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Fair Value Measurements and Financial Instruments (Tables)

12 Months Ended

Dec. 31, 2021

Fair Value Disclosures [Abstract]

Schedule of Fair Value Hierarchy

The following table summarizes financial assets and financial liabilities that we measured at fair value on a recurring basis at the dates indicated, classified in accordance with the fair value hierarchy described above (in thousands):

			As of December 31, 2021																								As of December 31, 2020
			Level 1						Level 2						Level 3						Total						Level 1						Level 2						Level 3						Total
Assets:
Cash equivalents
Money market funds			$	598,253					$	—					$	—					$	598,253					$	24,302					$	—					$	—					$	24,302
Commercial paper			—						13,997						—						13,997						—						77,176						—						77,176
Certificates of deposit			—						40,954						—						40,954						—						74,502						—						74,502
Marketable securities
Corporate debt securities			—						—						—						—						—						32,754						—						32,754
Commercial paper			—						207,457						—						207,457						—						444,554						—						444,554
Certificates of deposit			—						374,415						—						374,415						—						505,971						—						505,971
Available for sale debt securities			—						—						66,000						66,000						—						—						69,984						69,984
Total current assets			$	598,253					$	636,823					$	66,000					$	1,301,076					$	24,302					$	1,134,957					$	69,984					$	1,229,243
Equity securities			226,787						—						43,013						269,800						298,689						—						—						298,689
Available for sale debt securities			—						—						187,700						187,700						—						—						144,416						144,416
Forwards (1)			—						—						16,700						16,700						—						—						18,600						18,600
Warrant (2)			—						—						—						—						—						5,439						—						5,439
Total non-current assets			$	226,787					$	—					$	247,413					$	474,200					$	298,689					$	5,439					$	163,016					$	467,144

(1)The balance as of December 31, 2021 includes Series B Forwards and the Development Funding Bond Forward, recorded within Available for sale debt securities in the consolidated balance sheet, related to our obligations to fund acquisitions of the Series B Biohaven Preferred Shares and $150 million of the Development Funding Bonds, respectively. The balance as of December 31, 2020 relates to Series B Forwards, recorded within Available for sale debt securities in the consolidated balance sheet. See Note 3–Available for Sale Debt Securities for additional discussion.

(2)Related to the Epizyme transaction as described in Note 4–Derivative Instruments and recorded in Other assets in the consolidated balance sheets as of December 31, 2021 and 2020. The fair value of the warrant was not material as of December 31, 2021.

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, which relate to equity securities and available for sale debt securities, including the underlying debt securities and related forwards (in thousands).

			Years Ended December 31,
			2021						2020
Equity Securities
Balance at the beginning of the year			$	—					$	—
Purchases			35,120						—
Gains on equity securities			7,893						—
Balance at the end of the year			$	43,013					$	—

			Years Ended December 31,
			2021						2020
Debt Securities
Balance at the beginning of the year			$	214,400					$	131,280
Purchases			70,441						—
Unrealized gains on available for sale debt securities (1)			12,900						52,725
Settlement of forwards (2)			18,459						—
Transfer to Level 2			—						(184,005)
Transfer from Level 2 (3)			—						198,526
Unrealized gains on available for sale debt securities (1)			—						15,874
Redemption			(62,500)						—
Balance at the end of the year			$	253,700					$	214,400

			Years Ended December 31,
			2021						2020
Forwards
Balance at the beginning of the year			$	18,600					$	—
Unrealized gains (4)			16,559						18,600
Settlement of forwards (2)			(18,459)						—
Balance at the end of the year			$	16,700					$	18,600

(1)For the year ended December 31, 2021, the unrealized gains on available for sale debt securities is comprised of $11.6 million related to Series A Biohaven Preferred Shares as recorded on the consolidated statements of comprehensive income and $1.3 million related to the Series B Biohaven Preferred Shares as recorded on the consolidated statements of operations. For the year ended December 31, 2020, the unrealized gains on available for sale debt securities related to the Series A Biohaven Preferred Shares as recorded on the consolidated statements of comprehensive income, including $52.7 million prior to transferring out of Level 3 and then $15.9 million after transferring back to Level 3.     

(2)Reflects the fair value attributed to the Series B Forwards that were settled in the period as the Series B Biohaven Preferred Shares were acquired, which is included in the fair value of the Series B Biohaven Preferred Shares. See Note 3–Available for Sale Debt Securities.

(3)Includes $14.5 million of unrealized gains on available for sale debt securities included in other comprehensive income while the Series A Biohaven Preferred Shares was classified as a Level 2 asset.

(4)Recorded within Unrealized gains on available for sale debt securities on the consolidated statements of operations.

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

Estimated fair values based on Level 3 inputs and related carrying values for our financial royalty assets as of December 31, 2021 and 2020 are presented below (in thousands).

			December 31, 2021												December 31, 2020
			Fair Value						Carrying Value, net						Fair Value						Carrying Value, net
Financial royalty assets, net			$	19,047,183					$	14,332,596					$	18,718,179					$	12,955,277

X

- Definition

Tabular disclosure of the fair value measurement of assets using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income (loss), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs), by class of asset.

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Tabular disclosure of information about fair value of asset and liability not measured at fair value.

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Tabular disclosure of assets and liabilities, including [financial] instruments measured at fair value that are classified in stockholders' equity, if any, that are measured at fair value on a recurring basis. The disclosures contemplated herein include the fair value measurements at the reporting date by the level within the fair value hierarchy in which the fair value measurements in their entirety fall, segregating fair value measurements using quoted prices in active markets for identical assets (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 3).

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 820
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