FAIR VALUE MEASUREMENTS

9 Months Ended

Sep. 30, 2024

Fair Value Disclosures [Abstract]

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS

The Company’s financial assets and liabilities subject to fair value measurement on a recurring basis and the level of inputs used for such measurements were as follows (in thousands):

	Fair value measurements at reporting date using
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Fair Value at September 30, 2024
Assets included in:
Cash and cash equivalents
Money market securities	$	32,832	$	—	$	—	$	32,832
Marketable securities
Corporate debt securities	—		198,674		—		198,674
Government and agency - U.S.	—		27,037		—		27,037
Total fair value	$	32,832	$	225,711	$	—	$	258,543
Liabilities included in:
Debt, long-term
Embedded derivatives liability	$	—	$	—	$	1,520	$	1,520
Total fair value	$	—	$	—	$	1,520	$	1,520

	Fair value measurements at reporting date using
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Fair Value at December 31, 2023
Assets included in:
Cash and cash equivalents
Money market securities	$	66,207	$	—	$	—	$	66,207
Marketable securities
Corporate debt securities	—		201,635		—		201,635
Government and agency - U.S.	—		37,554		—		37,554
Total fair value	$	66,207	$	239,189	$	—	$	305,396
Liabilities included in:
Debt, long-term
Embedded derivatives liability	$	—	$	—	$	2,560	$	2,560
Total fair value	$	—	$	—	$	2,560	$	2,560

The carrying values reported in the Company’s condensed balance sheets for cash (excluding cash equivalents, which are recorded at fair value on a recurring basis), restricted cash, accounts payable, accrued clinical trial expenses and accrued expenses and other current liabilities are reasonable estimates of their fair values due to the short-term nature of these items.

The carrying amount of the Company’s long-term debt approximates fair value due to its variable market interest rate and management’s opinion that current rates and terms that would be available to the Company with the same maturity and security structure would be essentially equivalent to that of the Company’s long-term debt. Certain features of the Company’s term loan facility (the “Term Loan”) were determined to be embedded derivatives requiring separate measurement from the loan host instrument. For additional information regarding the Term Loan, see Note 6. Debt.

The fair value of the Company’s money market funds is determined using quoted market prices in active markets for identical assets.

The fair value for the available-for-sale marketable securities is determined based on valuation models using inputs that are observable either directly or indirectly (Level 2 inputs), such as quoted prices for similar assets or liabilities, yield curve, volatility factors, credit spreads, default rates, loss severity, current market and contractual prices for the underlying instruments or debt, broker and dealer quotes, as well as other relevant economic measures.

The following table presents changes in Level 3 liabilities measured at fair value for the nine months ended September 30, 2024 (in thousands):

Balance, December 31, 2023	$	2,560
Change in fair value of embedded derivatives	(1,040)
Balance, September 30, 2024	$	1,520

As of September 30, 2024 and December 31, 2023, the fair value of the embedded derivatives in the Term Loan has been estimated using the Monte Carlo model. A summary of the weighted-average significant unobservable inputs (Level 3 inputs) used in measuring the embedded derivatives in the Term Loan as of September 30, 2024 and December 31, 2023 is as follows:

	September 30, 2024	December 31, 2023
Conversion price	$2.53	$2.53
Expected term (in years)	4.0	4.7
Expected equity volatility	102.1%	106.7%
Risk-free interest rate	3.6%	3.9%
Discount for lack of marketability	11.0%	11.5%
Expected dividend yield	0%	0%