Fair Value Measurements and Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2025

The following table summarizes assets and liabilities measured at fair value on a recurring basis by level within the fair value hierarchy (in thousands):


	As of June 30, 2025								As of December 31, 2024
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Assets:
Money market funds(1)	$	151,083	$	—	$	—	$	151,083	$	568,317	$	—	$	—	$	568,317
Available for sale debt securities(2)	—		—		13,200		13,200		—		—		58,200		58,200
Total current assets	$	151,083	$	—	$	13,200	$	164,283	$	568,317	$	—	$	58,200	$	626,517

Equity securities(3)	108,288		—		2,241		110,529		184,719		—		2,241		186,960
Available for sale debt securities(2)	—		—		271,900		271,900		—		—		693,500		693,500
Cytokinetics R&D Funding Derivative(4)	—		—		9,000		9,000		—		—		12,000		12,000
Royalty at fair value(3)	—		—		5,323		5,323		—		—		5,323		5,323
Total non-current assets	$	108,288	$	—	$	288,464	$	396,752	$	184,719	$	—	$	713,064	$	897,783

Liabilities:
Cytokinetics Funding Commitments	—		—		(27,200)		(27,200)		—		—		(12,080)		(12,080)
Employee EPAs(5)	—		—		(467,143)		(467,143)		—		—		—		—
Total non-current liabilities	$	—	$	—	$	(494,343)	$	(494,343)	$	—	$	—	$	(12,080)	$	(12,080)

(1)Recorded within Cash and cash equivalents on the condensed consolidated balance sheets.

(2)Related to the funded Cytokinetics Funding Arrangements as of respective balance sheet dates. As of December 31, 2024, amount also included the MorphoSys Development Funding Bonds, which were sold in January 2025.

(3)The amounts reflected within Level 3 are related to equity securities and a revenue participation right acquired from ApiJect Holdings, Inc. (“ApiJect”), a private company. We estimated the fair values related to both instruments using a discounted cash flow with Level 3 inputs, including forecasted cash flows and the weighted average cost of capital. The revenue participation right was recorded within Other assets on the condensed consolidated balance sheets. See Note 10–Non-Consolidated Affiliates for additional discussion.

(4)Recorded within Other assets on the condensed consolidated balance sheets. See definition below.

(5)Recorded within Accrued compensation liabilities on the condensed consolidated balance sheet. See Note 4–Share-Based Compensation for additional discussion.

Summary of 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 (in thousands):


	For the Three Months Ended June 30, 2025
	Equity Securities		Debt Securities		Funding Commitments		Derivative Instrument		Royalty at Fair Value		Employee EPAs
Balance at the beginning of the period	$	2,241	$	231,100	$	(17,900)	$	11,000	$	5,323	$	—

Purchases	—		75,000		—		—		—		—
Initial recognition(1)	—		—		—		—		—		422,479



Changes in fair value(2)	—		(18,120)		(10,200)		(2,000)		—		38,457
Vested	—		—		—		—		—		7,275
Settled(3)	—		—		—		—		—		(1,068)
Settlement of forward(4)	—		—		900		—		—		—
Redemption(5)	—		(2,880)		—		—		—		—
Balance at the end of the period	$	2,241	$	285,100	$	(27,200)	$	9,000	$	5,323	$	467,143

(1)Amount reflects the portion of the Employee EPAs attributable to service rendered prior to the Internalization, recognized in connection with the Internalization, see Note 3–Internalization for additional discussion.

(2)Change in fair value of the Employee EPAs is recorded within General and administrative expenses in the condensed consolidated statement of operations. Changes in fair value of all other financial instruments are recorded within their respective financial statement line items in the Other (income)/expense section of the condensed consolidated statements of operations.

(3)The Employee EPAs are generally settled partially in shares and partially through periodic cash distributions required for tax advances.

(4)Amount reflects the fair value attributable to the required draw under tranche four of the Cytokinetics Commercial Launch Funding that was settled upon funding.

(5)Amount relates to the quarterly repayment on the Cytokinetics Commercial Launch Funding.


	For the Three Months Ended June 30, 2024
	Equity Securities		Debt Securities		Funding Commitments		Derivative Instrument		Royalty at Fair Value
Balance at the beginning of the period	$	—	$	502,700	$	(3,220)	$	—	$	—
Purchases	46,500		150,000		—		18,000		—
Gains/(losses) on initial recognition(1)	—		5,000		(5,000)		—		—



Changes in fair value(2)	5,822		13,580		(13,780)		—		5,323
Redemptions(3)	—		(2,880)		—		—		—
Balance at the end of the period	$	52,322	$	668,400	$	(22,000)	$	18,000	$	5,323

(1)Represents purchase price allocation to arrive at the appropriate fair value on initial recognition.

(2)Changes in fair value of the financial instruments are recorded within their respective financial statement line items in the Other (income)/expense section of the condensed consolidated statements of operations.

(3)Amount relates to the quarterly repayment on the Cytokinetics Commercial Launch Funding.


	For the Six Months Ended June 30, 2025
	Equity Securities		Debt Securities		Funding Commitments		Derivative Instrument		Royalty at Fair Value		Employee EPAs
Balance at the beginning of the period	$	2,241	$	751,700	$	(12,080)	$	12,000	$	5,323	$	—

Purchases	—		75,000		—		—		—		—
Initial recognition(1)	—		—		—		—		—		422,479

Changes in fair value(2)	—		(15,581)		(15,920)		(3,000)		—		38,457
Vested	—		—		—		—		—		7,275
Settled(3)	—		—		—		—		—		(1,068)
Sales(4)	—		(510,553)		—		—		—		—

Settlement of forward(5)	—		—		800		—		—		—
Redemptions(6)	—		(15,466)		—		—		—		—
Balance at the end of the period	$	2,241	$	285,100	$	(27,200)	$	9,000	$	5,323	$	467,143

(1)Amount reflects the Employee EPAs attributable to service rendered prior to the Internalization, recognized in connection with the Internalization, see Note 3–Internalization for additional discussion.

(2)Change in fair value of the Employee EPAs is recorded within General and administrative expenses in the condensed consolidated statement of operations. Changes in the fair value of all other financial instruments are recorded within their respective financial statement line items in the Other (income)/expense section of the condensed consolidated statements of operations.

(3)The Employee EPAs are generally settled partially in shares and partially through periodic cash distributions required for tax advances.

(4)The MorphoSys Development Funding Bonds were sold in January 2025.

(5)Amount reflects the fair value attributable to the required draw under tranche four of the Cytokinetics Commercial Launch Funding that was settled upon funding.

(6)Amount relates to the quarterly repayments on the MorphoSys Development Funding Bonds prior to the sale and on the Cytokinetics Commercial Launch Funding.


	For the Six Months Ended June 30, 2024
	Equity Securities		Debt Securities		Funding Commitments		Derivative Instrument		Royalty at Fair Value
Balance at the beginning of the period	$	297	$	455,400	$	(900)	$	—	$	1,778
Purchases	46,500		150,000		—		18,000		—
Gains/(losses) on initial recognition(1)	—		5,000		(5,000)		—		—



Changes in fair value(2)	5,525		62,320		(16,100)		—		3,545
Redemptions(3)	—		(4,320)		—		—		—
Balance at the end of the period	$	52,322	$	668,400	$	(22,000)	$	18,000	$	5,323

(1)Represents purchase price allocation to arrive at the appropriate fair value on initial recognition.

(3)Amount relates to the quarterly repayments on the Cytokinetics Commercial Launch Funding.

- 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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