Harmony Biosciences Holdings, Inc. Fair Value Disclosure
6. FAIR VALUE MEASUREMENTS
Money market funds are classified as Level 1 fair value instruments. Investments in available-for-sale debt securities are classified as Level 2 and carried at fair value, which we estimate utilizing a third-party pricing service. The pricing service utilizes industry standard valuation models whereby all significant inputs, including benchmark yields, reported trades, broker/dealer quotes, issuer spreads, bids, offers, or other market-related data, are observable. We validate valuations obtained from third-party services by obtaining market values from other pricing sources. The Company did not classify any assets or liabilities as Level 3 as of December 31, 2025, or December 31, 2024.
The Company’s assets measured at fair value consisted of the following:
December 31, 2025 | December 31, 2024 | ||||||||||||
Total | Level 1 | Level 2 | Total | Level 1 | Level 2 | ||||||||
Assets | |||||||||||||
Cash equivalents | $ | 225,605 | 225,605 | — | $ | 303,545 | 303,545 | — | |||||
Commercial paper | 8,371 | — | 8,371 | 7,678 | — | 7,678 | |||||||
Corporate debt securities | 104,147 | — | 104,147 | 93,257 | — | 93,257 | |||||||
U.S. government securities | 17,447 | — | 17,447 | 22,124 | — | 22,124 | |||||||
Total | $ | 355,570 | 225,605 | 129,965 | $ | 426,604 | 303,545 | 123,059 | |||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 24, 2026 | Showing above |
| 2024 | Feb 25, 2025 | |
| 2023 | Feb 22, 2024 | |
| 2022 | Feb 21, 2023 | |
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.