Fair Value Measurements

3 Months Ended

Mar. 31, 2022

Fair Value Measurements

Fair Value Measurements

3. Fair Value Measurements

The Company’s assets and liabilities measured at fair value on a recurring basis at March 31, 2022 consisted of the following (in thousands):

	Fair Value Measurement at March 31, 2022
	Total		Level 1		Level 2		Level 3
Assets:
Cash equivalents - money market funds	$	65,641	$	65,641	$	—	$	—
Total		65,641		65,641		—		—
Liabilities:
Contingent consideration liability (see Note 8)		4,310		—		—		4,310
Total	$	4,310	$	—	$	—	$	4,310

The Company’s assets and liabilities measured at fair value on a recurring basis at December 31, 2021 consisted of the following (in thousands):

	Fair Value Measurement at December 31, 2021
	Total		Level 1		Level 2		Level 3
Assets:
Cash equivalents - money market funds	$	65,634	$	65,634	$	—	$	—
Total		65,634		65,634		—		—
Liabilities:
Contingent consideration liability (see Note 8)		6,090		—		—		6,090
Total	$	6,090	$	—	$	—	$	6,090

The fair value of contingent payments classified as a liability is based on the regulatory milestones described in Note 8 and estimated using the Monte Carlo simulation valuation model with Level 3 inputs.

The assumptions used to estimate the fair value of contingent payments that are classified as a liability at March 31, 2022 include the following significant unobservable inputs:

Unobservable input	Value or Range	Weighted-Average
Expected volatility	84.4%	84.4%
Risk-free interest rate	0.90%	0.90%
Cost of capital	30%	30%
Discount for lack of marketability	10%‑13%	12%
Probability of payment	94%	94%
Projected year of payment	2022	2022

If applicable, the Company will recognize transfers into and out of Level 3 within the fair value hierarchy at the end of the reporting period in which the actual event or change in circumstance occurs. There were no transfers into or out of Level 3 of the fair value hierarchy as of March 31, 2022 and December 31, 2021.

Separate disclosure is required for assets and liabilities measured at fair value on a recurring basis from those measured at fair value on a non-recurring basis. Assets recorded at fair value on a non-recurring basis, such as property and equipment and intangible assets are recognized at fair value when they are impaired. During the three months ended March 31, 2022, the Company had no significant assets or liabilities that were measured at fair value on a non-recurring

basis. During the year ended December 31, 2021, the Company recorded non-cash impairment charges to property and equipment, net on a non-recurring basis (see below).

Lonza Manufacturing Agreement

In March 2021, the Company expanded its manufacturing collaboration with Lonza Houston, Inc. (“Lonza”) for the manufacture of AdCOVID or other adenovirus-based vaccines. Under the expanded agreement, the Company had committed approximately $23.0 million to Lonza to procure long-lead equipment and construct a dedicated manufacturing suite for clinical and commercial production of adenovirus-based vaccines. This work was completed during the fourth quarter of 2021. The Company capitalized a total of $4.0 million as construction-in-progress (“CIP”) during the three months ended March 31, 2021 under this expanded agreement. The Company subsequently terminated the agreement and impaired the amount during the year ended December 31, 2021.