Fair Value Measurements and Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2024

The following table summarizes assets and liabilities measured at fair value on a recurring basis by level within the fair value hierarchy (in thousands):


	As of March 31, 2024								As of December 31, 2023
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Assets:


Money market funds(1)	$	581,666	$	—	$	—	$	581,666	$	157,420	$	—	$	—	$	157,420









Available for sale debt securities(2)	—		—		29,000		29,000		—		—		18,300		18,300



Total current assets	$	581,666	$	—	$	29,000	$	610,666	$	157,420	$	—	$	18,300	$	175,720

Equity securities(3)	277,217		—		—		277,217		199,190		—		297		199,487

Available for sale debt securities(2)	—		—		473,700		473,700		—		—		437,100		437,100




Royalty at fair value(3)	—		—		—		—		—		—		1,778		1,778
Total non-current assets	$	277,217	$	—	$	473,700	$	750,917	$	199,190	$	—	$	439,175	$	638,365

Liabilities:






Funding commitments(4)	—		—		(3,220)		(3,220)		—		—		(900)		(900)
Total non-current liabilities	$	—	$	—	$	(3,220)	$	(3,220)	$	—	$	—	$	(900)	$	(900)

(1)Recorded within Cash and cash equivalents on the condensed consolidated balance sheets.

(2)Reflects the fair value of the Development Funding Bonds and the funded Cytokinetics Commercial Launch Funding.

(3)Fair values reflected within Level 3 are related to equity securities and a revenue participation right acquired from ApiJect Holdings, Inc. (“ApiJect”). We estimated the fair values related to both instruments using a discounted cash flow with Level 3 inputs including forecasted cash flows and the weighted average cost of capital. The revenue participation right was recorded within Other assets on the condensed consolidated balance sheet as of December 31, 2023. See Note 7–Non-Consolidated Affiliates for additional discussion.

(4)Related to the fair value of the Cytokinetics Funding Commitments recorded within Other liabilities on the condensed consolidated balance sheets.

Summary of Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation

The tables presented below summarize the change in the combined fair value (current and non-current) of Level 3 financial instruments (in thousands):


	For the Three Months Ended March 31, 2024
	Equity Securities		Debt Securities		Funding Commitments		Royalty at Fair Value
Balance at the beginning of the period	$	297	$	455,400	$	(900)	$	1,778


Losses on equity securities	(297)		—		—		—


Gains/(losses) on available for sale debt securities included in earnings	—		48,740		(2,320)		—
Other non-operating expense	—		—		—		(1,778)


Redemptions(1)	—		(1,440)		—		—
Balance at the end of the period	$	—	$	502,700	$	(3,220)	$	—

(1)Amount relates to the quarterly repayment from the first tranche of the Cytokinetics Commercial Launch Funding.


	For the Three Months Ended March 31, 2023
	Equity Securities		Debt Securities		Funding Commitments		Derivative Instruments(1)		Royalty at Fair Value
Balance at the beginning of the period	$	8,472	$	227,600	$	(2,500)	$	96,610	$	14,500


Losses on equity securities	(437)		—		—		—		—
Gains on derivative financial instruments	—		—		—		7,090		—

Gains/(losses) on available for sale debt securities included in earnings	—		42,100		(9,800)		—		—
Other non-operating expense	—		—		—		—		(256)
Settlements	—		—		—		(94,320)		—


Balance at the end of the period	$	8,035	$	269,700	$	(12,300)	$	9,380	$	14,244

(1)Represents the embedded derivative instruments related to our option to accelerate the zavegepant milestone payments into a single payment. In March 2023, the U.S. Food and Drug Administration (“FDA”) approved Zavzpret, the intranasal formulation of zavegepant, and we received a $475 million milestone payment which resulted in partial settlement of the derivative instruments.

Summary of Fair Value Disclosure of Asset and Liability Not Measured at Fair Value

The estimated fair values and related carrying values of the current and non-current portions of financial royalty assets are presented below (in thousands):


	As of March 31, 2024				As of December 31, 2023
Financial Royalty Assets	Fair Value		Carrying Value, Net		Fair Value		Carrying Value, Net
Current	$	660,482	$	660,482	$	738,438	$	738,438
Non-current	18,546,190		13,465,407		19,077,706		14,088,655
Total financial royalty assets	$	19,206,672	$	14,125,889	$	19,816,144	$	14,827,093