GOODWILL AND INTANGIBLE ASSETS

6 Months Ended

Jun. 30, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND INTANGIBLE ASSETS

Goodwill

There was no change in the carrying value of the Company’s goodwill during the three and six months ended June 30, 2020. The balance at both December 31, 2019 and June 30, 2020 was $99.5 million.

Skyepharma Acquisition

In March 2007, the Company acquired from SkyePharma Holding, Inc. (now a subsidiary of Vectura Group plc), or Skyepharma, its California operating subsidiary named Pacira Pharmaceuticals, Inc. (the “Skyepharma Acquisition”). The Skyepharma Acquisition was accounted for under Statement of Financial Accounting Standards 141, Accounting for Business Combinations, which was the effective GAAP standard at the Skyepharma Acquisition date. As of June 30, 2020 the Company has recorded $62.0 million of goodwill related to the Skyepharma Acquisition.

In connection with the Skyepharma Acquisition, the Company agreed to percentage and milestone payments for DepoBupivacaine products, including EXPAREL. The milestone payments are as follows:

(i) $10.0 million upon the first commercial sale in the United States (met April 2012);

(ii) $4.0 million upon the first commercial sale in the United Kingdom, France, Germany, Italy or Spain;

(iii) $8.0 million when annual net sales collected reach $100.0 million (met September 2014);

(iv) $8.0 million when annual net sales collected reach $250.0 million (met June 2016); and

(v) $32.0 million when annual net sales collected reach $500.0 million.

The two unmet milestone payments totaling $36.0 million are the only remaining obligations to Skyepharma. Any remaining milestone payments will be treated as additional costs of the Skyepharma Acquisition and, therefore, recorded as goodwill if and when each contingency is resolved. For purposes of meeting future potential milestone payments, annual net sales are measured on a rolling quarterly basis.

MyoScience Acquisition

In connection with the MyoScience Acquisition, the Company recorded goodwill totaling $37.5 million. The Company subsequently made a tax election that allows the acquired goodwill and intangible assets to be tax deductible.

Intangible Assets

MyoScience Acquisition

Intangible assets, net, consist of the developed technology and customer relationships that were acquired in the MyoScience Acquisition and are summarized as follows (in thousands):


June 30, 2020	Gross Carrying Value		Accumulated Amortization		Intangible Assets, Net		Estimated Useful Life
Developed technology	$	110,000	$	(9,625)	$	100,375	14 years
Customer relationships	90		(11)		79		10 years
Total intangible assets	$	110,090	$	(9,636)	$	100,454


December 31, 2019	Gross Carrying Value		Accumulated Amortization		Intangible Assets, Net		Estimated Useful Life
Developed technology	$	110,000	$	(5,696)	$	104,304	14 years
Customer relationships	90		(7)		83		10 years
Total intangible assets	$	110,090	$	(5,703)	$	104,387

Amortization expense on intangible assets for the three and six months ended June 30, 2020 was $2.0 million and $3.9 million, respectively. There was $1.8 million of amortization expense on intangible assets for both the three and six months ended June 30, 2019.

Assuming no changes in the gross carrying amount of these intangible assets, amortization expense on intangible assets will be $3.9 million for the remaining six months of 2020 and the future amortization expense on intangible assets will be $7.9 million annually through 2032 and $2.2 million in 2033.