Business Combination

The Company finalized its purchase accounting for the Acquisition during the third quarter of 2017. The Company has valued the acquired assets and liabilities based on their estimated fair values as of September 20, 2016 (the "Acquisition Date"). The fair values included in the condensed consolidated balance sheet as of September 30, 2017 are based on the best estimates of the Company.

The consideration for the Acquisition and the final allocation of the purchase consideration presented has been updated from the amounts previously disclosed to reflect new information related to facts and circumstances which existed as of the Acquisition Date. The changes in assumptions were primarily due to additional information gathered regarding the potential market for Vicinium outside of the U.S., which resulted in adjustments to the fair value of contingent consideration as of the acquisition date and the in-process research and development assets for Vicinium in the European Union ("E.U.") and the rest of world. The assumptions related to the U.S. market were not updated as sufficient information had previously been gathered to support this estimate. The update of these assumptions also had an effect on the discount rate and certain other valuation assumptions used to value the acquired assets due to an adjustment in the Company specific risk factors, which effected the in-process research and development assets for Vicinium in the U.S., E.U., and the rest of world. As a result of these changes, the Company updated (1) the fair value of the in-process research and development assets for Vicinium, which resulted in a reduction in the fair value of the in-process research and development asset for Vicinium in the rest of the world to a di minimus amount, (2) the fair value of the contingent consideration, and (3) the related deferred tax liability and goodwill.

The preliminary estimate of the purchase price and the final purchase price as of the Acquisition Date are reflected in the following table (in thousands):



	Preliminary Fair Value of Consideration*		Adjustment			Final Fair Value of Consideration
Shares Issued	$	13,525	$	—		$	13,525
Contingent Consideration	46,200		(14,600		)	31,600
	$	59,725	$	(14,600	)	$	45,125

*As presented in the Company’s Form 10-K as of and for the year ended December 31, 2016.

The preliminary allocation of the purchase consideration and the final allocation of the purchase consideration as of the Acquisition Date are reflected in the following table (in thousands):



	Preliminary Allocation*			Adjustment			Final Allocation
Cash and cash equivalents	$	136		$	—		$	136
Prepaid expenses and other assets	1,162			—			1,162
Property and equipment	867			—			867
In-process research and development assets (all markets)	60,500			(14,100		)	46,400
Goodwill	16,864			(3,800		)	13,064
Accounts payable	(1,163		)	—			(1,163		)
Accrued expenses	(1,494		)	(507		)	(2,001		)
Other liabilities	(812		)	—			(812		)
Deferred tax liability	(16,335		)	3,807			(12,528		)
	$	59,725		$	(14,600	)	$	45,125

*As presented in the Company’s Form 10-K as of and for the year ended December 31, 2016.

The revised fair values of indefinite-lived intangible assets, deferred tax liability and goodwill noted above did not have an impact on the Company’s condensed consolidated statement of operations and comprehensive income (loss), as the effected assets are not amortized. The Company is required to revalue its contingent consideration at each balance sheet date. As such, changes in the fair value of contingent consideration since the Acquisition Date due to updated assumptions and estimates are recognized within the condensed consolidated statements of operations and comprehensive income (loss) (Note 3).