XML 60 R10.htm IDEA: XBRL DOCUMENT v3.24.1
Fair Value Measurements
 12 Months Ended
Dec. 31, 2023
Fair Value Disclosures [Abstract]  
Fair Value Measurements

4. Fair Value Measurements

The Company measures the fair value of money market funds based on quoted prices in active markets for identical securities. Investments also include commercial paper and government securities that are valued either based on recent trades of securities in inactive markets or based on quoted market prices of similar instruments and other significant inputs derived from or corroborated by observable market data. The carrying amounts reflected in the consolidated balance sheets for cash, prepaid expenses and other current assets, accounts payable and accrued expenses approximate their fair values, due to their short-term nature.

Assets measured at fair value on a recurring basis as of December 31, 2023 were as follows (in thousands):

 

 

Total

 

 

Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)

 

 

Significant
Other
Observable
Inputs
(Level 2)

 

 

Significant
Unobservable
Inputs
(Level 3)

 

Money market funds, included in cash and cash equivalents

 

$

158,706

 

 

$

158,706

 

 

$

—

 

 

$

—

 

MS APA asset

 

$

1,448

 

 

$

—

 

 

$

—

 

 

$

1,448

 

Total

 

$

160,154

 

 

$

158,706

 

 

$

—

 

 

$

1,448

 

 

Assets measured at fair value on a recurring basis as of December 31, 2022 were as follows (in thousands):

 

Total

 

 

Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)

 

 

Significant
Other
Observable
Inputs
(Level 2)

 

 

Significant
Unobservable
Inputs
(Level 3)

 

Money market funds, included in cash and cash equivalents

 

$

14,904

 

 

$

14,904

 

 

$

—

 

 

$

—

 

Short-term investments:

 

 

 

 

 

 

 

 

 

 

 

 

Commercial paper

 

$

14,935

 

 

 

—

 

 

 

14,935

 

 

 

—

 

Government securities

 

$

3,980

 

 

 

—

 

 

 

3,980

 

 

 

—

 

Total

 

$

33,819

 

 

$

14,904

 

 

$

18,915

 

 

$

—

 

 

 

As noted previously in Note 1, at the effective time of the Transaction, the Company entered into the CVR Agreement providing for the payment of certain contingent cash payments equal to the net amount of proceeds actually received by the Company or its subsidiaries after the end of each fiscal quarter following the first anniversary of the closing of the Transaction related to the disposition of assets related to the Company’s former multiple sclerosis programs, with the time periods and subject to deductions as provided therein. The Company concluded that the CVR is a derivative liability and is accounted for at fair value, which was $1.4 million as of December 31, 2023 of which $0.4 million is included in accrued expenses and other current liabilities and the remaining $1.0 million in other non-current liabilities in the consolidated balance sheet. Concurrently, the Company entered into the MS APA with Progentos, whereby Progentos acquired the rights, title and interest in certain assets related to the Company’s MS program. The MS APA included initial consideration of $0.5 million in proceeds that were settled through net cash at the merger closing and will be entitled to future milestone payments of up to $17.5 million as well as a $0.7 million payment in the event of Progentos closing of an equity financing at or above a specified amount. The Company concluded that the MS APA is a derivative asset and is accounted for at fair value, which was $1.4 million as of December 31, 2023 of which $0.4 million is included in prepaid and other current assets and the remaining $1.0 million in other long-term assets in the consolidated balance sheet.

The fair value of the CVR liability and the MS APA are based on significant unobservable inputs, which represent Level 3 measurements within the fair value hierarchy. In determining the fair value of the CVR liability and the MS APA asset, the Company used the income approach, primarily discounted cash flow models. The discounted cash flow models require the use of significant judgment, estimates and assumptions, including the probability of technical and regulatory success, and discount rates. For the year ended December 31, 2023, the aggregate change in fair value of the CVR liability and MS APA asset was $0.08 million.

There were no liabilities measured at fair value on a recurring basis as of December 31, 2022.

There were no changes in valuation techniques, nor were there any transfers among the fair value hierarchy levels during the years ended December 31, 2023 or 2022.