PTC THERAPEUTICS, INC. Fair Value Disclosure
3. Fair value of financial instruments and investments
The Company follows the fair value measurement rules, which provide guidance on the use of fair value in accounting and disclosure for assets and liabilities when such accounting and disclosure is called for by other accounting literature. Cash equivalents, marketable securities, and equity investments are reflected in the accompanying financial statements at fair value. The carrying amount of receivables and accounts payable and accrued expenses approximate fair value due to the short-term nature of those instruments.
The Company uses the market approach to measure fair value for its marketable securities. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets. The Company’s marketable securities are classified as Level 2 as they primarily utilize broker quotes in a nonactive market to value these securities.
The Company owned common stock in ClearPoint Neuro, Inc. (“ClearPoint”) (formerly MRI Interventions, Inc.), a publicly traded medical device company. The ClearPoint equity investments (collectively, the “ClearPoint Equity Investments”) represented financial instruments, and therefore, were recorded at fair value, which was readily determinable. As of December 31, 2025, the Company sold all of its ClearPoint Equity Investments. The ClearPoint Equity Investments were components of prepaids and other current assets as of December 31, 2024 on the consolidated balance sheet. The Company classified its equity investments in ClearPoint as a Level 1 asset within the fair value hierarchy, as the value was based on a quoted market price in an active market, which was not adjusted.
In January 2020, the Company purchased a $10.0 million convertible note from ClearPoint that was convertible into ClearPoint shares at a conversion rate of $6.00 per share at any point throughout the term of the loan, with a maturity date five years from the purchase date. In August 2024, the outstanding principal amount of the convertible note, together with any accrued and unpaid interest thereon, was repaid in full by ClearPoint and therefore the balance at December 31, 2024 was $0. The Company determined that the convertible note represented an available for sale debt security and the Company had elected to record it at fair value under ASC 825. The Company classified its ClearPoint convertible debt security as a Level 2 asset within the fair value hierarchy, as the value was based on inputs other than quoted prices that are observable. The fair value of the ClearPoint convertible debt security was determined at each reporting period by utilizing a Black-Scholes option pricing model, as well as a present value of expected cash flows from the debt security utilizing the risk free rate and the estimated credit spread as of the valuation date as the discount rate.
The Company has an investment in mutual funds that is denominated in foreign currency and is classified as marketable securities on the Company’s consolidated balance sheets. This equity investment is reported at fair value, as it is readily available, and as such is classified as a Level 1 asset. Unrealized holding gains and losses for this equity investment are included as components of interest expense, net within the consolidated statement of operations.
The table presented below is a summary of changes in the fair value for the Company’s marketable securities – equity investments, ClearPoint Equity Investments, and ClearPoint convertible debt security for the years ended December 31, 2025 and 2024:
Ending | Foreign | Ending | |||||||||||||||||||
Balance at | Currency | Balance at | |||||||||||||||||||
December 31, | Unrealized | Realized | Unrealized | Investments | December 31, | ||||||||||||||||
| 2024 |
| Gain |
| Loss | | Gain | | Purchased | | Sales | 2025 | |||||||||
Marketable securities - equity investments | $ | 29,034 | 3,960 | — | 3,782 | 53,628 | (58,808) | $ | 31,596 | ||||||||||||
ClearPoint Equity Investments | 13,759 | 5,734 | (7,081) | — | — | (12,412) | — | ||||||||||||||
Total Fair Value | $ | 42,793 | $ | 9,694 | $ | (7,081) | $ | 3,782 | $ | 53,628 | $ | (71,220) | $ | 31,596 | |||||||
Ending | Foreign | Ending | |||||||||||||||||||
Balance at | Currency | Balance at | |||||||||||||||||||
December 31, | Unrealized | Realized | Unrealized | Investments | December 31, | ||||||||||||||||
| 2023 | | Gain/(Loss) | Loss | | Loss | | Purchased | | Sales | 2024 | ||||||||||
Marketable securities - equity investments | $ | 22,634 | 2,572 | — | (7,422) | 59,377 | (48,127) | $ | 29,034 | ||||||||||||
ClearPoint Equity Investments | 6,074 | 7,685 | — | — | — | — | 13,759 | ||||||||||||||
ClearPoint convertible debt security | 12,553 | (1,931) | (622) | — | — | (10,000) | — | ||||||||||||||
Total Fair Value | $ | 41,261 | $ | 8,326 | $ | (622) | $ | (7,422) | $ | 59,377 | $ | (58,127) | $ | 42,793 | |||||||
Fair value of marketable securities that are classified as available for sale debt securities is based upon market prices using quoted prices in active markets for identical assets quoted on the last day of the period. In establishing the estimated fair value of the remaining available for sale debt securities, the Company used the fair value as determined by its investment advisors using observable inputs other than quoted prices.
The following represents the fair value using the hierarchy described in Note 2 for the Company’s financial assets and liabilities that are required to be measured at fair value on a recurring basis as of December 31, 2025 and 2024:
December 31, 2025 | ||||||||||||
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| Quoted prices |
| Significant |
| |||||||
| in active |
| other |
| Significant | |||||||
| markets for |
| observable |
| unobservable | |||||||
| identical assets |
| inputs |
| inputs | |||||||
| Total | | (level 1) | | (level 2) | | (level 3) | |||||
Marketable securities - available for sale | $ | 929,127 | $ | — | $ | 929,127 | $ | — | ||||
Marketable securities - equity investments | $ | 31,596 | $ | 31,596 | $ | — | $ | — | ||||
December 31, 2024 | ||||||||||||
|
| Quoted prices |
| Significant |
| |||||||
| in active |
| other |
| Significant | |||||||
| markets for |
| observable |
| unobservable | |||||||
| identical assets |
| inputs |
| inputs | |||||||
| Total | | (level 1) | | (level 2) | | (level 3) | |||||
Marketable securities - available for sale | $ | 330,953 | $ | — | $ | 330,953 | $ | — | ||||
Marketable securities - equity investments | $ | 29,034 | $ | 29,034 | $ | — | $ | — | ||||
ClearPoint Equity Investments | $ | 13,759 | $ | 13,759 | $ | — | $ | — | ||||
Contingent consideration payable- net sales milestones | $ | 800 | $ | — | $ | — | $ | 800 | ||||
No transfers of assets between Level 1 and Level 2 of the fair value measurement hierarchy occurred during the years ended December 31, 2025 and 2024.
The following is a summary of marketable securities accounted for as available for sale debt securities at December 31, 2025 and 2024:
December 31, 2025 | ||||||||||||
| Amortized |
| Gross Unrealized | |||||||||
| Cost | | Gains | | Losses | | Fair Value | |||||
Commercial paper | $ | 93,113 | $ | 8 | $ | (9) | $ | 93,112 | ||||
Corporate debt securities | 279,090 | 181 | (9) | 279,262 | ||||||||
Government obligations | 556,137 | 616 | — | 556,753 | ||||||||
Total | $ | 928,340 | $ | 805 | $ | (18) | $ | 929,127 | ||||
December 31, 2024 | ||||||||||||
| Amortized |
| Gross Unrealized | |||||||||
| Cost | | Gains | | Losses | | Fair Value | |||||
Commercial paper | $ | 44,780 | $ | — | $ | (1) | $ | 44,779 | ||||
Corporate debt securities |
| 89,320 | 76 | (75) | 89,321 | |||||||
Government obligations | 196,584 | 269 | — | 196,853 | ||||||||
Total | $ | 330,684 | $ | 345 | $ | (76) | $ | 330,953 | ||||
For available for sale debt securities in an unrealized loss position, the Company assesses whether it intends to sell or if it is more likely than not that the Company will be required to sell the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value. For the years ended December 31, 2025 and 2024, no write downs occurred. The Company does not intend to sell the investments and it is not more likely than not that the Company will be required to sell the investments before recovery of their amortized cost basis, which may be maturity. The Company also reviews its available for sale debt securities in an unrealized loss position and evaluates whether the decline in fair value has resulted from credit losses or other factors. This review is subjective, as it requires management to evaluate whether an event or change in circumstances has occurred in that period that may be related to credit issues. For the years ended December 31, 2025 and 2024, no allowance was recorded for credit losses. Unrealized gains and losses are reported as a component of accumulated other comprehensive income (loss) in stockholders’ deficit.
For the year ended December 31, 2025, realized gains from the sale of available for sale debt securities were immaterial. For the year ended December 31, 2024, the Company had $3.4 million of realized gains from the sale of available for sale debt securities. Realized gains and losses are reported as a component of interest expense, net in the consolidated statement of operations.
The unrealized losses and fair values of available for sale debt securities that have been in an unrealized loss position for a period of less than and greater than or equal to 12 months as of December 31, 2025 are as follows:
December 31, 2025 | ||||||||||||||||||
| Securities in an unrealized loss |
| Securities in an unrealized loss |
| ||||||||||||||
| position less than 12 months |
| position greater than or equal to 12 months | Total | ||||||||||||||
| Unrealized losses | | Fair Value | | Unrealized losses | | Fair Value | | Unrealized losses | | Fair Value | |||||||
Commercial paper | $ | (9) | 50,306 | — | — | (9) | $ | 50,306 | ||||||||||
Corporate debt securities | $ | (9) | 45,068 | — | — | (9) | $ | 45,068 | ||||||||||
Total | $ | (18) | $ | 95,374 | $ | — | $ | — | $ | (18) | $ | 95,374 | ||||||
The unrealized losses and fair values of available for sale debt securities that have been in an unrealized loss position for a period of less than and greater than or equal to 12 months as of December 31, 2024 are as follows:
December 31, 2024 | ||||||||||||||||||
| Securities in an unrealized loss |
| Securities in an unrealized loss |
| ||||||||||||||
| position less than 12 months |
| position greater than or equal to 12 months | Total | ||||||||||||||
| Unrealized losses | | Fair Value | | Unrealized losses | | Fair Value | | Unrealized losses | | Fair Value | |||||||
Commercial paper | $ | (1) | 29,810 | — | — | (1) | $ | 29,810 | ||||||||||
Corporate debt securities | $ | (75) | 59,550 | — | — | (75) | $ | 59,550 | ||||||||||
Total | $ | (76) | $ | 89,360 | $ | — | $ | — | $ | (76) | $ | 89,360 | ||||||
Available for sale debt securities on the balance sheet at December 31, 2025 and 2024 mature as follows:
December 31, 2025 | ||||||
| Less Than |
| More Than | |||
| 12 Months | | 12 Months | |||
Commercial paper | $ | 93,112 | $ | — | ||
Corporate debt securities | 279,262 | — | ||||
Government obligations | 556,753 | — | ||||
Total | $ | 929,127 | $ | — | ||
December 31, 2024 | ||||||
| Less Than |
| More Than | |||
| 12 Months | | 12 Months | |||
Commercial paper | $ | 44,779 | $ | — | ||
Corporate debt securities |
| 89,321 |
| — | ||
Government obligations | 196,853 | — | ||||
Total | $ | 330,953 | $ | — | ||
The Company classifies all of its marketable securities as current as they are all either available for sale debt securities or equity investments and are available for current operations.
Convertible senior notes
In September 2019, the Company issued $287.5 million of 1.5% convertible senior notes due September 15, 2026 (the “2026 Convertible Notes”). The fair value of the 2026 Convertible Notes, which differs from their carrying values, is influenced by interest rates, the Company’s stock price and stock price volatility and is determined by prices for the 2026 Convertible Notes observed in market trading which are Level 2 inputs. The estimated fair value of the 2026 Convertible Notes at December 31, 2025 and December 31, 2024 was $424.5 million and $321.3 million, respectively.
Level 3 valuation
The contingent consideration payable is fair valued each reporting period with the change in fair value recorded as a gain or loss within the change in the fair value of contingent consideration on the consolidated statements of operations. During the first quarter of 2025, the probability of triggering the remaining contingent consideration was determined to be remote, and therefore the balance was written down to zero. The change in fair value of the contingent consideration for the year ended December 31, 2025 is $0.8 million and is recorded in the consolidated statement of operations. Refer to Note 14 for additional details.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 19, 2026 | Showing above |
| 2024 | Feb 27, 2025 | |
| 2023 | Feb 29, 2024 | |
| 2022 | Feb 21, 2023 | |
| 2021 | Feb 22, 2022 | |
| 2020 | Feb 25, 2021 | |
| 2019 | Mar 2, 2020 | |
| 2018 | Mar 1, 2019 | |
| 2017 | Mar 6, 2018 | |
| 2016 | Mar 16, 2017 | |
| 2015 | Feb 29, 2016 | |
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.