XML 31 R20.htm IDEA: XBRL DOCUMENT
v3.22.2.2

Fair Value Measurements (Tables) | 9 Months Ended
--- | ---
Sep. 30, 2022
Fair Value Disclosures [Abstract] |
Schedule of Assets and Liabilities Measured at Fair Value | The following table presents the hierarchy for our assets and liabilities measured at fair value (in thousands):
|  | September 30, 2022 |  | December 31, 2021
|  | Level 1 |  | Level 2 |  | Level 3 |  | Total |  | Level 1 |  | Level 2 |  | Level 3 |  | Total
Assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Short-term investments, excluding Viking(1) |  | $ | 4,649 |  |  | $ | 94,145 |  |  | $ | 232 |  |  | $ | 99,026 |  |  | $ | 9,735 |  |  | $ | 280,553 |  |  | $ | 409 |  |  | $ | 290,697 |
Investment in Viking common stock |  | 18,265 |  |  | — |  |  | — |  |  | 18,265 |  |  | 30,889 |  |  | — |  |  | — |  |  | 30,889 |
Total assets |  | $ | 22,914 |  |  | $ | 94,145 |  |  | $ | 232 |  |  | $ | 117,291 |  |  | $ | 40,624 |  |  | $ | 280,553 |  |  | $ | 409 |  |  | $ | 321,586 |
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
CyDex contingent liabilities |  | $ | — |  |  | $ | — |  |  | $ | 308 |  |  | $ | 308 |  |  | $ | — |  |  | $ | — |  |  | $ | 349 |  |  | $ | 349 |
Metabasis contingent liabilities(2) |  | — |  |  | 2,507 |  |  | — |  |  | 2,507 |  |  | — |  |  | 3,358 |  |  | — |  |  | 3,358 |
Icagen contingent liabilities(3) |  | — |  |  | — |  |  | 5,333 |  |  | 5,333 |  |  | — |  |  | — |  |  | 7,364 |  |  | 7,364 |
xCella contingent liabilities(4) |  | — |  |  | — |  |  | 480 |  |  | 480 |  |  | — |  |  | — |  |  | — |  |  | — |
Amounts owed to former licensor |  | 73 |  |  | — |  |  | — |  |  | 73 |  |  | 86 |  |  | — |  |  | — |  |  | 86 |
Total liabilities |  | $ | 73 |  |  | $ | 2,507 |  |  | $ | 6,121 |  |  | $ | 8,701 |  |  | $ | 86 |  |  | $ | 3,358 |  |  | $ | 7,713 |  |  | $ | 11,157 |
1. Excluding our investment in Viking, our short-term investments in marketable debt and equity securities are classified as available-for-sale securities based on management's intentions and are at level 2 of the fair value hierarchy, as these investment securities are valued based upon quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market. Short-term investments in mutual funds are valued at their net asset value (NAV) on the last day of the period. We have classified marketable securities with original maturities of greater than one year as short-term investments based upon our ability and intent to use any and all of those marketable securities to satisfy the liquidity needs of our current operations. In addition, we have investment in warrants resulting from Seelos Therapeutics Inc. milestone payments that were settled in shares during the first quarter of 2019 and are at level 3 of the fair value hierarchy, based on Black-Scholes value estimated by management on the last day of the period. 2. In connection with our acquisition of Metabasis in January 2010, we issued Metabasis stockholders four tradable CVRs, one CVR from each of four respective series of CVR, for each Metabasis share. The CVRs entitle Metabasis stockholders to cash payments as frequently as every six months as cash is received by us from proceeds from the sale or partnering of any of the Metabasis drug development programs, among other triggering events. The liability for the CVRs is determined using quoted prices in a market that is not active for the underlying CVR. The carrying amount of the liability may fluctuate significantly based upon quoted market prices and actual amounts paid under the agreements may be materially different than the carrying amount of the liability. Several of the Metabasis drug development programs have been outlicensed to Viking, including VK2809. VK2809 is a novel selective TR-β agonist with potential in multiple indications, including hypercholesterolemia, dyslipidemia, NASH, and X-ALD. Under the terms of the agreement with Viking, we may be entitled to up to $375 million of development, regulatory and commercial milestones and tiered royalties on potential future sales including a $10 million payment upon initiation of a Phase 3 clinical trial. During the three and nine months ended September 30, 2022, we adjusted the balance of the Metabasis CVR liability $0.1 million and $(0.9) million to mark to market, respectively. 3. The fair value of Icagen contingent liabilities was determined using a probability weighted income approach. Most of the contingent payments are based on certain revenue milestones as defined in the asset purchase agreement with Icagen. The fair value is subjective and is affected by changes in inputs to the valuation model including management’s estimates regarding the timing and probability of achievement of certain developmental and regulatory milestones. Changes in these estimates may materially affect the fair value. During the nine months ended September 30, 2022, we paid $1.5 million contingent liability based on revenue milestones to former Icagen shareholders, respectively. During the three and nine months ended September 30, 2022, we adjusted the balance of the Icagen CVR liability $(0.2) million and $(0.5) million to mark to market, respectively. 4.The fair value of xCella contingent liabilities is determined when it is probable that the earnout liability will occur and the amount can be reasonably estimated. We concluded that no earnout liability would be recognized at the acquisition date in September 2020. During the three and nine months ended September 30, 2022, we paid $1.0 million contingent liabilities to former xCella shareholders. During the three and nine months ended September 30, 2022, we recorded $0.5 million and $1.4 million of earnout liability to be allocated to the cost of the acquired assets due to contingencies being met as part of the acquisition agreement, respectively.
Schedule of Reconciliation of Level 3 Financial Instruments | A reconciliation of the level 3 financial instruments as of September 30, 2022 is as follows (in thousands):
Fair value of level 3 financial instruments as of December 31, 2021 | $ | 7,713 |
Payments to CVR holders and other contingent payments | (2,505) |
Fair value adjustments to contingent liabilities | (527) |
Contingent liabilities from xCella asset acquisition | 1,440 |
Fair value of level 3 financial instruments as of September 30, 2022 | $ | 6,121 |

X
- Definition Tabular disclosure of financial instruments measured at fair value, including those classified in shareholders' equity measured on a recurring or nonrecurring basis. Disclosures include, but are not limited to, fair value measurements recorded and the reasons for the measurements, level within the fair value hierarchy in which the fair value measurements are categorized and transfers between levels 1 and 2. Nonrecurring fair value measurements are those that are required or permitted in the statement of financial position in particular circumstances. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=126976982&loc=d3e19207-110258 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 3 -URI https://asc.fasb.org/extlink&oid=126976982&loc=d3e19279-110258 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2C -URI https://asc.fasb.org/extlink&oid=126976982&loc=SL7498348-110258 Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=126976982&loc=d3e19207-110258 Reference 5: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (bb) -URI https://asc.fasb.org/extlink&oid=126976982&loc=d3e19207-110258 + Details
Name: | us-gaap_FairValueAssetsAndLiabilitiesMeasuredOnRecurringAndNonrecurringBasisTableTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_FairValueDisclosuresAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition Tabular disclosure of the fair value measurement of liabilities using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets), and gains or losses recognized in other comprehensive income (loss) and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs) by class of liability. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (c) -URI https://asc.fasb.org/extlink&oid=126976982&loc=d3e19207-110258 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 3 -URI https://asc.fasb.org/extlink&oid=126976982&loc=d3e19279-110258 + Details
Name: | us-gaap_FairValueLiabilitiesMeasuredOnRecurringBasisUnobservableInputReconciliationTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration