GOODWILL AND INTANGIBLE ASSETS, NET

Goodwill

Our $639.5 million goodwill balance consisted of $198.1 million of goodwill acquired through the November 2014 Lumara Health acquisition and $441.4 million acquired through the August 2015 CBR acquisition. During the nine months ended September 30, 2016, the CBR goodwill increased by $0.3 million related to measurement period net tax adjustments. These measurement period adjustments have been reflected as current period adjustments in accordance with ASU 2015-16, discussed below in Note S, “Recently Issued and Proposed Accounting Pronouncements.” As of September 30, 2016, we had no accumulated impairment losses related to goodwill.

Intangible Assets

As of September 30, 2016 and December 31, 2015, our identifiable intangible assets consisted of the following (in thousands):



	September 30, 2016								December 31, 2015
			Accumulated								Accumulated
	Cost		Amortization		Impairments		Net		Cost		Amortization		Net
Amortizable intangible assets:
Makena base technology	$	797,100	$	105,207	$	—	$	691,893	$	797,100	$	56,540	$	740,560
CBR customer relationships	297,000		10,458		—		286,542		297,000		1,061		295,939
CBR Favorable lease	358		119		239		—		358		63		295
MuGard Rights	16,893		1,169		15,724		—		16,893		1,016		15,877
	1,111,351		116,953		15,963		978,435		1,111,351		58,680		1,052,671
Indefinite-lived intangible assets:
Makena IPR&D	79,100		—		—		79,100		79,100		—		79,100
CBR trade names and trademarks	65,000		—		—		65,000		65,000		—		65,000
Total intangible assets	$	1,255,451	$	116,953	$	15,963	$	1,122,535	$	1,255,451	$	58,680	$	1,196,771

As of September 30, 2016, the weighted average remaining amortization period for our finite-lived intangible assets was approximately nine years.

The Makena base technology and IPR&D intangible assets were acquired in November 2014 in connection with our acquisition of Lumara Health. Amortization of the Makena base technology asset is being recognized using an economic consumption model over 20 years, which we believe is an appropriate amortization period due to the estimated economic lives of the product rights and related intangibles.

The CBR intangible assets (the CBR customer relationships, favorable lease and trade names and trademarks) were acquired in August 2015 in connection with our acquisition of CBR. Amortization of the CBR customer relationships is being recognized using an estimated useful life of 20 years, which we believe is an appropriate amortization period due to the estimated economic lives of the CBR intangible assets. The favorable lease was being amortized on a straight-line basis over the remaining term of the lease. On May 4, 2016, we entered into a sublease arrangement for a portion of our CBR office space in San Bruno, California with a sublessee at a rate lower than the market rate used to determine the favorable lease intangible asset. We reevaluated the favorable lease asset based on the negotiated sublease rate, resulting in an impairment charge for the full $0.2 million net intangible asset in the second quarter of 2016.

The MuGard Rights were acquired from Abeona in June 2013. Amortization of the MuGard Rights was being recognized using an economic consumption model over ten years, which represented our best estimate of the period over which we expected the majority of the asset’s cash flows to be derived. Based on events in the second quarter of 2016, we determined that broader reimbursement coverage for MuGard by government payors was unlikely based on recent interactions with those agencies and assessed the MuGard Rights for potential impairment. From this assessment, we concluded that based on the lack of broad reimbursement and insurance coverage for MuGard and the resulting decrease in expected revenues and cash flows, the projected undiscounted cash flows were less than the book value, indicating impairment of this intangible asset. As a result of an analysis of the fair value of the net MuGard Rights intangible asset as compared to its recorded book value, we recognized an impairment charge for the full $15.7 million net intangible asset in the second quarter of 2016.

See Note C, “Business Combinations,” for additional information on our intangible assets.

Total amortization expense for the nine months ended September 30, 2016 and 2015, was $58.3 million and $13.9 million, respectively. Amortization expense for Makena base technology and the MuGard Rights is recorded in cost of product sales in our condensed consolidated statements of operations. Amortization expense for the CBR related intangibles is recorded in selling, general and administrative expenses in our condensed consolidated statements of operations. We expect amortization expense related to our finite-lived intangible assets to be as follows (in thousands):



	Estimated
	Amortization
Period	Expense
Remainder of Year Ending December 31, 2016	$	21,121
Year Ending December 31, 2017	90,826
Year Ending December 31, 2018	97,992
Year Ending December 31, 2019	68,993
Year Ending December 31, 2020	46,271
Thereafter	653,232
Total	$	978,435