Goodwill and Intangible Assets

12 Months Ended

Dec. 31, 2021

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

Note 2. Goodwill and Intangible Assets

Goodwill

There was no change in the carrying amount of goodwill from December 31, 2020 to December 31, 2021, and net book value remains at $8.4 million. The net book value of goodwill is solely related to the Enteris acquisition in 2019. The Company reviews goodwill for impairment on an annual basis or whenever events or changes in circumstances indicate the carrying value of an asset may not be recoverable. The Company first assesses qualitative factors to determine whether it is more-likely-than-not that the fair value of the reporting unit is less than the carrying amount as a basis for determining whether it is necessary to perform an impairment test. If the qualitative assessment warrants further analysis, the Company compares the fair value of the reporting unit to its carrying value. The fair value of the reporting unit is determined using the market approach. If the fair value of the reporting unit exceeds the carrying value of net assets of the reporting unit, goodwill is not impaired. If the carrying value of the reporting unit’s goodwill exceeds its fair value, then the Company must record an impairment charge equal to the difference. As of December 31, 2021, the Company concluded that it is more likely than not that the fair value of the reporting unit is greater than its carrying value, and goodwill is not considered to be impaired.

Intangible Assets

As of December 31, 2021 and 2020, the gross book value, accumulated amortization, net book value and estimated useful life of acquired intangible assets were as follows (in thousands, except estimated useful life data):

	As of December 31, 2021
	Gross Book Value		Accumulated Amortization		Net Book Value		Estimated Useful Life
License Agreement (1)	$	29,400	$	19,780	$	9,620		10
Trade names and trademarks		210		50		160		10
Customer relationships		240		56		184		10
Total intangible assets	$	29,850	$	19,886	$	9,964
	As of December 31, 2020
	Gross Book Value		Accumulated Amortization		Net Book Value		Estimated Useful Life
License Agreement (1)	$	29,400	$	16,336	$	13,064		10
Trade names and trademarks		210		29		181		10
Customer relationships		240		32		208		10
Total intangible assets	$	29,850	$	16,397	$	13,453

⁽¹⁾ Prior to our acquisition of Enteris, Enteris entered into a non-exclusive commercial license agreement (the “License Agreement”) with Cara Therapeutics, Inc. (“Cara”), for oral formulation rights to Enteris’ Peptelligence® technology to develop and commercialize Oral KORSUVA^TM in any indication worldwide, excluding South Korea and Japan. Cara is obligated to pay Enteris certain development, regulatory and tiered commercial milestone payments, as well as low single-digit royalties based on net sales in the licensed territory.

Amortization expense was $3.5 million and $11.7 million for the years ended December 31, 2021 and 2020, respectively, and was recorded in depreciation and amortization expense. Based on amounts recorded at December 31, 2021, the Company will recognize acquired intangible asset amortization as follows (in thousands):

2022	$	1,768
2023		1,696
2024		1,540
2025		1,069
2026		1,069
Thereafter	$	2,822
Total	$	9,964