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Fair Value Measurements
 9 Months Ended
Sep. 30, 2024
Fair Value Disclosures [Abstract]  
Fair Value Measurements Fair Value Measurements
The Company determines the fair value of financial assets and liabilities using the fair value hierarchy, which establishes three levels of inputs that may be used to measure fair value, as follows:
•Level 1: Inputs that include quoted prices in active markets for identical assets and liabilities.
•Level 2: Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices 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 assets or liabilities.
•Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
The carrying amounts of the Company’s financial instruments, including accounts payable and accrued liabilities, approximate fair value due to their relatively short maturities.
Cash Equivalents and Available-for-Sale Securities
The following tables summarize the Company’s Level 1 and Level 2 financial assets measured at fair value on a recurring basis within the fair value hierarchy as of September 30, 2024 and December 31, 2023 (in thousands):
September 30, 2024
Valuation
Hierarchy		Amortized
Cost		Gross
Unrealized
Holding
Gains		Gross
Unrealized
Holding
Losses 		Aggregate
Fair Value
Assets:
Money market funds(1)
Level 1$118,278 $— $— $118,278 
U.S. government treasuriesLevel 2691,089 1,469 (25)692,533 
U.S. government agency bonds and discount notesLevel 253,529 53 (1)53,581 
Asset-backed securities Level 237,083 278 — 37,361 
Corporate bondsLevel 2277,938 1,235 (1)279,172 
Equity securitiesLevel 1N/AN/AN/A5,517 
Total financial assets$1,177,917 $3,035 $(27)$1,186,442 
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(1)Includes $21.0 million of restricted cash equivalents.

December 31, 2023
Valuation
Hierarchy		Amortized
Cost		Gross
Unrealized
Holding
Gains		Gross
Unrealized
Holding
Losses 		Aggregate
Fair Value
Assets:
Money market funds(1)
Level 1$278,187 $— $— $278,187 
U.S. government treasuriesLevel 21,162,124 1,017 (80)1,163,061 
U.S. government agency bonds and discount notesLevel 2181,189 27 (50)181,166 
Equity securitiesLevel 1N/AN/AN/A 9,853 
Total financial assets$1,621,500 $1,044 $(130)$1,632,267 
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(1)Includes $19.7 million of restricted cash equivalents.
Accrued interest receivable excluded from both the fair value and amortized cost basis of the available-for-sale debt securities are presented within prepaid expenses and other current assets in the unaudited condensed consolidated balance sheets. Accrued interest receivable amounted to $5.3 million and $4.0 million as of September 30, 2024 and December 31, 2023, respectively. The Company did not write off any accrued interest receivable during the nine months ended September 30, 2024 and 2023.
The Company recognized total net unrealized gains of $3.0 million and $0.9 million in accumulated other comprehensive gain (loss) as of September 30, 2024 and December 31, 2023, respectively. The gross unrealized losses related to U.S. government treasuries, U.S. government agency bonds and discount notes, and securities issued by institutions with investment-grade credit ratings as of September 30, 2024 and December 31, 2023 were nominal. The Company determined that the gross unrealized losses on the investments as of September 30, 2024 were temporary in nature. The Company currently does not intend, and it is highly unlikely that it will be required, to sell these securities before recovery of their amortized cost basis. As of September 30, 2024, no securities have contractual maturities (or weighted average life for asset-backed securities) of longer than two years.
As of September 30, 2024, the Company’s equity investment consisted solely of ordinary shares of Brii Biosciences Limited (“Brii Bio Parent”). The equity securities of Brii Bio Parent are listed on the The Stock Exchange of Hong Kong Limited, are considered to be marketable equity securities, and measured at fair value at each reporting date. As of September 30, 2024, the Company remeasured the equity investment at a fair value of $5.5 million. The Company recognized an unrealized gain of $1.1 million for the three months ended September 30, 2024, and an unrealized loss of $4.4 million for the nine months ended September 30, 2024, respectively, and unrealized losses of $2.7 million and $20.9 million for the three and nine months ended September 30, 2023, respectively, as other income in the unaudited condensed consolidated statement of operations. For the three and nine months ended September 30, 2024 and 2023, the unrealized gains or losses related to foreign currency translation were not material.
Contingent Consideration Obligations in connection with Business Combinations
Contingent consideration obligations in connection with business combinations include potential milestone payments in connection with the acquisition of Humabs Biomed SA (“Humabs”). The Company classifies the contingent consideration as Level 3 financial liabilities within the fair value hierarchy as of September 30, 2024 and December 31, 2023.
The estimated fair value of the contingent consideration related to the Humabs acquisition was determined by calculating the probability-weighted clinical, regulatory and commercial milestone payments based on the assessment of the likelihood and estimated timing that certain milestones would be achieved. As of September 30, 2024, the Company calculated the estimated fair value of the remaining clinical and regulatory milestones related to tobevibart (formerly as VIR-3434), an investigational subcutaneously administered HBV-neutralizing monoclonal antibody, or mAb, using the following significant unobservable inputs:
Unobservable input
Range
(Weighted-Average)1
Discount rates
10.6% - 11.8% (11.1%)
Probability of achievement
16.2% - 80.0% (58.2%)
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(1)Unobservable inputs were weighted based on the relative fair value of the clinical and regulatory milestone payments.
For the commercial milestones, the Company used a Monte Carlo simulation. As of September 30, 2024, the Monte Carlo simulation assumed a commercial product launch and associated discrete revenue forecasts, as well as the following significant unobservable inputs for the remaining commercial milestones related to tobevibart:
Unobservable inputValue
Volatility70.0%
Discount rate10.0%
Probability of achievement47.4%
The discount rate captures the credit risk associated with the payment of the contingent consideration when earned and due. As of September 30, 2024 and December 31, 2023, the estimated fair value of the contingent consideration related to the Humabs acquisition was $33.2 million and $26.0 million, respectively, with changes in the estimated fair value recorded in research and development expenses in the unaudited condensed consolidated statements of operations.
The estimated fair value of the contingent consideration related to the Humabs acquisition involves significant estimates and assumptions that give rise to measurement uncertainty.
The following table sets forth the changes in the estimated fair value of the Company’s contingent consideration obligations (in thousands):
Contingent
Consideration
Balance at December 31, 2023$25,961 
Changes in fair value7,209 
Balance at September 30, 2024$33,170