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Fair value of financial instruments and marketable securities - (Tables)

6 Months Ended

Jun. 30, 2020

Fair Value Disclosures [Abstract]

Schedule of financial assets and liabilities that are required to be measured at fair value on a recurring basis

The following represents the fair value using the hierarchy described above for the Company’s financial assets and liabilities that are required to be measured at fair value on a recurring basis as of June 30, 2020 and December 31, 2019:

						June 30, 2020
						Total						Quoted prices in active markets for identical assets (level 1)						Significant other observable inputs (level 2)						Significant unobservable inputs (level 3)
Marketable securities						$	340,430					$	—					$	340,430					$	—
Equity investment in ClearPoint						$	4,594					$	4,594					$	—					$	—
ClearPoint convertible debt security						$	9,251					$	—					$	9,251					$	—
Deferred consideration payable						$	2,384					$	—					$	2,384					$	—
Contingent consideration payable- development and regulatory milestones						$	136,100					$	—					$	—					$	136,100
Contingent consideration payable- net sales milestones and royalties						$	89,600					$	—					$	—					$	89,600

						December 31, 2019
						Total						Quoted prices in active markets for identical assets (level 1)						Significant other observable inputs (level 2)						Significant unobservable inputs (level 3)
Marketable securities						$	398,535					$	—					$	398,535					$	—
Equity investment in ClearPoint						$	6,194					$	6,194					$	—					$	—
Stock appreciation rights liability						$	3,186					$	—					$	—					$	3,186
Deferred consideration payable						$	40,000					$	—					$	40,000					$	—
Contingent consideration payable- development and regulatory milestones						$	290,500					$	—					$	—					$	290,500
Contingent consideration payable- net sales milestones and royalties						$	65,800					$	—					$	—					$	65,800

Summary of marketable securities accounted for as available-for-sale securities

The following is a summary of marketable securities accounted for as available-for-sale securities at June 30, 2020 and December 31, 2019:

						June 30, 2020
						Amortized Cost						Gross Unrealized																		Fair Value
															Gains						Losses
Commercial paper						$	53,638					$	178					$	—					$	53,816
Corporate debt securities						221,068						2,882						—						223,950
Asset-backed securities						44,492						332						(1)						44,823
Government obligations						17,823						19						(1)						17,841
Total						$	337,021					$	3,411					$	(2)					$	340,430

						December 31, 2019
						Amortized Cost						Gross Unrealized																		Fair Value
															Gains						Losses
Commercial paper						$	157,936					$	162					$	—					$	158,098
Corporate debt securities						188,778						576						(20)						189,334
Asset-backed securities						51,062						49						(8)						51,103
Total						$	397,776					$	787					$	(28)					$	398,535

Summary of unrealized losses and fair values of available-for-sale securities in a continuous unrealized loss position

The unrealized losses and fair values of available-for-sale securities that have been in an unrealized loss position for a period of less than and greater than 12 months as of June 30, 2020 are as follows:

						June 30, 2020
						Securities in an unrealized loss position less than 12 months																		Securities in an unrealized loss position greater than 12 months																		Total
						Unrealized losses						Fair Value						Unrealized losses						Fair Value						Unrealized losses						Fair Value
Asset-backed securities						(1)						594						—						—						(1)						594
Government obligations						(1)						8,602						—						—						(1)						8,602
Total						$	(2)					$	9,196					$	—					$	—					$	(2)					$	9,196

The unrealized losses and fair values of available-for-sale securities that have been in an unrealized loss position for a period of less than and greater than 12 months as of December 31, 2019 are as follows:

						December 31, 2019
						Securities in an unrealized loss position less than 12 months																		Securities in an unrealized loss position greater than 12 months																		Total
						Unrealized losses						Fair Value						Unrealized losses						Fair Value						Unrealized losses						Fair Value
Corporate debt securities						$	(20)					$	71,779					$	—					$	—					$	(20)					$	71,779
Asset-backed securities						(8)						24,211						—						—						(8)						24,211
Total						$	(28)					$	95,990					$	—					$	—					$	(28)					$	95,990

Schedule of marketable securities on the balance sheet

Marketable securities on the balance sheet at June 30, 2020 and December 31, 2019 mature as follows:

						June 30, 2020
						Less Than 12 Months						More Than 12 Months
Commercial paper						$	53,816					$	—
Corporate debt securities						168,250						55,700
Asset-backed securities						26,320						18,503
Government obligations						7,201						10,640
Total Marketable securities						$	255,587					$	84,843

						December 31, 2019
						Less Than 12 Months						More Than 12 Months
Commercial paper						$	158,098					$	—
Corporate debt securities						139,596						49,738
Asset-backed securities						44,724						6,379
Total Marketable securities						$	342,418					$	56,117

Summary of changes in the fair value of the Company's Level 3 valuation for warrant liability and SARs liability

The following significant unobservable inputs were used in the valuation of the contingent consideration payable for the periods ended June 30, 2020 and December 31, 2019 and of the SARs liability for the period ended December 31, 2019:

June 30, 2020

Fair Value

Valuation Technique

Unobservable Input

Range

Contingent consideration payable- development and regulatory milestones

$136,100

Probability-adjusted discounted cash flow

Potential development and regulatory milestones

$0 - $381 million

Probabilities of success

25% - 94%

Discount rates

4.6% - 6.1%

Projected years of payments

2021 - 2027

Contingent considerable payable- net sales milestones and royalties

$89,600

Option-pricing model with Monte Carlo simulation

Potential net sales milestones

$0 - $150 million

Probabilities of success

25% -94%

Potential percentage of net sales for royalties

2% - 6%

Discount rate

12.0%

Projected years of payments

2022 - 2039

December 31, 2019

Fair Value

Valuation Technique

Unobservable Input

Range

SARs

$3,186

Option-pricing model

Volatility

28.93%

Risk free interest rate

0.19%

Strike price

$6.76 - $30.86

Fair value of common stock

$48.03

Expected life

0.01 years

Contingent consideration payable- development and regulatory milestones

$290,500

Probability-adjusted discounted cash flow

Potential development and regulatory milestones

$0- $555 million

Probabilities of success

25% - 94%

Discount rates

2.2% - 4.7%

Projected years of payments

2020 - 2026

Contingent considerable payable- net sales milestones and royalties

$65,800

Option-pricing model with Monte Carlo simulation

Potential net sales milestones

$0 - $150 million

Probabilities of success

25% - 89%

Potential percentage of net sales for royalties

2% - 6%

Discount rate

14.5%

Projected years of payments

2021 - 2038

Fair Value Measurement Inputs and Valuation Techniques

The table presented below is a summary of changes in the fair value of the Company’s Level 3 valuations for the SARs liability, and the contingent consideration payable for the periods ended June 30, 2020 and June 30, 2019.

						Level 3 liabilities
						SARs						Contingent consideration payable- development and regulatory milestones						Contingent consideration payable- net sales milestones and royalties
Beginning balance as of December 31, 2019						$	3,186					$	290,500					$	65,800
Additions						—						—						—
Change in fair value						—						(15,220)						23,800
Payments						(3,186)						—						—
Rights Exchange settlement						—						(139,180)						—
Ending balance as of June 30, 2020						$	—					$	136,100					$	89,600

						Level 3 liabilities
						SARs						Contingent consideration payable- development and regulatory milestones						Contingent consideration payable- net sales milestones and royalties
Beginning balance as of December 31, 2018						$	3,814					$	257,040					$	53,200
Additions						—						—						—
Change in fair value						1,961						20,360						5,600
Payments						(3,815)						—						—
Ending balance as of June 30, 2019						$	1,960					$	277,400					$	58,800

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- Definition

Tabular disclosure of fair value of investment in debt security measured at fair value with change in fair value recognized in other comprehensive income (available-for-sale), in unrealized loss position, without allowance for credit loss. Includes beneficial interest in securitized financial asset.

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Tabular disclosure of input and valuation technique used to measure fair value and change in valuation approach and technique for each separate class of asset and liability measured on recurring and nonrecurring basis.

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