XML 32 R13.htm IDEA: XBRL DOCUMENT v3.22.4
Fair Value Measurements
12 Months Ended
Dec. 31, 2022
Fair Value Disclosures [Abstract]  
Fair Value Measurements

6. Fair Value Measurements

Financial instruments, including cash, cash equivalents, accounts receivable, net, other current assets, other assets, restricted cash, accounts payable, and accrued expenses, are presented at amounts that approximate fair value at December 31, 2022 and 2021.

Items classified as Level 2 consist of corporate debt securities, commercial paper, and U.S. government and agency securities. We estimate the fair values of these marketable securities by taking into consideration valuations obtained from third-party pricing sources. These pricing sources utilize industry standard valuation models, including both income and market-based approaches, for which all significant inputs are observable, either directly or indirectly, to estimate fair value. These inputs include market pricing based on real-time trade data for the same or similar securities, issuer credit spreads, benchmark yields, and other observable inputs. We validate the prices provided by our third-party pricing sources by understanding the models used, obtaining market values from other pricing sources and analyzing pricing data in certain instances.

In certain cases where there is limited activity or less transparency around inputs to valuation, the related assets or liabilities are classified as Level 3. The embedded derivative liability associated with a Revenue Interest Financing Agreement we entered into with HCR in September 2019 and amended in June 2021 (the “Amended Revenue Interest Agreement”), as discussed further in Note 10, “Long-Term Obligations”, is measured at fair value and is included as a component of the deferred royalty obligation on our consolidated balance sheet. The embedded derivative liability is subject to remeasurement at the end of each reporting period, with changes in fair value recognized as a component of other (expense) income, net on the consolidated statements of operations. The valuation method incorporates certain unobservable Level 3 key inputs including: (i) the probability-weighted net sales of XPOVIO and any of our other future products, including worldwide net product sales, upfront payments, milestones and royalties; (ii) our risk-adjusted discount rate; and (iii) the probability of a change in control occurring during the term of the instrument.

The following tables present information about our financial assets and liability that have been measured at fair value and indicate the fair value hierarchy of the valuation inputs utilized to determine such fair value (in thousands):

 

Description

 

As of December 31, 2022

 

 

Quoted
Prices
in Active
Markets for Identical Assets
(Level 1)

 

 

Significant
Other
Observable
Inputs
(Level 2)

 

 

Significant
Unobservable
Inputs
(Level 3)

 

Financial assets

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents:

 

 

 

 

 

 

 

 

 

 

 

 

Money market funds

 

$

115,498

 

 

$

115,498

 

 

$

 

 

$

 

Commercial paper

 

 

7,629

 

 

 

 

 

 

7,629

 

 

 

 

Investments:

 

 

 

 

 

 

 

 

 

 

 

 

Corporate debt securities

 

 

78,143

 

 

 

 

 

 

78,143

 

 

 

 

Commercial paper

 

 

43,914

 

 

 

 

 

 

43,914

 

 

 

 

U.S. government and agency securities

 

 

20,722

 

 

 

 

 

 

20,722

 

 

 

 

 

 

$

265,906

 

 

$

115,498

 

 

$

150,408

 

 

$

 

Financial liability

 

 

 

 

 

 

 

 

 

 

 

 

Embedded derivative liability

 

$

2,800

 

 

$

 

 

$

 

 

$

2,800

 

 

Description

 

As of December 31, 2021

 

 

Quoted
Prices
in Active
Markets for Identical Assets
(Level 1)

 

 

Significant
Other
Observable
Inputs
(Level 2)

 

 

Significant
Unobservable
Inputs
(Level 3)

 

Financial assets

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents:

 

 

 

 

 

 

 

 

 

 

 

 

Money market funds

 

$

32,947

 

 

$

32,947

 

 

$

 

 

$

 

U.S. government and agency securities

 

 

12,000

 

 

 

12,000

 

 

 

 

 

 

 

Commercial paper

 

 

11,998

 

 

 

 

 

 

11,998

 

 

 

 

Investments:

 

 

 

 

 

 

 

 

 

 

 

 

Corporate debt securities

 

 

24,269

 

 

 

 

 

 

24,269

 

 

 

 

Commercial paper

 

 

12,995

 

 

 

 

 

 

12,995

 

 

 

 

U.S. government and agency securities

 

 

892

 

 

 

 

 

 

892

 

 

 

 

 

 

$

95,101

 

 

$

44,947

 

 

$

50,154

 

 

$

 

Financial liability

 

 

 

 

 

 

 

 

 

 

 

 

Embedded derivative liability

 

$

3,080

 

 

$

 

 

$

 

 

$

3,080

 

 

 

The following table sets forth a summary of the changes in the estimated fair value of our embedded derivative liability (in thousands):

 

 

 

Embedded
Derivative
Liability

 

Balance as of December 31, 2020

 

$

1,800

 

Change in fair value

 

 

(90

)

Addition of value as a result of Amended Revenue Interest Agreement

 

 

1,370

 

Balance as of December 31, 2021

 

 

3,080

 

Change in fair value

 

 

(280

)

Balance as of December 31, 2022

 

$

2,800