Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 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:

		March 31, 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	$	98,694	$	-	$	-		$	98,694
U.S. government and agency securities	Level 2		23,981		6		-			23,987
Corporate debt securities	Level 2		3,465		-		(3	)		3,462
Total cash equivalents			126,140		6		(3	)		126,143
Short-term marketable securities:
U.S. government and agency securities	Level 2		170,445		9		(1,859	)		168,595
Corporate debt securities	Level 2		20,429		-		(174	)		20,255
Total short-term marketable securities			190,874		9		(2,033	)		188,850
Long-term marketable securities:
U.S. government and agency securities	Level 2		5,943		-		(118	)		5,825
Total long-term marketable securities			5,943		-		(118	)		5,825
Other assets	Level 3		367		-		-			367
Total financial assets		$	323,324	$	15	$	(2,154	)	$	321,185
Financial liabilities:
Short-term financial liabilities:
Contingent consideration	Level 3	$	57,224	$	-	$	-		$	57,224
Total short-term financial liabilities			57,224		-		-			57,224
Long-term financial liabilities:
Contingent consideration	Level 3		98,615		-		-			98,615
Success payment liabilities	Level 3		15,667		-		-			15,667
Total long-term financial liabilities			114,282		-		-			114,282
Total financial liabilities		$	171,506	$	-	$	-		$	171,506

		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)
March 31, 2023
U.S. government and agency securities	$	24,062	$	(256	)	$	124,811	$	(1,721	)	$	148,873	$	(1,977	)
Corporate debt securities		6,182		(9	)		16,980		(168	)		23,162		(177	)
Total	$	30,244	$	(265	)	$	141,791	$	(1,889	)	$	172,035	$	(2,154	)
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

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:

	March 31, 2023		December 31, 2022
Unobservable Input	Cobalt	Harvard	Cobalt	Harvard
Expected stock price volatility	70%	70%	70%	70%
Expected term (years)	15.9	8.0	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:

	March 31, 2023		December 31, 2022
Unobservable Input	Range	Weighted-Average	Range	Weighted-Average
Discount rates	13.2% – 15.0%	14.6%	13.4% – 15.1%	14.6%
Probability of milestone achievement	5.0% – 85.0%	36.0%	5.0% – 85.0%	36.0%