ACHN 2017 Annual Report

Achillion Pharmaceuticals, Inc. Notes to Financial Statements—(Continued) (in thousands, except per share amounts) ORA and does not relate to any past or future performance by the Company. Because the Company has no performance obligations under these agreements, it intends to recognize revenue related to any milestone payment upon achievement of a milestone by GCAT or Ora. 6. Marketable Securities The fair value of the Company’s marketable securities of $287,089 and $314,215 as of December 31, 2017 and 2016, respectively, is valued based on level 2 inputs. The Company’s investments consist mainly of U.S. government and agency securities, government-sponsored bond obligations and certain other corporate debt securities. Fair value is determined by taking into consideration valuations obtained from third-party pricing services. The third-party pricing services utilize industry standard valuation models, for which all significant inputs are observable, either directly or indirectly, to estimate fair value. These inputs include reported trades of and broker/dealer quotes on the same or similar securities; issuer credit spreads; benchmark securities; and other observable inputs. There were no transfers between levels within the hierarchy during the years ended December 31, 2017 and 2016. The Company has assessed these as level 2 within the fair value hierarchy of ASC 820. The Company classifies its entire investment portfolio as available for sale as defined in ASC 320, Debt and Equity Securities . Securities are carried at fair value with the unrealized gains (losses) reported in other comprehensive income. The unrealized (loss) gain from marketable securities was $(389), $151 and $(45) at December 31, 2017, 2016 and 2015, respectively. As of December 31, 2017, none of the Company’s investments were determined to be other than temporarily impaired. The following table summarizes the Company’s investments: December 31, 2017 December 31, 2016 Amortized Cost Unrealized Gain Unrealized (Loss) Estimated Fair Value Amortized Cost Unrealized Gain Unrealized (Loss) Estimated Fair Value Commercial Paper . . . . . . . . $ 29,079 $ 9 (2) $ 29,086 $ 96,891 $267 — $ 97,158 Corporate Debt Securities . . 216,297 — (324) 215,973 163,286 4 (129) 163,161 Government and Agency Securities . . . . . . . . . . . . . 42,102 — (72) 42,030 53,887 19 (10) 53,896 Total . . . . . . . . . . . . . . . . . . . $287,478 $ 9 (398) $287,089 $314,064 $290 (139) $314,215 The following additional table summarizes, by industry, the fair value of investments: As of December 31, 2017 2016 Government . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42,030 53,896 Banking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74,884 86,844 Industrial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 170,175 173,475 Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $287,089 $314,215 F-18