Fair Value Measurements (Tables)

9 Months Ended

Sep. 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:

		September 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	$	379,336	$	-	$	-		$	379,336
Corporate debt securities	Level 2		121		-		-			121
Total cash equivalents			379,457		-		-			379,457
Short-term marketable securities:
U.S. government and agency securities	Level 2		76,538		18		-			76,556
Corporate debt securities	Level 2		93,504		4		(23	)		93,485
Total short-term marketable securities			170,042		22		(23	)		170,041
Long-term marketable securities:
U.S. government and agency securities	Level 2		226,861		24		(81	)		226,804
Corporate debt securities	Level 2		35,621		-		(24	)		35,597
Total long-term marketable securities			262,482		24		(105	)		262,401
Total financial assets		$	811,981	$	46	$	(128	)	$	811,899
Financial liabilities:
Short-term financial liabilities:
Contingent consideration	Level 3	$	43,459	$	-	$	-		$	43,459
Success payment liabilities	Level 3		5,000		-		-			5,000
Total short-term financial liabilities			48,459		-		-			48,459
Long-term financial liabilities:
Contingent consideration	Level 3		88,522		-		-			88,522
Success payment liabilities	Level 3		129,192		-		-			129,192
Total long-term financial liabilities			217,714		-		-			217,714
Total financial liabilities		$	266,173	$	-	$	-		$	266,173

		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

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, 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
Changes in fair value - expense (gain)		(8,476	)		21,790			3,439
Balance as of September 30, 2021	$	131,981		$	111,609		$	22,583

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:

	September 30, 2021		December 31, 2020
Unobservable Input	Range	Weighted-Average	Range	Weighted-Average
Discount rates	10.8% - 11.6%	11.1%	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

Summary of Estimated Fair Value of Liabilities using Unobservable Inputs

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

	September 30, 2021			December 31, 2020
Unobservable Input	Cobalt	Harvard		Cobalt	Harvard
Expected stock price volatility	70%	70%		70%	70%
Expected term (years)	17.4		9.5	18.1	10.2