Note 6 - Intangible assets and Goodwill

12 Months Ended

Mar. 31, 2024

Notes To Financial Statements [Abstract]

Intangible assets and Goodwill

6. Intangible assets and goodwill

Individual IPR&D projects and goodwill are tested for impairment on an annual basis in the fourth quarter, and in between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of each technology or our reporting unit below its carrying value. In April 2023, the Company announced its strategic realignment plan to prioritize resources to GTX-104, from GTX-101 and GTX-102 triggering a comprehensive review as of March 31, 2023. The estimated fair values of identifiable intangible assets were determined using the multi-period excess earnings method. The estimated fair value of the reporting unit was determined using the projected discounted cash flow model. The impairment assessments resulted in the following activity during the years ended March 31, 2024 and 2023:

	GTX-104		GTX-102			GTX-101			Total
	$		$			$			$
Intangible assets – in-process research and development
Balance, March 31, 2022		27,595		31,908			10,307			69,810
Impairment		—		(22,712	)		(5,970	)		(28,682	)
Balance, March 31, 2023		27,595		9,196			4,337			41,128
Impairment		—		—			—			—
Balance, March 31, 2024		27,595		9,196			4,337			41,128

During 2023, the impairment of $28,682 of the intangible assets resulted in a recovery of $8,633 of the related deferred tax liability.

	$
Goodwill
Balance, March 31, 2022		12,964
Impairment		(4,826	)
Balance, March 31, 2023		8,138
Impairment		—
Balance, March 31, 2024		8,138

The multi-period excess earnings method models used to estimate the fair value of assets of our IPR&D reflect significant assumptions and are level 3 unobservable data regarding the estimates a market participant would make in order to evaluate a drug development asset, including the following:

•Probability of clinical success of research and development and obtaining regulatory approval;

•Forecasted net sales from up-front and milestone payments, royalties and product sales; and

•A discount rate reflecting our weighted average cost of capital and specific risk inherent in the underlying assets.

The Company's IPR&D projects, consistent with others in our industry, have risks and uncertainties associated with the timely and successful completion of the development and commercialization of product candidates, including our ability to confirm safety and efficacy based on data from clinical trials, our ability to obtain necessary regulatory approvals and our ability to successfully complete these tasks within budgeted costs. It is not permitted to market a human therapeutic without obtaining regulatory approvals, and such approvals require the completion of clinical trials that demonstrate that a product candidate is safe and effective. In addition, the availability and extent of coverage and reimbursement from third-party payers, including government healthcare programs and private insurance plans as well as competitive product launches, affect the revenues a product can generate. Consequently, the eventual realized values, if any, of acquired IPR&D projects may vary from their estimated fair values.