6. Goodwill and Intangible Assets

3 Months Ended

Mar. 31, 2018

Goodwill and Intangible Assets Disclosure [Abstract]

6. Goodwill and Intangible Assets

Note 6. Goodwill and Intangible Assets

Goodwill consists of the following (in thousands):

		Amount
Balance at December 31, 2016	$	30,600
Goodwill impairment		(18,500)
Balance at December 31, 2017		12,100
Goodwill impairment		-
Balance at March 31 2018	$	12,100

The Company performs an impairment test of goodwill annually in the fourth quarter of each fiscal year unless there are triggering events that would require such analysis during an interim period. There were no triggering events during the three months ended March 31, 2018. For the year ended December 31, 2017, the carrying value of the reporting unit exceeded its fair value by $18.5 million and accordingly an impairment charge of $18.5 million was recorded in 2017. The decline in the estimated fair value of the reporting unit resulted from management's review of its then-current forecast. As a result of this review, management lowered its forecast for Zohydro ER. The lower projected operating results reflected changes in assumptions related to revenue, market trends, cost structure, and other expectations about the anticipated short-term and long-term operating results of the business.

Intangible assets consist of the following (dollars in thousands):

		As of March 31, 2018
	Weighted Average		Gross Carrying				Accumulated		Net Carrying
	Life Remaining		Amount		Impairment		Amortization		Amount
Unamortized intangible assets:
In-process research and development	Indefinite	$	11,000	$	-	$	-	$	11,000
Total unamortized intangible assets			11,000		-		-		11,000
Amortized intangible assets:
Product licenses	5.2 years		2,846		-		(1,690)		1,156
Supplier contracts	3.1 years		583		-		(223)		360
Acquired developed technologies	14.9 years		364,686		-		(290,402)		74,284
Total amortized intangible assets			368,115		-		(292,315)		75,800
Total intangible assets		$	379,115	$	-	$	(292,315)	$	86,800

		As of December 31, 2017
	Weighted Average		Gross Carrying				Accumulated		Net Carrying
	Life Remaining		Amount		Impairment		Amortization		Amount
Unamortized intangible assets:
In-process research and development	Indefinite	$	11,000	$	-	$	-	$	11,000
Total unamortized intangible assets			11,000		-		-		11,000
Amortized intangible assets:
Product licenses	5.4 years		2,846		-		(1,623)		1,223
Supplier contracts	3.3 years		583		-		(194)		389
Acquired developed technologies	13.7 years		364,686		-		(280,692)		83,994
Total amortized intangible assets			368,115		-		(282,509)		85,606
Total intangible assets		$	379,115	$	-	$	(282,509)	$	96,606

As of March 31, 2018, the weighted average remaining life for our definite-lived intangible assets in total was approximately 15 years.

In process research and development (IPR&D) will be amortized on a straight-line basis over its useful life once the receipt of regulatory approval is obtained.

Estimated amortization expense related to intangible assets with definite lives for each of the five succeeding years and thereafter is as follows (in thousands):

		Amount
2018 (April - December)	$	4,130
2019		5,507
2020		5,420
2021		5,325
2022		5,286
Thereafter		50,132
Total	$	75,800

Amortization expense was $9.8 million and $18.5 million for the three months ended March 31, 2018 and 2017, respectively, of which, $29,000 and $29,000 are included in cost of product sales in the unaudited condensed consolidated statements of operations for the three months ended March 31, 2018 and 2017, respectively.