The Company has certain financial assets and liabilities that are recorded at fair value which have been classified as Level 1, 2 or 3 within the fair value hierarchy as described in the accounting standards for fair value measurements.

During the six months ended June 30, 2025, there were no transfers into or out of Level 3. 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 June 30, 2025
	Total		Level 1		Level 2		Level 3
	(in thousands)
Assets
Money market funds	$	153,270	$	153,270	$	—	$	—
Commercial paper		3,534		—		3,534		—
Government and government agency bonds		255,065		—		255,065		—
Corporate bonds		55,208		—		55,208		—
Strategic investments*		195,522		190,091		—		5,431
Certificates of deposit		10,338		—		10,338		—
Deferred compensation plan assets		475		475		—		—
Total assets	$	673,412	$	343,836	$	324,145	$	5,431

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


	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

* The balance at June 30, 2025 includes an investment with a fair value of $188.4 million, which is subject to a contractual sale restriction that expires in August 2025.

The Company’s assets with a fair value categorized as Level 1 within the fair value hierarchy include money market funds, the Company's strategic investments in Arrowhead and another biotechnology company, both listed on Nasdaq, and assets associated with the Company's deferred compensation plan that are held in a trust. For more information related to Arrowhead, please read Note 3, License and Collaboration Agreements. The Company's deferred compensation plan allows for certain employees and directors to defer the receipt of compensation until a later date based on the terms of the plan. The Company has recorded an asset within other non-current assets on the Company's unaudited condensed consolidated balance sheets which reflects the participants' investment elections and has been valued at daily quoted market prices.

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. These assets have been initially valued at the transaction price and subsequently valued at the end of each reporting period. The Company uses observable market inputs to determine value, which primarily consist of reportable trades. Certain highly liquid investments with maturities of less than three months at the date of acquisition are presented as cash equivalents on the unaudited condensed consolidated balance sheets as of June 30, 2025 and December 31, 2024.

The Company’s assets with a fair value categorized as Level 3 within the fair value hierarchy consist of strategic investments in private biotechnology companies whose fair value measurement was based upon significant inputs not observable in the market and therefore represented a Level 3 measurement. At the end of each reporting period, the fair value of the Company's strategic investments that are not listed securities are adjusted if the entities were to 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 six months ended June 30, 2025 or 2024, as no impairment indicators were identified nor were similar securities issued.

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 Therapeutics, Inc. (“Myonexus”) selling shareholders as well as to an academic institution under a license agreement that meets the definition of a derivative. For more information related to Myonexus, please read Note 3, License and Collaboration Agreements to the financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024. 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 valuation assumptions through earnings. For the six months ended June 30, 2024, the Company recorded an increase of $10.1 million to account for the change in fair value of the Company's existing contingent consideration liabilities, with no similar activity for the six months ended June 30, 2025. As of June 30, 2025, the contingent consideration was recorded as a non-current liability on the Company's unaudited condensed consolidated balance sheets.

The fair value of the Company's 1.25% convertible senior notes due on September 15, 2027 (the “2027 Notes”) is based on open market trades and is classified as Level 1 in the fair value hierarchy. As of June 30, 2025 and December 31, 2024, the fair value of the 2027 Notes was $849.6 million and $1,254.9 million, respectively.

The carrying amounts reported in the unaudited condensed 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.