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Goodwill and Intangible Assets
 12 Months Ended
Dec. 31, 2021
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Intangible Assets GOODWILL AND INTANGIBLE ASSETS
Goodwill
Goodwill is recorded when the purchase price of an acquisition exceeds the fair value of the net tangible and identified intangible assets acquired.
Goodwill is tested annually for impairment at the reporting unit level during the fourth quarter or earlier upon the occurrence of certain events or substantive changes in circumstances. There were no indicators of impairment in the year ended December 31, 2021.
The following table presents details of the Company’s goodwill as of December 31, 2021 and 2020 ($ in thousands):
20212020
Balance as of January 1,$23,857 $23,857 
Goodwill acquired13,126 — 
Balance as of December 31,$36,983 $23,857 
On December 1, 2021, the Company performed a qualitative assessment of its reporting unit taking into consideration past, current and projected future earnings, recent trends and market conditions, and its market capitalization. Based on this analysis, the Company concluded that it was more likely than not that the fair value of the reporting unit exceeded its carrying amount. As such, it was not necessary to perform the quantitative goodwill impairment assessment at this time. As of December 31, 2021, no impairment of goodwill has been identified.
Intangible Assets
The following table presents details of the Company’s intangible assets as of December 31, 2021 ($ in thousands):
December 31, 2021
Gross Carrying Amount
Accumulated
Amortization
Foreign
Currency
Translation
Net
Carrying
Amount
Weighted
Average
Remaining
Useful Life
(In Years)
Intangible assets with finite lives:
Acquired and developed technology$35,874 $(12,088)$(1,513)$22,273 8.1
Customer relationships21,898 (6,024)(1,210)14,664 9.9
Commercialization rights10,579 (2,030)— 8,549 7.6
Trademarks and tradenames4,540 (988)(155)3,397 9.5
Other250 (188)— 62 0.2
Total intangible assets with finite lives73,141 (21,318)(2,878)48,945 
Acquired in-process technology1,250 — — 1,250 
Total intangible assets$74,391 $(21,318)$(2,878)$50,195 
The following table presents details of the Company’s intangible assets as of December 31, 2020 ($ in thousands):
December 31, 2020
Gross
Carrying
Amount
Accumulated
Amortization
Foreign
Currency
Translation
Net Carrying
Amount
Weighted
Average
Remaining
Useful Life
(In Years)
Intangible assets with finite lives:
Acquired and developed technology$31,209 $(8,991)$(725)$21,493 9.1
Customer relationships18,168 (4,684)(449)13,035 10.9
Commercialization rights8,079 (1,039)— 7,040 8.7
Trademarks and tradenames2,360 (804)(19)1,537 9.9
Total intangible assets with finite lives59,816 (15,518)(1,193)43,105 
Acquired in-process technology1,250 — — 1,250 
Total intangible assets$61,066 $(15,518)$(1,193)$44,355 
Acquisition of intangible assets
In June 2020, the Company commercially launched AlloSeq HCT, a NGS solution for chimerism testing for stem cell transplant recipients. This technology has the potential to provide better sensitivity and data analysis compared to current solutions on the market. AlloSeq HCT, previously included in Acquired in-process technology as of December 31, 2019, is included in Acquired and developed technology as of December 31, 2021.
In June 2021, the Company acquired commercialization rights in an exclusive partnership for comprehensive data analytics in relation to NGS-based metagenomics testing for infectious diseases. This is included within Commercialization rights as of December 31, 2021.
In June 2021, the Company acquired the Transplant Hero patient application. The patient application is included in Acquired and developed technology as of December 31, 2021.
As of December 31, 2021, acquisition of intangible assets increased $13.4 million primarily from business combinations. These acquisitions included $4.7 million of Acquired and developed technology, $2.5 million of Commercialization rights, $3.7 million of Customer relationships, $2.2 million of Trademarks and tradenames and $0.3 million of Other intangible assets.
Cibiltech License and Commercialization Agreement
Effective April 30, 2019, the Company entered into a license and commercialization agreement (the “Cibiltech Agreement”) with Cibiltech SAS (“Cibiltech”). Cibiltech is a French company engaged in the development and support of predictive medicine and artificial intelligence software, services and technology, with an emphasis on personalized patient care and clinical research, including its proprietary software and service offering known in the U.S. as iBox for the predictive analysis of post-transplantation kidney allograft loss. The Cibiltech Agreement provides the Company with an irrevocable, non-transferable right to commercialize Cibiltech’s proprietary software in the field of transplantation in the U.S. for a period of ten years. The Company estimated the fair value of the acquired commercialization rights intangible asset based on expected contractual payments discounted to present value using a discount rate of 6%. In September 2019, the Company initiated the OKRA clinical study, which incorporates iBox. On such date, the Company commenced amortization of the acquired commercialization intangible asset.
On July 26, 2019, pursuant to the Cibiltech Agreement, the Company purchased $1.0 million of convertible preferred shares of Cibiltech, which is recorded in other assets. The Company does not have a significant influence on Cibiltech’s operations. The net carrying amount of intangible assets and the related amortization expense of intangible assets may change due to the effects of foreign currency fluctuations as a result of acquiring an entity with a functional currency other than the U.S. dollar.
Amortization of Intangible Assets
Amortization expense was $5.8 million, $4.8 million and $3.6 million for the years ended December 31, 2021, 2020 and 2019, respectively. For the year ended December 31, 2021, $1.3 million, $1.9 million, $0.7 million and $1.9 million were amortized to cost of testing services, cost of product, cost of patient and digital solutions, and sales and marketing, respectively. For the year ended December 31, 2020, $1.3 million, $1.7 million, $0.3 million and $1.5 million were amortized to cost of testing services, cost of product, cost of patient and digital solutions, and sales and marketing, respectively. For the year ended December 31, 2019, $0.7 million, $1.4 million, $0.2 million and $1.3 million were amortized to cost of testing services, cost of product, cost of patient and digital solutions and sales and marketing, respectively.
Intangible assets are carried at cost less accumulated amortization. Amortization expenses are recorded to cost of testing services, cost of product, cost of patient and digital solutions, and sales and marketing expenses in the consolidated statements of operations.
The following table summarizes the Company’s estimated future amortization expense of intangible assets with finite lives as of December 31, 2021 (in thousands):
Years Ending December 31,Cost of Testing Services
Cost of
Product
Cost of Patient and Digital Solutions
Sales and
Marketing
Total
2022$1,316 $1,855 $945 $2,261 $6,377 
20231,316 1,855 945 2,188 6,304 
20241,316 1,855 709 2,188 6,068 
20251,316 1,855 540 2,187 5,898 
20261,316 780 540 2,186 4,822 
Thereafter4,141 4,186 1,720 9,429 19,476 
Total future amortization expense$10,721 $12,386 $5,399 $20,439 $48,945