INTANGIBLE ASSETS AND GOODWILL

9 Months Ended

Sep. 30, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets

The following table summarizes the net-book-value and estimated remaining life of the Company’s intangible assets as of September 30, 2020:


(In thousands)	Weighted Average Remaining Life (Years)	Cost		Accumulated Amortization		Net Balance at September 30, 2020
Finite-lived intangible assets
Trade name	15.2	$	100,700	$	(5,683)	$	95,017
Customer relationships	13.1	2,700		(359)		2,341
Patents	4.0	10,441		(5,089)		5,352
Acquired developed technology	9.2	814,171		(73,022)		741,149
Supply agreements	6.8	30,000		(3,538)		26,462
Internally developed technology	2.4	1,883		(750)		1,133
Total finite-lived intangible assets		959,895		(88,441)		871,454
Internally developed technology in process	n/a	206		—		206
Total intangible assets		$	960,101	$	(88,441)	$	871,660

The following table summarizes the net-book-value and estimated remaining life of the Company’s intangible assets as of December 31, 2019:


(In thousands)	Weighted Average Remaining Life (Years)	Cost		Accumulated Amortization		Net Balance at December 31, 2019
Finite-lived intangible assets
Trade name	15.9	$	100,700	$	(961)	$	99,739
Customer relationships	13.6	2,700		(224)		2,476
Patents	8.8	22,690		(5,974)		16,716
Acquired developed technology	9.9	806,371		(12,345)		794,026
Supply agreements	7.5	30,000		(571)		29,429
Internally developed technology	2.5	1,229		(336)		893
Total finite-lived intangible assets		963,690		(20,411)		943,279
In-process research and development	n/a	200,000		—		200,000
Internally developed technology in process	n/a	271		—		271
Total intangible assets		$	1,163,961	$	(20,411)	$	1,143,550

As of September 30, 2020, the estimated future amortization expense associated with the Company’s finite-lived intangible assets for each of the five succeeding fiscal years is as follows:


(In thousands)
2020	$	23,357
2021	93,322
2022	93,116
2023	92,812
2024	92,421
Thereafter	476,426
	$	871,454

The Company’s acquired intangible assets are being amortized on a straight-line basis over the estimated useful life. The amortization expense recorded from these intangible assets is reported in amortization of acquired intangible assets on the condensed consolidated statements of operations.

During the third quarter of 2020, the Company began discussions with Biocartis regarding the termination of its agreements with Biocartis related to the development of an in vitro diagnostic (“IVD”) version of the Oncotype DX Breast Recurrence Score test. As a result, and in connection with the preparation of the financial statements, the Company recorded a non-cash, pre-tax impairment loss of $200.0 million related to the in-process research and development intangible asset that was initially recorded as part of the combination with Genomic Health. The impairment is recorded in intangible asset impairment charge in the condensed consolidated statement of operations for the three and nine months ended September 30, 2020. See Note 7 for additional information on Biocartis.

During the third quarter of 2020, the Company abandoned certain research and development assets acquired through an asset purchase agreement with Armune Biosciences, Inc. in 2017. These assets were expected to complement the Company’s product pipeline and were expected to have alternative future uses at the time of acquisition; however, due to changes in strategic priorities and efforts during the third quarter of 2020, these assets are no longer expected to be utilized to advance the Company’s product pipeline. As a result, and in connection with the preparation of the financial statements, the Company wrote-off the gross cost basis of the intangible asset of $12.2 million and accumulated amortization of $2.5 million as of September 30, 2020. This write-off resulted in a non-cash, pre-tax impairment loss of $9.7 million, which is recorded in intangible asset impairment charge in the condensed consolidated statement of operations for the three and nine months ended September 30, 2020.

There were no impairment losses for the three and nine months ended September 30, 2019.

Goodwill

As a result of the acquisition of Paradigm Diagnostics, Inc. (“Paradigm”) and Viomics, Inc. (“Viomics”) in March 2020, the Company recognized goodwill of $30.4 million, which includes an immaterial post-acquisition adjustment to goodwill in the second quarter of 2020. Refer to the Company’s 2019 10-K for further discussion on goodwill recorded from previous business combinations.

The Company evaluates goodwill for possible impairment in accordance with ASC 350 on an annual basis during the fourth quarter, or more frequently if events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Qualitative factors considered in this assessment include industry and market conditions, overall financial performance, and other relevant events and factors affecting the Company's business. Based on the qualitative assessment, if it is determined that the fair value of goodwill is more likely than not to be less than its carrying amount, the fair value of a reporting unit will be calculated and compared with its carrying amount and an impairment charge will be recognized for the amount that the carrying value exceeds the fair value. Due to the impact of COVID-19 on the Company’s operations, the Company performed a qualitative assessment of goodwill to determine if an event indicating impairment was present. No such indicators were identified as of September 30, 2020. There were no impairment losses for the periods ended September 30, 2020 and September 30, 2019. During the nine months ended September 30, 2020, the Company recognized a measurement period adjustment to goodwill of $4.0 million related to an increase in Genomic Health’s pre-acquisition deferred tax liability due to finalization of certain income-tax related items.

The change in the carrying amount of goodwill for the periods ended September 30, 2020 and December 31, 2019 is as follows:


(In thousands)
Balance, January 1, 2019	$	17,279
Genomic Health acquisition	1,185,918
Balance, December 31, 2019	1,203,197
Paradigm & Viomics acquisition	30,431
Genomic Health acquisition adjustment	4,044
Balance, September 30, 2020	$	1,237,672