Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2021

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, 2021
	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	$	656,524	$	-	$	-		$	656,524
Corporate debt securities	Level 2		180		-		-			180
Total cash equivalents			656,704		-		-			656,704
Short-term marketable securities:
U.S. government and agency securities	Level 2		124,906		21		-			124,927
Corporate debt securities	Level 2		52,776		4		(11	)		52,769
Total short-term marketable securities			177,682		25		(11	)		177,696
Long-term marketable securities:
U.S. government and agency securities	Level 2		74,464		7		(4	)		74,467
Corporate debt securities	Level 2		3,471		-		(4	)		3,467
Total long-term marketable securities			77,935		7		(8	)		77,934
Total financial assets		$	912,321	$	32	$	(19	)	$	912,334
Financial liabilities:
Short-term financial liabilities:
Success payment liabilities	Level 3	$	5,000	$	-	$	-		$	5,000
Long-term financial liabilities:
Contingent consideration	Level 3		140,457		-		-			140,457
Success payment liabilities	Level 3		103,963		-		-			103,963
Total financial liabilities		$	249,420	$	-	$	-		$	249,420

		December 31, 2020
	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	$	48,359	$	-	$	-		$	48,359
U.S. government and agency securities	Level 2		40,727		1		(1	)		40,727
Corporate debt securities	Level 2		1,138		-		-			1,138
Total cash equivalents			90,224		1		(1	)		90,224
Short-term marketable securities:
U.S. government and agency securities	Level 2		244,637		30		(5	)		244,662
Corporate debt securities	Level 2		8,798		-		(2	)		8,796
Total short-term marketable securities			253,435		30		(7	)		253,458
Long-term marketable securities:
U.S. government and agency securities	Level 2		33,724		7		-			33,731
Total long-term marketable securities			33,724		7		-			33,731
Total financial assets		$	377,383	$	38	$	(8	)	$	377,413
Financial liabilities:
Long-term financial liabilities:
Contingent consideration	Level 3	$	121,901	$	-	$	-		$	121,901
Success payment liabilities	Level 3		76,494		-		-			76,494
Total financial liabilities		$	198,395	$	-	$	-		$	198,395

Summary of Changes in Estimated Fair Value of 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, 2020		$	121,901	$	64,694		$	11,800
Changes in fair value - expense (gain)			11,393		91,757			23,900
Balance as of March 31, 2021			133,294		156,451			35,700
Changes in fair value - expense (gain)			7,163		(66,632	)		(16,556	)
Balance as of June 30, 2021		$	140,457	$	89,819		$	19,144

Cobalt Contingent Consideration

Fair Value of Contingent Consideration and Success Payment Liabilities Calculated Using Unobservable Inputs

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

	June 30, 2021		December 31, 2020
Unobservable Input	Range	Weighted-Average	Range	Weighted-Average
Discount rates	7.2% - 8.6%	7.7%	10.5% - 10.8%	10.6%
Probability of milestone achievement	5.0% - 65.0%	27.9%	2.5% - 65.0%	27.6%

Success Payment Liabilities

Fair Value of Contingent Consideration and Success Payment Liabilities Calculated Using Unobservable Inputs

The fair values of the Cobalt and Harvard success payment liabilities were calculated using the following unobservable inputs:

	June 30, 2021			December 31, 2020
Unobservable Input	Cobalt	Harvard		Cobalt	Harvard
Expected stock price volatility	70.0%	70.0%		70.0%	70.0%
Expected term (years)	17.6		9.7	18.1	10.2