XML 25 R13.htm IDEA: XBRL DOCUMENT v3.24.3
Fair Value of Financial Instruments
 9 Months Ended
Sep. 30, 2024
Fair Value of Financial Instruments  
Fair Value of Financial Instruments

6. Fair Value of Financial Instruments

​

Fair value measurements and disclosures describe the fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value, as follows:

​

​

​

Level 1 inputs:

Quoted prices (unadjusted) in active markets for identical assets or liabilities. An active market is defined as a market where transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.

Level 2 inputs:

Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active.

Level 3 inputs:

Unobservable inputs that reflect the Company’s own assumptions about the assumptions market participants would use in pricing the asset or liability.

​

The Company invests in instruments within defined credit parameters to minimize credit risk while ensuring liquidity.

​

There were no transfers between Levels 1, 2, and 3 during the nine months ended September 30, 2024 and 2023.

​

The following table presents the Company’s financial instruments carried at fair value using the lowest level input applicable to each financial instrument as of September 30, 2024 and December 31, 2023:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Significant

​

​

​

​

​

​

​

​

​

Quoted Prices

​

​

other

​

​

Significant

​

​

​

​

​

​

in active

​

​

observable

​

​

unobservable

​

​

​

​

​

​

markets

​

​

inputs

​

​

inputs

​

    

​

Total

    

​

(Level 1)

    

​

(Level 2)

    

​

(Level 3)

September 30, 2024

​

​

​

​

​

​

​

​

​

​

​

​

Assets

​

​

​

​

​

​

​

​

​

​

​

​

Cash equivalents:

​

​

​

​

​

​

​

​

​

​

​

​

Money market funds

​

$

12,957

​

$

12,957

​

$

—

​

$

—

Marketable securities:

​

​

​

​

​

​

​

​

​

​

​

​

Corporate debt securities

​

​

65,621

​

​

—

​

​

65,621

​

​

—

U.S. Treasury securities

​

​

4,586

​

​

—

​

​

4,586

​

​

—

Government-sponsored securities

​

​

6,828

​

​

—

​

​

6,828

​

​

—

Commercial paper

​

​

3,962

​

​

—

​

​

3,962

​

​

—

Total assets measured at fair value

​

$

93,954

​

$

12,957

​

$

80,997

​

$

—

Liabilities

​

​

​

​

​

​

​

​

​

​

​

​

Contingent consideration

​

​

4,096

​

​

—

​

​

—

​

​

4,096

Total liabilities measured at fair value

​

$

4,096

​

$

—

​

$

—

​

$

4,096

​

​

​

​

​

​

​

​

​

​

​

​

​

December 31, 2023

​

​

​

​

​

​

​

​

​

​

​

​

Cash equivalents:

​

​

​

​

​

​

​

​

​

​

​

​

Money market funds

​

$

77,299

​

$

77,299

​

$

—

​

$

—

U.S. Treasury securities

​

​

4,729

​

​

—

​

​

4,729

​

​

—

Marketable securities:

​

​

​

​

​

​

​

​

​

​

​

​

Corporate debt securities

​

​

41,612

​

​

—

​

​

41,612

​

​

—

U.S. Treasury securities

​

​

25,468

​

​

—

​

​

25,468

​

​

—

Government-sponsored securities

​

​

4,521

​

​

—

​

​

4,521

​

​

—

Total assets measured at fair value

​

$

153,629

​

$

77,299

​

$

76,330

​

$

—

​

The Company’s cash equivalents, which consist of money market funds, are measured at fair value on a recurring basis using quoted market prices. Accordingly, these securities are categorized as Level 1.

​

Contingent Consideration

​

The Company’s contingent consideration liability is related to the Ironshore Acquisition in 2024. The Ironshore Acquisition included a contingent payment of $25,000 related to the achievement of a financial milestone based on net revenues of Jornay for the year ended December 31, 2025.

​

The contingent consideration liability is measured at fair value using an option pricing model. The Company classifies its contingent consideration liability as a Level 3 fair value measurement based on the significant unobservable inputs used to estimate fair value. The key assumptions considered in estimating the fair value include the estimated probability and timing of milestone achievement, such as the probability and timing of projected revenues.

​

Change in the Fair Value of Contingent Consideration

​

The following tables provide a reconciliation of the beginning and ending balances related to the contingent consideration for the Ironshore Acquisition (dollars in thousands):

​

​

​

​

​

​

​

Ironshore Acquisition

​

​

Contingent Consideration

Balance as of December 31, 2023

​

$

—

Acquisition date fair value

​

​

4,096

Balance as of September 30, 2024

​

$

4,096

​

​

There were no changes in fair value of the contingent consideration liability from the Acquisition Date the through the period end September 30, 2024.

​

Assets and Liabilities Not Carried at Fair Value

​

Convertible Senior Notes

​

The Company’s convertible senior notes are considered Level 2 financial liabilities. The fair value was determined based on data points other than quoted prices that are observable, either directly or indirectly, such as broker quotes in a non-active market. As of September 30, 2024, the fair value of the Company's 2.875% convertible senior notes due in 2029 was $269,652 and the net carrying value was $236,911.

​

Term Notes Payable

​

The Company’s term notes are considered Level 2 financial liabilities. The fair value was determined using quoted prices for similar liabilities in active markets, as well as inputs that are observable for the liability (other than quoted prices), such as interest rates that are observable at commonly quoted intervals. As of September 30, 2024, the carrying amount of the term notes reasonably approximated the estimated fair value.

​

Deferred Royalty Obligation

​

The Company’s deferred royalty obligation liability was assumed as part of the Ironshore Acquisition in 2024. Refer to Note 13, Deferred Royalty Obligation, for more information.

​

The royalty is not carried at fair value. The deferred royalty obligation is considered a level 3 fair value measurement. The fair value of the Company’s deferred royalty obligation approximates the carrying value as of September 30, 2024.

​

Other Assets and Liabilities

​

As of September 30, 2024, and December 31, 2023, the carrying amounts of cash and cash equivalents, accounts receivable, inventory, prepaid expenses and other current assets, accounts payable, accrued liabilities, and accrued rebates, returns and discounts reasonably approximated their estimated fair values.