Nuvalent, Inc. Fair Value Disclosure
4. Fair Value Measurements
The following tables present the Company’s fair value hierarchy for its assets and liabilities, which are 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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Assets: |
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Cash equivalents |
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$ |
251,567 |
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|
$ |
— |
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|
$ |
— |
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|
$ |
251,567 |
|
Marketable securities: |
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Commercial paper |
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— |
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|
107,884 |
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|
— |
|
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|
107,884 |
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Corporate bonds |
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— |
|
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|
774,506 |
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|
— |
|
|
|
774,506 |
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Government and agency securities |
|
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— |
|
|
|
207,990 |
|
|
|
— |
|
|
|
207,990 |
|
U.S. treasury bills |
|
|
— |
|
|
|
19,827 |
|
|
|
— |
|
|
|
19,827 |
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|
|
$ |
251,567 |
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|
$ |
1,110,207 |
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$ |
— |
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|
$ |
1,361,774 |
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Liabilities: |
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Related party revenue share liability |
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$ |
— |
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$ |
— |
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|
$ |
73,160 |
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$ |
73,160 |
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Fair Value Measurements at December 31, 2024 |
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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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Assets: |
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Cash equivalents |
|
$ |
135,902 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
135,902 |
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Marketable securities: |
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|
|
|
|
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Commercial paper |
|
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— |
|
|
|
251,309 |
|
|
|
— |
|
|
|
251,309 |
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Corporate bonds |
|
|
— |
|
|
|
468,617 |
|
|
|
— |
|
|
|
468,617 |
|
Government and agency securities |
|
|
— |
|
|
|
162,886 |
|
|
|
— |
|
|
|
162,886 |
|
U.S. treasury bills |
|
|
— |
|
|
|
89,799 |
|
|
|
— |
|
|
|
89,799 |
|
|
|
$ |
135,902 |
|
|
$ |
972,611 |
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|
$ |
— |
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|
$ |
1,108,513 |
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Liabilities: |
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Related party revenue share liability |
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$ |
— |
|
|
$ |
— |
|
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$ |
17,940 |
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$ |
17,940 |
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Cash equivalents were valued by the Company based on quoted market prices for identical securities, which represent a Level 1 measurement within the fair value hierarchy. Commercial paper, corporate bonds, government and agency securities, and U.S. treasury bills were valued by the Company using quoted prices in active markets for similar securities, which represent a Level 2 measurement within the fair value hierarchy. During the periods presented, there were no transfers in or out of Level 3. The carrying values of the Company’s accounts payable and accrued expenses and other current liabilities approximate their fair values due to the short-term nature of these liabilities.
The following table sets forth the changes in estimated fair value of the Company’s related party revenue share liability for the year ended December 31, 2025, which represents a Level 3 measurement within the fair value hierarchy (in thousands):
Estimated fair value as of December 31, 2024 |
|
$ |
17,940 |
|
Change in fair value |
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|
55,220 |
|
Estimated fair value as of December 31, 2025 |
|
$ |
73,160 |
|
The fair value of the related party revenue share liability was estimated using a discounted cash flow model to calculate the estimated payments that could become due following commercialization. Assumptions in the model include but are not limited to the following: probability and timing of product approval, future product revenues and discount rate. Changes in fair value each reporting period are recognized as a component of other income (expense) in the consolidated statements of operations and comprehensive loss. See Note 10 for additional information regarding the revenue sharing agreement with Deerfield.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 26, 2026 | Showing above |
| 2024 | Feb 27, 2025 | |
| 2023 | Feb 27, 2024 | |
| 2022 | Mar 16, 2023 | |
| 2021 | Mar 29, 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.