v3.25.2
Fair Value Measurement
 6 Months Ended
Jun. 30, 2025
Fair Value Disclosures [Abstract]  
Fair Value Measurement
3. Fair Value Measurement

The Company measures its financial assets and liabilities at fair value, which is defined as the exit price, or the amount that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

The Company uses the following three-level valuation hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs to value its financial assets and liabilities:

•Level 1 — Observable inputs such as unadjusted quoted prices in active markets for identical instruments.
•Level 2 — Quoted prices for similar instruments in active markets or inputs that are observable for the asset or liability, either directly or indirectly.
•Level 3 — Significant unobservable inputs based on the Company’s assumptions.
Financial Instruments Measured on a Recurring Basis

The following tables provide a summary of the assets and liabilities that are measured at fair value on a recurring basis as of June 30, 2025 and December 31, 2024:

Fair Value Measurements as of
June 30, 2025
(in thousands)Level 1Level 2Level 3Total
Cash equivalents:
Money market funds$13,806 $— $— $13,806 
Total cash equivalents$13,806 $— $— $13,806 
Short-term investments:
Government securities
$23,334 $— $— $23,334 
Total short-term investments$23,334 $— $— $23,334 
Liabilities:
Current contingent liabilities$— $— $1,123 $1,123 
Long-term contingent liabilities— — 586 586 
Total contingent liabilities$— $— $1,709 $1,709 

Fair Value Measurements as of
December 31, 2024
(in thousands)Level 1Level 2Level 3Total
Cash equivalents:
Money market funds$17,616 $— $— $17,616 
Total cash equivalents$17,616 $— $— $17,616 
Short-term investments:
Government and agency securities$30,429 $1,316 $— $31,745 
Asset-backed securities— 91 — 91 
Total short-term investments$30,429 $1,407 $— $31,836 
Liabilities:
Current contingent liabilities$— $— $531 $531 
Long-term contingent liabilities— — 953 953 
Total contingent liabilities$— $— $1,484 $1,484 

The carrying amounts reported in the Company’s condensed consolidated balance sheets for accounts receivable, other assets, accounts payable and accrued expenses and other current liabilities approximate fair value due to their relatively short periods to maturity.
Available-for-Sale Securities

The Company obtains the fair value of its Level 2 available-for-sale securities from third-party pricing services. The pricing services utilize industry standard valuation models whereby all significant inputs, including benchmark yields, reported trades, broker/dealer quotes, issuer spreads, bids, offers, or other market-related data, are observable. The Company validates the prices provided by the third-party pricing services by reviewing their pricing methods and obtaining market values from other pricing sources. The Company did not adjust or override any fair value measurements provided by these pricing services as of December 31, 2024. There were no level 2 available-for-sale securities as of June 30, 2025. The Company has not transferred any investment securities between classification levels.

Contingent Liabilities

Contingent liabilities are measured at fair value each reporting period by using a probability weighted income approach.

A reconciliation of the Level 3 financial instruments as of June 30, 2025 and December 31, 2024 is as follows:

(in thousands)
Icagen(1)
Taurus(2)
Total
Balance as of January 1, 2024
$4,106 $400 $4,506 
Payments of contingent liabilities
(75)(400)(475)
Fair value adjustments to contingent liabilities(2,547)— (2,547)
Balance as of December 31, 2024
$1,484 $— $1,484 
Payments of contingent liabilities
— — — 
Fair value adjustments to contingent liabilities225 — 225 
Balance as of June 30, 2025
$1,709 $— $1,709 
_____________
(1)Changes in the fair values of contingent liabilities in connection with the acquisition of Icagen are recognized in “Other operating income, net” in the condensed consolidated statements of operations and in the operating section of the statements of cash flows. Payments of contingent liabilities are disclosed in the financing section of the statements of cash flows.
(2)Changes in the fair values of contingent liabilities in connection with the acquisition of Taurus are recognized in “Intangible assets, net” in the condensed consolidated balance sheets. Payments of contingent liabilities are disclosed in the investing section of the statement of cash flows.

Contingent liabilities are classified as Level 3 liabilities as their valuation requires substantial judgment and estimation of factors that are not currently observable in the market. These subjective estimates include but are not limited to assumptions involving the achievement probability of certain developmental and commercialization milestones, discount rates, and projected years of payments. If different assumptions were used for the various inputs to the valuation approaches, the estimated fair value could be materially higher or lower than the fair value determined.