Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2022

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, 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	$	74,981	$	-	$	-		$	74,981
U.S. government and agency securities	Level 2		54,644		7		(2	)		54,649
Corporate debt securities	Level 2		200		-		-			200
Total cash equivalents			129,825		7		(2	)		129,830
Short-term marketable securities:
U.S. government and agency securities	Level 2		278,844		5		(4,859	)		273,990
Corporate debt securities	Level 2		49,096		-		(679	)		48,417
Total short-term marketable securities			327,940		5		(5,538	)		322,407
Long-term marketable securities:
U.S. government and agency securities	Level 2		26,709		-		(886	)		25,823
Total long-term marketable securities			26,709		-		(886	)		25,823
Other assets	Level 3		370		-		-			370
Total financial assets		$	484,844	$	12	$	(6,426	)	$	478,430
Financial liabilities:
Short-term financial liabilities:
Contingent consideration	Level 3	$	59,429	$	-	$	-		$	59,429
Total short-term financial liabilities			59,429		-		-			59,429
Long-term financial liabilities:
Contingent consideration	Level 3		81,701		-		-			81,701
Success payment liabilities	Level 3		35,710		-		-			35,710
Total long-term financial liabilities			117,411		-		-			117,411
Total financial liabilities		$	176,840	$	-	$	-		$	176,840

		December 31, 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	$	224,671	$	-	$	-		$	224,671
Corporate debt securities	Level 2		2,345		-		-			2,345
Total cash equivalents			227,016		-		-			227,016
Short-term marketable securities:
U.S. government and agency securities	Level 2		162,854		1		(195	)		162,660
Corporate debt securities	Level 2		135,441		-		(134	)		135,307
Total short-term marketable securities			298,295		1		(329	)		297,967
Long-term marketable securities:
U.S. government and agency securities	Level 2		176,492		-		(925	)		175,567
Corporate debt securities	Level 2		20,427		-		(113	)		20,314
Total long-term marketable securities			196,919		-		(1,038	)		195,881
Other assets	Level 3		426		-		-			426
Total financial assets		$	722,656	$	1	$	(1,367	)	$	721,290
Financial liabilities:
Short-term financial liabilities:
Contingent consideration	Level 3	$	51,382	$	-	$	-		$	51,382
Success payment liabilities	Level 3		5,000		-		-			5,000
Total short-term financial liabilities			56,382		-		-			56,382
Long-term financial liabilities:
Contingent consideration	Level 3		102,361		-		-			102,361
Success payment liabilities	Level 3		97,525		-		-			97,525
Total long-term financial liabilities			199,886		-		-			199,886
Total financial liabilities		$	256,268	$	-	$	-		$	256,268

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)
September 30, 2022
U.S. government and agency securities	$	110,150	$	(1,425	)	$	193,970	$	(4,322	)	$	304,120	$	(5,747	)
Corporate debt securities		14,000		(272	)		34,617		(407	)		48,617		(679	)
Total	$	124,150	$	(1,697	)	$	228,587	$	(4,729	)	$	352,737	$	(6,426	)
December 31, 2021
U.S. government and agency securities	$	329,883	$	(1,120	)	$	-	$	-		$	329,883	$	(1,120	)
Corporate debt securities		156,662		(247	)		-		-			156,662		(247	)
Total	$	486,545	$	(1,367	)	$	-	$	-		$	486,545	$	(1,367	)

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, 2021	$	153,743		$	88,353		$	14,172
Changes in fair value - gain		(528	)		(46,823	)		(8,087	)
Balance as of March 31, 2022		153,215			41,530			6,085
Changes in fair value - gain		(3,830	)		(12,073	)		(2,025	)
Balance as of June 30, 2022		149,385			29,457			4,060
Changes in fair value - expense (gain)		(8,255	)		2,439			(246	)
Balance as of September 30, 2022	$	141,130		$	31,896		$	3,814

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, 2022		December 31, 2021
Unobservable Input	Cobalt	Harvard	Cobalt	Harvard
Expected stock price volatility	70%	70%	70%	70%
Expected term (years)	16.4	8.5	17.1	9.2

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:

	September 30, 2022		December 31, 2021
Unobservable Input	Range	Weighted-Average	Range	Weighted-Average
Discount rates	18.0% - 20.7%	19.2%	10.9% - 11.6%	11.2%
Probability of milestone achievement	3.3% - 85.0%	34.5%	5.0% - 75.0%	33.8%