Equity Investments

3 Months Ended

Mar. 31, 2022

Equity Method Investments And Joint Ventures [Abstract]

Equity Investments

(12) Equity Investments

(a) Nimbus

The Company provides collaboration services for Nimbus under the terms of a master services agreement executed on May 18, 2010, as amended. Collaboration agreements are separate from the transaction that resulted in equity ownership and related fees are paid in cash to the Company. As Nimbus is a limited liability company and the Company is not a passive investor due to its collaboration with Nimbus on a number of drug discovery targets, the Company's management determined that it has significant influence over the entity and therefore accounts for the investment as an equity method investment.

The Company has concluded that the carrying value of its equity investment in Nimbus should reflect its contractual rights to substantive profits. The Company further determined that the HLBV method for valuing contractual rights to substantive profits provides the best representation of its financial position in Nimbus.

The HLBV method is a balance sheet-oriented approach to equity method accounting. Under the HLBV method, the Company determines its share of earnings or losses by comparing its claim on the book value at the beginning and end of each reporting period. This claim is calculated as the amount that the Company would receive (or be obligated to pay) if the investee were to liquidate all of

its assets at recorded amounts, determined as of the balance sheet date in accordance with U.S. GAAP, and distribute the resulting cash to creditors and investors in accordance with their respective priorities.

The carrying value of the Nimbus investment was zero as of March 31, 2022 and December 31, 2021. The Company has no obligation to fund Nimbus losses in excess of its initial investment. For the three months ended March 31, 2022 and March 31, 2021, the Company reported no gain or loss on the Nimbus investment.

(b) Morphic

The Company accounts for its investment in Morphic Holding, Inc. (“Morphic”) at fair value based on the share price of Morphic’s common stock at the measurement date.

For the three months ended March 31, 2022, the Company reported a loss of $6,037 on the Morphic investment. For the three months ended March 31, 2021, the Company reported a gain of $24,824 on the Morphic investment. As of March 31, 2022 and December 31, 2021, the carrying value of the Company’s investment in Morphic was $33,524 and $39,561, respectively.

(c) Ravenna

In connection with the merger of Petra Pharma Corporation (“Petra”) and a third party, the Company received 2,676,191 shares of common stock of Ravenna Pharmaceuticals, Inc. (“Ravenna”). The Company concluded that its equity investment in Ravenna should be valued as a non-marketable equity security as the Company does not exercise significant influence over Ravenna. As of each of March 31, 2022 and December 31, 2021, the carrying value of the Company’s investment in Ravenna was $19.

(d) Ajax

In May 2021, the Company purchased 631,377 shares of Series B preferred stock of Ajax Therapeutics, Inc. (“Ajax”) for $1,700 in cash. The Company has concluded that its equity investment in Ajax should be valued as a non-marketable equity security as the Company does not exercise significant influence over Ajax. As of each of March 31, 2022 and December 31, 2021, the carrying value of the Company’s investment in Ajax was $1,700.

(e) ShouTi

In July 2021, the Company purchased 494,035 shares of Series B preferred stock of ShouTi for $2,000 in cash. As ShouTi is structured as a company limited by shares, incorporated under the laws of the Cayman Islands and the Company is not a passive investor due to its collaboration with ShouTi on a number of drug discovery targets, the Company’s management determined that it has significant influence over the entity and therefore accounts for the investment as an equity method investment.

The Company has determined that the HLBV method for valuing contractual rights to substantive profits provides the best representation of its financial position in ShouTi. The carrying value of ShouTi was $1,759 and $1,887 as of March 31, 2022 and December 31, 2021, respectively. The Company has no obligation to fund ShouTi losses in excess of its initial investment. For the three months ended March 31, 2022 and 2021 the Company recorded losses of $128 and zero on the ShouTi investment, respectively.

(f) Eonix

On March 31, 2022, the Company received 4,000,000 membership interest units of Eonix in exchange for material science collaboration services under the terms of a master services agreement executed on March 31, 2022. As Eonix is a limited liability company and the Company is not a passive investor due to its collaboration with Eonix on a number of material science targets, the Company's management determined that it has significant influence over the entity and therefore accounts for the investment as an equity method investment.

The Company has determined that the HLBV method for valuing contractual rights to substantive profits provides the best representation of its financial position in Eonix. The carrying value of Eonix was zero as of March 31, 2022. For the three months ended March 31, 2022 the Company recorded no gain or loss on the Eonix investment.