v3.26.1
Fair Value Measurements
 3 Months Ended
Mar. 31, 2026
Fair Value Disclosures [Abstract]  
Fair Value Measurements Fair Value Measurements
The following tables present the Company’s assets and liabilities that are measured at fair value on a recurring basis as of March 31, 2026 and December 31, 2025 (in thousands):
March 31, 2026
TotalLevel 1Level 2Level 3
Assets:
Money market funds (included in cash equivalents)
$117,674 $117,674 $— $— 
Total assets$117,674 $117,674 $— $— 
Liabilities:
Warrant liability
$47 $— $— $47 
Contingent value right liability
405,900 — — 405,900 
Total liabilities$405,947 $— $— $405,947 
December 31, 2025
TotalLevel 1Level 2Level 3
Assets:
Money market funds (included in cash equivalents)
$122,724 $122,724 $— $— 
Total assets$122,724 $122,724 $— $— 
Liabilities:
Warrant liability
$141 $— $— $141 
Contingent value right liability
392,100 — — 392,100 
Total liabilities$392,241 $— $— $392,241 
There were no transfers within the fair value hierarchy during the three months ended March 31, 2026 or the year ended December 31, 2025.
Cash, Cash Equivalents, and Restricted Cash
As of March 31, 2026 and December 31, 2025, money market funds were classified as cash and cash equivalents on the accompanying consolidated balance sheets as they mature within 90 days from the date of purchase.
As of March 31, 2026, the Company had restricted cash balances relating to secured letters of credit in connection with its real estate leases. The Company’s consolidated statements of cash flows include the following as of March 31, 2026 and 2025 (in thousands):
March 31,
20262025
Cash and cash equivalents$118,641 $180,434 
Long-term restricted cash1,735 1,669 
Total cash, cash equivalents, and restricted cash$120,376 $182,103 
Warrants to Purchase Common Stock
In April 2022, the Company issued warrants in connection with an underwritten offering, or the 2022 Warrants. Pursuant to the terms of the 2022 Warrants, the Company could be required to settle the 2022 Warrants in cash in the event of an acquisition of the Company under certain circumstances and, as a result, the 2022 Warrants are required to be measured at fair value and reported as a liability on the balance sheet.
The Company recorded the fair value of the 2022 Warrants upon issuance using the Black-Scholes valuation model and is required to revalue the 2022 Warrants at each reporting date, with any changes in fair value recorded in the statements of operations and comprehensive loss. The valuation of the 2022 Warrants is classified as Level 3 of the fair value hierarchy due to the need to use assumptions in the valuation that are both significant to the fair value measurement and unobservable,
including the stock price volatility and the expected life of the 2022 Warrants. Generally, increases (decreases) in the fair value of the underlying stock and estimated term would result in a directionally similar impact to the fair value measurement.
The estimated fair value of the 2022 Warrants was determined using the following inputs to the Black-Scholes simulation valuation:
•Estimated fair value of the underlying stock. The Company estimates the fair value of the common stock based on the closing stock price at the end of each reporting period.
•Risk-free interest rate. The risk-free interest rate is based on the U.S. Treasury at the valuation date commensurate with the expected remaining life assumption.
•Dividend rate. The dividend rate is based on the historical rate, which the Company anticipates will remain at zero.
•Expected life. The expected life of the 2022 Warrants is assumed to be equivalent to their remaining contractual term which expires on April 11, 2027.
•Volatility. The Company estimates stock price volatility based on the Company’s historical volatility for a period of time commensurate with the expected remaining life of the 2022 Warrants.
A summary of the Black-Scholes pricing model assumptions used to record the fair value of the 2022 Warrants liability is as follows:
 March 31, 2026December 31, 2025
Risk-free interest rate3.68%3.48%
Dividend yield— — 
Expected life (in years)1.031.28
Expected volatility89.14%87.36%
The following table reflects a roll-forward of fair value for the Company’s Level 3 warrant liabilities (see Note 9, “Equity” to these unaudited consolidated financial statements) for the three months ended March 31, 2026 (in thousands):
Warrant Liability
Fair value as of December 31, 2025
$141 
Change in fair value
(94)
Fair value as of March 31, 2026
$47 
Contingent Value Right
In December 2023, the Company entered into a contingent value rights agreement, or the CVR Agreement, pursuant to which each holder of common stock or a 2022 Warrant in December 2023 was distributed a CVR by the Company. Each CVR entitles its holder to distributions of milestone and royalty payments under the Sobi License, net of deductions. See Note 6, “Fair Value Measurements” to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 for further discussion of the terms related to the CVR Agreement.
The CVRs represent financial instruments that are accounted for under the fair value option election in ASC 825, Financial Instruments, or ASC 825. Under the fair value option election, the CVRs are initially measured at the aggregate estimated fair value of the CVRs and will be subsequently remeasured at estimated fair value on a recurring basis at each reporting period date. The estimated fair value of the CVR liability was determined using a Monte Carlo simulation model to estimate future cash flows associated with the legacy assets, including the expected milestone and royalty payments under the Sobi License, net of deductions. Changes in fair value of the CVR liability are presented in the consolidated statements of operations and comprehensive loss. The liability value is based on significant inputs not observable in the market such as estimated cash flows, estimated probabilities of success, and expected volatility of future revenues, which represent a Level 3 measurement within the fair value hierarchy. The significant inputs used to estimate the fair value of the CVR liability, which represented a financial instrument being accounted for under the fair value option, were as follows:
March 31, 2026December 31, 2025
Estimated cash flow dates2026 - 20382026 - 2037
Estimated probability of success
95.0% - 100.0%
95.0% - 100.0%
Expected volatility of future revenues23.0%23.0%
The following table reflects a roll-forward of fair value for the Company’s Level 3 CVR liability for the three months ended March 31, 2026 (in thousands):
CVR Liability
Fair value as of December 31, 2025
$392,100 
Change in fair value
13,800 
Fair value as of March 31, 2026
$405,900