Goodwill impairment |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Goodwill impairment | Goodwill impairment On June 30, 2014, bluebird bio acquired Pregenen. All assets and liabilities related to the Pregenen acquisition, including the resulting goodwill and contingent consideration, were attributed to the Company in connection with the separation from bluebird bio. Prior to the impairment test described further below, the balance of the Company’s goodwill was $12.1 million. The Company operates in a single segment, focusing on researching, developing and commercializing potentially transformative treatments for cancer. Consistent with its operational structure, its chief operating decision maker manages and allocates resources for the Company at a consolidated level. Additionally, the Company determined that its single operating segment is also its only reporting unit. As such, the Company has allocated its entire goodwill balance to its single reporting unit and the goodwill impairment test is completed at this level. During the third quarter of 2023 and more recently, the Company experienced a sustained decline in the price of its common stock in part due to decreased external expectations for future Abecma sales resulting from increased competitive dynamics, which was considered a triggering event. Management concluded it was more likely than not that the fair value of its reporting unit is less than its carrying amount. The Company then performed a one-step quantitative test and recorded the amount of goodwill impairment as the excess of the reporting unit’s carrying amount over its fair value, not to exceed the total amount of goodwill allocated to the reporting unit. At September 30, 2023, the Company estimated the fair value of the Company’s single reporting unit using both a market approach and an income approach. Major assumptions were applied in the income approach, including (i) forecasted growth rates (ii) forecasted profitability and (iii) discount rate. Considerable management judgment is necessary to evaluate the impact of operating changes and business initiatives on estimated future growth rates and profitability in order to estimate future cash flows. Upon completing the impairment test, the Company determined that the estimated fair value of the reporting unit was less than its carrying value, thus indicating an impairment. The Company recognized a goodwill impairment charge of $12.1 million during the third quarter of 2023, which represented the entire goodwill balance prior to impairment charge. The following table summarizes the activity of goodwill for the twelve months ended December 31, 2023 (in thousands):
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