Note 8 - Intangible Assets, net:

($ amounts in thousands)


	December 31,		December 31,
	2011		2010
In-process research and development acquired in Anchen Acquisition, net of accumulated amortization of $0 and $0	$	126,700	$	-
Developed products acquired in Anchen Acquisition, net of accumulated amortization of $1,650 and $0		83,550		-
QOL Medical, LLC Asset Purchase Agreement, net of accumulated amortization of $12,540 and $7,980		42,181		46,741
Teva Pharmaceuticals, Inc. Asset Purchase Agreement, net of accumulated amortization of $1,255		16,745		-
Glenmark Generics Limited and Glenmark Generics, Inc. USA Licensing Agreement, net of accumulated amortization of $0		15,000		15,000
Synthon Pharmaceuticals, Inc. Asset Purchase Agreement, net of accumulated amortization of $0		9,600		-
Covenant not-to-compete acquired in Anchen Acquisition, net of accumulated amortization of $358 and $0		8,542		-
Teva Pharmaceuticals, Inc. License and Distribution Agreement, net of accumulated amortization of $0		6,000		-
Genpharm, Inc. Distribution Agreement, net of accumulated amortization of $9,748 and $9,026		1,085		1,807
Trademark licensed from Bristol-Myers Squibb Company, net of accumulated amortization of $9,148 and $7,433		852		2,567
SVC Pharma LP License and Distribution Agreement, net of accumulated amortization of $3,034 and $2,525		650		1,159
MDRNA, Inc. Asset Purchase Agreement, net of accumulated amortization of $1,750 and $770		350		1,330
BioAlliance Licensing Agreement, net of accumulated amortization of $1,399 and $559		-		19,441
MonoSol Rx Licensing Agreement, net of accumulated amortization of $350 and $125		-		5,875
Spectrum Development and Marketing Agreement, net of accumulated amortization of $25,000 and $24,254		-		746
Other intangible assets, net of accumulated amortization of $7,209 and $5,947		414		801
	$	311,669	$	95,467

Intangible assets include estimated fair values of certain distribution rights acquired by the Company for equity instruments or in legal settlements, amounts paid for contractual rights acquired by the Company to a process, product or other legal right having multiple or alternative future uses that support its realizability and intellectual property and are capitalized and amortized over the estimated useful lives in which the related cash flows are expected to be generated or on a straight-line basis over the products' estimated useful lives of three to 15 years if estimated cash flows method approximates straight-line basis. We evaluate all intangible assets for impairment whenever events or other changes in circumstances indicate that the carrying value of an asset may no longer be recoverable. Such evaluations utilize forecasted financial information. As of December 31, 2011, we believe our net intangible assets are recoverable. The intangible assets included on our consolidated balance sheet at December 31, 2011 include the following:

Intangible Assets Acquired in Anchen Acquisition

On November 17, 2011, Par completed the Anchen Acquisition. Refer to Note 2, "Anchen Acquisition" for details of the transaction. As part of the Anchen Acquisition, we acquired intangible assets related to IPR&D, products derived from developed technology, and a covenant not to compete from a former Anchen securityholder and employee.

The fair value of the developed technology, and in-process research and development intangible assets were estimated using the discounted cash flow method of the income approach. Under this method, an intangible asset's fair value is equal to the present value of the after-tax cash flows (excess earnings) attributable solely to the intangible asset over its remaining useful life. To calculate fair value, we estimated the present value of cash flows discounted at rates commensurate with the inherent risks associated with each type of asset. We believe that the level and timing of cash flows appropriately reflect market participant assumptions. Some of the significant assumptions inherent in the development of the identifiable intangible asset valuations, from the perspective of a market participant, include the estimated net cash flows by year by project or product (including net revenues, costs of sales, research and development costs, selling and marketing costs and other charges), the appropriate discount rate to select in order to measure the risk inherent in each future cash flow stream, the assessment of each asset's life cycle, competitive trends impacting the asset and each cash flow stream and other factors. The major risks and uncertainties associated with the timely and successful completion of the IPR&D projects include legal risk and regulatory risk.

The value of IPR&D ($126,700 thousand) was capitalized and accounted for as an indefinite-lived intangible asset and will be subject to impairment testing until the completion or abandonment of each project. Upon successful completion and launch of each project, we will make a separate determination of useful life of the IPR&D intangible. Amortization expense of the related intangible assets will commence when each product is launched.

The remaining net book value of the related intangible asset related to developed products ($83,550 thousand) will be amortized over a weighted average amortization period of approximately nine years.

The fair value of the covenant not to compete was estimated using the discounted cash flow method of the income approach first assuming no additional competition from the parties to the covenant not to compete and then assuming competition from the parties to the covenant not to compete. The level of competition was adjusted by such factors as the timing of FDA approval and the likelihood of competition over the term of the covenant not to compete. The remaining net book value of the related intangible asset ($8,542 thousand) will be amortized over approximately three years.

Teva Pharmaceuticals, Inc. Asset Purchase Agreement and License and Distribution Agreement

On October 18, 2011, we announced that we acquired rights to three products from Teva Pharmaceuticals in connection with Teva's acquisition of Cephalon. Under terms of the agreements, Par owns the ANDAs of fentanyl citrate lozenges, a generic version of Actiq^®, and cyclobenzaprine ER capsules, the generic version of Amrix^®, as well as the U.S. rights to market modafinil tablets, the generic version of Provigil^®. Par began shipping to the trade all strengths of fentanyl citrate lozenges. Cyclobenzaprine ER capsules and modafinil tablets were not previously marketed by Teva and are not yet available. We have a contractually guaranteed launch date for modafinil tablets in April 2012. We paid $24,000 thousand to acquire fentanyl citrate lozenges and modafinil tablets. We would also be obligated to pay up to an additional $500 thousand milestone upon the launch of cyclobenzaprine ER capsules depending on timing of our launch relative to other market competitors. We allocated the $24,000 thousand paid for fentanyl citrate lozenges ($18,000 thousand) and for modafinil tablets ($6,000 thousand) based on expected future cash flows. The remaining net book value of the intangible asset related to fentanyl citrate lozenges ($16,745 thousand) will be amortized over approximately five years. Amortization expense of the intangible asset related to modafinil tablets will commence when the product is launched in April 2012.

Synthon Pharmaceuticals, Inc. Asset Purchase Agreement

On November 30, 2011, we entered into an asset purchase agreement with Synthon Pharmaceuticals, Inc., and on December 30, 2011, we closed on our acquisition, of Synthon's ANDA for amlodipine besylate and valsartan (5 mg/320 mg and 10 mg/320 mg) fixed dose combination tablets, a generic version of Exforge®, for $9,600 thousand. Under the terms of a separate license agreement with Novartis Pharmaceuticals Corporation, we have a certain launch date in October 2014. Amortization expense of the related intangible asset will commence when the product is launched.

QOL Medical, LLC Asset Purchase Agreement

During the three-month period ended June 27, 2009, we acquired the rights to Nascobal^® Nasal Spray from QOL Medical, LLC for $54,500 thousand in cash and the assumption of certain liabilities. The purchase price of the acquisition has been allocated to the net tangible and intangible assets acquired on the basis of estimated fair values. The fair value of the product rights received is being amortized on a straight-line basis over 12 years based on its estimated useful life. Refer to "Nascobal^®" in Note 21, "2009 Acquisitions."

BioAlliance Licensing Agreement

In April 2010, the FDA approved Oravig^®. Under the terms of Strativa's U.S. license agreement with BioAlliance Pharma SA, we paid BioAlliance $20,000 thousand in the second quarter of 2010 as a result of the FDA approval. Strativa began to commercialize Oravig^®, which was supplied by BioAlliance, during the third quarter of 2010. In June 2011, we decided to reduce our marketing efforts for this productas part of plans to resize Strativa. We also reduced our Strativa workforce by a total of approximately 90 people and we recorded intangible asset impairment charges as part of this strategic assessment. In September 2011, Strativa executed a termination agreement with BioAlliance returning all Oravig^® rights and obligations to BioAlliance. Refer to Note 20, "Restructuring Costs" for further details.

MonoSol Rx Licensing Agreement

In June 2008, Strativa and MonoSol Rx entered into a licensing agreement under which Strativa acquired the U.S. commercialization rights to Zuplenz^®. Under the terms of an amended agreement, the FDA's approval of Zuplenz^®in July 2010 triggered Strativa's payments to MonoSol Rx of a $4,000 thousand approval milestone and a $2,000 thousand pre-launch milestone. Strativa began to commercialize Zuplenz^®, which was supplied by MonoSol, during the fourth quarter of 2010. Amortization expense of the related intangible asset commenced when the product was launched in the fourth quarter of 2010. In June 2011, we stopped marketing Zuplenz^® as part of plans to resize Strativa. We also reduced our Strativa workforce by a total of approximately 90 people and we recorded intangible asset impairment charges as part of this strategic assessment. In July 2011, Strativa returned the U.S. commercialization rights of Zuplenz^®to MonoSol, as part of the resizing of our branded products division. Refer to Note 20, "Restructuring Costs" for further details.

Glenmark Generics Limited and Glenmark Generics, Inc. USA Licensing Agreement

In May 2010, Par entered into a licensing agreement with Glenmark Generics to market ezetimibe 10 mg tablets, the generic version of Merck & Co. Inc.'s Zetia^®, in the U.S. Glenmark believes it is the first to file an ANDA containing a paragraph IV certification for the product, which would potentially provide 180 days of marketing exclusivity. On April 24, 2009, Glenmark was granted tentative approval for its product by the FDA. Under the terms of the licensing and supply agreement, we made a $15,000 thousand payment to Glenmark for exclusive rights to market, sell and distribute the product in the U.S. The companies will participate in a profit sharing arrangement based on any future sales of the product. Glenmark will supply the product subject to FDA approval. The product has a contractual launch date of no later than December 2016. Under defined conditions, the product could be launched earlier than December 2016. Amortization expense of the related intangible asset will commence when the product is launched.

Trademark licensed from BMS

Par entered into an agreement with Mead Johnson & Company and BMS, dated August 6, 2003, to license the use of the MegaceÒ trademark in connection with a new product developed by Par in exchange for $5,000 thousand paid by Par in August 2003. In July 2005, Par made an additional milestone payment of $5,000 thousand to BMS related to the trademark license above. The remaining net book value of the trademark will be amortized over approximately two years.

Genpharm Distribution Agreement

On June 30, 1998, Par completed a strategic alliance with Merck KGaA, a pharmaceutical and chemical company located in Darmstadt, Germany. Pursuant to a Stock Purchase Agreement, dated March 25, 1998, Par issued 10,400 shares of Par's common stock to a Merck KGaA subsidiary, EMD, Inc. (formerly known as Lipha Americas, Inc.), in exchange for cash of $20,800 thousand and the exclusive U.S. distribution rights to a set of products covered by a distribution agreement with Genpharm (the "Genpharm Distribution Agreement") (see Note 11 – "Distribution and Supply Agreements"). Par determined the fair value of the common stock sold to Merck KGaA to be $27,300 thousand, which exceeded the cash consideration of $20,800 thousand received by Par by $6,500 thousand. That $6,500 thousand was assigned to the Genpharm Distribution Agreement, with a corresponding increase in stockholders' equity. Additionally, Par recorded a deferred tax liability of approximately $4,300 thousand and a corresponding increase in the financial reporting basis of the Genpharm Distribution Agreement to account for the difference between the basis in the Genpharm Distribution Agreement for financial reporting and income tax purposes. The aggregate amount of approximately $10,800 thousand assigned to the Genpharm Distribution Agreement is being amortized on a straight-line basis over 15 years.

MDRNA, Inc. Asset Purchase Agreement

During the three-month period ended June 27, 2009, the Company acquired additional rights to calcitonin, a generic drug, from MDRNA, Inc., mainly in order to facilitate our acquisition of the rights to Nascobal^®. The purchase price of the acquisition has been allocated to the net tangible and intangible assets acquired on the basis of estimated fair values. This asset has a fair market value of $1,400 thousand and will be amortized over its estimated useful life of approximately 2 years. Refer to "MDRNA, Inc." in Note 21, "2009 Acquisitions."

SVC Pharma LP License and Distribution Agreement

In June 2008, Par and SVC Pharma LP entered into a license and distribution agreement for dronabinol and related agreements. Under the terms of the agreements, Par transferred 100% of its interest in SVC to an affiliate of Rhodes Technologies, and SVC became the sole owner of the ANDA for dronabinol. In exchange, SVC granted Par the exclusive right and license to market, distribute and sell dronabinol in the United States for a term of approximately 10 years. Par reclassified a portion of its investment in SVC to intangible assets, which represents the right and license to market dronabinol in the United States. Par launched dronabinol during the third quarter of 2008. The remaining net book value of this asset will be amortized over approximately two years.

Other Intangible Assets

In January 2010, we reached a settlement with a third party of two litigations related to the enforcement of our patent rights and acquired intellectual property related to a product that was the subject of the litigations. We paid $3,500 thousand in settlement of the two litigations and $500 thousand to acquire the intellectual property. The $3,500 thousand was recorded as expense in 2009 as a change in estimate and the $500 thousand was recorded as an intangible asset in first quarter of 2010 and included in "Other intangible assets" above.

Amortization Expense

We recorded amortization expense related to intangible assets of approximately $14,822 thousand for 2011, $16,005 thousand for 2010 and $23,057 thousand for 2009 and such expense is primarily included in cost of goods sold with the remainder in selling, general and administrative expense.

Estimated Amortization Expense for Existing Intangible Assets at December 31, 2011

The following table does not include estimated amortization expense for future milestone payments that may be paid and result in the creation of intangible assets after December 31, 2011.

($ amounts in thousands)


	Estimated
	Amortization
	Expense
2012	$	37,194
2013		23,640
2014		23,487
2015		19,149
2016		32,650
2017 and thereafter		175,549
	$	311,669

As of December 31, 2011, we determined through our evaluation that intangible assets were recoverable.