v3.26.3
Fair Value Measurement
 9 Months Ended
Sep. 30, 2026
Fair Value Disclosures [Abstract]  
Fair Value Measurement
3. Fair Value Measurement

The Company measures its financial assets and liabilities at fair value, which is defined as the exit price, or the amount that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

The Company uses the following three-level valuation hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs to value its financial assets and liabilities:

•Level 1 — Observable inputs such as unadjusted quoted prices in active markets for identical instruments.
•Level 2 — Quoted prices for similar instruments in active markets or inputs that are observable for the asset or liability, either directly or indirectly.
•Level 3 — Significant unobservable inputs based on the Company’s assumptions.

Financial Instruments Measured on a Recurring Basis

The following tables provide a summary of the assets and liabilities that are measured at fair value on a recurring basis as of September 30, 2026 and December 31, 2025:

Fair Value Measurements as of
September 30, 2026
(in thousands)Level 1Level 2Level 3Total
Cash equivalents:
Money market funds$16,073 $— $— $16,073 
Total cash equivalents$16,073 $— $— $16,073 
Short-term investments:
Government securities
$13,112 $— $— $13,112 
Corporate debt securities— 17,466 — 17,466 
Commercial paper— 10,749 — 10,749 
Total short-term investments$13,112 $28,215 $— $41,327 
Liabilities:
Current contingent liabilities$— $— $793 $793 
Long-term contingent liabilities— — 219 219 
Total contingent liabilities$— $— $1,012 $1,012 
Fair Value Measurements as of
December 31, 2025
(in thousands)Level 1Level 2Level 3Total
Cash equivalents:
Money market funds$20,080 $— $— $20,080 
Total cash equivalents$20,080 $— $— $20,080 
Short-term investments:
Government securities$28,501 $— $— $28,501 
Total short-term investments$28,501 $— $— $28,501 
Liabilities:
Current contingent liabilities$— $— $1,044 $1,044 
Long-term contingent liabilities— — 315 315 
Total contingent liabilities$— $— $1,359 $1,359 

The carrying amounts reported in the Company’s condensed consolidated balance sheets for accounts receivable, other assets, accounts payable and accrued expenses and other current liabilities approximate fair value due to their relatively short periods to maturity.

Available-for-Sale Securities

The Company obtains the fair value of its Level 2 available-for-sale securities from third-party pricing services. The pricing services utilize industry standard valuation models whereby all significant inputs, including benchmark yields, reported trades, broker/dealer quotes, issuer spreads, bids, offers, or other market-related data, are observable. The Company validates the prices provided by the third-party pricing services by reviewing their pricing methods and obtaining market values from other pricing sources. The Company did not adjust or override any fair value measurements provided by these pricing services as of September 30, 2026. There were no level 2 available-for-sale securities as of December 31, 2025. The Company has not transferred any investment securities between classification levels.

Contingent Liabilities

Contingent liabilities are measured at fair value each reporting period by using a probability weighted income approach. Changes in the fair values of contingent liabilities are recognized in “Other operating expense (income), net” in the condensed consolidated statements of operations and in the operating section of the statements of cash flows. Payments of contingent liabilities are disclosed in the financing section of the statements of cash flows.

A reconciliation of the Level 3 financial instruments as of September 30, 2026 and December 31, 2025 is as follows:

(in thousands)Icagen
Balance as of January 1, 2025
$1,484 
Payments of contingent liabilities
(450)
Fair value adjustments to contingent liabilities325 
Balance as of December 31, 2025
$1,359 
Payments of contingent liabilities
(263)
Fair value adjustments to contingent liabilities(84)
Balance as of September 30, 2026
$1,012 

Contingent liabilities are classified as Level 3 liabilities as their valuation requires substantial judgment and estimation of factors that are not currently observable in the market. These subjective estimates include but are not limited to assumptions involving the achievement probability of certain developmental and commercialization milestones, discount rates, and projected years of payments. If different assumptions were used for the various inputs to the valuation approaches, the estimated fair value could be materially higher or lower than the fair value determined.