stockholders equity for each interim period, as well as each comparable period.

2. Net Income Per Share

Basic net income per share attributable to Innoviva stockholders is computed by dividing net income attributable to Innoviva stockholders by the weighted-average number of shares of common stock outstanding. Diluted net income per share attributable to Innoviva stockholders is computed by dividing net income attributable to Innoviva stockholders by the weighted-average number of shares of common stock and dilutive potential common stock equivalents then outstanding. Dilutive potential common stock equivalents include the assumed exercise, vesting and issuance of employee stock awards using the treasury stock method, as well as common stock issuable upon assumed conversion of our convertible subordinated notes due 2023 (the “2023 Notes”) using the if-converted method.

Our convertible senior notes due 2025 (the “2025 Notes”) are convertible, based on the applicable conversion rate, into cash, shares of our common stock or a combination thereof, at our election. Our current intent is to settle the principal amount of the 2025 Notes in cash upon conversion. The impact of the assumed conversion premium to diluted net income per share is computed using the treasury stock method. As the average market price per share of our common stock as reported on The Nasdaq Global Select Market during the relevant periods was lower than the initial conversion price of $17.26 per share, there was no dilutive effect of the assumed conversion premium for the three and six months ended June 30, 2019 and 2018, respectively.

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The following table shows the computation of basic and diluted net income per share for the three and six months ended June 30, 2019 and 2018:

Three Months Ended June 30, 

Six Months Ended June 30, 

(In thousands except per share data)

    

2019

    

2018

    

2019

    

2018

Numerator:

Net income attributable to Innoviva stockholders, basic

$

37,740

$

54,626

$

71,530

$

84,207

Add: interest expense on 2023 Notes

1,158

1,417

2,325

2,829

Net income attributable to Innoviva stockholders, diluted

$

38,898

$

56,043

$

73,855

$

87,036

Denominator:

Weighted-average shares used to compute basic net income per share attributable to Innoviva stockholders

 

101,151

 

100,873

 

101,105

 

100,739

Dilutive effect of 2023 Notes

12,189

12,189

12,189

12,189

Dilutive effect of options and awards granted under equity incentive plan and employee stock purchase plan

51

337

90

555

Weighted-average shares used to compute diluted net income per share attributable to Innoviva stockholders

 

113,391

 

113,399

 

113,384

 

113,483

Net income per share attributable to Innoviva stockholders

Basic

$

0.37

$

0.54

$

0.71

$

0.84

Diluted

$

0.34

$

0.49

$

0.65

$

0.77

Anti-Dilutive Securities

The following common stock equivalents were not included in the computation of diluted net income per share because their effect was anti-dilutive:

Three Months Ended June 30, 

Six Months Ended June 30, 

(In thousands)

    

2019

    

2018

    

2019

    

2018

Outstanding options and awards granted under equity incentive plan and employee stock purchase plan

 

1,188

1,633

 

1,120

1,562

3. Revenue Recognition and Collaborative Arrangements

Revenue is recognized when our customer obtains control of promised goods or services, in an amount that reflects the consideration which we expect to receive in exchange for those goods or services. Revenue is recognized through a five-step process: (i) identify the contract with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price for the contract; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) a performance obligation is satisfied. We recognize the royalty revenue on licensee net sales of products with respect to which we have contractual royalty rights in the period in which the royalties are earned and reported to us. Royalties are recognized net of amortization of capitalized fees associated with any approval and launch milestone payments made to GSK.

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Net Revenue from Collaborative Arrangements

Net revenue recognized under our GSK Agreements was as follows:

Three Months Ended June 30, 

Six Months Ended June 30, 

(In thousands)

    

2019

    

2018

    

2019

    

2018

Royalties from a related party - RELVAR/BREO

$

47,086

$

57,515

$

89,826

$

103,675

Royalties from a related party - ANORO

10,635

10,656

19,205

19,380

Royalties from a related party - TRELEGY

9,842

2,371

17,171

3,323

Total royalties from a related party

67,563

70,542

126,202

126,378

Less: amortization of capitalized fees paid to a related party

 

(3,456)

 

(3,456)

 

(6,912)

 

(6,912)

Royalty revenue from GSK

$

64,107

$

67,086

$

119,290

$

119,466

4. Available-for-Sale Securities and Fair Value Measurements

Available-for-Sale Securities

The estimated fair value of available-for-sale securities is based on quoted market prices for these or similar investments that were based on prices obtained from a commercial pricing service. Available-for-sale securities are summarized below:

June 30, 2019

    

    

Gross

    

Gross

    

Unrealized

Unrealized

Estimated

(In thousands)

Amortized Cost

Gains

Losses

Fair Value

U.S. government securities

$

49,012

$

25

$

$

49,037

U.S. government agencies

19,919

8

19,927

U.S. commercial paper

 

38,747

 

 

 

38,747

Money market funds

 

120,581

 

 

 

120,581

Total

$

228,259

$

33

$

$

228,292

December 31, 2018

    

    

Gross

    

Gross

    

Unrealized

Unrealized

Estimated

(In thousands)

Amortized Cost

Gains

Losses

Fair Value

U.S. government securities

$

29,736

$

$

(3)

$

29,733

U.S. government agencies

4,971

4,971

U.S. corporate notes

2,875

2,875

U.S. commercial paper

 

22,037

 

 

 

22,037

Money market funds

 

49,358

 

 

 

49,358

Total

$

108,977

$

$

(3)

$

108,974

As of June 30, 2019, all of the available-for-sale securities had contractual maturities within one year and the weighted average maturity of marketable securities was approximately two months.

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Fair Value Measurements

Our available-for-sale securities are measured at fair value on a recurring basis and our debt is carried at amortized cost basis. The estimated fair values were as follows:

Estimated Fair Value Measurements as of June 30, 2019 Using:

Quoted Price in

Active Markets

Significant Other

Significant

for Identical

Observable

Unobservable

Types of Instruments

Assets

Inputs

Inputs