Intangible Assets and Goodwill

3 Months Ended

Mar. 31, 2018

(6) Intangible Assets and Goodwill

Intangible Assets, Net

The table below presents information for the Company’s finite-lived intangible assets that are subject to amortization and indefinite-lived intangible assets:

	Gross Carrying Amount		Accumulated Amortization			Impairment			Net Carrying Amount
	(In thousands)
March 31, 2018
Finite-lived Intangible Assets:
License Rights (16 year life)	$	14,500	$	(7,623	)	$	(6,877	)	$	—

Indefinite-lived Intangible Assets:
IPR&D	60,490		—			(11,800		)	48,690

Total Intangible Assets, Net	$	74,990	$	(7,623	)	$	(18,677	)	$	48,690


December 31, 2017
Finite-lived Intangible Assets:
License Rights (16 year life)	$	14,500	$	(7,399	)	$	—		$	7,101

Indefinite-lived Intangible Assets:
IPR&D	60,490		—			—			60,490

Total Intangible Assets, Net	$	74,990	$	(7,399	)	$	—		$	67,591

Finite-lived intangible assets consist solely of license rights amended under a 2009 agreement with Amgen Fremont related to developing and commercializing Glemba. The Company evaluated the intangible asset for potential impairment related to the discontinuation of the Glemba program. The carrying value of the intangible asset was determined to be fully impaired and a non-cash impairment charge of $6.9 million was recorded for the three months ended March 31, 2018. Amortization expense related to this finite-lived intangible asset was $0.2 million for each of the three-month periods ended March 31, 2018 and 2017.

Indefinite-lived intangible assets consist of acquired in-process research and development (“IPR&D”) related to the development of Glemba, CDX-3379, the anti-KIT program and the TAM program. The Company performs an impairment test on IPR&D assets at least annually, or more frequently if events or changes in circumstances indicate that IPR&D assets may be impaired. The Company evaluated the Glemba IPR&D asset for potential impairment related to the discontinuation of the Glemba program. The Company concluded that the Glemba IPR&D asset was fully impaired, and a non-cash impairment charge of $11.8 million was recorded for the three months ended March 31, 2018. CDX-3379 is in Phase 2 development. The anti-KIT and TAM programs are in preclinical development.

As of March 31, 2018, none of the remaining IPR&D assets had reached technological feasibility nor did any have alternative future uses. Due to the nature of IPR&D projects, the Company may experience future delays or failures to obtain regulatory approvals to conduct clinical trials, failures of such clinical trials or other failures to achieve a commercially viable product, and as a result, may recognize further impairment losses in the future.

Goodwill

The changes in the carrying amount of goodwill for the three months ended March 31, 2018 were as follows:

	Goodwill
	(In thousands)
Balance at December 31, 2017	$	90,976
Goodwill Impairment	(90,976		)

Balance at March 31, 2018	$	—

The Company evaluated goodwill for potential impairment due to the METRIC failure. The carrying amount of the Company was compared to the Company’s fair value. The Company’s fair value assessment reflected a number of significant management assumptions and estimates including the Company’s probability forecasts for pipeline assets, income taxes, capital expenditures and changes in working capital requirements. Changes in these assumptions and/or discount rates could materially impact the Company’s conclusions. Through this assessment, it was determined that the carrying amount of the Company exceeded its fair value by over $91.0 million. As such, the full goodwill asset was considered impaired and a charge of $91.0 million was recorded during the three months ended March 31, 2018.

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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