Fair Value Measurements

6 Months Ended

Sep. 30, 2022

Fair Value MeasurementsThe preparation of the Company’s unaudited condensed consolidated financial statements in accordance with U.S. GAAP requires certain assets and liabilities to be reflected at their fair value. Fair value is defined as the exchange price, or exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Financial assets and liabilities carried at fair value are to be

classified and disclosed into one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable. These levels are as follows:

•Level 1—inputs, which include unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access;

•Level 2—inputs, which include observable inputs other than Level 1 inputs, such as quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the asset or liability; and

•Level 3—inputs, which include unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the underlying asset or liability. Level 3 assets and liabilities include those whose fair value measurements are determined using pricing models, discounted cash flow methodologies, or similar valuation techniques, as well as significant management judgement or estimation.

For a description of the methods and assumptions that are used to estimate the fair value and determine the fair value hierarchy classification of each class of the Company’s financial instruments, see Note 2, “Summary of Significant Accounting Policies,” and Note 4, “Fair Value Measurements,” to the Company’s audited consolidated financial statements included in its Annual Report for the fiscal year ended March 31, 2022, filed with the SEC on May 11, 2022.

Financial Instruments Measured at Fair Value on a Recurring Basis

The following table summarizes the Company’s financial assets measured at fair value on a recurring basis and their respective input levels based on the fair value hierarchy (in thousands):


	Fair Value Measurement Using:
	Level 1		Level 2		Level 3		Total
As of September 30, 2022
Assets:
Money market funds (1)	$	165	$	—	$	—	$	165
Commercial paper (2)	—		154,164		—		154,164

U.S. treasury securities (3)	1,930		—		—		1,930

Total assets	$	2,095	$	154,164	$	—	$	156,259


	Fair Value Measurement Using:
	Level 1		Level 2		Level 3		Total
As of March 31, 2022
Assets:
Money market funds (1)	$	69	$	—	$	—	$	69
Commercial paper (2)	—		219,772		—		219,772



Total assets	$	69	$	219,772	$	—	$	219,841

(1) Included in cash and cash equivalents.

(2) Includes $126.8 million in cash and cash equivalents and $27.4 million in marketable securities as of September 30, 2022. Includes $192.3 million in cash and cash equivalents and $27.5 million in marketable securities as of March 31, 2022.

(3) Included in marketable securities, non-current.

There were no liabilities measured at fair value on a recurring basis as of September 30, 2022 or March 31, 2022.

The Company does not intend to sell its marketable securities that are in an unrealized loss position, and it is not more likely than not that the Company will be required to sell its securities before recovery of their amortized cost basis, which may be at maturity. There were no realized gains or realized losses on marketable securities for the periods presented.

Financial Instruments Not Measured at Fair Value on a Recurring Basis

The Company recorded the cost share advance from Pfizer, which was included in Level 2 of the fair value hierarchy, at its estimated fair value as of the transaction date. As discussed in Note 8(A), on the transaction date, the cost share advance from Pfizer was discounted to fair value using the Company’s estimated incremental borrowing rate over the period in which the cost share advance was expected to be utilized. The recorded amount was reduced each reporting period by the amount of Allowable Expenses applied to the cost share advance. As of September 30, 2022, the cost share advance from Pfizer has been fully utilized and no amounts remained outstanding on the Company’s unaudited condensed consolidated balance sheet as of September 30, 2022. There were no non-recurring fair value assets as of September 30, 2022 and March 31, 2022.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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