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Filler Distribution Agreement
9 Months Ended
Sep. 30, 2020
Goodwill and Intangible Assets Disclosure [Abstract]  
Filler Distribution Agreement Filler Distribution Agreement
In January 2020, we entered into an exclusive distribution agreement (the “Teoxane Agreement”) with Teoxane SA (“Teoxane”), pursuant to which Teoxane granted us the exclusive right to import, market, promote, sell and distribute Teoxane’s line of Resilient Hyaluronic Acid® (“RHA®”) Collection of dermal fillers in exchange for 2,500,000 shares of our common stock and certain other commitments by us. The Teoxane Agreement includes rights to (i) RHA® 2, RHA® 3 and RHA® 4 which have been approved by the U.S. Food and Drug Administration (the “FDA”) for the correction of moderate to severe dynamic facial wrinkles and folds in the currently approved indications, (ii) RHA® 1, which is currently in the premarket approval (“PMA”) application process for the treatment of perioral rhytids, and (iii) future hyaluronic acid filler advancements and products by Teoxane (collectively the “RHA® Collection of dermal fillers”) in the U.S. and U.S. territories and possessions. The Teoxane Agreement will be effective for a term of ten years upon product launch and may be extended for two years upon the mutual agreement of the parties. We are required to meet certain minimum purchase obligations and certain minimum expenditure requirements, which are discussed in Note 14.
If Teoxane pursues regulatory approval for RHA® Collection of dermal fillers for certain new indications or filler technologies, including innovations with respect to existing products in the U.S., we will be subject to certain specified cost-sharing arrangements for third party expenses incurred in achieving regulatory approval for such products. We will also have a right of first negotiation with respect to any cosmeceutical products that Teoxane wishes to distribute in the U.S, and Teoxane will have a right of first negotiation in connection with the distribution of DaxibotulinumtoxinA for Injection for aesthetic use outside the U.S. and U.S. territories where Teoxane has an affiliate.
The Teoxane Agreement is accounted for as an asset acquisition for the distribution rights of various approved and unapproved products and indications. The aggregate purchase consideration for the distribution rights is $43.5 million, consisting of the fair value of the 2,500,000 shares transferred to Teoxane and transaction costs. The purchase consideration is allocated to the underlying groups of approved and unapproved products based on their relative fair values, of which $11.2 million is allocated to certain unapproved products and future innovations, or in-process research and development assets, and is recognized as research and development expense on the condensed consolidated statements of operations and
comprehensive loss. The remaining purchase consideration is allocated to the currently approved products and indications, and is recognized as an intangible asset on the condensed consolidated balance sheets. The distribution rights to approved products and indications are amortized over approximately 4 years commenced upon the first delivery of the RHA® Collection of dermal fillers products from Teoxane in June 2020. Refer to Note 6 for further details.Intangible Assets
The following table sets forth the intangible assets and the remaining useful lives for the intangible assets:
September 30, 2020
(in thousands, except for in years) Remaining Useful Lives
(in years)
Gross Carrying AmountAccumulated AmortizationNet Carrying Amount
Distribution rights3.7$32,334 $(2,695)$29,639 
Developed technology5.819,600 (544)19,056 
In-process research and developmentN/A16,200 N/A16,200 
Customer relationships3.810,300 (429)9,871 
Tradename0.8100 (17)83 
Total intangible assets$78,534 $(3,685)$74,849 

For the three and nine months ended September 30, 2020, the aggregate amortization expense of intangible assets was $3.0 million and $3.7 million, respectively. No amortization expense of the intangible assets was recorded for the three and nine months ended September 30, 2019.
Based on the amount of intangible assets subject to amortization as of September 30, 2020, the estimated amortization expense for each of the next five fiscal years and thereafter was as follows:
Year Ending December 31,(in thousands)
2020 remaining three months$3,506 
202113,983 
202213,925 
202313,925 
20248,137 
2025 and thereafter5,173 
Total$58,649