Intangible Assets and Goodwill

12 Months Ended

Dec. 31, 2014

Goodwill and Intangible Assets Disclosure [Abstract]

The following information details the carrying amounts and accumulated amortization of the Company’s intangible assets subject to amortization:



		As of December 31, 2014							As of December 31, 2013
	Weighted Average Remaining Useful Life	Gross Carrying Amount		Accumulated Amortization and other charges			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
	(In thousands)
Amortizable intangible assets
Customer relationships⁽¹⁾	—	$	7,457	$	(7,457	)	$	—	$	7,457	$	(5,631	)	$	1,826
Selling rights agreements⁽¹⁾	0.1	9,125		(8,961		)	164		9,125		(5,870		)	3,255
Trademarks⁽¹⁾	—	3,024		(3,024		)	—		3,024		(2,284		)	740
Product licenses⁽²⁾	0.5	71,000		(65,602		)	5,398		71,530		(25,067		)	46,463
Developed product rights ⁽³⁾	11.9	180,930		(6,513		)	174,417		2,000		(191		)	1,809
Total	12.5	$	271,536	$	(91,557	)	$	179,979	$	93,136	$	(39,043	)	$	54,093

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(1)	The Company amortizes intangible assets related to Angiox through the end of its patent life.


(2)	The Company amortizes intangible assets related to the product licenses over their expected useful lives.


(3)	The Company amortizes intangible assets related to developed product rights over the remaining life of the patents.

In the third quarter of 2014, the Company paid to third parties $15.0 million upon regulatory approval of Orbactiv. In addition, in the second quarter of 2014 the Company completed its acquisition of Tenaxis and Tenaxis became a wholly owned subsidiary of the Company. The Company classified the $15.0 million payment to third parties and the intangible assets obtained from Tenaxis as developed products rights. In the fourth quarter of 2014, the Company reclassified in-process research and development of $69.5 million related to Orbactiv, to developed product rights and commenced amortizing.

Amortization expense was $52.5 million, $28.5 million and $4.4 million for the years ended December 31, 2014, 2013 and 2012, respectively. The Company expects annual amortization expense related to these intangible assets to be $14.6 million, $13.2 million, $13.3 million, $13.3 million and $12.9 million for the years ending December 31, 2015, 2016, 2017, 2018 and 2019, respectively, with the balance of $112.6 million being amortized thereafter. Amortization of customer relationships, distribution agreements and trademarks are recorded in selling, general and administrative expense on the consolidated statements of income. Amortization of developed product and product licenses are recorded in cost of revenue on the consolidated statements of income.

The following information details the carrying amounts of the Company’s intangible assets not subject to amortization:



	As of December 31, 2014						As of December 31, 2013
	Gross Carrying Amount		Adjustments		Net Carrying Amount		Gross Carrying Amount		Adjustments		Net Carrying Amount
	(In thousands)
Intangible assets not subject to amortization:
In-process research and development	$	650,680	$	—	$	650,680	720,180		$	—	$	720,180
Recothrom option	62,000		—		62,000		62,000		—		62,000
Total	$	712,680	$	—	$	712,680	$	782,180	$	—	$	782,180

The changes in the carrying amount of goodwill for the years ended December 31, 2014 and December 31, 2013 are as follows:



	December 31, 2014		December 31, 2013
	(In thousands)
Balance at beginning of period	$	257,694	$	14,671
Goodwill resulting from the acquisition of Tenaxis	25,063		—
Goodwill resulting from the acquisition of Incline	—		102,613
Goodwill resulting from the acquisition of Recothrom	—		21,000
Goodwill resulting from the acquisition of ProFibrix	—		52,037
Goodwill resulting from the acquisition of Rempex	—		68,632
Translation adjustments	3,775		(1,259		)
Balance at end of period	$	286,532	$	257,694

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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