Intangible Assets

6 Months Ended

Jun. 30, 2021

Intangible Assets

Intangible Assets

7.           Intangible Assets

Intangible assets include ANDAs that were acquired as part of 2018 asset acquisitions of U.S. marketed generic products, as well as capitalized costs related to a cloud computing arrangement (CCA). These intangible assets were originally recorded at relative estimated fair values based on the purchase price for the asset acquisitions and are stated net of accumulated amortization and impairment, if any.

The ANDAs are amortized over their estimated useful lives of 13 years, using the straight-line method. The CCA is being amortized over its useful life of 5 years.

In February 2020, the Company entered into an agreement with Chartwell Rx Sciences, LLC (“Chartwell”) in which the Company sold and transferred the control of seven U.S. FDA-approved ANDAs to Chartwell in exchange for $450,000 in cash, which the Company received in March 2020. These ANDAs had a net book value of $0 at the time of sale. The Company is entitled to an additional $1 million, contingent upon Chartwell receiving certain FDA approvals relating to certain of these ANDAs. The Company recognized a gain on disposal of intangible assets in the amount of $450,000 in the accompanying unaudited condensed consolidated statement of operations and comprehensive loss for the three months ended March 31, 2020. The additional $1 million is treated as variable consideration. Because the amount of variable consideration is highly susceptible to factors outside the Company's influence and the Company’s experience with similar types of contracts is limited, the Company did not include the amount of variable consideration in recognition of gain on disposal of intangible assets for the three months ended March 31, 2020. The Company will recognize the variable consideration and additional gain on disposal of intangible assets when the constraint on variable consideration is resolved, i.e., Chartwell receives relevant FDA approvals.  As of June 30, 2021,  no FDA approvals has been obtained by Chartwell on those products.

Intangible assets at June 30, 2021 consists of the following:

(In thousands)
Asset	Purchase Price		Accumulated Amortization		Estimated useful lives
ANDAs	$	15,832		(3,217)	13 years
Others		197		(121)	5 years
Total	$	16,029	$	(3,338)

The changes in intangible assets for six months ended June 30, 2021 are as follows:

(In thousands)
Balance as of December 31, 2020	$	13,210
Amortization expense		(674)
Foreign currency translation adjustment		155
Balance as of June 30, 2021	$	12,691

Expected future amortization expense, is as follows:

(In thousands)
2021 (remaining six months)	$	667
2022		1,334
2023		1,334
2024		1,303
2025		1,303
2026 and thereafter		6,750