Equity Investments

6 Months Ended

Jun. 30, 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 June 30, 2022 and December 31, 2021. The Company has no obligation to fund Nimbus losses in excess of its initial investment. For the three and six months ended June 30, 2022 and June 30, 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 and six months ended June 30, 2022, the Company reported a loss of $15,405 and $21,422 on the Morphic investment. For the three and six months ended June 30, 2021, the Company reported a loss of $4,918 and a gain of $19,906 on the Morphic investment. As of June 30, 2022 and December 31, 2021, the carrying value of the Company’s investment in Morphic was $18,119 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 June 30, 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 June 30, 2022 and December 31, 2021, the carrying value of the Company’s investment in Ajax was $1,700.

(e) Structure Therapeutics

In July 2021, the Company purchased 494,035 shares of Series B preferred stock of Structure Therapeutics for $2,000 in cash. In April 2022, the Company purchased an additional 148,210 shares of Series B preferred stock for $600 in cash.

As Structure Therapeutics 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 Structure Therapeutics 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 Structure Therapeutics. The carrying value of Structure Therapeutics was $2,065 and $1,887 as of June 30, 2022 and December 31, 2021, respectively. The Company has no obligation to fund Structure Therapeutics losses in excess of its initial investment. For the three and six months ended June 30, 2022, the Company recorded losses of $294 and $421, respectively, on the Structure Therapeutics investment. For the three and six months ended June 30, 2021, the Company reported no gains or losses on the Structure Therapeutics investment.

(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 June 30, 2022. For the three and six months ended June 30, 2022, the Company recorded no gain or loss on the Eonix investment.