The tables below present information about the Company’s financial assets and liabilities that are measured and carried at fair value and indicate the level within the fair value hierarchy of the valuation techniques it utilizes to determine such fair value:


	Fair Value Measurement as of December 31, 2024
	Total		Level 1		Level 2		Level 3
	(in thousands)
Assets
Money market funds	$	455,535	$	455,535	$	—	$	—
Government and government agency bonds		279,899		—		279,899		—
Corporate bonds		93,727		—		93,727		—
Strategic investments		3,710		2,710		—		1,000
Certificates of deposit		11,319		—		11,319		—
Total assets	$	844,190	$	458,245	$	384,945	$	1,000

Liabilities
Contingent consideration	$	47,400	$	—	$	—	$	47,400
Total liabilities	$	47,400	$	—	$	—	$	47,400


	Fair Value Measurement as of December 31, 2023
	Total		Level 1		Level 2		Level 3
	(in thousands)
Assets
Money market funds	$	63,919	$	63,919	$	—	$	—
Commercial paper		113,362		—		113,362		—
Government and government agency bonds		1,001,137		—		1,001,137		—
Corporate bonds		130,380		—		130,380		—
Strategic investments		6,527		5,527		—		1,000
Certificates of deposit		56,621		—		56,621		—
Total assets	$	1,371,946	$	69,446	$	1,301,500	$	1,000

Liabilities
Contingent consideration	$	38,100	$	—	$	—	$	38,100
Total liabilities	$	38,100	$	—	$	—	$	38,100

The Company’s assets with a fair value categorized as Level 1 within the fair value hierarchy include money market funds and the Company's strategic investment in a biotechnology company listed on the Nasdaq Global Market (the “Nasdaq”). The Company's $2.7 million strategic investment is included in other non-current assets in the Company's consolidated balance sheets, with changes in fair value being recorded within other income (expense), net in the consolidated statements of comprehensive income (loss).

The Company's assets with a fair value categorized as Level 2 within the fair value hierarchy consist of commercial paper, government and government agency bonds, corporate bonds and certificates of deposit. The Company's commercial paper, government and government agency bonds, corporate bonds and certificates of deposit have been initially valued at the transaction price and subsequently valued at the end of each reporting period utilizing third-party pricing services. The Company uses observable market inputs to determine value, which primarily consist of reportable trades. Certain short-term investments with maturities of less than three months at the date of acquisition are presented as cash equivalents on the consolidated balance sheets as of December 31, 2024 and 2023.

The Company’s assets with a fair value categorized as Level 3 within the fair value hierarchy consist of a strategic investment in a private biotechnology company whose fair value measurement was based upon significant inputs not observable in the market and therefore represented a Level 3 measurement.

The Company’s contingent consideration liability with a fair value categorized as Level 3 within the fair value hierarchy relates to the regulatory-related contingent payments to Myonexus selling shareholders as well as to an academic institution under a separate license agreement that meets the definition of a derivative. For more information related to Myonexus, please read Note 3, License and Collaboration Agreements. The contingent consideration liability was estimated using an income approach based on the probability-weighted expected cash flows that incorporated industry-based probability adjusted assumptions relating to the achievement of the milestone and thus the likelihood of making the payments. This fair value measurement was based upon significant inputs not observable in the market and therefore represented a Level 3 measurement. Significant changes, which increase or decrease the probabilities of achieving the milestone or shorten or lengthen the time required to achieve the milestone, would result in a corresponding increase or decrease in the fair value of the liability. At the end of each reporting period, the fair value is adjusted to reflect the most current assumptions through earnings.

The Company assesses its financial assets measured at fair value on a recurring basis and transfers its financial assets between the relevant fair value hierarchies at the end of each reporting period, as needed. There were no transfers into or out of Level 3 during the year ended December 31, 2024. During the year ended December 31, 2023, the Company's strategic investment in a formerly private biotechnology company transferred into Level 1 from Level 3 as a result of the biotechnology company's listing on the Nasdaq. The following table represents a roll-forward of the fair value of Level 3 financial assets for each of the periods indicated:


	As of December 31,
	2024		2023
	(in thousands)
Fair value, beginning of year	$	1,000	$	31,000
Additions		—		4,000
Transfers out of Level 3		—		(4,000	)
Changes in estimated fair value		—		(30,000	)
Fair value, end of year	$	1,000	$	1,000

At the end of each reporting period, the fair value of the Company's strategic investments that are not publicly traded securities are adjusted if the issuers issue similar or identical securities or when there is a triggering event for impairment. There were no valuation measurement events related to the fair value of the Company's Level 3 strategic investments during the year ended December 31, 2024, as no impairment indicators were identified nor were similar securities issued. During the year ended December 31, 2023, the Company impaired its investment in Series A preferred stock of Lacerta Therapeutics, Inc. (“Lacerta”) after comparing the fair value of the Lacerta strategic investment to its carrying value, resulting in an impairment loss of $30.0 million. The Company's assessment considered entity-specific impairment indicators, such as the future business prospects of Lacerta's existing programs and expected future cash flows. The fair value as of December 31, 2023 was estimated based on the expectation that the Company would realize no future cash flows associated with its investment in Lacerta. The impairment loss is included in other income (expense), net within the consolidated statements of comprehensive income (loss). During the year ended December 31, 2022, the company recorded impairment losses of $2.6 million related to its strategic investments.

The following table represents a roll-forward of the fair value of Level 3 financial liabilities for each of the periods indicated:


	As of December 31,
	2024			2023
	(in thousands)
Fair value, beginning of year	$	38,100		$	36,900
Change in estimated fair value		9,500			2,000
Liabilities terminated		(200	)		(800	)
Fair value, end of year	$	47,400		$	38,100

A net increase of $9.3 million and $1.2 million were recorded in other income (expense), net in the consolidated statement of comprehensive income (loss) during the years ended December 31, 2024 and 2023, respectively, to account for the change in fair value and termination of liabilities of the Company's existing contingent consideration liabilities. These changes were a result of updates made to certain inputs and assumptions impacting the probability-weighted expected cash flows, principally the probability of success of the underlying programs and the discount rate utilized to determine the present value of future payments to be made, partially offset by the termination of a license agreement with an academic institution that included an embedded derivative during both years ended December 31, 2024 and 2023. As of December 31, 2024 and 2023, the remaining contingent consideration was recorded as a non-current liability on the Company's consolidated balance sheets.

The carrying amounts reported in the consolidated balance sheets for cash and cash equivalents, accounts receivable, net and accounts payable approximated fair value because of the immediate or short-term maturity of these financial instruments. For fair value information related to the Company’s debt facilities, please read Note 13, Indebtedness.