HALOZYME THERAPEUTICS, INC.HALO
HALOZYME THERAPEUTICS, INC. Fair Value Disclosure
Fair Value Measurement
Available-for-sale marketable securities consisted of the following (in thousands):
| December 31, 2025 | ||||||||||||||||||||||||||
| Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | |||||||||||||||||||||||
U.S. treasury securities | $ | 9,002 | $ | — | $ | (2) | $ | 9,000 | ||||||||||||||||||
| Total marketable securities, available-for-sale | $ | 9,002 | $ | — | $ | (2) | $ | 9,000 | ||||||||||||||||||
| December 31, 2024 | ||||||||||||||||||||||||||
| Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | |||||||||||||||||||||||
| Asset-backed securities | $ | 251 | $ | — | $ | — | $ | 251 | ||||||||||||||||||
| Corporate debt securities | 102,632 | 150 | (207) | 102,575 | ||||||||||||||||||||||
U.S. treasury securities | 367,700 | 442 | (572) | 367,570 | ||||||||||||||||||||||
| Agency bonds | 9,844 | — | (16) | 9,828 | ||||||||||||||||||||||
| Total marketable securities, available-for-sale | $ | 480,427 | $ | 592 | $ | (795) | $ | 480,224 | ||||||||||||||||||
As of December 31, 2025, all available-for-sale marketable securities with a fair market value of $9.0 million were in an immaterial gross unrealized loss position. Based on our review of these marketable securities, we believe none of the unrealized loss is as a result of a credit loss as of December 31, 2025 because we do not intend to sell these securities and it is not more-likely-than-not that we will be required to sell these securities before the recovery of their amortized cost basis.
The estimated fair value of our contractual maturities of available-for-sale debt securities were as follows (in thousands):
| December 31, 2025 | December 31, 2024 | |||||||||||||
| Due within one year | $ | 9,000 | $ | 314,978 | ||||||||||
Due after one year but within five years (1) | — | 165,246 | ||||||||||||
Total estimated fair value of available-for-sale securities | $ | 9,000 | $ | 480,224 | ||||||||||
(1) These investments are classified as current assets which reflects management’s intention to use the proceeds from the sale of these investments to fund operations, as necessary.
The following table summarizes, by major security type, our cash equivalents and available-for-sale marketable securities measured at fair value on a recurring basis and are categorized using the fair value hierarchy (in thousands):
| December 31, 2025 | December 31, 2024 | |||||||||||||||||||||||||||||||||||||
| Level 1 | Level 2 | Total Estimated Fair Value | Level 1 | Level 2 | Total Estimated Fair Value | |||||||||||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||||||||||||
Cash equivalents | ||||||||||||||||||||||||||||||||||||||
| Money market funds | $ | 175 | $ | — | $ | 175 | $ | 55,182 | $ | — | $ | 55,182 | ||||||||||||||||||||||||||
Available-for-sale marketable securities | ||||||||||||||||||||||||||||||||||||||
| Asset-backed securities | — | — | — | — | 251 | 251 | ||||||||||||||||||||||||||||||||
| Corporate debt securities | — | — | — | — | 102,575 | 102,575 | ||||||||||||||||||||||||||||||||
U.S. treasury securities | 9,000 | — | 9,000 | 367,570 | — | 367,570 | ||||||||||||||||||||||||||||||||
| Agency bonds | — | — | — | 9,828 | — | 9,828 | ||||||||||||||||||||||||||||||||
Derivative instruments | ||||||||||||||||||||||||||||||||||||||
Currency hedging contracts (1) | — | — | — | — | 4,006 | 4,006 | ||||||||||||||||||||||||||||||||
Total assets measured at fair value | $ | 9,175 | $ | — | $ | 9,175 | $ | 432,580 | $ | 106,832 | $ | 539,412 | ||||||||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||||||||||||||||
Derivative instruments | ||||||||||||||||||||||||||||||||||||||
Currency hedging contracts (1) | $ | — | $ | 22,891 | $ | 22,891 | $ | — | $ | 17 | $ | 17 | ||||||||||||||||||||||||||
(1) Based on observable market transactions of spot currency rates, forward currency rates or equivalently-termed instruments. Carrying amounts of the financial assets and liabilities are equal to the fair value. As of December 31, 2025, the derivative liabilities recorded within accrued expenses and other long-term liabilities in our consolidated balance sheets were $ and $, respectively. As of December 31, 2024, the derivative assets recorded within prepaid expenses and other current assets and prepaid expenses and other assets in our consolidated balance sheets were $ and $, respectively. The derivative liabilities recorded within other long-term liabilities in our consolidated balance sheets as of December 31, 2024 were not material.
We had no available-for-sale securities that were classified within Level 3 as of December 31, 2025 and 2024.
A contingent liability was assumed as part of the Antares acquisition related to TLANDO. The acquisition date fair value was measured using the income approach, specifically the probability weighted expected return method for the development milestone payments and the option pricing methodology using the Monte Carlo simulation for commercial milestone payments and royalty payments. Estimates and assumptions used in the Monte Carlo simulation include forecasted revenues, cost of debt, risk free rate, weighted average cost of capital, revenue market price risk and revenue volatility. Estimates and assumptions used in the income approach include the probability of achieving certain milestones and a discount rate. These unobservable inputs represent a Level 3 measurement because they are supported by little or no market activity and reflect our own assumptions in measuring fair value. Changes in the fair value subsequent to the acquisition date is recognized in our consolidated statements of income. In September 2023, we provided Lipocine notice of termination of the TLANDO license agreement effective January 31, 2024. Based on the fair value remeasurement performed, we recognized a gain on change in fair value of the contingent liability of $13.2 million for the twelve months ended December 31, 2023 in our consolidated statements of income.
A contingent liability with a preliminary value of $23.0 million was assumed as part of the Elektrofi acquisition related to future milestone payments. The acquisition date fair value of contingent consideration was measured using the income
approach, specifically the probability weighted expected return method for the development milestone payments. The fair value of the contingent liability will be remeasured quarterly. Estimates and assumptions used in the valuation include probability of achieving certain milestones, the expected timing of achieving these milestones, and a discount rate. These unobservable inputs represent a Level 3 measurement because they are supported by little or no market activity and reflect our own assumptions in measuring fair value. Changes in the fair value subsequent to the acquisition date will be recognized in our consolidated statements of income.
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Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 17, 2026 | Showing above |
| 2024 | Feb 18, 2025 | |
| 2023 | Feb 20, 2024 | |
| 2022 | Feb 21, 2023 | |
| 2021 | Feb 22, 2022 | |
| 2020 | Feb 23, 2021 | |
| 2019 | Feb 24, 2020 | |
| 2018 | Feb 21, 2019 | |
| 2017 | Feb 20, 2018 | |
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.