Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2023

Fair Value Assets and Liabilities Measured on Recurring Basis

The following tables summarize the Company’s financial assets and liabilities measured at fair value on a recurring basis based on the three-tier fair value hierarchy:

		June 30, 2023
	Valuation Hierarchy	Amortized Cost		Gross Unrealized Holding Gains		Gross Unrealized Holding Losses			Estimated Fair Value
		(in thousands)
Financial assets:
Cash equivalents:
Money market funds	Level 1	$	86,623	$	-	$	-		$	86,623
U.S. government and agency securities	Level 2		45,700		12		-			45,712
Total cash equivalents			132,323		12		-			132,335
Short-term marketable securities:
U.S. government and agency securities	Level 2		142,940		15		(868	)		142,087
Corporate debt securities	Level 2		10,065		-		(24	)		10,041
Total short-term marketable securities			153,005		15		(892	)		152,128
Other assets	Level 3		369		-		-			369
Total financial assets		$	285,697	$	27	$	(892	)	$	284,832
Financial liabilities:
Short-term financial liabilities:
Contingent consideration	Level 3	$	58,417	$	-	$	-		$	58,417
Total short-term financial liabilities			58,417		-		-			58,417
Long-term financial liabilities:
Contingent consideration	Level 3		103,317		-		-			103,317
Success payment liabilities	Level 3		36,451		-		-			36,451
Total long-term financial liabilities			139,768		-		-			139,768
Total financial liabilities		$	198,185	$	-	$	-		$	198,185

		December 31, 2022
	Valuation Hierarchy	Amortized Cost		Gross Unrealized Holding Gains		Gross Unrealized Holding Losses			Estimated Fair Value
		(in thousands)
Financial assets:
Cash equivalents:
Money market funds	Level 1	$	114,363	$	-	$	-		$	114,363
U.S. government and agency securities	Level 2		40,532		10		-			40,542
Corporate debt securities	Level 2		9,796		1		(2	)		9,795
Total cash equivalents			164,691		11		(2	)		164,700
Short-term marketable securities:
U.S. government and agency securities	Level 2		222,435		2		(3,711	)		218,726
Corporate debt securities	Level 2		28,836		-		(364	)		28,472
Total short-term marketable securities			251,271		2		(4,075	)		247,198
Long-term marketable securities:
U.S. government and agency securities	Level 2		10,314		-		(263	)		10,051
Total long-term marketable securities			10,314		-		(263	)		10,051
Other assets	Level 3		369		-		-			369
Total financial assets		$	426,645	$	13	$	(4,340	)	$	422,318
Financial liabilities:
Short-term financial liabilities:
Contingent consideration	Level 3	$	55,345	$	-	$	-		$	55,345
Total short-term financial liabilities			55,345		-		-			55,345
Long-term financial liabilities:
Contingent consideration	Level 3		95,034		-		-			95,034
Success payment liabilities	Level 3		21,007		-		-			21,007
Total long-term financial liabilities			116,041		-		-			116,041
Total financial liabilities		$	171,386	$	-	$	-		$	171,386

Summary of Estimated Fair Value Available For Sale Debt Securities Continuous Unrealized Loss Position

The following table summarizes available-for-sale debt securities in a continuous unrealized loss position for less than and greater than twelve months for the periods presented:

	Less than 12 months					12 months or greater					Total
	Fair value		Unrealized losses			Fair value		Unrealized losses			Fair value		Unrealized losses
	(in thousands)
June 30, 2023
U.S. government and agency securities	$	5,431	$	(45	)	$	81,549	$	(823	)	$	86,980	$	(868	)
Corporate debt securities		-		-			10,041		(24	)		10,041		(24	)
Total	$	5,431	$	(45	)	$	91,590	$	(847	)	$	97,021	$	(892	)
December 31, 2022
U.S. government and agency securities	$	49,253	$	(673	)	$	172,845	$	(3,301	)	$	222,098	$	(3,974	)
Corporate debt securities		13,333		(16	)		19,664		(350	)		32,997		(366	)
Total	$	62,586	$	(689	)	$	192,509	$	(3,651	)	$	255,095	$	(4,340	)

Changes in Estimated Fair Value of Level 3 Financial Liabilities

The following table sets forth a summary of the changes in the fair value of the Company’s Level 3 financial liabilities:

	Contingent Consideration		Cobalt Success Payment Liability			Harvard Success Payment Liability
	(in thousands)
Balance as of December 31, 2022	$	150,379	$	19,016		$	1,991
Changes in fair value – expense (gain)		5,460		(4,760	)		(580	)
Balance as of March 31, 2023		155,839		14,256			1,411
Changes in fair value – expense		5,895		18,505			2,279
Balance as of June 30, 2023	$	161,734	$	32,761		$	3,690

Success Payment Liabilities

Summary of Estimated Fair Value of Liabilities using Unobservable Inputs

The fair values of the Cobalt Success Payments and Harvard Success Payments were calculated using the following unobservable inputs:

	June 30, 2023		December 31, 2022
Unobservable Input	Cobalt	Harvard	Cobalt	Harvard
Expected stock price volatility	72.5%	72.5%	70.0%	70.0%
Expected term (years)	15.6	7.7	16.1	8.2

Cobalt Contingent Consideration

Summary of Estimated Fair Value of Liabilities using Unobservable Inputs

The fair value of the Cobalt Contingent Consideration was calculated using the following unobservable inputs:

	June 30, 2023		December 31, 2022
Unobservable Input	Range	Weighted-Average	Range	Weighted-Average
Discount rates	13.0% – 15.1%	13.8%	13.4% – 15.1%	14.6%
Probability of milestone achievement	5.0% – 85.0%	36.0%	5.0% – 85.0%	36.0%