INTANGIBLE ASSETS

9 Months Ended

Sep. 30, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

INTANGIBLE ASSETS

INTANGIBLE ASSETS

Ligand License Agreement

In 2012, the Company entered into an agreement with Ligand Pharmaceuticals, Inc. ("Ligand") for a worldwide sublicense to develop, manufacture and commercialize sparsentan (the “Ligand License Agreement”). As consideration for the license, the Company is required to make substantial payments upon the achievement of certain milestones, totaling up to $114.1 million. In March 2023, the Company capitalized a $23.0 million milestone payment to Ligand (and Bristol-Myers Squibb Company ("BMS")) that was triggered upon the accelerated approval of FILSPARI in February 2023. Pursuant to the Ligand License Agreement, the Company is obligated to pay to Ligand (and BMS) an escalating royalty between 15% and 17% of net sales of sparsentan, with payments due quarterly. The Company began incurring costs associated with such royalties following the February 2023 approval of FILSPARI (sparsentan). For the three and nine months ended September 30, 2023, the Company capitalized $1.1 million and $2.2 million, respectively, to intangible assets for royalties owed on net sales of FILSPARI. The cost of the $23.0 million milestone payment and royalty payments are being amortized to selling, general and administration on a straight-line basis through April 30, 2033.

The following table sets forth amortizable intangible assets as of September 30, 2023 and December 31, 2022 (in thousands):

	September 30, 2023		December 31, 2022
Finite-lived intangible assets	$	195,971	$	158,783
Less: accumulated amortization	(89,821)		(62,463)
Net carrying value	$	106,150	$	96,320

As of September 30, 2023 and December 31, 2022, the Company had goodwill of $0.8 million.

The following table summarizes amortization expense for the three and nine months ended September 30, 2023 and 2022 (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Research and development	$	2,447	$	1,906	$	7,261	$	3,817
Selling, general and administrative	8,461		3,173		20,097		9,008
Total amortization expense	$	10,908	$	5,079	$	27,358	$	12,825