GOODWILL AND INTANGIBLE ASSETS

9 Months Ended

Sep. 30, 2024

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill

As of September 30, 2024, the Company has two operating segments, which were also deemed the Company’s two reporting units, Generics, Established Brands, and Other reporting unit and the Rare Disease reporting unit. As a result of the 2013 merger with BioSante Pharmaceuticals, Inc., the Company recorded goodwill of $1.8 million. As a result of the acquisition of WellSpring Pharma Services Inc. in 2018, the Company recorded goodwill of $1.7 million. From the acquisition of Novitium in 2021, the Company recorded goodwill of $24.6 million. The goodwill from the transactions with BioSante Pharmaceuticals, Inc., WellSpring Pharma Services Inc., and Novitium is recorded in the Generics, Established Brands, and Other reporting unit. As a result of the acquisition of Alimera, on September 16, 2024, the Company recorded goodwill of $32.2 million in the Rare Disease reporting unit. Refer to Note 3 “Business Combination” to the Notes to Condensed Consolidated Financial Statements for further information related to the acquisition.

Goodwill is reviewed for impairment at least annually, at October 31, or more frequently if a triggering event occurs between impairment testing dates. The Company’s impairment assessment begins with a qualitative assessment to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying value. Qualitative factors may include, macroeconomic conditions, industry and market considerations, cost factors, and other relevant entity and Company specific events. If, based on the qualitative test, the Company determines that it is “more likely than not” that the fair value of a reporting unit is less than its carrying value, then we evaluate goodwill for impairment by comparing the fair value of our reporting unit to its respective carrying value, including its goodwill. If it is determined that it is “not likely” that the fair value of the reporting unit is less than its carrying value, then no further testing is required. There have been no events or changes in circumstances that would have reduced the fair value of the Generics, Established Brands, and Other reporting unit or the Rare Disease reporting unit below their carrying value during the three and nine months ended September 30, 2024 and 2023, and as a result no impairment charges have been recognized.

Intangible Assets

The components of definite-lived intangible assets and indefinite-lived intangible assets, other than goodwill, are as follows:


	September 30, 2024						December 31, 2023						Remaining Weighted Average Amortization Period(1)
(in thousands)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Definite-Lived Intangible Assets:
Acquired ANDAs intangible assets	$	210,411	$	(118,804)	$	91,607	$	209,780	$	(100,660)	$	109,120	4.6 years
NDAs and product rights	644,871		(203,143)		441,728		244,871		(184,861)		60,010		11.0 years
Marketing and distribution rights	17,157		(14,992)		2,165		17,157		(14,271)		2,886		2.2 years
Customer relationships	24,900		(10,375)		14,525		24,900		(7,707)		17,193		4.1 years
Total Definite-Lived Intangible Assets	897,339		(347,314)		550,025		496,708		(307,499)		189,209		9.8 years
Indefinite-Lived Intangible Assets:
In process research and development	19,800		—		19,800		19,800		—		19,800		Indefinite
Total Intangible Assets, net	$	917,139	$	(347,314)	$	569,825	$	516,508	$	(307,499)	$	209,009

(1)Weighted average amortization period as of September 30, 2024.

Definite-lived intangible assets arising from business combinations and other asset acquisitions include intangibles such as Abbreviated New Drug Applications (“ANDAs”), New Drug Applications (“NDAs”) and product rights, marketing and distribution rights, customer relationships, and non-compete agreements. Definite-lived intangible assets are amortized over the estimated period during which the asset is expected to contribute directly or indirectly to future cash flows. Definite-lived intangible assets are stated at cost, net of amortization, and generally amortized over their remaining estimated useful lives, ranging from seven to twelve years, based on the straight-line amortization method. In the case of certain NDAs and product rights assets, an accelerated amortization method is used to better match the anticipated economic benefits expected to be provided. Definite-lived intangible assets are tested for impairment when events or changes in circumstances indicate that these asset might be impaired.

During the quarter ended September 30, 2024, the Company acquired Alimera, and as a result, acquired two intangible assets for YUTIQ and ILUVIEN, in the amount of $170.0 million and $230.0 million, respectively, which will be amortized over 12 years.

Amortization expense for definite-lived intangibles was $13.9 million and $13.3 million for the three months ended September 30, 2024 and 2023, respectively. Amortization expense for definite-lived intangibles was $39.8 million and $39.0 million for the nine months ended September 30, 2024 and 2023, respectively. No impairment losses were recognized in the three and nine months ended September 30, 2024 and 2023.

Indefinite-lived intangible assets other than goodwill include primarily In-Process Research & Development (“IPR&D”) projects. IPR&D intangible assets represent the fair value of technology acquired in a business combination or asset acquisition for which the technology projects are incomplete but have substance or alternative future use. When an IPR&D project is completed (generally upon receipt of regulatory approval), then the IPR&D will be accounted for as a definite-lived intangible asset.

Indefinite-lived intangible assets are not amortized, and the Company tests for impairment of indefinite-lived intangible assets when events or circumstances indicate that the carrying value of the assets may not be recoverable, and the Company performs an asset impairment analysis annually, as of October 31. No impairment losses were recognized in the three and nine months ended September 30, 2024 and 2023, respectively.

Expected future amortization expense for definite-lived intangible assets is as follows:


(in thousands)
2024 (remainder of the year)	$	20,647
2025	81,016
2026	67,531
2027	58,564
2028	51,783
2029 and thereafter	270,484
Total	$	550,025