Fair Value Measurements

12 Months Ended

Dec. 31, 2021

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


Description	December 31, 2021		Quoted Prices In Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Unobservable Inputs (Level 3)
Assets:
Cash equivalents	$	21,000	$	21,000	$	—	$	—
Restricted cash equivalents	100		100		—		—
Total assets measured and recorded at fair value	$	21,100	$	21,100	$	—	$	—
Liabilities:
Warrants potentially settleable in cash	$	40	$	—	$	—	$	40
Contingent consideration	296		—		—		296
Total liabilities measured and recorded at fair value	$	336	$	—	$	—	$	336


Description	December 31, 2020		Quoted Prices In Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Unobservable Inputs (Level 3)
Assets:
Cash equivalents	$	34,959	$	34,959	$	—	$	—
Restricted cash equivalents	$	100	$	100
Total assets measured and recorded at fair value	$	35,059	$	35,059	$	—	$	—
Liabilities:
Warrants potentially settleable in cash	$	55	$	—	$	—	$	55
Contingent consideration	4,633		—		—		4,633
Total liabilities measured and recorded at fair value	$	4,688	$	—	$	—	$	4,688

The Company did not transfer any financial instruments into or out of Level 3 classification during the years ended December 31, 2021 and 2020. See Note 10 for a reconciliation of the changes in the fair value of the warrant liability for the years ended December 31, 2021.

The Company presents the contingent consideration liability at fair value and it is measured at the end of each reporting period using Level 3 inputs. The contingent consideration relates to Galena’s acquisition of Apthera, Inc. in 2011 and the future contingent payments based on the achievement of certain development, regulatory and net sales milestones relating to NPS. 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.

A reconciliation of the change in the fair value of the contingent consideration liability for the year ended December 31, 2021 and 2020 is as follows (in thousands):


	Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
Contingent consideration, December 31, 2019	$	4,912
Change in the estimated fair value of the contingent consideration	(279)
Contingent consideration, December 31, 2020	4,633
Change in the estimated fair value of the contingent consideration	(4,337)
Contingent consideration, December 31, 2021	$	296

During the year ended December 31, 2021, the significant unobservable inputs were adjusted in connection with our determination that consummating an out-licensing transaction of NPS for further development in breast cancer was unlikely and taking into account the deferred development timeline and a lower probability of success associated with earlier stages of clinical development for the potential development of NPS in other oncology indications. See Note 2 for further discussion on how the Company determines the fair value of its contingent consideration.

The following significant unobservable inputs were used in the valuation of the contingent consideration liability:


Unobservable input	As of December 31, 2021		As of December 31, 2020
Potential milestone payments	$0 - $30 million		$0 - $30 million
Discount rate	15.5	%	6.6	%
Cumulative probability of success	5.3	%	33.0	%
Projected years of payments	2028 - 2031		2026 - 2029