Alkermes plc. Fair Value Disclosure
5. FAIR VALUE
The following table presents information about the Company’s assets and liabilities that are measured at fair value on a recurring basis and indicates the fair value hierarchy and the valuation techniques the Company utilized to determine such fair value:
|
|
December 31, |
|
|
|
|
|
|
|
|
|
|
||||
(In thousands) |
|
2025 |
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
||||
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash equivalents |
|
$ |
18,583 |
|
|
$ |
18,583 |
|
|
$ |
— |
|
|
$ |
— |
|
U.S. government and agency debt securities |
|
|
101,371 |
|
|
|
94,246 |
|
|
|
7,125 |
|
|
|
— |
|
Corporate debt securities |
|
|
98,274 |
|
|
|
— |
|
|
|
97,774 |
|
|
|
500 |
|
Total |
|
$ |
218,228 |
|
|
$ |
112,829 |
|
|
$ |
104,899 |
|
|
$ |
500 |
|
|
|
December 31, |
|
|
|
|
|
|
|
|
|
|
||||
|
|
2024 |
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
||||
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash equivalents |
|
$ |
8,388 |
|
|
$ |
8,388 |
|
|
$ |
— |
|
|
$ |
— |
|
U.S. government and agency debt securities |
|
|
315,882 |
|
|
|
265,090 |
|
|
|
50,792 |
|
|
|
— |
|
Corporate debt securities |
|
|
217,643 |
|
|
|
— |
|
|
|
217,643 |
|
|
|
— |
|
Total |
|
$ |
541,913 |
|
|
$ |
273,478 |
|
|
$ |
268,435 |
|
|
$ |
— |
|
The Company transfers its financial assets and liabilities, measured at fair value on a recurring basis, between the fair value hierarchies at the end of each reporting period. There were no transfers of any securities between levels during the year ended December 31, 2025.
The following table is a rollforward of the fair value of the Company’s assets with fair values that were determined using Level 3 inputs at December 31, 2025:
(In thousands) |
|
Fair Value |
|
|
Balance, January 1, 2025 |
|
$ |
— |
|
Purchase of a corporate debt security |
|
|
500 |
|
Balance, December 31, 2025 |
|
$ |
500 |
|
The Company’s investments in U.S. government and agency debt securities, non-U.S. government agency debt securities and corporate debt securities classified as Level 2 within the fair value hierarchy were initially valued at the transaction price and subsequently valued, at the end of each reporting period, utilizing market-observable data. The market-observable data included reportable trades, benchmark yields, credit spreads, broker/dealer quotes, bids, offers, current spot rates and other industry and economic events. The Company validated the prices developed using the market-observable data by obtaining market values from other pricing sources, analyzing pricing data in certain instances and confirming that the relevant markets are active.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 25, 2026 | Showing above |
| 2024 | Feb 12, 2025 | |
| 2023 | Feb 21, 2024 | |
| 2022 | Feb 16, 2023 | |
| 2021 | Feb 16, 2022 | |
| 2020 | Feb 11, 2021 | |
| 2019 | Feb 13, 2020 | |
| 2018 | Feb 15, 2019 | |
| 2017 | Feb 16, 2018 | |
| 2016 | Feb 17, 2017 | |
| 2015 | Feb 25, 2016 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.