Fair Value Measurement

9 Months Ended

Sep. 30, 2021

The following table presents information about our assets and liabilities that are measured at fair value on a recurring basis and indicates the level of the fair value hierarchy and the valuation techniques we utilized to determine such fair value:


	As of September 30, 2021
	Level 1		Level 2		Level 3		Total
Assets:
Corporate notes and bonds	$	—	$	329,339	$	—	$	329,339
Corporate commercial paper	—		555,924		—		555,924
Obligations of U.S. government agencies	—		5,882		—		5,882
Money market funds	48,336		—		—		48,336
Total assets	$	48,336	$	891,145	$	—	$	939,481
Liabilities:
Development derivative liability	$	—	$	—	$	21,387	$	21,387


	As of December 31, 2020
	Level 1		Level 2		Level 3		Total
Assets:
Corporate notes and bonds	$	—	$	687,469	$	—	$	687,469
Corporate commercial paper	—		313,497		—		313,497
Obligations of U.S. government agencies	—		2,382		—		2,382
Money market funds	179,302		—		—		179,302
Total assets	179,302		$	1,003,348	$	—	$	1,182,650
Liabilities:
Development derivative liability	$	—	$	—	$	—	$	—

Level 1 — Quoted prices in active markets for identical assets or liabilities.

Level 2 — Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices for identical or similar assets or liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

We use a market approach to value our Level 2 investments. The disclosed fair value related to our investments is based on market prices from a variety of industry standard data providers and generally represents quoted prices for similar assets in active markets or has been derived from observable market data. For the nine months ended September 30, 2021, there were no transfers between Level 1 and Level 2 of the fair value hierarchy.

Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. For the reconciliation of the changes in the development derivative liability and the description of the significant inputs used in estimating its fair value, see Note 4.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details