v3.25.2
Fair Value Measurements
 3 Months Ended
Jun. 30, 2025
Fair Value Measurements [Abstract]  
Fair Value Measurements
Note 13—Fair Value Measurements
 
Recurring Fair Value Measurements
 
The following table sets forth the Company’s assets and liabilities that are measured at fair value on a recurring basis as of June 30, 2025 and March 31, 2025, by level, within the fair value hierarchy (in thousands):
 
   
As of June 30, 2025
    
As of March 31, 2025
  
   
Level 1
    
Level 2
    
Level 3
    
Balance as of June 30, 2025
    
Level 1
    
Level 2
    
Level 3
    
Balance as
of March 31,
2025
  
Assets:
                                                
Money market funds
  
$
1,143,672
    
$
—
    
$
—
    
$
1,143,672
    
$
2,621,457
    
$
—
    
$
—
    
$
2,621,457
  
Available-for-sale marketable securities
    
—
      
1,803,035
      
—
      
1,803,035
      
—
      
—
      
—
      
—
  
Investment in Datavant Class A units
    
—
      
—
      
163,775
      
163,775
      
—
      
—
      
167,361
      
167,361
  
Investment in Arbutus common shares
    
120,039
      
—
      
—
      
120,039
      
135,578
      
—
      
—
      
135,578
  
Total assets at fair value
  
$
1,263,711
    
$
1,803,035
    
$
163,775
    
$
3,230,521
    
$
2,757,035
    
$
—
    
$
167,361
    
$
2,924,396
  
Liabilities:
                                                                
Liability instruments measured at fair value(1)
    
—
      
—
      
12,310
      
12,310
      
—
      
—
      
9,981
      
9,981
  
Total liabilities at fair value
  
$
—
    
$
—
    
$
12,310
    
$
12,310
    
$
—
    
$
—
    
$
9,981
    
$
9,981
  

(1) At June 30, 2025, Level 3 includes the fair value of the Earn-Out Shares of $12.3 million. At March 31, 2025, Level 3 includes the fair value of the Earn-Out Shares of $10.0 million.

There were no transfers of assets between Level 1 and Level 2 of the fair value measurement hierarchy that occurred during the three months ended June 30, 2025.
Level 3 Disclosures
 
The Company measures its Level 3 assets and liabilities at fair value based on significant inputs not observable in the market, which causes them to be classified as a Level 3 measurement within the fair value hierarchy. The valuation of the Level 3 assets and liabilities uses assumptions and estimates the Company believes would be made by a market participant in making the same valuation. The Company assesses these assumptions and estimates on an ongoing basis as additional data impacting the assumptions and estimates are obtained. Changes in the fair value related to updated assumptions and estimates are recorded within the statements of operations at the end of each reporting period.
 
The fair value of Level 3 assets and liabilities may change significantly as additional data are obtained, impacting the Company’s assumptions regarding probabilities of potential scenarios used to estimate fair value. In evaluating this information, considerable judgment is required to interpret the data used to develop the assumptions and estimates. Accordingly, the use of different market assumptions and/or different valuation techniques may have a material effect on the estimated fair value amounts, and such changes could materially impact the Company’s results of operations in future periods.
 
The changes in fair value of the Level 3 assets during the three months ended June 30, 2025 and 2024 were as follows (in thousands):
 
Balance at March 31, 2024
  
$
147,526
  
Changes in fair value of investment in Datavant, included in net income
    
(4,586
)
Balance at June 30, 2024
  
$
142,940
  
         
Balance at March 31, 2025
  
$
167,361
  
Changes in fair value of investment in Datavant, included in net loss
    
(3,586
)
Balance at June 30, 2025
  
$
163,775
  
 
The changes in fair value of the Level 3 liabilities during the three months ended June 30, 2025 and 2024 were as follows (in thousands):
 
Balance at March 31, 2024
  
$
25,737
  
Changes in fair value of liability instruments, included in net income
    
1,150
  
Balance at June 30, 2024
  
$
26,887
  
         
Balance at March 31, 2025
  
$
9,981
  
Changes in fair value of liability instruments, included in net loss
    
2,329
  
Balance at June 30, 2025
  
$
12,310
  
 
Investment in Datavant
 
The Company elected the fair value option to account for the investment in Datavant. The estimate of fair value for this investment was determined using the income approach and implementation of the option pricing method (“OPM”). The OPM allows for the allocation of a company’s equity value among the various equity capital owners (preferred and common shareholders). The OPM uses the preferred shareholders’ liquidation preferences, participation rights, dividend policy, and conversion rights to determine how proceeds from a liquidity event shall be distributed among the various ownership classes at a future date. The fair value was calculated using significant unobservable inputs including the following:
 
   
Point Estimate Used
  
Input
  
As of June 30, 2025
    
As of March 31, 2025
  
Volatility
    
100.0%
   
110.0%
Discount rate
    
13.0%
   
13.0%
Earn-Out Shares
 
The fair value of the Earn-Out Shares issued as part of the Business Combination was calculated using the Monte Carlo simulation method under the income approach. Refer to Note 12, “Earn-Out Shares” for additional details. Significant unobservable inputs used to calculate the fair value of the Earn-Out Shares included the following:
 
   
Point Estimate Used
  
Input
  
As of June 30, 2025
    
As of March 31, 2025
  
Volatility
    
36.5%
   
38.4%
Risk-free rate
    
3.90%
   
3.96%
 
As of March 31, 2025, the Company began using a blend of its historical and implied volatility, rather than exclusively relying on historical volatility, to estimate the expected volatility assumption of various equity instruments issued by the Company. Due to changes in the Company’s capital position, the Company believes this methodology better reflects its expected future volatility.
 
As of June 30, 2025 and March 31, 2025, the fair value of the Earn-Out Shares was $12.3 million and $10.0 million, respectively. Earn-Out Shares were included in “Liability instruments measured at fair value” in the accompanying condensed consolidated balance sheets.