v3.26.1
Fair Value Measurements
 3 Months Ended
Mar. 31, 2026
Fair Value Disclosures [Abstract]  
Fair Value Measurements Fair Value Measurements
The following table sets forth the fair value of the Company’s financial assets and liabilities measured at fair value on a recurring basis based on the three-tier fair value hierarchy (in thousands):
March 31, 2026
Level 1Level 2Level 3Total
Financial assets:
Money market funds$64,472 $— $— $64,472 
U.S. Treasury securities— 156,458 — 156,458 
U.S. government agency securities— 13,902 — 13,902 
Corporate debt securities— 9,417 — 9,417 
Total financial assets$64,472 $179,777 $— $244,249 
Financial liabilities:
Success payment liabilities— — 889 889 
Total financial liabilities$— $— $889 $889 
December 31, 2025
Level 1Level 2Level 3Total
Financial assets:
Money market funds$49,766 $— $— $49,766 
U.S. Treasury securities— 176,072 — 176,072 
U.S. government agency securities— 6,533 — 6,533 
Corporate debt securities— 4,434 — 4,434 
Total financial assets$49,766 $187,039 $— $236,805 
Financial liabilities:
SPA put/call$— $— $11,411 $11,411 
Success payment liabilities— — 1,242 1,242 
Total financial liabilities$— $— $12,653 $12,653 
The Company measures the fair value of money market funds based on quoted prices in active markets for identical assets. The Company measures the fair value of marketable equity securities traded in active markets based on quoted prices of identical assets. The Level 2 marketable securities include U.S. Treasury securities, U.S. government agency securities and corporate debt securities, which are valued using third-party pricing sources. The pricing services
applied industry standard valuation models. Inputs utilized include market pricing based on real-time trade data for the same or similar securities and other significant inputs derived from or corroborated by observable market data.
In July 2025, the Company completed a $50.0 million equity financing under a Securities Purchase Agreement (the “SPA”) with certain institutional and other accredited investors (the “Purchasers”) that provided both the Company and the Purchasers with mutually exclusive rights, but not obligations, to purchase or sell additional shares of the Company’s common stock (or pre-funded warrants in lieu thereof) under specified conditions. These rights included (i) the Company’s option to require investors to purchase additional equity securities upon the achievement of a defined milestone event (the “Milestone Closing”) and (ii) the investors’ option to purchase a similar dollar amount of equity securities at a fixed price prior to the Milestone Closing (the “Investor Call Closing”). Because the Milestone Closing and Investor Call Closing were mutually exclusive, they were accounted for as a single combined financial instrument (the “SPA put/call”).
Pursuant to the SPA, following the achievement of the applicable milestone, the Company initiated the Milestone Closing and on March 6, 2026, the Company sold and issued 1,952,360 shares of common stock at a purchase price per share of $25.61 at the Milestone Closing, for gross proceeds of approximately $50.0 million. Prior to exercise, the SPA put/call was presented within accrued liabilities and other current liabilities on the Company’s consolidated balance sheet as of December 31, 2025. See Note 9, Stockholders’ Equity - Securities Purchase Agreement, for additional information regarding the SPA put/call.
Prior to exercise, the SPA put/call was classified as a Level 3 financial instrument and the fair value was estimated using a Monte Carlo simulation valuation method including the following assumptions as of December 31, 2025:
December 31,
2025
Time to maturity (years)
0.67
Risk-free rate
3.55 %
Volatility
90 %
Upon the Milestone Closing on March 6, 2026, the fair value of the SPA put/call was determined based on the intrinsic value of the instrument (the difference between the exercise price of $25.61 and the Company’s closing stock price of $22.46). As the valuation was derived from observable inputs, the SPA put/call was classified as a Level 2 financial instrument at the time of settlement. Following the issuance of the shares, the instrument was settled and the carrying value of approximately $6.1 million was reclassified to stockholders’ equity.
The Company’s success payment liabilities are classified as Level 3 financial instruments. Prior to its settlement on March 6, 2026, the SPA put/call was also classified as a Level 3 financial instrument. The success payment liabilities were estimated by management using its historical experience of the correlation of success payment fair values relative to the Company’s stock price.
The Company utilizes estimates and assumptions in determining the estimated success payment liabilities and SPA put/call and associated changes in fair value. A small change in the value of the Company’s common stock may result in a relatively large change in the estimated fair value of the success payment liabilities and the SPA put/call prior to settlement and associated changes in fair value. Prior to its settlement, a small change in management’s assessment of the likelihood of achieving either a clinical milestone relating to the Company’s ongoing PiNACLE pivotal trial or certain other corporate milestones relevant to the SPA put/call could have resulted in a material change in its estimated fair value.
The following table sets forth a summary of the changes in the fair value of the Company’s Level 3 financial instruments (in thousands):
Success Payment
Liabilities		SPA Put/Call (Asset) Liability
Balance at December 31, 2025
$1,242 $11,411 
Change in fair value (1)
(353)(17,561)
Settlement via equity issuance— 6,150 
Balance at March 31, 2026
$889 $— 
(1)The change in fair value of the success payment liabilities and SPA put/call are recorded in other income, net.