v3.25.2
Fair Value Measurements
 6 Months Ended
Jun. 30, 2025
Fair Value Disclosures [Abstract]  
Fair Value Measurements Fair Value Measurements
The following tables summarize the Company’s financial assets and liabilities that are measured at fair value on a recurring basis by level within the fair value hierarchy as of the periods presented (in thousands):
Fair Value Measurements as of June 30, 2025
Line Item in the Condensed Consolidated Balance Sheets
Level 1Level 2Level 3Total
Assets
Money market funds
Cash and cash equivalents
$269,504 $— $— $269,504 
Liabilities
Contingent consideration
Accrued expenses and other current liabilities$— $— $4,940 $4,940 
Fair Value Measurements as of December 31, 2024
Line Item in the Condensed Consolidated Balance Sheets
Level 1Level 2Level 3Total
Assets
Money market funds
Cash and cash equivalents
$321,985 $— $— $321,985 
Interest rate cap
Prepaid expenses and other current assets— 1,375 — 1,375 
Total assets$321,985 $1,375 $— $323,360 
Contingent Consideration
Alphazyme
In connection with the acquisition of Alphazyme, LLC (“Alphazyme”), which was completed in January 2023, the Company was initially required to make contingent payments to the sellers of Alphazyme of up to $75.0 million (the “Performance Payments”), subject to Alphazyme achieving certain revenue thresholds during each of the fiscal years 2023 through 2025. The preliminary fair value of the liability for the contingent consideration recognized upon the completion of the acquisition as part of the purchase accounting opening balance sheet was $5.3 million. The preliminary fair value of the contingent consideration was determined using a Monte-Carlo simulation-based model discounted to present value. Assumptions used to determine the fair value were expected revenue, a discount rate of 17.8% and various probability factors. The ultimate settlement of the contingent consideration could deviate from current estimates based on actual revenues. The contingent consideration consists of three Performance Payments for each of the three annual performance periods, with the first and second payments (to the extent earned) due in 2024 and 2025, respectively. For the first and second performance periods which ended on December 31, 2023 and 2024, respectively, it was determined that the defined revenue targets were not achieved. Consequently, no Performance Payments were made to the sellers of Alphazyme for the first and second performance periods. As of June 30,
2025, the Company may be required to make Performance Payments to the sellers of Alphazyme of up to $25.0 million for the third performance period; however, based on Alphazyme’s current revenue expectations, no such payment is expected to be made.
This contingent consideration liability, which had no fair value as of June 30, 2025, is considered to be a Level 3 financial liability that is remeasured each reporting period. Changes in fair value of contingent consideration are recognized as a gain or loss and recorded within change in estimated fair value of contingent consideration in the condensed consolidated statements of operations. During the three and six months ended June 30, 2024, the Company recorded a $1.2 million decrease in the estimated fair value of contingent consideration. This was due to a change in estimate associated with the expected achievement of the Alphazyme revenue thresholds that would require the Company to make a contingent consideration payment under the Alphazyme Securities Purchase Agreement.
Officinae
In connection with the acquisition of Officinae (see Note 2), the Company is required to make contingent payments to the sellers of $5.0 million payable in cash upon the achievement of a certain integration milestone. The preliminary fair value of the liability for the contingent payments recognized upon the acquisition as part of the purchase accounting opening balance sheet was $4.8 million. The estimated fair value was developed at a 100.0% probability of achievement and by discounting future net cash flows to their present value at a discount rate of 7.3%. The ultimate settlement of the contingent consideration could deviate from current estimates based on the actual results of these financial measures.
This contingent consideration liability is considered to be a Level 3 financial liability that is remeasured each reporting period. Changes in fair value of contingent consideration are recognized as a gain or loss and recorded within change in estimated fair value of contingent consideration in the condensed consolidated statements of operations. During the three and six months ended June 30, 2025, the Company recorded a $0.1 million increase in the estimated fair value of contingent consideration due to a change in its present value.
The following table provides a reconciliation of liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the period presented (in thousands):
Contingent Consideration
Balance as of December 31, 2024$— 
Contingent consideration related to the acquisition of Officinae (see Note 2)
4,800 
Change in estimated fair value of contingent consideration
140 
Balance as of June 30, 2025$4,940