Fair Value Measurements

6 Months Ended

Jun. 30, 2024

Fair Value Disclosures [Abstract]

Fair Value Measurements

4. Fair Value Measurements

The following tables set forth the fair value of the Company’s financial assets measured at fair value on a recurring basis and indicates the level within the fair value hierarchy utilized to determine such values (in thousands):

As of June 30, 2024	Total		Level 1		Level 2		Level 3
Cash equivalents:
U.S. Treasury backed money market funds	$	93,631	$	93,631	$	—	$	—
U.S. Treasury securities		2,479		2,479		—		—
Marketable securities:
U.S. Treasury securities		215,519		215,519		—		—
Total	$	311,629	$	311,629	$	—	$	—
As of December 31, 2023	Total		Level 1		Level 2		Level 3
Cash equivalents:
U.S. Treasury backed money market funds	$	99,388	$	99,388	$	—	$	—
Marketable securities:
U.S. Treasury securities		153,007		153,007		—		—
Total	$	252,395	$	252,395	$	—	$	—

CVR asset and liability

Upon the completion of the Merger in February 2023, the Company assessed the fair value of the payments to be made under the CVR Agreement to be zero as the Company had determined the payments were not probable. During the fourth quarter of 2023, the Company assessed the fair value of the first milestone under the asset purchase agreement at 100% based upon certain information received from the third-party indicating that the milestone was likely to be achieved in early 2024. As such, the Company estimated

the fair value of the CVR asset and liability for this first milestone and recorded a $10.0 million CVR asset and $10.0 million CVR liability on its consolidated balance sheet as of December 31, 2023. In March 2024, the Company received formal notification from the third-party that the first milestone event as set forth in the asset purchase agreement had been achieved, and the Company received the $10.0 million milestone payment in April 2024. As the second milestone event under this asset purchase agreement relates to the future potential commercialization of the assets, no value was attributed to this milestone as of June 30, 2024 and December 31, 2023. Pursuant to the terms of the CVR Agreement, the Company has 45 days from the end of the calendar quarter in which funds are received to deliver the milestone proceeds, net of permitted deductions, to the rights agent for distribution to the CVR holders. The Company assessed the permitted deductions under the terms of the CVR Agreement and concluded that such permitted deductions amounted to $0.8 million as of June 30, 2024, and accordingly, the CVR liability was revalued to the net amount of $9.2 million as of such date. On August 9, 2024, after deducting incremental costs incurred subsequent to June 30, 2024, the Company paid $9.1 million to the rights agent for distribution to the CVR holders.

The following table is a reconciliation of the CVR liability (in thousands):

Balance at December 31, 2023	$	10,000
Change in fair value upon remeasurement		(800	)
Balance at June 30, 2024	$	9,200