Apellis Pharmaceuticals, Inc. Fair Value Disclosure
9. Fair Value Measurements
The following table presents the fair value of the Company’s financial instruments that are measured at fair value on a recurring basis as of December 31, 2025 and 2024 (in thousands):
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December 31, 2025 |
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Balance Sheet Classification: |
Type of Instrument |
Level 1 |
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|
Level 2 |
|
|
Level 3 |
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|
Total |
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Financial Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash and cash equivalents: |
Money market funds |
$ |
349,615 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
349,615 |
|
Total Financial Assets |
|
$ |
349,615 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
349,615 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
December 31, 2024 |
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Balance Sheet Classification: |
Type of Instrument |
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Total |
|
||||
Financial Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash and cash equivalents: |
Money market funds |
$ |
276,868 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
276,868 |
|
Total Financial Assets |
|
$ |
276,868 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
276,868 |
|
The Convertible Notes are financial instruments that are reported in the consolidated financial statements at historical cost. The Convertible Notes are Level 1 within the fair value level hierarchy as of December 31, 2025 and 2024. The fair value of the Convertible Notes was $97.5 million as of December 31, 2025 and $102.3 million as of December 31, 2024. The Convertible Notes accrue a semi-annual coupon at an annual rate of 3.5%, which was included in accrued expenses in the consolidated balance sheets as of December 31, 2025 and 2024.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 24, 2026 | Showing above |
| 2024 | Feb 28, 2025 | |
| 2023 | Feb 27, 2024 | |
| 2022 | Feb 21, 2023 | |
| 2021 | Feb 28, 2022 | |
| 2020 | Feb 25, 2021 | |
| 2019 | Feb 27, 2020 | |
| 2018 | Feb 26, 2019 | |
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.