Note 6 - Goodwill, In-process Research and Development and Other Intangible Assets

3 Months Ended

Mar. 31, 2020

Notes to Financial Statements

Intangible Assets Disclosure [Text Block]

Note

6

. Goodwill, In-Process Research and Development and Other Intangible Assets

Goodwill, In-Process Research and Development and Other Intangible Assets

The fair values of in-process research and development (“IPR&D”) and other identified intangible assets acquired in business combinations are capitalized. We utilize the “income method,” which applies a probability weighting that considers the risk of development and commercialization to the estimated future net cash flows that are derived from projected sales revenues and estimated costs or “replacement costs”, whichever is greater. These projections are based on factors such as relevant market size, patent protection, historical pricing of similar products and expected industry trends. The estimated future net cash flows are then discounted to the present value using an appropriate discount rate. This analysis is performed for each IPR&D project and other identified intangible assets, independently. IPR&D assets are treated as indefinite-lived intangible assets until completion or abandonment of the projects, at which time the assets are amortized over the remaining useful life or written off, as appropriate. Other identified intangible assets, which include the technology asset acquired as part of the EXINI business combination, AZEDRA product rights intangible and Somerset intangible, are amortized over the relevant estimated useful lives. The IPR&D assets are tested for impairment at least annually or when a triggering event occurs that could indicate a potential impairment and any impairment loss is recognized in our condensed consolidated statements of operations.

Goodwill represents excess consideration in a business combination over the fair value of identifiable net assets acquired. Goodwill is

not

amortized but is subject to impairment testing at least annually or when a triggering event occurs that could indicate a potential impairment. We determine whether goodwill

may

be impaired by comparing the fair value of the reporting unit (we have determined that we have only

one

reporting unit for this purpose), calculated as the product of shares outstanding and the share price as of the end of a period, to its carrying value (for this purpose, our total stockholders’ equity).

No

goodwill impairment has been recognized as of

March 31, 2020

or

2019.

The following tables summarize the activity related to our goodwill and intangible assets (in thousands):

					Other
					Intangible
	Goodwill		IPR&D		Assets
Balance at January 1, 2020	$	17,847	$	600	$	6,223
Amortization expense		-		-		(276	)
Balance at March 31, 2020	$	17,847	$	600	$	5,947

					Other
					Intangible
	Goodwill		IPR&D		Assets
Balance at January 1, 2019	$	13,074	$	600	$	6,066
Increase related to Somerset acquisition	$	4,773	$	-	$	1,245
Amortization expense		-		-		(260	)
Balance at March 31, 2019	$	17,847	$	600	$	7,051

The following table reflects the components of the finite-lived intangible assets as of

March 31, 2020 (

in thousands):

	Gross Amount		Accumulated Amortization		Net Carrying Value
Intangible assets - AZEDRA product rights	$	4,900	$	1,167	$	3,733
Intangible assets - Somerset		1,245		223		1,022
Intangible assets - EXINI technology		2,120		928		1,192
Total	$	8,265	$	2,318	$	5,947