Intangible Assets and Goodwill

6 Months Ended

Jun. 30, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

The following table sets forth the carrying amounts and accumulated amortization of the Company’s intangible assets:



	As of June 30, 2016								As of December 31, 2015
	Weighted Average Useful Life (years)	Gross Carrying Amount		Accumulated Amortization and Other Charges			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization and Other Charges			Net Carrying Amount
		(in thousands)
Amortizable intangible assets:
Product licenses⁽¹⁾	16.8	$	30,000	$	(1,466	)	$	28,534	$	31,500	$	(7,869	)	$	23,631
Developed product rights⁽²⁾	16.3	370,560		(24,555		)	346,005		373,090		(14,121		)	358,969
Total amortizable intangible assets	16.3	400,560		(26,021		)	374,539		404,590		(21,990		)	382,600

Intangible assets not subject to amortization:
In-process research and development	—	$	253,620	$	—		$	253,620	$	253,620	$	—		$	253,620
Total intangible assets not subject to amortization	—	253,620		—			253,620		253,620		—			253,620
Total intangible assets		$	654,180	$	(26,021	)	$	628,159	$	658,210	$	(21,990	)	$	636,220

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


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

In the second quarter of 2016, as part of the sale of the Non-Core ACC Products, the Company sold product licenses and developed product rights of $5.2 million. See Note 15, “Dispositions,” for further details on the sale of the Non-Core ACC Products.

The Company recognized amortization expense of approximately $6.6 million and $5.4 million for the three months ended June 30, 2016 and 2015, respectively, and approximately $12.9 million and $7.1 million during the six months ended June 30, 2016 and 2015, respectively, related to its intangible assets. The Company expects amortization expense related to its intangible assets to be $12.9 million for the last six months of 2016. The Company expects annual amortization expense related to its intangible assets to be $25.9 million, $25.9 million, $25.9 million, $25.9 million and $24.9 million for the years ending December 31, 2017, 2018, 2019, 2020 and 2021, respectively, with the balance of $233.1 million being amortized thereafter. The Company records amortization expense in cost of revenue in the accompanying condensed consolidated statements of operations.

The changes in the carrying amount of goodwill for the six months ended June 30, 2016 were as follows:



	June 30, 2016
	(in thousands)
Balance as of December 31, 2015	$	289,441
Allocation of goodwill to the Non-Core ACC Products	(33,812		)
Balance as of June 30, 2016	$	255,629

In the second quarter of 2016, the Company allocated approximately $33.8 million of its goodwill to the sale of the Non-Core ACC Products. See Note 15, “Dispositions,” for further details on the sale of the Non-Core ACC Products.

- 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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