Intangible assets, in-process research and development

6 Months Ended

Jun. 30, 2016

Intangible assets and in-process research and development [Abstract]

Intangible assets, in-process research and development

5. Intangible assets and in-process research and development

As of June 30, 2016, $41.8 million of IPR&D assets related to the Company's otlertuzumab product candidate is included in the Aptevo segment.

Intangible assets consisted of the following:

	Biodefense			Aptevo
(in thousands)	Segment			Segment			Total
Cost basis
Balance at December 31, 2015	$	55,790		$	20,809		$	76,599
Additions		-			-			-
Balance at June 30, 2016	$	55,790		$	20,809		$	76,599

Accumulated amortization
Balance at December 31, 2015	$	(15,857	)	$	(3,368	)	$	(19,225	)
Amortization		(3,557	)		(1,172	)		(4,729	)
Balance at June 30, 2016	$	(19,414	)	$	(4,540	)	$	(23,954	)

Net balance at June 30, 2016	$	36,376		$	16,269		$	52,645

Amortization expense consisted of the following:

	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2016		2015		2016		2015

Biodefense segment	$	1,778	$	2,014	$	3,557	$	3,777
Aptevo segment		587		378		1,172		757
Total amortization expense	$	2,365	$	2,392	$	4,729	$	4,534

As of June 30, 2016, the weighted average amortization period remaining for intangible assets in the Biodefense and Aptevo segments was 81 and 91 months, respectively.

In July 2016, the Company determined the pending spin-off of Aptevo was a potential indicator of impairment for the definite-lived intangible assets, in-process research and development indefinite-lived intangible assets and the goodwill within the Aptevo reporting unit. The Company completed an undiscounted cash flow recoverability test for the definite-lived intangibles and qualitative assessments for the indefinite-lived intangible assets, as well as the reporting unit and concluded that there was no impairment.

- 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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