Fair Value Measurements |
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| Fair Value Measurements |
6. Fair Value Measurements
Urica’s Equity Investment in Crystalys
Urica values its equity investment in Crystalys using an option pricing model backsolve method and level 3 inputs. During the three and nine months ended September 30, 2026, the Company recognized nil and $11.8 million, respectively, of other income in the unaudited condensed consolidated statement of operations related to additional shares received pursuant to the anti-dilution provisions and changes in the estimated fair value of the investment due to Crystalys’ Series B financing. The following inputs were utilized to derive the value: risk free rate of return: 4.24%; volatility: 80%; and a discount for lack of marketability: 30.3%. There are significant judgments and estimates inherent in the determination of the fair value, such as those regarding the selection of comparable companies used in estimating volatility, and the probability of possible future events. Such estimates involve inherent uncertainties and the application of significant judgment. Changes in judgments could have a material impact on our results of operations.
At September 30, 2026, the total fair value of Urica’s investment in Crystalys was approximately $26.9 million, which also represents the cumulative unrealized gain since acquisition of the investment.
Fair Value of Aevitas
The Company valued its retained investment in Aevitas, which is accounted for as an equity method investment for which the Company elected the fair value option, and estimated the fair value using level 3 inputs to be $2.6 million. The Company has not recognized any gains, losses, or impairments on the investment in 2026, 2025, or on a cumulative basis.
Common Stock Warrant Liabilities
Avenue
Avenue has previously issued freestanding warrants to purchase shares of its common stock in connection with financing activities. Avenue’s outstanding warrants to purchase common stock were originally issued in October 2022 (the “October 2022 Warrants”). The October 2022 Warrants are classified as liabilities on the balance sheet as they contain terms for redemption of the underlying security that are outside the Company's control. The Black-Scholes Model is used to value the warrants classified as liabilities and the approach required Avenue to estimate inputs including expected volatility and expected term and is most significantly impacted by the volatility of the Avenue's common stock price. These inputs are inherently subjective and require significant analysis and judgment to develop.
The fair value of the October 2022 Warrants was measured at the time of issuance and is re-measured at each financial reporting date with any changes in fair value being recognized in change in fair value of warrant liabilities, a component of other income (expense), in the consolidated statements of operations and comprehensive income (loss). Avenue will continue to re-measure the fair value of the October 2022 Warrant liabilities until exercise or expiration of the warrants on October 10, 2027.
A summary of the weighted average (in aggregate) significant unobservable inputs (Level 3 inputs) used in measuring the Avenue warrant liability that are categorized within Level 3 of the fair value hierarchy was as follows:
Partner Company Derivative Liability The partner company derivative liability associated with Cyprium’s 9.375% Series A Cumulative Redeemable Perpetual Preferred Stock (“Cyprium PPS”) increased in fair value by $7.1 million during the three months ended March 31, 2026. The increase in fair value was due to the settlement of the derivative in connection with the redemption of the Cyprium PPS (Level 1) and the liability was extinguished in connection with the redemption of the Cyprium PPS (see Note 15) during the three months ended March 31, 2026. As of September 30, 2026, no transfers occurred between Level , Level , and Level 3 instruments. |
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