Vanda Pharmaceuticals Inc.VNDA

Vanda Pharmaceuticals Inc. Fair Value Disclosure

10-KFiled Feb 12, 20262 min read
Fair Value Measurements
Authoritative guidance establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include:
•Level 1 — defined as observable inputs such as quoted prices in active markets
•Level 2 — defined as inputs other than quoted prices in active markets that are either directly or indirectly observable
•Level 3 — defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions
The Company’s assets classified in Level 1 and Level 2 as of December 31, 2025 and 2024 consist of cash equivalents and available-for-sale marketable securities. The valuation of Level 1 instruments is determined using a market approach and is based upon unadjusted quoted prices for identical assets in active markets. The valuation of Level 2 instruments is also determined using a market approach based upon quoted prices for similar assets in active markets, or other inputs that are observable for substantially the full term of the financial instrument. Level 2 securities include certificates of deposit, commercial paper and corporate notes that use as their basis readily observable market parameters.
The Company held certain assets that are required to be measured at fair value on a recurring basis as of December 31, 2025, as follows:
  Fair Value Measurement as of December 31, 2025 Using
(in thousands)Total Fair ValueQuoted Prices in
Active Markets for
Identical Assets
(Level 1)		Significant Other
Observable Inputs
(Level 2)		Significant
Unobservable
Inputs
(Level 3)
U.S. Treasury and government agencies$153,735 $153,735 $— $— 
Corporate debt25,261 — 25,261 — 
Total assets measured at fair value$178,996 $153,735 $25,261 $— 
The Company held certain assets that are required to be measured at fair value on a recurring basis as of December 31, 2024, as follows:
  Fair Value Measurement as of December 31, 2024 Using
(in thousands)Total Fair ValueQuoted Prices in
Active Markets for
Identical Assets
(Level 1)		Significant Other
Observable Inputs
(Level 2)		Significant
Unobservable
Inputs
(Level 3)
U.S. Treasury and government agencies$227,830 $227,830 $— $— 
Corporate debt44,497 — 44,497 — 
Total assets measured at fair value$272,327 $227,830 $44,497 $— 
Total assets measured at fair value as of December 31, 2025 and 2024 include no cash equivalents.
The Company also has financial assets and liabilities, not required to be measured at fair value on a recurring basis, which primarily consist of cash, accounts receivable, restricted cash, accounts payable and accrued liabilities, milestone obligations under licensing agreements and product revenue allowances, the carrying values of which materially approximate their fair values.

Historical Timeline

Fiscal YearFiled
2025Feb 12, 2026Showing above
2024Feb 14, 2025
2023Feb 8, 2024
2022Feb 9, 2023
2021Feb 24, 2022
2020Feb 11, 2021
2019Feb 26, 2020
2018Feb 19, 2019
2017Feb 15, 2018
2016Feb 17, 2017
2015Feb 12, 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.

Other Available Disclosures

Income TaxesRevenueEarnings Per SharePP&EGoodwill & IntangiblesLeasesSegmentsCommitmentsStock CompensationNew Standards