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Goodwill and Intangible Assets, Net

6 Months Ended

Jun. 30, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

6. Goodwill and Intangible Assets, Net

At June 30, 2022 and December 31, 2021, goodwill and intangible assets, net consisted of the following (in thousands):

	June 30, 2022			December 31, 2021
	(unaudited)
Goodwill ⁽¹⁾	$	10,672		$	10,672

Intangible assets:
Acquired IPR&D – OPC1 (from the Asterias Merger) ⁽²⁾	$	31,700		$	31,700
Acquired IPR&D – VAC (from the Asterias Merger) ⁽²⁾		14,840			14,840
Intangible assets subject to amortization:
Acquired patents		18,953			18,953
Acquired royalty contracts ⁽³⁾		650			650
Total intangible assets		66,143			66,143
Accumulated amortization ⁽⁴⁾		(19,386	)		(19,321	)
Intangible assets, net	$	46,757		$	46,822

(1)	Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired and liabilities assumed in the Asterias Merger (see Note 14 (Commitments and Contingencies) for additional information on the Asterias Merger).

(2)	Asterias had two in-process research and development (“IPR&D”) intangible assets that were valued at $46.5 million as part of the purchase price allocation that was performed in connection with the Asterias Merger. The fair value of these assets consisted of $31.7 million pertaining to the OPC1 program and $14.8 million pertaining to the VAC platform.

(3)	Asterias had royalty cash flows under certain specific patent families it acquired from Geron Corporation. Such patents are expected to continue to generate revenue, are not used in the OPC1 or the VAC platform and are considered to be separate long-lived intangible assets under ASC 805.

(4)	As of June 30, 2022 acquired patents were fully amortized and the acquired royalty contracts had a remaining unamortized balance of approximately $217,000.

Lineage amortizes its intangible assets over an estimated period of 5 to 10 years on a straight-line basis. Lineage recognized approximately $32,000 and $33,000 in amortization expense of intangible assets during the three months ended June 30, 2022 and 2021, respectively, and $65,000 and $145,000 during the six months ended June 30, 2022 and June 30, 2021, respectively.

Amortization of intangible assets for periods subsequent to June 30, 2022 is as follows (in thousands):

Year Ended December 31,	Amortization Expense
2022	$	65
2023		130
2024		22
Total	$	217