Business Combination and BELBUCA Acquisition

12 Months Ended

Dec. 31, 2019

Business Combination and BELBUCA Acquisition

Business combination and BELBUCA acquisition:

On December 7, 2016, the Company and Endo Pharmaceuticals, ("Endo") entered into the Termination Agreement to terminate Endo’s licensing rights for BELBUCA. The transaction closed on January 6, 2017. At the closing date, the Company purchased from Endo the following net assets (the “net assets”): (i) current BELBUCA product inventory and work-in-progress, (ii) material manufacturing contracts related to BELBUCA, (iii) BELBUCA-related domain names and trademarks (including the BELBUCA trademark), (iv) BELBUCA -related manufacturing equipment, and (v) all pre-approval regulatory submissions, including any INDs and NDAs, regulatory approvals and post-approval regulatory submissions concerning BELBUCA.

The BELBUCA acquisition was accounted for as a business combination in accordance with ASC No. 805, Business Combinations which, among other things, requires assets acquired and liabilities assumed to be measured at their acquisition date fair values.

The following table summarizes the consideration paid to acquire BELBUCA and the estimated values of assets acquired and liabilities assumed in the accompanying consolidated balance sheet based on their fair values on January 6, 2017 (the date of the Endo Closing):


Asset purchase price:
Deferred cash consideration to Endo	$	7,536
Total asset purchase price	$	7,536
Estimated fair value of assets acquired:
BELBUCA product inventory and work-in process	$	5,412
BELBUCA-related manufacturing equipment	432
License and distribution rights intangible assets	45,000
Deferred tax liability	(15,972)
Amount attributable to assets acquired	$	34,872
Bargain purchase gain	$	(27,336)