NTANGIBLE ASSETS

Amortizable intangible assets

Ligand License Agreement

In fiscal 2013, the Company entered into an agreement with Ligand Pharmaceuticals Incorporated for a worldwide sublicense for $2.5 million to develop, manufacture and commercialize a drug technology compound including RE-021 or sparsentan (the “Ligand License Agreement”). The cost of the Ligand License Agreement, which is presented net of amortization in the accompanying consolidated balance sheet in intangible assets, net, is being amortized to research and development on a straight-line basis through September 30, 2023. As consideration for the license, we are required to make substantial payments upon the achievement of certain milestones, totaling up to $105.5 million. Should we commercialize sparsentan or any products containing related compounds, we will be obligated to pay to Ligand an escalating annual royalty between 15% and 17% of net sales of all such products.

In September 2015, the license agreement was amended to facilitate sub-licensing in Asia-Pacific. As consideration for the amendment the Company paid $1.0 million. The Company has $3.3 million in intangibles related the Ligand license agreement as December 31, 2015.

Carbetocin Technology

In September 2015, the Company wrote-off the entire value of intangible assets related to Carbetocin. The write-off was deemed appropriate as the Company elected not to pursue any internal development of the asset and attempts to divest it were unsuccessful. The total charge of $4.7 million was included in operating expenses on the consolidated statement of operations and comprehensive income (loss).

Manchester Pharmaceuticals LLC

The Company acquired intangible assets with finite lives related to the Chenodal product rights, trade names, and customer relationships with the values of $71.4 million, $0.2 million, and $0.4 million, respectively. The useful lives related to the acquired product rights, trade names, and customer relationships are expected to be approximately 16, 1 and, 10 years, respectively. Amortization of product rights, trade names and customer relationships are being recorded in selling, general and administrative expense over their respective lives.

In 2015, the Company divested the assets related to Vecamyl, valued at $3.6 million, to Turing Pharmaceuticals. The remaining product rights from the Manchester business combination relate to Chenodal and are $67.8 million as of December 31, 2015.

Thiola License Agreement

In 2014, the Company entered into a license agreement with Mission Pharmacal, in which the Company obtained an exclusive, royalty-bearing license to market, sell and commercialize Thiola (Tiopronin) in the United States and Canada, and a non-exclusive license to use know-how relating to Thiola to the extent necessary to market Thiola. The initial term of the license is 10 years and will automatically renew thereafter for periods of one year.

The Company paid Mission an up-front license fee of $3 million and will pay guaranteed minimum royalties during each calendar year the greater of $2 million or twenty percent (20%) of the Company’s net sales of Thiola through June 30, 2024. As of December 31, 2015, the present value of guaranteed minimum royalties payable is $10.9 million using a discount rate of approximately 11% based on the Company’s current borrowing rate. As of December 31, 2015, the guaranteed minimum royalty current and long term liability is approximately $0.8 million and $10.1 million, respectively, and is recorded as guaranteed minimum royalty in the consolidated balance sheet. The Company has capitalized $24.1 million related to the Thiola asset which consists of the up-front license fee, professional fees, present value of the guaranteed minimum royalties and any additional payments through 2015 in excess of minimum royalties. There is 8.4 years remaining in the initial term of the license agreement.

Cholbam (Kolbam) Asset Purchase

On March 31, 2015, the Company completed its acquisition from Asklepion of all worldwide rights, titles and ownership of Cholbam, including all related contracts, data assets, intellectual property, regulatory assets and the PRV. The Company capitalized $75.9 million and approximately $7.3 million for the US and International economic interest, respectively.

Amortizable intangible assets as of December 31, 2015 (in thousands):



		As of December 31, 2015
	Useful Life	Gross Carrying Amount		Accumulated Amortization			Net Book Value
Chenodal Product Rights	16	$	67,849	$	(7,489	)	$	60,360
Thiola License	10	24,133		(2,793		)	21,340
Economic Interest - U.S. revenue Cholbam	10	75,900		(5,715		)	70,185
Economic Interest - Int'l revenue Cholbam	10	7,336		(552		)	6,784
Ligand License	11	3,300		(765		)	2,535
Manchester Customer Relationships	10	403		(71		)	332
Manchester Trade Name	1	175		(175		)	—
Total		$	179,096	$	(17,560	)	$	161,536

Amortizable intangible assets as of December 31, 2014 (in thousands):



		As of December 31, 2014
	Useful Life	Gross Carrying Amount		Accumulated Amortization			Net Book Value
Chenodal and Vecamyl Product Rights	16	$	71,372	$	(3,420	)	$	67,952
Thiola License	10	15,049		(870		)	14,179
Syntocinon License	20	5,000		(190		)	4,810
Carbetocin Assets	10	5,568		(430		)	5,138
Ligand License	11	2,300		(527		)	1,773
Manchester Customer Relationships	10	403		(31		)	372
Manchester Trade Name	1	175		(134		)	41
Total		$	99,867	$	(5,602	)	$	94,265

The following table summarizes amortization expense for the twelve months ended December 31, 2015, 2014 and 2013 (in thousands):



	Twelve months ended December 31,
	2015		2014		2013
Research and development	$	697	$	823	$	324
Selling, general and administrative	12,534		4,455		—
Total amortization expense	$	13,231	$	5,278	$	324

As of December 31, 2015, amortization expense for the next five years is expected to be as follows (in thousands):



2016	$	15,517
2017	15,474
2018	15,474
2019	15,474
2020	15,476
Thereafter	84,121
Total	$	161,536

As of December 31, 2015 the remaining weighted average period of amortization is 11.06 years.