v3.26.1
Fair Value Measurements
 6 Months Ended
Jun. 30, 2026
Fair Value Disclosures [Abstract]  
Fair Value Measurements

10. Fair Value Measurements

ASC Topic 820, Fair Value Measurement, establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value, as follows: Level 1 Inputs - unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date; Level 2 Inputs - other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability; and Level 3 Inputs - unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at measurement date.

Assets and liabilities measured at fair value on a recurring basis as of June 30, 2026 are as follows:

 

 

Total

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Contingent consideration

 

$

5,827

 

 

$

—

 

 

$

—

 

 

$

5,827

 

Total financial liabilities

 

$

5,827

 

 

$

—

 

 

$

—

 

 

$

5,827

 

 

In connection with the contingent consideration, the Company was not able to pay the first $1,000 Milestone 1 payment within the contractual due date as a result of the Company’s limited cash balance. Management considered the revised payment structure, together with the probability and timing of the remaining milestone obligations, in determining the fair value of the contingent consideration liability as of June 30, 2026

Assumptions utilized in the valuation of Level 3 liabilities are described as follows:

 

 

As of June 30, 2026

 

Milestone

 

Probability Of Success

 

 

Payment Date

 

Discount Rate

 

1

 

 

100.0

%

 

1/16/2026

 

 

9.54

%

2

 

 

11.7

%

 

6/30/2027

 

 

9.54

%

3

 

 

10.8

%

 

12/31/2028

 

 

9.54

%

4

 

 

10.8

%

 

12/31/2028

 

 

9.54

%

5

 

 

10.8

%

 

12/31/2030

 

 

14.54

%

6

 

 

10.8

%

 

12/31/2031

 

 

14.54

%

7

 

 

10.8

%

 

12/31/2032

 

 

14.54

%

 

The increase in the fair value of contingent consideration during the six months ended June 30, 2026 was primarily attributable to revisions in management’s estimates regarding the probability and timing of achievement of the applicable milestone events under the License and Collaboration Agreement.The following table sets forth a summary of the changes in the fair value of Level 3 contingent consideration that are measured at fair value on a recurring basis:

 

 

Three Months Ended June 30, 2026

 

 

Year Ended December 31, 2025

 

Contingent consideration

 

 

 

 

 

 

Beginning balance

 

$

6,799

 

 

$

—

 

Contingent consideration assumed in the GPCR USA acquisition

 

 

—

 

 

 

5,246

 

Change in fair value of contingent consideration

 

 

240

 

 

 

1,553

 

Ending balance

 

$

7,039

 

 

$

6,799

 

 

At June 30, 2026 and December 31, 2025, current portion of contingent consideration of $1,212 and $995, respectively, was included in accrued expenses and other current liabilities.

Cash and cash equivalents were measured using level 1 inputs as of June 30, 2026. The Company recognizes transfers between levels of the fair value hierarchy as of the end of the reporting period. There were no transfers within the hierarchy during the period ended June 30, 2026 and the year ended December 31, 2025. The carrying amount of the Company’s receivables and payables approximate their fair value due to their maturity.

The Company uses the market approach and Level 1 and Level 2 inputs to value its cash equivalents and Level 2 inputs to value its short-term investments. The Company uses the market approach and Level 3 inputs to value its liabilities. There were no liabilities measured at fair value on a recurring basis as of June 30, 2026.