Equity Method Investments

9 Months Ended

Dec. 31, 2023

Equity Method Investments [Abstract]

Equity Method Investments

Note 3—Equity Method Investments

The Company maintains equity method investments in certain entities. As of December 31, 2023 and March 31, 2023, the most significant of these were our investments in Arbutus and Datavant (as defined below), which are accounted for using the fair value option.

The Company determined that it does not control these entities and as a result does not consolidate these entities. Due to the Company’s significant influence over operating and financial policies of these entities, the entities are considered related parties of the Company.

Investment in Arbutus

The Company holds an investment in Arbutus in the form of 38,847,462 common shares of Arbutus. As of December 31, 2023, RSL held approximately 23% of issued and outstanding shares of Arbutus.

At December 31, 2023 and March 31, 2023, the aggregate fair value of the Company’s investment in Arbutus was $97.1 million and $117.7 million, respectively. During the three and nine months ended December 31, 2023, the Company recognized an unrealized gain of $18.3 million and an unrealized loss of $20.6 million on its investment in Arbutus, respectively, in the accompanying condensed consolidated statements of operations. During the three and nine months ended December 31, 2022, the Company recognized an unrealized gain of $16.3 million and an unrealized loss of $25.3 million on its investment in Arbutus, respectively, in the accompanying condensed consolidated statements of operations. The fair value of the Company’s investment was determined using the closing price of Arbutus’s common stock on December 31, 2023 and March 31, 2023 of $2.50 and $3.03, respectively.

Investment in Datavant

In June 2021, Datavant and Heracles Parent, L.L.C. (referred to herein as “Ciox Parent” and, after the closing of the Datavant Merger (as defined below), “Datavant”), primarily through its wholly owned subsidiary CIOX Health, LLC, entered into a definitive agreement to merge Datavant with and into a newly formed wholly owned subsidiary of Ciox Parent (the “Datavant Merger”). As of December 31, 2023, the Company’s minority equity interest represented approximately 9% of the outstanding Class A units in Ciox Parent. Ciox Parent’s capital structure includes several classes of preferred units that, among other features, have liquidation preferences and conversion rights. Upon conversion of such preferred units into Class A units, the Company’s ownership interest would be diluted.

As of December 31, 2023 and March 31, 2023, the fair value of the Company’s investment was $135.9 million and $178.6 million, respectively. During the three and nine months ended December 31, 2023, the Company recognized unrealized losses on its investment in Datavant of $28.4 million and $42.6 million, respectively, in the accompanying condensed consolidated statements of operations. During the three and nine months ended December 31, 2022, the Company recognized an unrealized gain on of $7.5 million and an unrealized loss of $21.4 million on its investment in Datavant, respectively, in the accompanying condensed consolidated statements of operations.

The fair value of the Company’s investment was determined using valuation models that incorporate significant unobservable inputs and is classified as a Level 3 measurement within the fair value hierarchy. Refer to Note 13, “Fair Value Measurements” for more information.