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Fair Value of Financial Instruments
 9 Months Ended
Sep. 30, 2025
Fair Value of Financial Instruments  
Fair Value of Financial Instruments

6. Fair Value of Financial Instruments

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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:

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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.

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

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There were no transfers between Levels 1, 2, and 3 during the nine months ended September 30, 2025 and 2024.

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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, 2025 and December 31, 2024:

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​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Significant

​

​

​

​

​

​

​

​

​

Quoted Prices

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​

other

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​

Significant

​

​

​

​

​

​

in active

​

​

observable

​

​

unobservable

​

​

​

​

​

​

markets

​

​

inputs

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​

inputs

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Total

    

​

(Level 1)

    

​

(Level 2)

    

​

(Level 3)

September 30, 2025

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​

​

​

​

​

​

​

​

​

​

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Assets

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​

​

​

​

​

​

​

​

​

​

​

Cash equivalents:

​

​

​

​

​

​

​

​

​

​

​

​

Money market funds

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$

33,410

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$

33,410

​

$

—

​

$

—

Commercial paper

​

​

3,977

​

​

—

​

​

3,977

​

​

—

Marketable securities:

​

​

​

​

​

​

​

​

​

​

​

​

Corporate debt securities

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​

125,313

​

​

—

​

​

125,313

​

​

—

Government-sponsored securities

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​

6,999

​

​

—

​

​

6,999

​

​

—

Commercial paper

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​

3,455

​

​

—

​

​

3,455

​

​

—

Total assets measured at fair value

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$

173,154

​

$

33,410

​

$

139,744

​

$

—

Liabilities

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​

​

​

​

​

​

​

​

​

​

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Contingent consideration

​

​

19

​

​

—

​

​

—

​

​

19

Total liabilities measured at fair value

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$

19

​

$

—

​

$

—

​

$

19

​

​

​

​

​

​

​

​

​

​

​

​

​

December 31, 2024

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​

​

​

​

​

​

​

​

​

​

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Cash equivalents:

​

​

​

​

​

​

​

​

​

​

​

​

Money market funds

​

$

36,153

​

$

36,153

​

$

—

​

$

—

Commercial paper

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​

1,993

​

​

—

​

​

1,993

​

​

—

Marketable securities:

​

​

​

​

​

​

​

​

​

​

​

​

Corporate debt securities

​

​

82,679

​

​

—

​

​

82,679

​

​

—

Government-sponsored securities

​

​

6,560

​

​

—

​

​

6,560

​

​

—

Commercial paper

​

​

2,959

​

​

—

​

​

2,959

​

​

—

Total assets measured at fair value

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$

130,344

​

$

36,153

​

$

94,191

​

$

—

Liabilities

​

​

​

​

​

​

​

​

​

​

​

​

Contingent consideration

​

​

1,182

​

​

—

​

​

—

​

​

1,182

Total liabilities measured at fair value

​

$

1,182

​

$

—

​

$

—

​

$

1,182

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The Company’s cash equivalents, which includes money market funds and commercial paper, are measured at fair value on a recurring basis using quoted market prices.

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Contingent Consideration

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

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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.

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Change in the Fair Value of Contingent Consideration

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

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Ironshore Acquisition

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Contingent Consideration

Balance as of December 31, 2024

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$

1,182

Gain on fair value remeasurement of contingent consideration

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​

(1,163)

Balance as of September 30, 2025

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$

19

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Assets and Liabilities Not Carried at Fair Value

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Convertible Senior Notes

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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, 2025, the fair value of the Company's 2.875% convertible senior notes due in 2029 was $286,491 and the net carrying value was $237,950.

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Term Notes Payable

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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, 2025, the carrying amount of the term notes reasonably approximated the estimated fair value.

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Deferred Royalty Obligation

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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.

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The deferred royalty obligation is considered a level 3 fair value measurement. The fair value of the Company’s deferred royalty obligation was approximately $125,403 as of September 30, 2025 and a net carrying value of $122,279.

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Other Assets and Liabilities

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As of September 30, 2025, and December 31, 2024, the carrying amounts of cash and cash equivalents, accounts receivable, prepaid expenses and other current assets, accounts payable, accrued liabilities, and accrued rebates, returns and discounts reasonably approximated their estimated fair values.