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Intangible Assets and Goodwill
6 Months Ended
Jun. 30, 2018
Intangible Assets and Goodwill  
Intangible Assets and Goodwill

(5)  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

    

Accumulated

    

Accumulated

 

Net

 

    

Carrying Amount

    

Amortization

    

Impairments

    

Carrying Amount

 

 

(In thousands)

June 30, 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. As a result of the discontinuation of the Glemba program, the Company recorded a non-cash impairment charge of $6.9 million during the first quarter of 2018. Amortization expense related to this finite-lived intangible asset was $0.0 million and $0.2 million for the three and six month periods ended June 30, 2018, respectively, and $0.2 million and $0.4 million for the three and six month periods ended June 30, 2017, respectively.

 

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. As a result of the discontinuation of the Glemba program, the Company recorded a non-cash impairment charge of $11.8 million during the first quarter of 2018. CDX-3379 is in Phase 2 development. The anti-KIT and TAM programs are in preclinical development. As of June 30, 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 six months ended June 30, 2018 were as follows:

 

 

 

 

 

 

    

Goodwill

 

 

(In thousands)

Balance at December 31, 2017

 

$

90,976

Goodwill Impairment

 

 

(90,976)

Balance at June 30, 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 first quarter of 2018.