Investments

12 Months Ended

Dec. 31, 2021

Marketable Investments

Available-for-Sale Debt Securities

Available-for-sale debt securities are recorded at fair value, with the portion of the unrealized gains and losses that are not credit-related included as a component of accumulated other comprehensive loss in stockholders’ equity, until realized. Available-for-sale debt securities consisted of the following (in millions):


As of December 31, 2021	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
U.S. government and agency securities	$	2,178.9	$	2.0	$	(7.3)	$	2,173.6
Corporate debt securities	482.5		0.6		(2.0)		481.1
Total	$	2,661.4	$	2.6	$	(9.3)	$	2,654.7
Reported under the following captions in our consolidated balance sheets:
Cash and cash equivalents							$	39.3
Current marketable investments							965.5
Non-current marketable investments							1,649.9
Total							$	2,654.7


As of December 31, 2020	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
U.S. government and agency securities	$	1,902.4	$	9.8	$	(0.1)	$	1,912.1
Corporate debt securities	331.2		3.2		—		334.4
Total	$	2,233.6	$	13.0	$	(0.1)	$	2,246.5
Reported under the following captions in our consolidated balance sheets:
Cash and cash equivalents							$	79.0
Current marketable investments							1,017.9
Non-current marketable investments							1,149.6
Total							$	2,246.5

The following table summarizes the contractual maturities of available-for-sale debt securities (in millions). Actual maturities may differ from contractual maturities because the issuers of certain of these debt securities have the right to call the securities or prepay their obligations under the securities with or without penalties.


	As of December 31, 2021
	Amortized Cost		Fair Value
Due within one year	$	1,003.8	$	1,004.8
Due in one to three years	1,657.6		1,649.9

Total	$	2,661.4	$	2,654.7

Investments in Equity Securities with Readily Determinable Fair Values

We held investments in equity securities with readily determinable fair values of $70.4 million and $78.4 million as of December 31, 2021 and 2020, respectively, which are included in current marketable investments in our consolidated balance sheets. One of the privately-held companies in which we invested became publicly traded in 2020 and another one became publicly traded in 2021. As a result, our investments in the equity securities of these companies are now recorded at fair value and included within current marketable investments in our consolidated balance sheets rather than measured as described below under Investments in Privately-Held Companies. Changes in the fair value of publicly-traded equity securities are recorded in our consolidated statements of operations within other income, net. Refer to Note 5—Fair Value Measurements.

During the years ended December 31, 2021, 2020, and 2019, we received $111.5 million, $27.3 million, and $20.5 million, respectively, in cash from the sale of these equity securities. During 2021, we sold our investments in two publicly-traded companies and realized a gain of $92.6 million. During 2020 and 2019, we sold our investment in one publicly-traded company and realized a gain of $3.4 million and $2.6 million, respectively. The gains were recorded within other income, net in our consolidated statements of operations for the years ended December 31, 2021, 2020, and 2019.

Investments in Privately-Held Companies

As of December 31, 2021 and 2020, we maintained non-controlling equity investments in privately-held companies of $31.1 million and $84.8 million, respectively, in the aggregate. We made payments of $8.0 million for investments in privately-held companies during the year ended December 31, 2019. No such payments were made during the years ended December 31, 2021 and 2020.

When an observable price transaction occurs that is identified as similar or identical to our investment, we perform a valuation analysis to assess the fair value of our investment using various inputs, such as the discount rate, time to a liquidation event, and price volatility of peer company stocks. We adjust the fair value of our investment based on the valuation analysis and recognize the gain or loss in the period in which the observable price change occurred. During the years ended December 31, 2021, 2020, and 2019, we recorded an aggregate increase of zero, $25.5 million, and $1.2 million, respectively, in the value of our investments. These gains were recorded within other income, net in our consolidated statements of operations.

During 2021, we observed an indicator of impairment for our investments in two of the private companies in which we invested, which caused us to recognize aggregate impairment charges of $2.3 million. During the years ended December 31, 2020 and 2019, we recorded $9.1 million and zero, respectively, of impairment charges related to our investments in privately-held companies. These impairment charges were recorded within impairments of investments in privately-held companies in our consolidated statements of operations.

Cumulative impairments and downward fair value adjustments on non-controlling equity investments in privately-held companies and cumulative upward fair value adjustments in privately-held companies were $4.1 million and $1.9 million, respectively, as of December 31, 2021.

Variable Interest Entities

We evaluate our interests in variable interest entities (VIEs) and will consolidate any VIE in which we have a controlling financial interest and are deemed to be the primary beneficiary. A controlling financial interest has both of the following characteristics: (1) the power to direct the activities of the VIE that most significantly impact its economic performance; and (2) the obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could be significant to the VIE. If both of the characteristics are met, we are considered to be the primary beneficiary and therefore will consolidate that VIE into our consolidated financial statements.

Unconsolidated Variable Interest Entity

In November 2019, we entered into a supply agreement with an affiliate of DEKA Research & Development Corporation (DEKA) to manufacture and supply the Remunity® Pump to us. Under the terms of the supply agreement, we reimburse all of the affiliate’s costs to manufacture and supply the Remunity Pump. We determined that the affiliate is a VIE as we are currently the only customer of the affiliate and the affiliate currently relies on our reimbursement of its costs to sustain its operations. We have determined we are not the primary beneficiary of the affiliate as we do not have the power to direct or control its significant activities related to the manufacturing of medical devices. Accordingly, we have not consolidated the affiliate’s results of operations and financial position with ours. As of December 31, 2021 and 2020, our consolidated balance sheets included $10.6 million and $11.7 million of assets, respectively, related to the supply agreement. As of December 31, 2021 and 2020, our consolidated balance sheets included a $2.0 million and $24.0 million liability, respectively, for our obligation to reimburse costs related to the supply agreement. While the terms of the supply agreement expose us to various future risks of loss given our responsibility to reimburse all costs incurred by the affiliate to manufacture and supply the Remunity Pump, we believe that our maximum exposure to loss as of December 31, 2021 as a result of our involvement with the affiliate is $10.6 million, the amount of assets related to the supply agreement noted above.

Consolidation of a Variable Interest Entity

In August 2019, we entered into an operating agreement and trust agreement related to the contribution of an asset to a newly created trust of which we are the beneficiary. The trust was created for legal and administrative purposes and is not expected to make future purchases. As the operator of the asset, we are required to incur all future expenses related to the operation and maintenance of the asset. Accordingly, the trust is deemed a VIE because it relies on our capital to sustain future operating expenses. We are deemed the primary beneficiary of the VIE because we are the sole provider of financial support and can unilaterally remove the trustee without cause. Accordingly, we consolidate the VIE’s balance sheet and results of operations.

As of December 31, 2021, our consolidated balance sheets included a $49.3 million asset due to the consolidation of this VIE included within property, plant, and equipment, net. Upon consolidating the VIE, which was not deemed a business as defined in ASC 805, Business Combinations, no gain or loss was recognized. This VIE has no recourse against our assets and general credit, and the VIE assets cannot be used to settle the VIE liabilities. Our total risk of loss is the $49.3 million asset we contributed, as noted above.

Deconsolidation of a Variable Interest Entity

In April 2017, we made a $7.5 million minority equity investment in a privately-held company. In addition to our investment, we entered into an exclusive license, development, and commercialization agreement (the License Agreement) with this company. The License Agreement entitled us to control rights sufficient to require us to regard the company as a VIE and to consolidate the company’s balance sheet and results of operations as the primary beneficiary of this company.

In June 2019, we elected to terminate the License Agreement. The termination of the License Agreement caused us to impair an associated IPR&D asset during 2019 and recognize an impairment charge of $8.8 million, which is included within research and development in our consolidated statements of operations. Upon effectiveness of the termination of the License Agreement in 2019, we no longer have the power to direct the entity’s activities. Consequently, we deconsolidated the entity in 2019. Our deconsolidation of the entity’s balance sheet, which included $3.5 million of goodwill and $8.4 million of temporary equity, resulted in a net deconsolidation loss of $2.0 million. We have no further obligations to fund the entity. In 2021, we recognized an impairment charge equal to the entire value of our equity investment in this privately-held company of $1.3 million and recorded the impairment charge within impairments of investments in privately-held companies in our consolidated statements of operations.