Deferred Legal Fees and Intangible Assets

6 Months Ended

Jun. 30, 2016

Deferred Legal Fees and Intangible Assets

Deferred Legal Fees and Intangible Assets

6.  Deferred Legal Fees and Intangible Assets

Deferred legal fees have been incurred in connection with patent litigation for Oxtellar XR and Trokendi XR. As of June 30, 2016 and December 31, 2015, the Company had deferred legal fees of $16.4 million and $22.5 million, respectively.

The following sets forth the gross carrying amount and related accumulated amortization of the intangible asset, in thousands:

		June 30, 2016
		(unaudited)				December 31, 2015
		Gross Carrying		Accumulated		Gross Carrying		Accumulated
	Average Life	Amount		Amortization		Amount		Amortization
Capitalized patent defense costs	9.5 - 11 years	$	16,318	$	533	$	994	$	18

The Company prevailed in a lawsuit related to Oxtellar XR in February 2016, at which time the Company began amortizing the costs associated with that litigation.

The net book value of intangible assets was $15.8 million as of June 30, 2016 and was $1.0 million as of December 31, 2015. The increase in intangible assets reflects the successful outcome of the lawsuit related to Oxtellar XR in February 2016. There is an offsetting reduction in the amount carried as deferred legal fees, as described above. Amortization expense on intangible assets was approximately $0.4 million and $0.5 million for the three and six months ended June 30, 2016 and was approximately $57,000 and $115,000 for the three and six months ended June 30, 2015.

There were no indicators of impairment identified at June 30, 2016 or December 31, 2015.