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. As of September 30, 2017, we had no accumulated impairment losses related to goodwill.

We test our goodwill balances during the fourth quarter of each year for impairment. An interim goodwill impairment test in advance of the annual impairment assessment may be required if events occur that indicate an impairment might be present. For example, a sustained substantial decline in our market capitalization, a material impairment charge related to other long-lived assets, unexpected adverse business conditions, economic factors and unanticipated competitive activities may signal that an interim impairment test is needed. Accordingly, among other factors, we monitor changes in our stock price between annual impairment tests. Our stock market capitalization has at times been, and as of September 30, 2017 is, lower than our stockholders’ equity or book value. We believe that the current short-term decline in share price below book value does not necessarily reflect the underlying value of the Company. Management believes that the fair value of the Company exceeds book value and accordingly, has not recognized an impairment of its goodwill.

Intangible Assets

As of September 30, 2017 and December 31, 2016, our identifiable intangible assets consisted of the following (in thousands):



	September 30, 2017								December 31, 2016
			Accumulated								Accumulated
	Cost		Amortization		Impairments		Net		Cost		Amortization		Impairments		Net
Amortizable intangible assets:
Makena base technology	$	797,100	$	198,354	$	319,246	$	279,500	$	797,100	$	128,732	$	—	$	668,368
CBR customer relationships	297,000		25,379		—		271,621		297,000		13,590		—		283,410
Intrarosa developed technology	77,655		16		—		77,639		—		—		—		—
	1,171,755		223,749		319,246		628,760		1,094,100		142,322		—		951,778
Indefinite-lived intangible assets:
Makena IPR&D	79,100		—		—		79,100		79,100		—		—		79,100
CBR trade names and trademarks	65,000		—		3,700		61,300		65,000		—		3,700		61,300
Total intangible assets	$	1,315,855	$	223,749	$	322,946	$	769,160	$	1,238,200	$	142,322	$	3,700	$	1,092,178

Intangible assets are initially recorded at fair value and stated net of accumulated amortization and impairments. We amortize our intangible assets that have finite lives based on the pattern in which the economic benefit of the asset is expected to be utilized. Amortization is recorded over the estimated useful lives ranging from 7 to 20 years. We evaluate the realizability of our definite lived intangible assets whenever events or changes in circumstances or business conditions indicate that the carrying value of these assets may not be recoverable based on expectations of future undiscounted cash flows for each asset. If the carrying value of an asset exceeds its undiscounted cash flows, we estimate the fair value of the assets, generally utilizing a discounted cash flow analysis based on the present value of estimated future cash flows to be generated by the assets using a risk-adjusted discount rate. To estimate the fair value of the assets, we use market participant assumptions pursuant to Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurements.

Indefinite lived intangible assets, such as IPR&D assets, are required to be tested for impairment annually, or more frequently if indicators of impairment are present. Our annual impairment test date is October 31st of each year.

During the third quarter of 2017, we received new information from a variety of sources, including from market research and our authorized generic partner, related to potential generic competitors to the intramuscular formulation of Makena. This information, combined with continued progress on our own authorized generic strategy, was incorporated into our revised long-range revenue forecasts for the Makena intramuscular formulation. We determined that this new information constituted a triggering event with respect to our Makena base technology intangible asset (the intramuscular formulation). We estimated that the sum of the undiscounted projected cash flows of the Makena intramuscular product was less than the carrying value of the corresponding intangible asset. In accordance with ASC Topic 350, Intangibles - Goodwill and Other we reassessed the fair value of the Makena base technology intangible asset using an income approach, a level three measurement technique. We determined that the fair value of the Makena base technology intangible asset was less than its carrying value and accordingly, we recorded an impairment charge of $319.2 million. The charge was recorded within a separate operating expense line item in our condensed consolidated statements of operations during the three months ended September 30, 2017. In addition, we reassessed the remaining useful life of the Makena base technology (the intramuscular formulation) and concluded that, as of September 30, 2017, seven years is an appropriate amortization period based on the estimated remaining economic life of the intramuscular formulation of Makena. Further, we evaluated our Makena IPR&D intangible asset, which is related to the Makena auto-injector, for impairment and concluded that its fair value was greater than its carrying value, and therefore it was not impaired. Future events, such as the upcoming February 2018 PDUFA date, could cause us to reassess the realizability of the Makena IPR&D asset. Furthermore, additional information may become available, which may cause us to identify additional impairment charges. Such charges could have a material adverse effect on our earnings in future periods.

As of September 30, 2017, the weighted average remaining amortization period for our finite-lived intangible assets was approximately 11.62 years. Total amortization expense for the nine months ended September 30, 2017 and 2016, was $81.4 million and $58.3 million, respectively. 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, 2017	$	60,693
Year Ending December 31, 2018	186,356
Year Ending December 31, 2019	35,779
Year Ending December 31, 2020	30,068
Year Ending December 31, 2021	31,020
Thereafter	284,844
Total	$	628,760