Kodiak Sciences Inc. Fair Value Disclosure
5. Fair Value Measurements
The following tables present the Company’s fair value hierarchy for assets measured at fair value on a recurring basis (in thousands):
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Fair Value Measurements at December 31, 2025 |
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|
Level 1 |
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Level 2 |
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|
Level 3 |
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Total |
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Cash equivalents: |
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|
|
|
|
|
|
|
|
|
|
||||
Money market funds |
|
$ |
207,585 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
207,585 |
|
Total cash equivalents |
|
|
207,585 |
|
|
|
— |
|
|
|
— |
|
|
|
207,585 |
|
Cash |
|
|
2,277 |
|
|
|
— |
|
|
|
— |
|
|
|
2,277 |
|
Total cash and cash equivalents |
|
$ |
209,862 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
209,862 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
Fair Value Measurements at December 31, 2024 |
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|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Total |
|
||||
Cash equivalents: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Money market funds |
|
$ |
166,464 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
166,464 |
|
Total cash equivalents |
|
|
166,464 |
|
|
|
— |
|
|
|
— |
|
|
|
166,464 |
|
Cash |
|
|
1,610 |
|
|
|
— |
|
|
|
— |
|
|
|
1,610 |
|
Total cash and cash equivalents |
|
$ |
168,074 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
168,074 |
|
As of December 31, 2025 and 2024, the fair value of the liability related to sale of future royalties is based on the Company's current estimates of future royalties expected to be paid to Baker Bros. Advisors, LP (“BBA”), which are considered Level 3 inputs. See Note 15.
As discussed in Note 8, the Company entered into a sublease agreement during the first quarter of 2025, which led to an impairment of the related right-of-use asset. Estimated fair value of the right-of-use asset was based on expected sublease rental income, considering current sublease market conditions, discounted at a market rate of return on similar assets. The estimates and assumptions used are considered Level 3 inputs.
There were no transfers of assets or liabilities between the fair value measurement levels during the years ended December 31, 2025 and 2024.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 31, 2026 | Showing above |
| 2024 | Mar 27, 2025 | |
| 2023 | Mar 28, 2024 | |
| 2022 | Mar 28, 2023 | |
| 2021 | Mar 1, 2022 | |
| 2020 | Mar 1, 2021 | |
| 2019 | Mar 16, 2020 | |
| 2018 | Mar 27, 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.