Intangible Assets and Goodwill

3 Months Ended

Mar. 31, 2020

Goodwill And Intangible Assets Disclosure [Abstract]

9. Intangible Assets and Goodwill

Intangible Assets

The following table presents the Company’s intangible assets at March 31, 2020 and December 31, 2019 (in thousands):

	March 31, 2020
	Gross Carrying Value		Accumulated Amortization			ASC 842 Adjustment			Total		Estimated useful life
Acquired intangible assets:
Developed product rights for Auryxia	$	329,130	$	(47,018	)	$	—		$	282,112	9 Years
Favorable lease		545		(5	)		(540	)		—	N/A
Total	$	329,675	$	(47,023	)	$	(540	)	$	282,112

	December 31, 2019
	Gross Carrying Value		Accumulated Amortization			ASC 842 Adjustment			Total		Estimated useful life
Acquired intangible assets:
Developed product rights for Auryxia	$	329,130	$	(37,918	)	$	—		$	291,212	9 Years
Favorable lease		545		(5	)		(540	)		—	N/A
Total	$	329,675	$	(37,923	)	$	(540	)	$	291,212

On December 12, 2018, the Company completed the Merger, whereby it acquired certain definite-lived intangible assets, including the developed product rights for Auryxia and a favorable lease. The Company amortizes its definite-lived intangible assets acquired as part of the Merger using the straight-line method, which is considered the best estimate of economic benefit, over its estimated useful life. As a result of the adoption of ASC 842 on January 1, 2019, the Company reclassed the remaining balance of the favorable lease intangible asset into the operating lease asset. The Company recorded $9.1 million in amortization expense related to the developed product rights for Auryxia during each of the three months ended March 31, 2020 and 2019. Estimated future amortization expense for the intangible asset as of March 31, 2020 is as follows (in thousands):

	Total
2020	$	27,302
2021		36,401
2022		36,402
2023		36,401
2024		36,402
Thereafter		109,204
	$	282,112

Goodwill

Goodwill was $55.1 million as of March 31, 2020 and December 31, 2019, derived as follows (in thousands):

Total Merger consideration	$	527,754
Less: Fair value of identified acquired assets and liabilities, net		(472,701	)
Goodwill	$	55,053

Goodwill is evaluated for impairment on an annual basis as of October 1, and more frequently if indicators are present or changes in circumstances suggest that an impairment may exist.