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INTANGIBLE ASSETS AND GOODWILL (Tables)
 12 Months Ended
Dec. 31, 2013
Goodwill and Intangible Assets Disclosure [Abstract]  
Schedule of components of intangible assets
The major components of intangible assets as of December 31, 2013 and 2012 were as follows:
 
Weighted-
Average
Useful
Lives
(Years)
 
2013
 
2012
 
Gross
Carrying
Amount
 
Accumulated
Amortization,
Including
Impairments
 
Net
Carrying
Amount
 
Gross
Carrying
Amount
 
Accumulated
Amortization,
Including
Impairments
 
Net
Carrying
Amount
Finite-lived intangible assets:
 
 
 
 
 
 
 
 
 
 
 
 
 
Product brands
9
 
$
10,554,160

 
$
(2,729,118
)
 
$
7,825,042

 
$
7,968,318

 
$
(1,345,367
)
 
$
6,622,951

Corporate brands
15
 
365,617

 
(44,372
)
 
321,245

 
284,287

 
(25,336
)
 
258,951

Product rights
8
 
3,020,996

 
(876,877
)
 
2,144,119

 
2,110,350

 
(525,186
)
 
1,585,164

Partner relationships
4
 
194,035

 
(83,221
)
 
110,814

 
187,012

 
(44,230
)
 
142,782

Out-licensed technology and other
6
 
263,911

 
(93,820
)
 
170,091

 
209,452

 
(57,507
)
 
151,945

Total finite-lived intangible assets(1)
9
 
14,398,719

 
(3,827,408
)
 
10,571,311

 
10,759,419

 
(1,997,626
)
 
8,761,793

Indefinite-lived intangible assets:
 
 
 
 
 
 
 
 
 
 
 
 
 
Acquired IPR&D(2)
NA
 
579,311

 
—

 
579,311

 
546,876

 
—

 
546,876

Corporate brand(3)
NA
 
1,697,538

 
—

 
1,697,538

 
—

 
—

 
—

 
 
 
$
16,675,568

 
$
(3,827,408
)
 
$
12,848,160

 
$
11,306,295

 
$
(1,997,626
)
 
$
9,308,669

____________________________________
(1)
In the third quarter of 2013, the Company recognized an impairment charge of $551.6 million related to ezogabine/retigabine (immediate-release formulation) which is co-developed and marketed under a collaboration agreement with GSK. For further information regarding this asset impairment charge, see note 7 titled “FAIR VALUE MEASUREMENTS”.
In addition, in the third quarter of 2013, the Company recognized a write-off of $10.0 million related to certain OTC skincare products in the U.S. (included in the Company’s Developed Markets segment) due to the discontinuation of the products.  The Company does not believe these programs have value to a market participant.
In the first quarter of 2013, the Company recognized a write-off of $22.2 million related to Opana®, a pain relief medication approved in Canada (included in the Company’s Developed Markets segment), due to production issues arising in the first quarter of 2013. These production issues resulted in higher spending projections and delayed commercialization timelines which, in turn, triggered the Company’s decision to suspend its launch plans. The Company does not believe this program has value to a market participant.
These impairment charges were recognized in Amortization and impairments of finite-lived intangible assets in the consolidated statements of (loss) income.
(2)
In the fourth quarter of 2013, the Company wrote-off (i) an IPR&D asset of $14.4 million related to the termination of the Mapracorat development program (included in both the Emerging Markets and Developed Markets segments), acquired by the Company as part of B&L Acquisition, resulting from analysis of Phase 3 study results and (ii) an IPR&D asset of $8.8 million related to a Xerese® life-cycle product (Developed Markets segment) due to assessment of market data and evaluation of development risk. The Company does not believe these programs have value to a market participant.
In the third quarter of 2013, the Company wrote off an IPR&D asset of $93.8 million relating to a modified-release formulation of ezogabine/retigabine. For further information regarding this write-off, see note 7 titled “FAIR VALUE MEASUREMENTS”.
In addition, in the third quarter of 2013, the Company wrote-off IPR&D assets of $27.3 million, in the aggregate, due to the write-off of IPR&D assets acquired by Valeant as part of Aton acquisition in May 2010, mainly related to the termination of the A007 (Lacrisert®) development program (Developed Markets segment) in the third quarter of 2013. The Company does not believe these programs have value to a market participant.
In the fourth quarter of 2012, the Company recognized an IPR&D impairment charge of $24.7 million related to a Xerese® life-cycle product (Developed Markets segment) due to higher projected development spend and revised timelines for potential commercialization. In the third quarter of 2012, the Company wrote off an IPR&D asset of $133.4 million, relating to the IDP-107 program (Developed Markets segment), which was acquired in September 2010 as part of the Merger. Through discussion with various internal and external Key Opinion Leaders, the Company completed its analysis of the Phase 2 study results for IDP-107 during the third quarter of 2012. This led to the Company’s decision in the third quarter of 2012 to terminate the program and fully impair the asset. As attempts to identify a partner for the program were not successful, the Company continues to not believe the program has value to a market participant. In addition, in the second quarter of 2012, the Company wrote off $4.3 million relating to the termination of the MC5 program (Developed Markets segment) acquired as part of the Ortho Dermatologics acquisition in 2011 described in note 3.
The write offs of the IPR&D assets were recorded in In-process research and development impairments and other charges in the consolidated statements of (loss) income.
In addition, a $12.0 million payment in the third quarter of 2012 to terminate a research and development commitment with a third party was included in In-process research and development impairments and other charges in the consolidated statements of (loss) income.
For further information regarding asset impairment charges, see note 7 titled “FAIR VALUE MEASUREMENTS”.
(3)
Represents the B&L corporate trademark, which has an indefinite useful life and is not amortizable. See note 3 “BUSINESS COMBINATIONS” for further information.
Schedule of amortization expense
For the years ended December 31, 2013, 2012 and 2011, amortization and impairments of finite-lived intangible assets were recorded as follows:
 
 
2013
 
2012
 
2011
Alliance and royalty revenue
 
$
—

 
$
—

 
$
1,072

Cost of goods sold
 
—

 
2,557

 
8,103

Amortization and impairments of finite-lived intangible assets
 
1,901,977

 
928,885

 
557,814

 
 
$
1,901,977

 
$
931,442

 
$
566,989
Schedule of estimated aggregate amortization expense for each of the five succeeding years
Estimated aggregate amortization expense for each of the five succeeding years ending December 31 is as follows:
 
 
2014
 
2015
 
2016
 
2017
 
2018
Amortization expense(1)
 
$
1,406,660

 
$
1,368,548

 
$
1,278,275

 
$
1,213,345

 
$
1,088,496

____________________________________
(1)
Estimated amortization expense shown in the table above does not include potential future impairments of finite-lived intangible assets, if any.
Schedule of changes in the carrying amount of goodwill
The changes in the carrying amount of goodwill for years ended December 31, 2013 and 2012 were as follows:
 
 
Developed
Markets
 
Emerging
Markets
 
Total
Balance, December 31, 2011(1)
 
$
2,530,976

 
$
1,050,536

 
$
3,581,512

Additions(2)
 
1,466,684

 
49,908

 
1,516,592

Adjustments(3)
 
(14,631
)
 
—

 
(14,631
)
Foreign exchange and other(4)
 
9,959

 
47,934

 
57,893

Balance, December 31, 2012(1)
 
3,992,988

 
1,148,378

 
5,141,366

Additions(5)
 
3,395,656

 
1,199,528

 
4,595,184

Adjustments(6)
 
28,468

 
(316
)
 
28,152

Foreign exchange and other
 
11,627

 
(24,229
)
 
(12,602
)
Balance, December 31, 2013
 
$
7,428,739

 
$
2,323,361

 
$
9,752,100

____________________________________
(1)
Effective in the first quarter of 2013, the Company has two reportable segments: Developed Markets and Emerging Markets. Accordingly, the Company has restated prior period segment information to conform to the current period presentation. For further details, see note 26 titled “SEGMENT INFORMATION”.
(2)
Primarily relates to the Medicis, OraPharma, Probiotica and Gerot Lannach acquisitions (as described in note 3).
(3)
Primarily reflects the impact of measurement period adjustments related to the iNova, Dermik and Afexa acquisitions (as described in note 3).
(4)
Includes an impairment charge of $12.8 million related to the allocation of goodwill to the carrying amounts of certain suncare and skincare brands primarily sold in Australia, which were classified as held for sale as of December 31, 2012. Refer to note 7 titled “FAIR VALUE MEASUREMENTS”, for additional details regarding these impairment charges.
(5)
Primarily relates to the B&L, Obagi and Natur Produkt acquisitions (as described in note 3).
(6)
Primarily reflects the impact of measurement period adjustments related to the Medicis acquisition (as described in note 3).