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Acquisition of Isconova AB
3 Months Ended
Mar. 31, 2014
Acquisition Of Isconova AB [Abstract]  
Acquisition Of Isconova AB

Note 4 - Acquisition Isconova AB

 

On July 31, 2013 (the "acquisition date"), Novavax announced the acquisition of Isconova (the "Acquisition") pursuant to its public tender offer to acquire all outstanding shares and warrants of that company directly from holders of those securities and its private offer for all of Isconova's outstanding stock options. As a result of the public offer for shares and warrants and private offer for stock options, Novavax issued approximately 15.6 million shares of its Common Stock valued at $41.9 million and paid cash of approximately $22,000 to acquire 99.5% of the outstanding shares and all of the outstanding stock options and warrants of Isconova. On September 6, 2013, Isconova AB was renamed "Novavax AB" and was delisted as a publicly traded company in Sweden. This transaction has been accounted for using the purchase method of accounting, with Novavax as the acquirer. The results of Novavax AB's operations have been included in the consolidated financial statements since the acquisition date. From the acquisition date to March 31, 2014, the minority interest in Novavax AB's net loss and stockholders' equity is immaterial.

 

The preliminary allocation of the purchase price was based upon information that was available to management at the time the consolidated financial statements were prepared and is subject to change within the purchase price allocation period (generally one year from the acquisition date). The primary area of the purchase price allocation that is not yet finalized relates to unsettled contingencies. Due to settlements in the first quarter of 2014 by Novavax AB of certain accrued contingencies related to its pre-existing contractual rights and obligations, the Company reduced the carrying value of its goodwill retrospectively as of the acquisition date related to the Acquisition by $0.8 million from $26.2 million to $25.4 million, which represents the purchase price paid in the Acquisition that was in excess of the fair value of the assets acquired and liabilities assumed. This adjustment did not have a material impact on the Company's current or prior period financial statements. The goodwill related to the Acquisition is included in the Company's vaccine operations because of the anticipated complementary use of Novavax AB adjuvants with its vaccine candidates discussed above. The goodwill generated from the Acquisition is not expected to be deductible for U.S. federal income tax purposes.