Intangible Assets

9 Months Ended

Sep. 30, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible assets acquired in connection with an asset acquisition are recorded at cost. Such amounts may include up-front payments and contingent consideration. With regards to contingent consideration, the Company recognizes regulatory milestones upon achievement, royalties in the period in which the underlying sales occur, and sales-based milestones when the milestone is deemed probable by the Company of being achieved.

Intangible assets are amortized to Cost of goods sold over the estimated useful lives of the assets based on the pattern in which the economic benefits of the intangible assets are consumed; if that pattern cannot be reliably determined, a straight-line basis is used. If contingent consideration is recognized subsequent to the acquisition date in an asset acquisition, the amount of such consideration is recorded as an addition to the cost basis of the intangible asset with a cumulative catch-up adjustment for amortization expense as if the additional amount of consideration had been accrued from the outset of the arrangement.

The Company's intangible assets are reviewed for recoverability whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. If an indicator of impairment exists, the Company compares the projected undiscounted cash flows to be generated by the asset to the intangible asset’s carrying amount. If the projected undiscounted cash flows of the intangible asset are less than the carrying amount, the intangible asset is written down to its fair value in the period in which the impairment occurs.

Intangible assets consist of the following:


		September 30, 2022						December 31, 2021
(In millions)	Estimated Useful Life	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross carrying Amount		Accumulated Amortization		Net Carrying Amount
Acquired product rights - Libtayo	13 years	$	814.2	$	(15.3)	$	798.9	$	—	$	—	$	—
Other intangibles	5–8 years	10.0		(4.8)		5.2		29.3		(22.6)		6.7
Intangible assets, net		$	824.2	$	(20.1)	$	804.1	$	29.3	$	(22.6)	$	6.7

As described in Note 3, the Company recorded an intangible asset in connection with obtaining the exclusive right to develop, commercialize, and manufacture Libtayo worldwide. The intangible asset recognized upon the effective date of the A&R IO LCA primarily consisted of the $900.0 million up-front payment, offset by the remaining IO Collaboration Other liabilities balance of $241.0 million. During the three months ended September 30, 2022, the Company recorded additions to the Libtayo intangible asset primarily related to contingent consideration and other amounts due to Sanofi in connection with obtaining the worldwide rights to Libtayo.

For the three and nine months ended September 30, 2022, amortization expense of $15.6 million and $16.8 million, respectively, was recognized. Amortization expense for the three and nine months ended September 30, 2021 was not material.

As of September 30, 2022, assuming no changes in the gross carrying amount of intangible assets, amortization expense for the three months ending December 31, 2022 is estimated to be $15.6 million and approximately $62 million for each of the years ending December 31, 2023 through December 31, 2027.