H.GOODWILL, IPR&D AND OTHER INTANGIBLE ASSETS, NET

Goodwill

In connection with our August 2015 acquisition of CBR, we recognized $439.3 million of goodwill as of September 30, 2015. In connection with our November 2014 acquisition of Lumara Health, we recognized $205.8 million of goodwill as of December 31, 2014. During the nine months ended September 30, 2015, the Lumara Health goodwill balance decreased by $7.7 million, which was comprised primarily of a $7.2 million reduction associated with adjustments to our Makena revenue reserves and a $5.0 million reduction related to net deferred tax liabilities, partially offset by a $4.5 million increase associated with the final settlement of net working capital with the former stockholders of Lumara Health. These measurement period adjustments have been reflected as a current period adjustment to these balances during the nine months ended September 30, 2015 in accordance with the guidance in ASU 2015-16, which we adopted early. As of September 30, 2015, we had no accumulated impairment losses related to goodwill. See Note C, “Business Combinations.”

IPR&D and Other Intangible Assets, Net

As of September 30, 2015 and December 31, 2014, our identifiable intangible assets consisted of the following (in thousands):


		September 30, 2015					December 31, 2014
			Accumulated						Accumulated
	Cost		Amortization		Net		Cost		Amortization		Net
Amortizable intangible assets:
Makena base technology	$	797,100	$	42,825	$	754,275	$	797,100	$	4,834	$	792,266
CBR customer relationships		297,000		357		296,643		—		—		—
Favorable lease		423		25		398		—		—		—
MuGard Rights		16,893		762		16,131		16,893		351		16,542
		1,111,416		43,969		1,067,447		813,993		5,185		808,808
Indefinite-lived intangible assets:
Makena IPR&D		79,100		—		79,100		79,100		—		79,100
CBR trade names and trademarks		65,000		—		65,000		—		—		—
Total intangible assets	$	1,255,516	$	43,969	$	1,211,547	$	893,093	$	5,185	$	887,908

As of September 30, 2015, the weighted average remaining amortization periods for our definite-lived intangible assets were as follows:


			Weighted Average Remaining Amortization Periods (in Years)
Makena base technology			8.6
CBR customer relationships			10.4
Favorable lease			1.5
MuGard Rights			5.9

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

The MuGard Rights were acquired from Abeona in June 2013. Amortization of the MuGard Rights is being recognized using an economic consumption model over ten years, which represents our best estimate of the period over which we expect the majority of the asset’s cash flows to be derived. We believe this is the best approximation of the period over which we will derive the majority of value of the MuGard Rights.

The CBR intangible assets (the CBR customer relationships and the favorable lease) 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 twenty years, which we believe is an appropriate amortization period due to the estimated economic lives of the CBR intangible assets. The favorable lease is being amortized on a straight-line basis over the remaining term of the lease.

Total amortization expense for the three months ended September 30, 2015 and 2014 was $13.9 million and $0.1 million, respectively, and for the nine months ended September 30, 2015 and 2014 was $38.8 million and $0.2 million, respectively. The increase in amortization expense is due to the amortization of the Makena and CBR related intangible assets. Amortization expense for Makena and MuGard is recorded in cost of product sales in our condensed consolidated statements of operations. Amortization expense for 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 2015	$	14,295
2016		77,324
2017		92,191
2018		99,532
2019		70,750
Thereafter		713,355
Total	$	1,067,447