The tables below present information about the Company’s financial assets and liabilities that are measured and carried at fair value and indicate the level within the fair value hierarchy of the valuation techniques it utilizes to determine such fair value:


	Fair Value Measurement as of December 31, 2023
	Total		Level 1		Level 2		Level 3
	(in thousands)
Assets
Money market funds	$	63,919	$	63,919	$	—	$	—
Commercial paper		113,362		—		113,362		—
Government and government agency bonds		1,001,137		—		1,001,137		—
Corporate bonds		130,380		—		130,380		—
Strategic investments		6,527		5,527		—		1,000
Certificates of deposit		56,621		—		56,621		—
Total assets	$	1,371,946	$	69,446	$	1,301,500	$	1,000

Liabilities
Contingent consideration	$	38,100	$	—	$	—	$	38,100
Total liabilities	$	38,100	$	—	$	—	$	38,100

	Fair Value Measurement as of December 31, 2022
	Total		Level 1		Level 2		Level 3
	(in thousands)
Assets
Money market funds	$	467,553	$	467,553	$	—	$	—
Commercial paper		211,369		—		211,369		—
Government and government agency bonds		807,540		—		807,540		—
Corporate bonds		125,741		—		125,741		—
Strategic investments		31,321		321		—		31,000
Certificates of deposit		42,745		—		42,745		—
Total assets	$	1,686,269	$	467,874	$	1,187,395	$	31,000

Liabilities
Contingent consideration	$	36,900	$	—	$	—	$	36,900
Total liabilities	$	36,900	$	—	$	—	$	36,900

The Company’s assets with a fair value categorized as Level 1 within the fair value hierarchy include money market funds and a $5.5 million strategic investment in a biotechnology company that became publicly traded on the Nasdaq Global Market (the “Nasdaq”) during the year ended December 31, 2023. The Company's $5.5 million strategic investment is included in other non-current assets in the Company's consolidated balance sheets, with changes in fair value being recorded within other income (expense), net in the consolidated statements of operations and comprehensive loss.

The Company's assets with a fair value categorized as Level 2 within the fair value hierarchy consist of commercial paper, government and government agency bonds, corporate bonds and certificates of deposit. These assets have been initially valued at the transaction price and subsequently valued at the end of each reporting period utilizing third-party pricing services. The Company uses observable market inputs to determine value, which primarily consist of reportable trades. Certain of the short-term investments with maturities of less than three months at the date of acquisition are presented as cash equivalents on the consolidated balance sheets as of December 31, 2023 and 2022.

The Company’s assets with a fair value categorized as Level 3 within the fair value hierarchy consist of a strategic investment in a private biotechnology company whose fair value measurement was based upon significant inputs not observable in the market and therefore represented a Level 3 measurement.

The Company’s contingent consideration liability with a fair value categorized as Level 3 within the fair value hierarchy relates to the regulatory-related contingent payments to Myonexus selling shareholders as well as to two academic institutions under separate license agreements that meet the definition of a derivative. For more information related to Myonexus, please read Note 3, License and Collaboration Agreements. The contingent consideration liability was estimated using an income approach based on the probability-weighted expected cash flows that incorporated industry-based probability adjusted assumptions relating to the achievement of the milestone and thus the likelihood of making the payments. This fair value measurement was based upon significant inputs not observable in the market and therefore represented a Level 3 measurement. Significant changes which increase or decrease the probabilities of achieving the milestone, or shorten or lengthen the time required to achieve the milestone, would result in a corresponding increase or decrease in the fair value of the liability. At the end of each reporting period, the fair value is adjusted to reflect the most current assumptions through earnings.

The Company assesses its financial assets measured at fair value on a recurring basis and transfers its financial assets between the relevant fair value hierarchies at the end of each reporting period, as needed. During the year ended December 31, 2023, the Company's strategic investment in a formerly private biotechnology company transferred into Level 1 from Level 3 as a result of the biotechnology company's listing on the Nasdaq. There were no additional transfers into or out of Level 3 during the year ended December 31, 2023. The following table represents a roll-forward of the fair value of Level 3 financial assets for each of the periods indicated:

During the year ended December 31, 2023, the Company impaired its investment in Series A preferred stock of Lacerta after comparing the fair value of the Lacerta strategic investment to its carrying value, resulting in an impairment loss of $30.0 million. The Company's assessment considered entity-specific impairment indicators, such as the future business prospects of Lacerta's existing programs and expected future cash flows. The fair value as of December 31, 2023 was estimated based on the expectation that the Company would realize no future cash flows associated with its investment in Lacerta. The impairment loss is included in other income (expense), net within the consolidated statements of operations and comprehensive loss. During the years ended December 31, 2022 and 2021, the company recorded impairment losses of $2.6 million and $4.5 million, respectively, related to its strategic investments.

A net increase of $1.2 million and a net decrease of $6.7 million were recorded during the years ended December 31, 2023 and December 31, 2022, respectively, to account for the change in fair value and termination of liabilities of the Company's existing contingent consideration liabilities. These changes, which are recorded in other income (expense), net in the consolidated statement of operations and comprehensive loss, were a result of updates made to certain inputs and assumptions impacting the probability-weighted expected cash flows, principally the discount rate utilized to determine the present value of future payments to be made, the

probability of success of the underlying programs and the approval date of the underlying programs, partially offset by the termination of a license agreement with an academic institution during the year ended December 31, 2023. As of December 31, 2023 and 2022, the remaining contingent consideration was recorded as a non-current liability on the Company's consolidated balance sheets.

The carrying amounts reported in the consolidated balance sheets for cash and cash equivalents, accounts receivable, net and accounts payable approximated fair value because of the immediate or short-term maturity of these financial instruments. For fair value information related to the Company’s debt facilities, please read Note 13, Indebtedness.