Goodwill and Intangible Assets, Net

12 Months Ended

Dec. 31, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets, Net

Goodwill and Intangible Assets, Net

Goodwill

Goodwill represents the excess of the USWM Acquisition purchase price over the fair value of the tangible and identifiable intangible net assets acquired. The following table sets forth the reconciliation of the goodwill balance as of December 31, 2020 (dollars in thousands):

	December 31, 2020
Balance at December 31, 2019	$	—
Initial estimate of Goodwill at Closing Date	88,095
Measurement period adjustment	(10,184)
Balance at December 31, 2020	$	77,911

In 2020, the Company recorded cumulative measurement period adjustments to the fair value of intangibles, inventory, and contingent consideration liability that resulted in a corresponding adjustment of $10.2 million to the initial estimate of

goodwill recorded at Closing Date. Refer to Note 3 for further discussion of these measurement period adjustments related to the USWM Acquisition.

As of December 31, 2020, there were no identified indicators of impairment.

Intangible assets, net

Intangible assets include: patent defense costs, which are deferred legal fees incurred in conjunction with defending patents for Oxtellar XR and Trokendi XR; acquired developed technology and product rights, and an acquired IPR&D asset associated with the USWM acquisition. The Company amortizes intangible assets over their useful lives, except for the acquired IPR&D asset.

The following table sets forth the gross carrying amounts and related accumulated amortization of intangible assets (dollars in thousands):

	Remaining Weighted- Average Life (Years)	December 31, 2020		December 31, 2019
Acquired In-process Research & Development		$	123,000	$	—
Intangible assets subject to amortization
Acquired Developed Technology and Product Rights	10 - 12	232,000		—
Capitalized patent defense costs	2.00 - 6.25	43,579		43,375
Less accumulated amortization		(34,237)		(18,535)
Total intangible assets, net		$	364,342	$	24,840

U.S. patents covering Oxtellar XR and Trokendi XR will expire no earlier than 2027. As regards Trokendi XR, the Company entered into settlement agreements that allow third parties to enter the market by January 1, 2023, or earlier under certain circumstances.

Amortization expense for intangible assets was approximately $15.7 million, $5.2 million, and $5.2 million for the years ended December 31, 2020, 2019, and 2018, respectively.

Anticipated annual amortization expense for intangible assets in 2021 and 2022 is estimated at $24.2 million per year. Anticipated annual amortization expense for intangible assets from 2023 to 2025 is estimated at $21.4 million per year.

As of December 31, 2020, there were no identified indicators of impairment.