Fair Value Measurements and Marketable Securities

6 Months Ended

Jun. 30, 2026

Fair Value Measurements and Marketable Securities [Abstract]

Fair Value Measurements and Marketable Securities

3. Fair Value Measurements and Marketable Securities

The following tables represent the Company’s fair value hierarchy for financial assets and financial liabilities measured at fair value on a recurring basis (in thousands):


	Amortized Cost Basis		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value as of June 30, 2026		Cash and Cash Equivalents		Current Marketable Securities		Non-Current Marketable Securities
Assets
Cash	$	29,718	$	—	$	—		$	29,718	$	29,718	$	—	$	—
Level 1:
Money market funds		34,659		—		—			34,659		34,659		—		—
Level 2:
Certificates of deposit		20,892		4		(9	)		20,887		—		20,887		—
Commercial paper		54,813		5		(52	)		54,766		5,995		48,771		—
U.S. Treasuries		92,469		10		(216	)		92,263		—		67,884		24,379
Corporate bonds		198,524		51		(239	)		198,336		—		153,420		44,916
Subtotal		366,698		70		(516	)		366,252		5,995		290,962		69,295
Total	$	431,075	$	70	$	(516	)	$	430,629	$	70,372	$	290,962	$	69,295


	Amortized Cost Basis		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value as of December 31, 2025		Cash and Cash Equivalents		Current Marketable Securities		Non-Current Marketable Securities
Assets
Cash	$	10,696	$	—	$	—		$	10,696	$	10,696	$	—	$	—
Level 1:
Money market funds		39,570		—		—			39,570		39,570		—		—
Level 2:
Certificates of deposit		35,986		37		—			36,023		—		36,023		—
Commercial paper		63,875		48		—			63,923		5,479		58,444		—
U.S. Treasuries		76,920		153		—			77,073		—		63,589		13,484
Corporate bonds		286,260		492		(3	)		286,749		4,496		184,358		97,895
Subtotal		463,041		730		(3	)		463,768		9,975		342,414		111,379
Total	$	513,307	$	730	$	(3	)	$	514,034	$	60,241	$	342,414	$	111,379

There are no Level 3 assets and no Level 1 or 2 liabilities.

Level 3 Inputs

The fair value of the derivative liability is based on significant inputs not observable in the market, which represent a Level 3 measurement within the fair value hierarchy. The fair value of the derivative liability was determined using a present value analysis with multiple scenarios. In determining the fair value of the derivative liability, the inputs impacting fair value include the change of control payment to the Cystic Fibrosis Foundation, the probability of a change of control event, the product status at time of a change of control event and the discount rate. See Note 6, Research and Collaboration Arrangements, and Note 16, Derivative Liability, for further discussion on the embedded derivative.

There were no transfers between Level 1, 2 and 3 for assets or liabilities during the periods presented.

The following table sets forth a summary of the changes in the fair value of the Company's Level 3 financial instrument (in thousands):


	Derivative Liability
Balance as of December 31, 2025	$	358
Change in fair value		26
Balance as of June 30, 2026	$	384

The change in fair value above is included in other income (expense), net, in the Company's condensed statements of operations.

All marketable securities held as of June 30, 2026 had contractual maturities of less than two years. There have been no material realized gains or losses on marketable securities for the periods presented.

Aggregate fair values of marketable securities with unrealized losses and gains were as follows as of June 30, 2026 and December 31, 2025 (in thousands):


	June 30, 2026		December 31, 2025
Aggregate fair value of marketable securities in a continuous loss position for less than twelve months	$	260,917	$	15,449
Aggregate fair value of marketable securities in a continuous loss position for more than twelve months		—		1,951
Aggregate fair value of marketable securities in unrealized gain position		105,335		446,368
Total marketable securities	$	366,252	$	463,768

The Company manages credit risk associated with its investment portfolio through its investment policy, which limits purchases to high-quality issuers and also limits the amount of its portfolio that can be invested in a single issuer. The Company did not record an allowance for credit losses or other impairment charges related to its marketable securities for any period presented. The Company has determined that (i) it does not have the intent to sell any of these investments, and (ii) it is not more likely than not that it will be required to sell any of these investments before recovery of the entire amortized cost basis. The Company further considered the maximum unrealized loss amounts both at the individual instrument level, $41 thousand, as well as in aggregate, $516 thousand, as of June 30, 2026, as immaterial. These unrealized losses were not attributed to credit risk and were associated with changes in market conditions. The Company periodically reviews its marketable securities for indications of credit losses. The Company anticipates that it will recover the entire amortized cost basis of such securities, and therefore, no credit loss existed as of June 30, 2026.