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Investments | 6 Months Ended
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Jun. 30, 2025
Investments [Abstract] |
Investments | We hold investments in publicly traded companies and privately held entities primarily involved in the life science industry. As a REIT, we generally limit our ownership of each individual entity’s voting stock to less than 10%. We evaluate each investment to determine whether we have the ability to exercise significant influence, but not control, over an investee. We evaluate investments in which our ownership is equal to or greater than 20%, but less than or equal to 50%, of an investee’s voting stock with a presumption that we have this ability. For our investments in limited partnerships that maintain specific ownership accounts, we presume that such ability exists when our ownership interest exceeds 3% to 5%. In addition to our ownership interest, we consider whether we have a board seat or whether we participate in the investee’s policy-making process, among other criteria, to determine if we have the ability to exert significant influence, but not control, over an investee. If we determine that we have such ability, we account for the investment under the equity method, as described below. From time to time, we may hold equity investments in publicly traded companies that are subject to temporary contractual sale restrictions. We do not recognize a discount related to such contractual sale restrictions. Investments accounted for under the equity method Under the equity method of accounting, we initially recognize our investment at cost and subsequently adjust the carrying amount of the investment for our share of earnings or losses reported by the investee, distributions received, and other-than-temporary impairments. As of June 30, 2025, we had ten investments in limited partnerships maintaining specific ownership accounts for each investor, which were accounted for under the equity method. These investments aggregated $276.8 million. Our ownership interest in each of these ten investments was greater than 5%. Investments that do not qualify for the equity method of accounting For investees over which we determine that we do not have the ability to exercise significant influence or control, we account for each investment depending on whether it is an investment in a (i) publicly traded company, (ii) privately held entity that reports NAV per share, or (iii) privately held entity that does not report NAV per share, as described below. Investments in publicly traded companies Our investments in publicly traded companies are classified as investments with readily determinable fair values and are presented at fair value in our consolidated balance sheets, with changes in fair value classified in investment income (loss) in our consolidated statements of operations. The fair values for our investments in publicly traded companies are determined based on sales prices or quotes available on securities exchanges. Investments in privately held companies Our investments in privately held entities without readily determinable fair values consist of (i) investments in privately held entities that report NAV per share and (ii) investments in privately held entities that do not report NAV per share. These investments are accounted for as follows: Investments in privately held entities that report NAV per share Investments in privately held entities that report NAV per share, such as our privately held investments in limited partnerships, are presented at fair value using NAV as a practical expedient, with changes in fair value classified in investment income (loss) in our consolidated statements of operations. We use NAV per share reported by limited partnerships generally without adjustment, unless we are aware of information indicating that the NAV reported by a limited partnership does not accurately reflect the fair value of the investment at our reporting date. Investments in privately held entities that do not report NAV per share Investments in privately held entities that do not report NAV per share are accounted for using a measurement alternative under which these investments are measured at cost, adjusted for observable price changes and impairments, with changes classified in investment income (loss) in our consolidated statements of operations. An observable price arises from an orderly transaction for an identical or similar investment of the same issuer, which is observed by an investor without expending undue cost and effort. Observable price changes result from, among other things, equity transactions of the same issuer executed during the reporting period, including subsequent equity offerings or other reported equity transactions related to the same issuer. To determine whether these transactions are indicative of an observable price change, we evaluate, among other factors, whether these transactions have similar rights and obligations, including voting rights, distribution preferences, and conversion rights to the investments we hold. I mpairment evaluation of equity method investments and investments in privately held entities that do not report NAV per share We monitor equity method investments and investments in privately held entities that do not report NAV per share for new developments, including operating results, prospects and results of clinical trials, new product initiatives, new collaborative agreements, capital-raising events, and merger and acquisition activities. These investments are evaluated on the basis of a qualitative assessment for indicators of impairment by monitoring the presence of the following triggering events or impairment indicators: (i)a significant deterioration in the earnings performance, credit rating, asset quality, or business prospects of the investee; (ii)a significant adverse change in the regulatory, economic, or technological environment of the investee; (iii)a significant adverse change in the general market condition, including the research and development of technology and products that the investee is bringing or attempting to bring to the market; (iv)significant concerns about the investee’s ability to continue as a going concern; and/or (v)a decision by investors to cease providing support or reduce their financial commitment to the investee. If such indicators are present, we are required to estimate the investment’s fair value and immediately recognize an impairment charge in an amount equal to the investment’s carrying value in excess of its estimated fair value. Investment income/loss recognition and classification We recognize both realized and unrealized gains and losses in our consolidated statements of operations, classified in investment income (loss) in our consolidated statements of operations. Unrealized gains and losses represent: (i)changes in fair value for investments in publicly traded companies; (ii)changes in NAV for investments in privately held entities that report NAV per share; (iii)observable price changes for investments in privately held entities that do not report NAV per share; and (iv)our share of unrealized gains or losses reported by our equity method investees. Realized gains and losses on our investments represent the difference between proceeds received upon disposition of investments and their historical or adjusted cost basis. For our equity method investments, realized gains and losses represent our share of realized gains or losses reported by the investee. Impairments are realized losses, which result in an adjusted cost basis, and represent charges to reduce the carrying values of investments in privately held entities that do not report NAV per share and equity method investments, if impairments are deemed other than temporary, to their estimated fair value. Funding commitments to investments in privately held entities that report NAV We are committed to funding approximately $351.0 million for our investments in privately held entities that report NAV. Our funding commitments expire at various dates over the next 12 years, with a weighted-average expiration of 8.0 years as of June 30, 2025. These investments are not redeemable by us, but we may receive distributions from these investments throughout their terms. Our investments in privately held entities that report NAV generally have expected initial terms in excess of 10 years. The weighted- average remaining term during which these investments are expected to be liquidated was 5.2 years as of June 30, 2025. The following tables summarize our investments as of June 30, 2025 and December 31, 2024 (in thousands):
| June 30, 2025
| Cost |  | Unrealized Gains |  | Unrealized Losses |  | Carrying Amount
Publicly traded companies | $183,859 |  | $18,365 |  | $(120,299) |  | $81,925
Entities that report NAV | 497,975 |  | 97,201 |  | (43,013) |  | 552,163
Entities that do not report NAV: |  |  |  |  |  |  |
Entities with observable price changes | 78,105 |  | 64,585 |  | (9,156) |  | 133,534
Entities without observable price changes | 432,299 |  | — |  | — |  | 432,299
Investments accounted for under the equity method | N/A |  | N/A |  | N/A |  | 276,775
Total investments | $1,192,238 |  | $180,151 |  | $(172,468) |  | $1,476,696
| December 31, 2024
| Cost |  | Unrealized Gains |  | Unrealized Losses |  | Carrying Amount
Publicly traded companies | $188,653 |  | $24,262 |  | $(107,248) |  | $105,667
Entities that report NAV | 518,074 |  | 126,077 |  | (34,285) |  | 609,866
Entities that do not report NAV: |  |  |  |  |  |  |
Entities with observable price changes | 99,932 |  | 77,761 |  | (2,956) |  | 174,737
Entities without observable price changes | 400,487 |  | — |  | — |  | 400,487
Investments accounted for under the equity method | N/A |  | N/A |  | N/A |  | 186,228
Total investments | $1,207,146 |  | $228,100 |  | $(144,489) |  | $1,476,985
Cumulative gains and losses (realized and unrealized) on investments in privately held entities that do not report NAV still held as of June 30, 2025 aggregated to a loss of $123.3 million, which consisted of upward adjustments aggregating $64.6 million, downward adjustments aggregating $9.2 million, and impairments aggreg ating $178.7 million. Our investment income (loss) for the three and six months ended June 30, 2025 and 2024 consisted of the following (in thousands):
|  | Three Months Ended June 30, |  | Six Months Ended June 30,
|  | 2025 |  | 2024 |  | 2025 |  | 2024
Realized (losses) gains |  | $(8,684) | (1) | $20,578 |  | $9,469 | (1) | $34,704
Unrealized losses |  | (21,938) |  | (64,238) |  | (90,083) |  | (35,080)
Investment loss |  | $(30,622) |  | $(43,660) |  | $(80,614) |  | $(376)
(1)Consists of realized gains of $30.5 million and $59.9 million, partially offset by impairmen t charges of $39.2 million and $50.4 million during the three and six months ended June 30, 2025, respectively. During the six months ended June 30, 2025, gains and losses on investments in privately held entities that do not report NAV still held as of June 30, 2025 aggregated to a loss of $57.6 million, which consisted of upward adjustments aggregating $8.8 million and downward adjustments and impairments aggregating $66.4 million. During the six months ended June 30, 2024, gains and losses on investments in privately held entities that do not report NAV still held as of June 30, 2024 aggregated to a loss of $13.7 million, which consisted of upward adjustments aggregating $15.7 million and downward adjustments and impairments aggregatin g $29.4 million. Unrealized gains or losses related to investments still held (excluding investments accounted for under the equity method) as of June 30, 2025 and 2024 aggregated to a loss of $30.7 million and a loss of $1.8 million during the six months ended June 30, 2025 and 2024, respectively. Our investment loss of $80.6 million for the six months ended June 30, 2025 also included $102 thousand of equity in losses of our equity method investments. Refer to “Investments” in Note 2 – “Summary of significant accounting policies” to our unaudited consolidated financial statements for additional information

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