CORCEPT THERAPEUTICS INCCORT

CORCEPT THERAPEUTICS INC Fair Value Disclosure

10-KFiled Feb 26, 20192 min read
Fair Value of Financial Instruments
As of December 31, 2018 and 2017, we had invested our financial assets in marketable securities, primarily U.S. Treasury securities, commercial paper, corporate notes, asset-backed securities and repurchase agreements. We measured these funds, which totaled $192.2 million and $87.9 million as of December 31, 2018 and 2017, respectively, at fair value, which approximates cost and classified them as Level 1 and Level 2 assets in the fair value hierarchy.
Our available-for-sale securities included:
 
 
 
Fair Value
 
Estimated Fair Value
 
 
Hierarchy
Level
 
December 31, 2018
 
December 31, 2017
 
 
 
 
(in thousands)
Corporate bonds
 
Level 2
 
$
54,469

 
$
26,116

Commercial paper
 
Level 2
 
67,906

 
32,637

Asset-backed securities
 
Level 2
 
10,965

 
—

Repurchase agreements
 
Level 2
 
15,000

 
—

U.S. treasury securities
 
Level 1
 
39,287

 
14,210

Money market funds
 
Level 1
 
4,583

 
14,979

Total Marketable securities
 
 
 
$
192,210

 
$
87,942

 
 
 
 
 
 
 
Classified as:
 
 
 
 
 
 
Cash equivalents
 
 
 
$
27,075

 
$
14,979

Short-term marketable securities
 
 
 
165,135

 
57,682

Long-term marketable securities
 
 
 
—

 
15,281

Total marketable securities
 
 
 
$
192,210

 
$
87,942


The estimated fair value of marketable securities is based on quoted market prices for these or similar investments obtained from a commercial pricing service. The fair value of marketable securities classified within Level 2 is based upon inputs that may include benchmark yields, reported trades, broker/dealer quotes and issuer spreads. Our accumulated other comprehensive loss on our balance sheets consisted of net unrealized losses on available-for-sale investments of $0.1 million at both December 31, 2018 and 2017. We did not recognize any realized gains or losses on sales of investments for any period presented.
As of December 31, 2018, all our marketable securities had original maturities of less than two years. The weighted-average maturity of our holdings was four months. None of our marketable securities changed from one fair value hierarchy to another during the year ended December 31, 2018.

Historical Timeline

Fiscal YearFiled
2018Feb 26, 2019Showing above
2017Feb 28, 2018
2016Mar 6, 2017
2015Mar 10, 2016

About Fair Value Disclosures

Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.

Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.

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