v3.26.1
Fair Value
 3 Months Ended
Mar. 31, 2026
Fair Value Disclosures [Abstract]  
Fair Value

6. 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 that the Company utilized to determine such fair value:

 

 

 

March 31,

 

 

 

 

 

 

 

 

 

 

(In thousands)

 

2026

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents

 

$

7,960

 

 

$

7,960

 

 

$

—

 

 

$

—

 

U.S. government and agency debt securities

 

 

83,035

 

 

 

78,676

 

 

 

4,359

 

 

 

—

 

Corporate debt securities

 

 

103,494

 

 

 

—

 

 

 

102,994

 

 

 

500

 

Total

 

$

194,489

 

 

$

86,636

 

 

$

107,353

 

 

$

500

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Contingent consideration

 

$

109,494

 

 

 

—

 

 

 

—

 

 

 

109,494

 

Total

 

$

109,494

 

 

$

—

 

 

$

—

 

 

$

109,494

 

 

 

 

December 31,

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

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 three months ended March 31, 2026. At March 31, 2026, the contingent consideration resulting from the Avadel Acquisition was valued as a contingent liability utilizing Level 3 inputs as its fair value is based on significant inputs not observable in the market.

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 March 31, 2026:

 

 

 

Fair Value

 

(In thousands)

 

Assets

 

 

Liabilities

 

Balance, January 1, 2026

 

$

500

 

 

$

—

 

Addition of contingent consideration related to CVR Milestone for consideration transferred

 

 

—

 

 

 

107,713

 

Addition of contingent consideration related to CVR Milestone for post-combination expense

 

 

—

 

 

 

1,781

 

Balance, March 31, 2026

 

$

500

 

 

$

109,494

 

The Company’s investments 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. For additional information related to the Company’s contingent consideration, see Note 18, Commitments and Contingent Liabilities in these “Notes to Condensed Consolidated Financial Statements”.

The carrying amounts reflected in the accompanying condensed consolidated balance sheets for cash and cash equivalents, accounts receivable, contract assets, other current assets, accounts payable and accrued expenses, sales discounts, allowances and reserves approximate fair value due to their short-term nature.

The estimated fair value of the Company’s long-term debt under its Facilities (as defined in Note 12, Long-Term Debt in these “Notes to Condensed Consolidated Financial Statements”), which was based on quoted market price indications (Level 2 in the fair value hierarchy) and which may not be representative of actual values that could have been, or will be, realized in the future, was $1,542.6 million at March 31, 2026.