3. INTANGIBLE ASSETS AND GOODWILL

4 Months Ended

Dec. 31, 2012

Goodwill and Intangible Assets Disclosure [Abstract]

INTANGIBLE ASSETS AND GOODWILL

On December 14, 2007, the Company acquired the intellectual property and other rights to develop RP103 to treat various clinical indications from the University of California at San Diego ("UCSD") by way of a merger with Encode Pharmaceuticals, Inc., a privately held development stage company ("Encode"), which held the intellectual property license with UCSD. The intangible assets acquired in the merger with Encode were recorded at approximately $2.6 million, primarily based on the value of the Company's common stock and warrants issued to the Encode stockholders.

Intangible assets recorded as a result of the 2009 Merger were approximately $0.2 million as discussed in Note 10 below.

Summary of intangibles acquired as discussed above: 

		December 31,		August 31,
		2012		2012		2011
Intangible asset (IP license for RP103/RP104) related to the Encode merger	$	2,620	$	2,620	$	2,620
Intangible assets (out-license) related to the 2009 Merger		240		240		240
In-process research and development (IP license for tezampanel/NGX426) related to the 2009 Merger (written off on 8/31/12)		0		0		900
Total intangible assets		2,860		2,860		3,760
Less accumulated amortization		(704)		(655)		(509)
Intangible assets, net	$	2,156	$	2,205	$	3,251

The intangible assets related to RP103 are being amortized monthly over 20 years, which are the lives of the intellectual property patents and the estimated useful life. The 20 year estimated useful life is also based upon the typical development, approval, marketing and life cycle management timelines of pharmaceutical drug products. The intangible assets related to the out-license will be amortized using the straight-line method over the estimated useful life of 16 years, which is the life of the intellectual property patents.  As of August 31, 2012, the Company had determined that the capitalized acquired in-process research and development cost or $900, representing the tezampanel and NGX 426 program acquired in the 2009 Merger, was impaired due to the Company's decision to discontinue development for thrombosis due to some regulatory hurdles that would require significant expenditures which the Company chose not to prioritize for funding.  The Company performed an impairment analysis and determined that the fair value of this intangible asset was zero.  As such, the Company expensed $900 as in-process research and development as part of research and development expense on the Company's consolidated statements of comprehensive loss for the year ended August 31, 2012. During the four months ended December 31, 2012, there was no impairment recognized.

During the four months ended December 31, 2012, the years ended August 31, 2012, 2011 and 2010 and the cumulative period from September 8, 2005 (inception) to December 31, 2012, the Company amortized $49, $146, $153, $152 and $746, respectively, of intangible assets to research and development expense.

The following table summarizes the actual and estimated amortization expense for intangible assets for the periods indicated:

Amortization period		Amortization expense
	September 8, 2005 (inception) to August 31, 2006 – actual	$	4
	Fiscal year ended August 31, 2007 – actual		8
	Fiscal year ended August 31, 2008 – actual		95
	Fiscal year ended August 31, 2009 – actual		139
	Fiscal year ended August 31, 2010 – actual		152
	Fiscal year ending August 31, 2011 – actual		153
	Fiscal year ending August 31, 2012 – actual		146
	Four months ended December 31, 2012 -- actual		49
	Fiscal year ending December 31, 2013 – estimate		146
	Fiscal year ending December 31, 2014 – estimate		146
	Fiscal year ending December 31, 2015 – estimate		146
	Fiscal year ending December 31, 2016 – estimate		146
	Fiscal year ending December 31, 2017 – estimate		146

Goodwill of $3,275 represents the excess of total consideration recorded for the 2009 Merger over the value of the assets assumed.  The Company tested the carrying value of goodwill for impairment as of December 31, 2012 and determined that there was no impairment.  Intangibles are tested for impairment whenever events indicate that their carrying values may not be recoverable.  During the year ended August 31, 2012, the tezampanel/NGX426 asset was written off with a carrying value of $900 and during the year ended August 31, 2011, the NeuroTrans™ asset was written off with a carrying value of $108 due to the termination of a collaboration agreement.