Aclaris Therapeutics, Inc. Fair Value Disclosure
3. Fair Value of Financial Assets and Liabilities
The following tables present information about the fair value measurements of the Company’s financial assets and liabilities which are measured at fair value on a recurring and non-recurring basis, and indicate the level of the fair value hierarchy utilized to determine such fair values:
December 31, 2025 | ||||||||||||
(In thousands) | | Level 1 | | Level 2 | | Level 3 | | Total | ||||
Assets: | | | | | | | | | ||||
Cash equivalents | $ | 16,302 | $ | — | $ | — | $ | 16,302 | ||||
Marketable securities |
| — | 131,403 | — | 131,403 | |||||||
Total assets | $ | 16,302 | $ | 131,403 | $ | — | $ | 147,705 | ||||
Liabilities: | ||||||||||||
Contingent consideration | $ | — | $ | — | $ | 11,000 | $ | 11,000 | ||||
Total liabilities | $ | — | $ | — | $ | 11,000 | $ | 11,000 | ||||
December 31, 2024 | ||||||||||||
(In thousands) | | Level 1 | | Level 2 | | Level 3 | | Total | ||||
Assets: | | | | | | | | | ||||
Cash equivalents | $ | 22,245 | $ | — | $ | — | $ | 22,245 | ||||
Marketable securities |
| — | 179,326 | — | 179,326 | |||||||
Total assets | $ | 22,245 | $ | 179,326 | $ | — | $ | 201,571 | ||||
Liabilities: | ||||||||||||
Contingent consideration | $ | — | $ | — | $ | 8,700 | $ | 8,700 | ||||
Total liabilities | $ | — | $ | — | $ | 8,700 | $ | 8,700 | ||||
As of December 31, 2025 and 2024, the Company’s cash equivalents consisted of money market funds, which were valued based upon Level 1 inputs. The Company’s marketable securities as of December 31, 2025 consisted of corporate debt securities and U.S. government debt securities, which were all valued based upon Level 2 inputs. The Company’s marketable securities as of December 31, 2024 consisted of commercial paper, corporate debt securities, foreign government agency debt securities, and U.S. government and government agency debt securities, which were all valued based upon Level 2 inputs.
In determining the fair value of its Level 2 investments, the Company relied on quoted prices for identical securities in markets that are not active. These quoted prices were obtained by the Company with the assistance of a third-party pricing service based on available trade, bid and other observable market data for identical securities. During the years ended December 31, 2025 and 2024, there were no transfers into or out of Level 3.
The overall $2.3 million increase in the fair value of the contingent consideration liability during the year ended December 31, 2025 was primarily due to changes to the probability of success for certain product candidates and the passage of time.
As of December 31, 2025 and 2024 the fair value of the Company’s available-for-sale marketable securities by type of security was as follows:
December 31, 2025 | ||||||||||||
Gross | Gross | |||||||||||
Book | Unrealized | Unrealized | Fair | |||||||||
(In thousands) | Value | Gain | Loss | Value | ||||||||
Marketable securities: | ||||||||||||
Corporate debt securities(1) | $ | 85,222 | $ | 373 | $ | — | $ | 85,595 | ||||
U.S. government debt securities(2) | 45,571 | 237 | — | 45,808 | ||||||||
Total marketable securities | $ | 130,793 | $ | 610 | $ | — | $ | 131,403 | ||||
| (1) | Included in Corporate debt securities is $45.4 million with maturity dates between and three years. |
| (2) | Included in U.S. government debt securities is $15.2 million with maturity dates between and three years. |
December 31, 2024 | ||||||||||||
Gross | Gross | |||||||||||
Book | Unrealized | Unrealized | Fair | |||||||||
(In thousands) | Value | Gain | Loss | Value | ||||||||
Marketable securities: | ||||||||||||
Corporate debt securities(1) | $ | 105,154 | $ | 192 | $ | (156) | $ | 105,190 | ||||
Commercial paper | 4,720 | — | (1) | 4,719 | ||||||||
Foreign government agency debt securities | 4,911 | 16 | — | 4,927 | ||||||||
U.S. government and government agency debt securities(2) | 64,454 | 47 | (11) | 64,490 | ||||||||
Total marketable securities | $ | 179,239 | $ | 255 | $ | (168) | $ | 179,326 | ||||
| (1) | Included in Corporate debt securities is $59.8 million with maturity dates between and three years. |
| (2) | Included in U.S. government and government agency debt securities is $30.5 million with maturity dates between and three years. |
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 26, 2026 | Showing above |
| 2024 | Feb 27, 2025 | |
| 2023 | Feb 27, 2024 | |
| 2022 | Feb 23, 2023 | |
| 2021 | Feb 24, 2022 | |
| 2020 | Feb 25, 2021 | |
| 2019 | Feb 25, 2020 | |
| 2018 | Mar 18, 2019 | |
| 2017 | Mar 12, 2018 | |
| 2016 | Mar 15, 2017 | |
| 2015 | Mar 23, 2016 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.