Intangible Asset (Tables)

3 Months Ended

Mar. 31, 2020

Intangible Asset

Carrying amount of Nucynta intangible

	As of March 31,		As of December 31,
	2020		2019
Gross carrying amount	$	521,170	$	154,089
Accumulated amortization		(134,881)		(124,586)
Intangible asset, net	$	386,289	$	29,503

		Gross Carrying Value		Accumulated Amortization		Net Book Value
Intangible Asset, net
Cost basis as of acquisition date	$	515,627	$	—	$	515,627
Amortization expense from acquisition date through Third Amendment Date		—		(107,662)		(107,662)
Adjustment due to the remeasurement of liability as of Third Amendment Date		(369,581)		—		(369,581)
Additional costs incurred as of Third Amendment Date(1)		8,043		—		8,043
Amortization expense from Amendment Date through fiscal year end		—		(2,172)		(2,172)
Balance as of December 31, 2018	$	154,089	$	(109,834)	$	44,255
Amortization expense		—		(14,752)		(14,752)
Balance as of December 31, 2019	$	154,089	$	(124,586)	$	29,503
Amortization expense through Nucynta Acquisition		—		(1,754)		(1,754)
Additional cost incurred from Nucynta Acquisition		367,081		—		367,081
Amortization expense from Nucynta Acquisition through period end		—		(8,541)		(8,541)
Balance as of March 31, 2020:	$	521,170	$	(134,881)	$	386,289

(1) Represents fair value of warrant issued in connection with the Amendment to the Nucynta Commercialization Agreement.

Summary of costs included in acquired asset

Acquisition consideration:
Base purchase price	$	375,000
Cash paid for inventory		6,030
Transaction costs		6,297
Reduction for 2020 cash transferred to Assertio under the prior Nucynta Commercialization Agreement(1)		(13,071)
Reduction for accrued royalty obligation discharged upon closing(1)		(1,145)
Total acquisition consideration:	$	373,111

(1) Represents $14,216 total reduction to the base purchase price comprising of $13,071 of cash payments transferred to Assertio under the prior Nucynta Commercialization Agreement as well as a reduction for discharged pre-acquisition accrued royalties based on sales from January 1, 2020 through closing.

The Company then allocated the consideration transferred to the individual assets acquired on a relative fair value basis as summarized in the table below:

Assets acquired:
Nucynta Intangible Asset	$	367,081
Inventory		6,030
Total consideration allocated to assets acquired:	$	373,111

Summary of amortization expense

	Three months ended March 31,
		2020		2019
Nucynta amortization expense included in cost of product revenues	$	10,295	$	3,688