Fair Value Measurements

12 Months Ended

Dec. 31, 2024

Fair Value Disclosures [Abstract]

Fair Value Measurements

4. Fair Value Measurements

The Company classifies fair value-based measurements using a three-level hierarchy that prioritizes the inputs used to measure fair value. This hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows: Level 1, quoted market prices (unadjusted) in active markets for identical assets or liabilities; Level 2, observable inputs other than quoted market prices included in Level 1, such as quoted market prices for markets that are not active or other inputs that are observable or can be corroborated by observable market data; and Level 3, unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities, including certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.

The Company’s financial assets recognized at fair value on a recurring basis consisted of the following:

	December 31, 2024
	Total		Level 1		Level 2		Level 3
	(In thousands)
Assets
Cash equivalents and restricted cash equivalents	$	66,898	$	66,898	$	-	$	-
Marketable securities:
U.S. Treasury and other government-backed securities		352,616		169,735		182,881		-
Financial institution debt securities		217,827		-		217,827		-
Corporate debt securities		94,927		-		94,927		-
Other asset-backed securities		7,178		-		7,178		-
Total marketable securities		672,548		169,735		502,813		-
Investment in Kyverna Therapeutics, Inc.		4,390		4,390		-		-
Total assets	$	743,836	$	241,023	$	502,813	$	-
	December 31, 2023
	Total		Level 1		Level 2		Level 3
	(In thousands)
Assets
Cash equivalents and restricted cash equivalents	$	136,254	$	136,254	$	-	$	-
Marketable securities:
U.S. Treasury and other government-backed securities		382,308		120,556		261,752		-
Financial institution debt securities		246,119		-		246,119		-
Corporate debt securities		97,408		-		97,408		-
Other asset-backed securities		59,504		-		59,504		-
Total marketable securities		785,339		120,556		664,783		-
Total assets	$	921,593	$	256,810	$	664,783	$	-

Certain of the Company’s financial assets, including cash equivalents, restricted cash equivalents and marketable securities, have been initially valued at the transaction price, and subsequently revalued at the end of each reporting period, utilizing third party pricing services or other observable market data. The pricing services utilize industry standard valuation models and observable market inputs to determine value.

Other financial instruments, including accounts receivable, accounts payable and accrued expense, are carried at cost, which approximates fair value due to the short duration and term to maturity.

The Company has determined that the estimated fair value of its investment in Kyverna, a publicly traded company, is reported as Level 1 as it is valued at a quoted market price in an active market. The investment in Kyverna is classified within “Investments and other assets” in the consolidated balance sheets. Refer to Note 10 for further details.

Other Investments

The Company’s investment in SparingVision was initially recorded at fair value, determined according to Level 3 inputs in the fair value hierarchy described above. The SparingVision investment is included in “Investments and other assets” on the consolidated balance sheets. This investment is accounted for using the measurement alternative at cost minus impairment, adjusted for changes in observable prices. There were no changes in observable prices or impairment of this investment as of December 31, 2024 or 2023. The carrying value of the SparingVision investment was $14.6 million and $14.8 million as of December 31, 2024 and 2023, respectively. Refer to Note 10 for further details.

The Company’s investment in AvenCell was initially recorded at fair value, determined according to Level 3 inputs in the fair value hierarchy described above. The AvenCell investment is included in “Investments and other assets” on the consolidated balance sheet as of December 31, 2024. This investment is accounted for using the measurement alternative at cost minus impairment, adjusted for changes in observable prices. The Company previously accounted for the AvenCell investment under the equity method; refer to Note 10 for further details including the change in fair value.

In the fourth quarter of 2024, AvenCell completed a Series B financing, which represented an observable price change in the investment in AvenCell. The Company determined the fair value of the AvenCell investment using an option pricing model which requires the input of certain subjective assumptions. The key assumptions used in the option pricing model, which are Level 3 inputs, include the anticipated holding period to an exit and liquidity event, the indicated equity volatility (95%), and the risk free rate (3.9%). The carrying value of the Company’s investment in AvenCell was $7.9 million and $11.8 million as of December 31, 2024 and December 31, 2023, respectively.

Contingent Consideration

As part of its acquisition of Rewrite Therapeutics, Inc. (“Rewrite”) in 2022, the Company made a $25.0 million research milestone payment in February of 2023, payable in a combination of $0.9 million in cash and the remainder in the Company’s common stock. The milestone payable in the Company’s common stock resulted in liability classification under ASC 480. This contingent consideration liability was carried at fair value which was estimated by applying a probability-based model, which utilized inputs based on timing of achievements that were unobservable in the market. The contingent consideration liability was classified within Level 3 of the fair value hierarchy until it was settled in February of 2023.

The following table reconciles the change in fair value of the contingent consideration liability (in thousands):

Balance at December 31, 2022	$	24,026
Change in fair value		100
Payment of contingent consideration		(24,126	)
Balance at December 31, 2023	$	-