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Fair Value Measurements
9 Months Ended
Sep. 30, 2024
Fair Value Disclosures [Abstract]  
Fair Value Measurements

3. Fair Value Measurements

The following tables represent the Company’s fair value hierarchy for financial assets and financial liabilities measured at fair value on a recurring basis as of September 30, 2024 and December 31, 2023 (in thousands):

 

 

 

Basis for Fair Value Measurements

 

 

Fair Value as of

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

September 30, 2024

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

Money market funds

 

$

160,546

 

 

$

 

 

$

 

 

$

160,546

 

Certificates of deposit

 

 

 

 

 

55,872

 

 

 

 

 

 

55,872

 

Commercial paper

 

 

 

 

 

86,712

 

 

 

 

 

 

86,712

 

Corporate bonds

 

 

 

 

 

213,848

 

 

 

 

 

 

213,848

 

U.S. Treasuries

 

 

 

 

 

6,700

 

 

 

 

 

 

6,700

 

Total

 

$

160,546

 

 

$

363,132

 

 

$

 

 

$

523,678

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Derivative liability

 

$

 

 

$

 

 

$

396

 

 

$

396

 

Total

 

$

 

 

$

 

 

$

396

 

 

$

396

 

 

 

 

Basis for Fair Value Measurements

 

 

Fair Value as of

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

December 31, 2023

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

Money market funds

 

$

217,644

 

 

$

 

 

$

 

 

$

217,644

 

Commercial paper

 

 

 

 

 

18,243

 

 

 

 

 

 

18,243

 

Corporate bonds

 

 

 

 

 

28,939

 

 

 

 

 

 

28,939

 

U.S. government sponsored agencies

 

 

 

 

 

2,896

 

 

 

 

 

 

2,896

 

Total

 

$

217,644

 

 

$

50,078

 

 

$

 

 

$

267,722

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Derivative liability

 

$

 

 

$

 

 

$

369

 

 

$

369

 

Total

 

$

 

 

$

 

 

$

369

 

 

$

369

 

 

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 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 15 for further discussion on the embedded derivative.

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

The following tables set forth a summary of the changes in the fair value of the Company’s Level 3 financial instrument during the nine months ended September 30, 2024 and 2023 (in thousands):

 

 

 

Derivative
Liability

 

Balance as of December 31, 2023

 

$

369

 

Change in fair value included in other income (expense), net

 

 

27

 

Balance as of September 30, 2024

 

$

396

 

 

 

 

Derivative
Liability

 

Balance as of December 31, 2022

 

$

212

 

Change in fair value included in other income (expense), net

 

 

157

 

Balance as of September 30, 2023

 

$

369