Centessa Pharmaceuticals plc
Centessa Pharmaceuticals plc Fair Value Disclosure
Fair Value of Financial Instruments
The following fair value hierarchy table presents fair value information about the Company’s assets and liabilities (amounts in thousands):
| Fair value measurement 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) | Total | ||||||||||||||||||||
| December 31, 2025 | |||||||||||||||||||||||
Assets | |||||||||||||||||||||||
| Money Market fund | $ | 23,970 | $ | — | $ | — | $ | 23,970 | |||||||||||||||
| U.S. Treasury and government agency securities | 59,842 | 247,890 | — | 307,732 | |||||||||||||||||||
| Corporate debt securities | — | 183,456 | — | 183,456 | |||||||||||||||||||
| Commercial Paper | — | 34,616 | — | 34,616 | |||||||||||||||||||
| Total | $ | 83,812 | $ | 465,962 | $ | — | $ | 549,774 | |||||||||||||||
| Fair value measurement 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) | Total | ||||||||||||||||||||
| December 31, 2024 | |||||||||||||||||||||||
| Assets | |||||||||||||||||||||||
| Money Market fund | $ | 217,515 | $ | — | $ | — | $ | 217,515 | |||||||||||||||
| U.S. Treasury securities | 171,885 | — | — | 171,885 | |||||||||||||||||||
| Total | $ | 389,400 | $ | — | $ | — | $ | 389,400 | |||||||||||||||
We classify our investments in available-for-sale U.S. Treasury securities and the money market fund into Level 1 of the ASC Topic 820 hierarchy because fair values represent quoted market prices for identical or comparable instruments. The Company estimates the fair value of its U.S. government agency securities, corporate debt securities and commercial paper that are considered Level 2 fair values by taking into consideration valuations obtained from third-party pricing services. The pricing services utilize industry standard valuation models, including both income and market-based
approaches, for which all significant inputs are observable, either directly or indirectly, to estimate fair value. These inputs include reported trades of and broker/dealer quotes on the same or similar securities, issuer credit spreads; benchmark securities; prepayment/default projections based on historical data; and other observable inputs.
The following represents the amortized cost bases and fair values of the Company’s investments and money market fund as of December 31, 2025 (amounts in thousands):
| Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | ||||||||||||||||||||
| Money Market fund, included in Cash and cash equivalents | $ | 23,970 | $ | — | $ | — | $ | 23,970 | |||||||||||||||
| U.S. Treasury and government agency securities, included in: | |||||||||||||||||||||||
| Cash and cash equivalents | $ | 9,974 | $ | 1 | $ | — | $ | 9,975 | |||||||||||||||
| Short-term investments | 134,625 | 73 | (21) | 134,677 | |||||||||||||||||||
| Long-term investments | 163,141 | 27 | (88) | 163,080 | |||||||||||||||||||
| Total U.S. Treasury and government agency securities | $ | 307,740 | $ | 101 | $ | (109) | $ | 307,732 | |||||||||||||||
| Corporate debt securities, included in: | |||||||||||||||||||||||
| Short-term investments | $ | 63,847 | $ | 141 | $ | — | $ | 63,988 | |||||||||||||||
| Long-term investments | 119,279 | 252 | (63) | 119,468 | |||||||||||||||||||
| Total Corporate debt securities | $ | 183,126 | $ | 393 | $ | (63) | $ | 183,456 | |||||||||||||||
| Commercial paper, included in: | |||||||||||||||||||||||
| Short-term investments | $ | 34,605 | $ | 11 | $ | — | $ | 34,616 | |||||||||||||||
| Total Commercial paper | $ | 34,605 | $ | 11 | $ | — | $ | 34,616 | |||||||||||||||
| In aggregate: | |||||||||||||||||||||||
| Investments above with no unrealized loss | $ | 309,888 | $ | 505 | $ | — | $ | 310,393 | |||||||||||||||
| Investments above with unrealized loss | 239,553 | — | (172) | 239,381 | |||||||||||||||||||
| Total investments | $ | 549,441 | $ | 505 | $ | (172) | $ | 549,774 | |||||||||||||||
At the end of December 31, 2025, the Company held approximately 79 securities, of which 37 were in an unrealized loss position as of the end of the period, with an aggregate fair value of $239.4 million. The Company has not recorded any allowance for credit losses as of December 31, 2025 as it believes the decline in fair value below amortized cost is not related to credit losses. These investments in an unrealized loss position were in this position for less than 12 months and there has been no change in the credit risk of such securities during the period. The Company does not intend to sell its investments and it is not more likely than not that the Company will be required to sell the securities before
recovery of the amortized cost basis of its debt securities. Securities are evaluated at the end of each reporting period for evidence of the credit-related impairment.
The following represents the amortized cost bases and fair values of the Company’s investments and its money market fund as of December 31, 2024 (amounts in thousands):
| Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | ||||||||||||||||||||
| Money Market fund, included in Cash and cash equivalents | $ | 217,515 | $ | — | $ | — | $ | 217,515 | |||||||||||||||
| U.S. Treasury securities, included in: | |||||||||||||||||||||||
Cash and cash equivalents | $ | 72,762 | $ | 167 | $ | — | $ | 72,929 | |||||||||||||||
| Short-term investments | 95,534 | 3,422 | — | 98,956 | |||||||||||||||||||
| Total U.S. Treasury securities | $ | 168,296 | $ | 3,589 | $ | — | $ | 171,885 | |||||||||||||||
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Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 31, 2026 | Showing above |
| 2024 | Mar 24, 2025 | |
| 2023 | Mar 28, 2024 | |
| 2022 | Mar 30, 2023 | |
| 2021 | Mar 30, 2022 | |
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.