Marketable Securities and Fair Value Measurements

12 Months Ended

Dec. 31, 2022

Marketable Securities and Fair Value Measurements

The following is a summary of the Company’s assets measured at fair value on a recurring basis.


	December 31, 2022
(dollars in millions)	Valuation Hierarchy	Effective Maturity	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Corporate bonds	Level 2	2023	$	802.7	$	—	$	(9.3)	$	793.4
Corporate bonds	Level 2	2024 - 2025	205.3		—		(9.2)		196.1
Government securities	Level 2	2023	61.9		—		(0.4)		61.5
Government securities	Level 2	2024	73.3		—		(0.3)		73.0
Total			$	1,143.2	$	—	$	(19.2)	$	1,124.0


	December 31, 2021
(dollars in millions)	Valuation Hierarchy	Effective Maturity	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Corporate bonds	Level 2	2022	$	784.0	$	—	$	(0.7)	$	783.3
Corporate bonds	Level 2	2023 - 2024	582.5		—		(3.8)		578.7
Government securities	Level 2	2022	32.4		—		(0.1)		32.3
Total			$	1,398.9	$	0.0	$	(4.6)	$	1,394.3

The Company generally does not intend to sell any investments prior to recovery of their amortized cost basis for any investment in an unrealized loss position. As such, the Company has classified these losses as temporary in nature.

The carrying value of accounts receivable and accounts payable and accrued liabilities approximate their fair values due to the short-term nature of these assets and liabilities.

Non-recurring fair value measures

In September 2021, in connection with the Pfizer Stock Purchase Agreement, the Company valued the common stock issued to Pfizer at fair value. The Pfizer Stock Purchase Agreement contains provisions restricting the sale or transfer for a period of time (the “lock-up period”). The resulting fair value of $264.6 million was determined by applying the discount due to lack of marketability during the contractual lock-up period to the public trading price of the common stock, which is a Level 1 input, on the date of sale. The Company accounted for the lack of marketability during the contractual lock-up period, by utilizing put option models, which are considered Level 3 inputs. Such option models included the Company’s historical volatility and the risk-free rate based on U.S. Treasury bond rates, as key inputs.

- 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.

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