Goodwill, In-Process Research and Development and Intellectual Property

9 Months Ended

Sep. 30, 2015

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill, In-Process Research and Development and Intellectual Property

9.	Goodwill, In-Process Research and Development and Intellectual Property

Goodwill

Goodwill has been recorded in connection with the Merger, as discussed in Note 15, and the ALF-X Acquisition, as discussed in Note 5. The carrying value of goodwill and the change in the balance for the nine months ended September 30, 2015 is as follows:


	September 30, 2015
	(In thousands)
	(unaudited)
Beginning balance	$	93,842
Additions		22,315
Foreign currency translation impact		(103	)

Ending balance	$	116,054

The Company has no accumulated impairment losses on goodwill.

In-Process Research and Development

As described in Note 5, on September 21, 2015, the Company acquired all of the assets related to the ALF-X System and recorded $22.3 million of IPR&D. The estimated fair value of the IPR&D was determined using a probability-weighted income approach, which discounts expected future cash flows to present value. The projected cash flows were based on certain key assumptions, including estimates of future revenue and expenses, taking into account the stage of development of the technology at the acquisition date and the time and resources needed to complete development. The Company used a discount rate of 50% and cash flows that have been probability adjusted to reflect the risks of product commercialization, which the Company believes are appropriate and representative of market participant assumptions.

The carrying value of the Company’s IPR&D assets and the change in the balance for the nine months ended September 30, 2015 is as follows:


	September 30, 2015
	(In thousands)
	(unaudited)
Beginning balance	$	—
Additions		22,300
Foreign currency translation impact		(103	)

Ending balance	$	22,197

Intellectual Property

As described in Note 5, on September 21, 2015, the Company acquired all of the assets related to the ALF-X System and recorded $62.5 million of intellectual property. The estimated fair value of the intellectual property was determined using a probability-weighted income approach, which discounts expected future cash flows to present value. The projected cash flows were based on certain key assumptions, including estimates of future revenue and expenses, taking into account the stage of development of the technology at the acquisition date and the time and resources needed to complete development. The Company used a discount rate of 45% and cash flows that have been probability adjusted to reflect the risks of product commercialization, which the Company believes are appropriate and representative of market participant assumptions.

The carrying value of the Company’s intellectual property and the change in the balance for the nine months ended September 30, 2015 is as follows:


	September 30, 2015
	(In thousands)
	(unaudited)
Beginning balance	$	5,000
Additions		62,500
Foreign currency translation impact		(286	)

Ending balance		67,214
Amortization of intellectual property		(3,348	)

Total intellectual property	$	63,866

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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