Fair Value Measurements

The following tables present information about the Company's assets and liabilities measured at fair value on a recurring basis in the condensed consolidated balance sheets (in thousands):



Description	September 30, 2018		Quoted Prices In Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Unobservable Inputs (Level 3)
Assets:
Cash equivalents	$	6,774	$	6,774	$	—	$	—
Total assets measured and recorded at fair value	$	6,774	$	6,774	$	—	$	—
Liabilities:
Warrants potentially settleable in cash	$	975	$	—	$	—	$	975
Contingent consideration	5,319		—		—		5,319
Total liabilities measured and recorded at fair value	$	6,294	$	—	$	—	$	6,294



Description	December 31, 2017		Quoted Prices In Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Unobservable Inputs (Level 3)
Assets:
Cash equivalents	$	1,662	$	1,662	$	—	$	—
Restricted cash equivalents	10,245		10,245		—		—
Total assets measured and recorded at fair value	$	11,907	$	11,907	$	—	$	—
Liabilities:
Warrants potentially settleable in cash	$	1,309	$	—	$	—	$	1,309
Contingent consideration	1,294		—		—		1,294
Total liabilities measured and recorded at fair value	$	2,603	$	—	$	—	$	2,603

The Company did not transfer any financial instruments into or out of Level 3 classification during the three and nine months ended September 30, 2018 and 2017. See Note 10 for a reconciliation of the changes in the fair value of the warrant liability for the nine months ended September 30, 2018.

A reconciliation of the change in the fair value of the contingent consideration liability for the nine months ended September 30, 2018 is as follows (in thousands):



	Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
Contingent consideration, December 31, 2017	$	1,294
Change in the estimated fair value of the contingent consideration	4,025
Contingent consideration, September 30, 2018	$	5,319

The fair value of the contingent consideration is measured at the end of each reporting period using Level 3 inputs in a probability-weighted, discounted cash-outflow model. The contingent consideration relates to Galena’s acquisition of Apthera, Inc. in 2011 and the future contingent payments of up to $32.0 million based on the achievement of certain development and commercial milestones relating to the Company’s nelipepimut-S ("NeuVax^TM"or "NPS") product candidate. The contingent consideration is payable at the election of the Company in either cash or shares of common stock, provided that the Company may not issue any shares in satisfaction of any contingent consideration unless it has first obtained approval of its stockholders in accordance with Rule 5635(a) of the Nasdaq Marketplace Rules. The significant unobservable assumptions include the probability of achieving each milestone, the date the Company expects to reach the milestone, and a determination of present value factors used to discount future expected cash outflows. The change in the estimated fair value of the contingent consideration during the nine months ended September 30, 2018 reflects an adjusted probability and timeline for the potential approval of NPS associated with the positive interim data in the triple-negative breast cancer cohort from the prospective, randomized, single-blinded, controlled Phase 2b investigator-sponsored clinical trial ("IST") of trastuzumab (Herceptin®) +/- NPS in HER2 1+/2+ breast cancer patients in the adjuvant setting to prevent recurrences that was announced on April 2, 2018.