XML 24 R14.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 | 5. Fair Value of Financial Instruments Accounting Standards Codification (“ASC”) 820, Fair Value Measurement, defines fair value as the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is determined based upon assumptions that market participants would use in pricing an asset or liability. Fair value measurements are classified on a three-tier hierarchy as follows:
| ● | Level 1 inputs: Quoted prices (unadjusted) for identical assets or liabilities in active markets;
| ● | Level 2 inputs: Inputs, other than quoted prices, that are observable either directly or indirectly; and
| ● | Level 3 inputs: Unobservable inputs for which there is little or no market data, which require the reporting entity to develop its own assumptions.
In many cases, a valuation technique used to measure fair value includes inputs from multiple levels of the fair value hierarchy described above. The lowest level of significant input determines the placement of the entire fair value measurement in the hierarchy. The carrying amounts of the Company’s short-term financial instruments, including cash and cash equivalents, accounts payable and accrued liabilities, approximate fair value due to the relatively short period to maturity for these level 1 instruments. As a result of the Acquisition of VCN the Company acquired interest-free or below-market interest rate loans extended by Spanish government. The carrying value of the loans payable approximate fair value and are classified under level 2. In connection with the Acquisition of VCN, the Company agreed to pay up to $70.2 million in additional consideration upon the achievement of certain milestones, including regulatory filings completed. In August 2023, the Company initiated patient dosing in the U.S. in its Phase 2 clinical trial of VCN-01 in PDAC. As a result, payment was made in the third quarter 2023 in the amount of $3.25 million. The discounted cash flow method used to value this contingent consideration includes inputs of not readily observable market data, which are Level 3 inputs. The fair value of the contingent consideration was $6.8 million as of September 30, 2024 and is all reflected as non-current contingent consideration liability. During the three months ended September 30, 2024 and 2023, the Company recognized in operating expense a $587,000 increase and $1.6 million decrease, respectfully, fair value adjustment to contingent consideration. During the nine months ended September 30, 2024 and 2023, the Company recognized in operating expense a $514,000 increase and $1.0 million decrease, respectfully, fair value adjustment to contingent consideration. There were no transfers in or out of the level 3 liabilities during the nine months ended September 30, 2024 and 2023. The following table summarizes the change in the fair value as determined by Level 3 inputs for the contingent consideration liabilities as of December 31, 2023 and September 30, 2024: ​
​ | ​ | ​ | ​
​ |  | (in thousands)
Balance at December 31, 2022 | ​ | $ | 10,184
Payment of contingent consideration | ​ | ​ | (3,250)
Change in fair value | ​ |  | (660)
Balance at December 31, 2023 | ​ | $ | 6,274
​ | ​ | ​ | ​
Contingent consideration, current portion | ​ | $ | —
Contingent consideration, net of current portion | ​ |  | 6,274
Balance at December 31, 2023 | ​ | $ | 6,274
​ 5. Fair Value of Financial Instruments – (continued) ​
​ | ​ | ​ | ​
​ |  | (in thousands)
Balance at December 31, 2023 | ​ | $ | 6,274
Change in fair value | ​ |  | 514
Balance at September 30, 2024 | ​ | $ | 6,788
​ | ​ | ​ | ​
Contingent consideration, current portion | ​ | $ | —
Contingent consideration, net of current portion | ​ |  | 6,788
Balance at September, 2024 | ​ | $ | 6,788
​ The fair value of financial instruments measured on a recurring basis is as follows: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | As of September 30, 2024
Description |  | Total |  | Level 1 |  | Level 2 |  | Level 3
Liabilities: |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |
Contingent consideration | ​ | $ | 6,788 |  | $ | — |  | $ | — | ​ | $ | 6,788
Total liabilities | ​ | $ | 6,788 |  | $ | — |  | $ | — | ​ | $ | 6,788
​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | As of December 31, 2023
Description |  | Total |  | Level 1 |  | Level 2 |  | Level 3
Liabilities: |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |
Contingent consideration | ​ | $ | 6,274 |  | $ | — |  | $ | — | ​ | $ | 6,274
Total liabilities | ​ | $ | 6,274 |  | $ | — |  | $ | — | ​ | $ | 6,274
​ The recurring Level 3 fair value measurements of contingent consideration for which a liability is recorded include the following significant unobservable inputs: ​
​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | As of September 30, 2024
​ | ​ | Valuation | ​ | Significant | ​ | Weighted Average
​ |  | Methodology |  | Unobservable Input |  | (range, if applicable)
Contingent Consideration |  | Discounted Cash Flows |  | Milestone dates |  | 2026-2028
​ |  | ​ | ​ | ​ | ​ | ​
​ |  |  |  | Discount rate |  | 11.6% to 11.9%
​ |  |  |  | Weighted Average Discount rate |  | 11.7%
​ |  |  |  | Probability of Occurrence (periodic for each Milestone) |  | 11.7% to 92.0%
​ |  |  |  | Probability of occurrence (cumulative through each Milestone) |  | 5.3% to 48.8%
​
​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | As of December 31, 2023
​ | ​ | Valuation | ​ | Significant | ​ | Weighted Average
​ |  | Methodology |  | Unobservable Input |  | (range, if applicable)
Contingent Consideration |  | Discounted Cash Flows |  | Milestone dates |  | 2025-2028
​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | ​ |  | Discount rate | ​ | 12.9% to 13.6%
​ | ​ | ​ | ​ | Weighted Average Discount rate | ​ | 13.16%
​ | ​ | ​ | ​ | Probability of Occurrence (periodic for each Milestone) | ​ | 11.7% to 92.0%
​ |  | ​ |  | Probability of occurrence (cumulative through each Milestone) | ​ | 5.3% to 48.8%
​ ​ 5. Fair Value of Financial Instruments – (continued) The Company measures certain non-financial assets on a non-recurring basis, including goodwill and in-process R&D. As a result of those measurements, during the quarter ended September 30, 2024 in-process R&D with a carrying value of $19.8 million was written down to its estimated fair value of $18.6 million and an impairment charge of $1.3 million was recorded, and goodwill with a carrying value of $1.5 million was written down to its estimated fair value of zero and an impairment charge of $1.5 million was recorded. For the quarter ending June 30, 2024, goodwill with a carrying value of $5.5 million was written down to its estimated fair value of $1.5 million and an impairment charge of $4.0 million was recorded. This analysis requires significant judgments, including primarily the estimation of future development costs, the probability of success in various phases of its development programs, potential post-launch cash flows and a risk-adjusted weighted average cost of capital. The fair value of the Company’s reporting unit was determined using an income approach that utilizes a discounted cash flow model. The discounted cash flow models are dependent upon the Company’s estimates of future cash flows and other factors. The Company’s estimates of future cash flows are based on a comprehensive product by product forecast over a period which covers Phase 1 to approval and 15 years of commercialized revenue and involve assumptions concerning (i) future operating performance, including research and development costs through approval of the drug, the future addressable market, future sales, long-term growth rates, operating margins, allocation and timing of cash flows and the probability of achieving the estimated cash flows and (ii) future economic conditions, all which may differ from actual future cash flows. Assumptions related to future operating performance are based on management’s annual and ongoing budgeting, forecasting and planning processes and represent the Company’s best estimate of the future results of its operations as of a point in time. These estimates are subject to many assumptions, such as the economic environments in which it operates, demand for the products and competitor actions. Estimated future cash flows are discounted to present value using a market participant, weighted average cost of capital, which considers the risk inherent in the probability adjusted future cash flows from each product. The financial and credit market volatility directly impacts certain inputs and assumptions used to develop the weighted average cost of capital such as the risk-free interest rate, industry beta, debt interest rate and the Company’s market capital structure. These assumptions are based on significant inputs not observable in the market and thus represent Level 3 measurements within the fair value hierarchy. The use of different inputs and assumptions could increase or decrease the Company’s estimated discounted future cash flows, the resulting estimated fair values and the amounts of related goodwill impairments, if any.

X
- References No definition available. + Details
Name: | us-gaap_FairValueDisclosuresAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information. + References Reference 1: http://www.xbrl.org/2003/role/exampleRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 107 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482078/820-10-55-107 Reference 2: http://www.xbrl.org/2003/role/exampleRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 100 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482078/820-10-55-100 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (c)(3) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2E -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2E Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (h) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (e) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (h) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (g) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Topic 940 -SubTopic 820 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147478119/940-820-50-1 + Details
Name: | us-gaap_FairValueDisclosuresTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration