XML 68 R16.htm IDEA: XBRL DOCUMENT v2.4.0.8
Intangible Assets
9 Months Ended
Sep. 30, 2014
Intangible Assets

9. Intangible Assets

The following is a summary of the Company’s intangible asset as of September 30, 2014:

 

            September 30, 2014  
(in thousands)    Estimated
Useful Life
(Years)
     Gross
Carrying
Amount
     Accumulated
Amortization
     Net
Carrying
Amount
 

HETLIOZ®

     19       $ 8,000       $ 436       $ 7,564   

Fanapt®

     7.5       $ 12,000       $ 8,245       $ 3,755   

The following is a summary of the Company’s intangible asset as of December 31, 2013:

 

            December 31, 2013  
(in thousands)    Estimated
Useful Life
(Years)
     Gross
Carrying
Amount
     Accumulated
Amortization
     Net
Carrying
Amount
 

Fanapt®

     8       $ 12,000       $ 6,963       $ 5,037   

In January 2014, the Company announced that the FDA had approved the NDA for HETLIOZ®. As a result of this approval, the Company met a milestone under its license agreement with Bristol-Myers Squibb (BMS) that required the Company to make a license payment of $8.0 million to BMS. The $8.0 million is being amortized on a straight-line basis over the remaining life of the U.S. patent for HETLIOZ®, which prior to June 2014, the Company expected to last until December 2022. In June 2014, the Company received a notice of allowance from the U.S. Patent and Trademark Office for a patent covering the method of use of HETLIOZ®. The patent expires in January 2033, thereby potentially extending the exclusivity protection in the U.S. beyond the composition of matter patent. As a result of the patent allowance, the Company extended the estimated useful life of the U.S. patent for HETLIOZ® from December 2022 to January 2033.

In 2009, the Company announced that the FDA had approved the NDA for Fanapt®. As a result of this approval, the Company met a milestone under its original sublicense agreement with Novartis that required the Company to make a license payment of $12.0 million to Novartis. The $12.0 million is being amortized on a straight-line basis over the remaining life of the U.S. patent for Fanapt®, which as of December 31, 2013 the Company expected to last until May 2017. In 2014, the Company became aware of events that led it to believe that Novartis would not complete the ongoing pediatric efficacy studies in a time that would enable it to receive the incremental six-month pediatric term extension. This resulted in a six-month reduction to the estimated patent life from May 2017 to November 2016.

 

The intangible assets are being amortized over their estimated useful economic life using the straight-line method. Amortization expense was $0.5 million and $0.4 million for the three months ended September 30, 2014 and 2013, respectively. Amortization expense was $1.7 million and $1.1 million for the nine months ended September 30, 2014 and 2013, respectively. The following is a summary of future intangible asset amortization as of September 30, 2014:

 

(in thousands)    Total      Remainder
of 2014
     2015      2016      2017      2018      Thereafter  

HETLIOZ®

   $ 7,564       $ 102       $ 411       $ 411       $ 411       $ 411       $ 5,818   

Fanapt®

     3,755         433         1,733         1,589         —           —           —     
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
   $ 11,319       $ 535       $ 2,144       $ 2,000       $ 411       $ 411       $ 5,818