In May 2022, Apotex Corp. and its affiliate, Apotex Inc. (collectively, “Apotex”), initiated an at-risk launch of a generic version of PENNSAID 2% in the United States. The at-risk launch was expected to have an on-going negative impact on PENNSAID 2% net sales. As a result, the Company determined the generic product launch and the expected impact on PENNSAID 2% to be a triggering event to conduct an interim impairment analysis and an indicator it was more likely than not that the carrying amount of its former inflammation reporting unit exceeded its fair value as of June 30, 2022.

The Company determined the fair value of the former inflammation reporting unit as of June 30, 2022 using the income approach. The cash flow projections were based on a financial forecast developed by management that included net sales projections, which are updated annually, or more frequently based on events that may significantly impact forecasts.

The Company’s interim goodwill impairment test in the second quarter of 2022 indicated an impairment, which represented the difference between the estimated fair value of the former inflammation reporting unit and its carrying value. As a result, the Company recognized an impairment charge of $56.2 million in June 2022 representing the full amount of goodwill for the former inflammation reporting unit.

The Company’s annual goodwill impairment test in the fourth quarter of 2022 did not indicate that it was more likely than not that the fair value of the reporting unit was less than the carrying value.

During the fourth quarter of 2022, management realigned the Company’s reportable segments to reflect changes in the manner in which the CODM assesses financial information for decision-making purposes. The Company transitioned its two reportable segments, the inflammation segment and the orphan segment, to one reportable segment for the year ended December 31, 2022. Refer to Note 11 for further details.

As of December 31, 2022, the Company’s finite-lived intangible assets consisted of developed technology related to ACTIMMUNE, KRYSTEXXA, PROCYSBI, RAVICTI, TEPEZZA and UPLIZNA. The intangible assets related to RAYOS developed technology and ACTIMMUNE customer relationships were fully amortized as of December 31, 2022.

In July 2021, in connection with the purchase of a drug product biologics manufacturing facility from EirGen, the Company capitalized $21.8 million of intangible assets which are being amortized over a weighted-average estimated useful life of 16 years. Refer to Note 4 for further details.

On March 15, 2021, in connection with the acquisition of Viela, the Company capitalized $1,460.0 million of developed technology related to UPLIZNA. Refer to Note 4 for further details.

Intangible assets as of December 31, 2022 and 2021 consisted of the following (in thousands):


	As of December 31,
	2022							2021
	Cost Basis		Accumulated Amortization			Net Book Value		Cost Basis		Accumulated Amortization			Net Book Value
Developed technology (1)	$	4,650,292	$	(2,005,327	)	$	2,644,965	$	4,579,171	$	(1,642,427	)	$	2,936,744
In-process research and development (1)		810,000		—			810,000		880,000		—			880,000
Other intangibles		29,894		(10,082	)		19,812		29,894		(6,520	)		23,374
Total intangible assets	$	5,490,186	$	(2,015,409	)	$	3,474,777	$	5,489,065	$	(1,648,947	)	$	3,840,118

(1)

In April 2022, the European Commission issued a legally binding decision based on the favorable recommendation of the CHMP of the EMA to grant a MA for UPLIZNA for the treatment of adult patients with NMOSD in the EU. As a result, the Company transferred $70.0 million of IPR&D to developed technology in the second quarter of 2022. As of December 31, 2022, the remaining IPR&D relating to the Viela acquisition was $810.0 million.

Amortization expense for the years ended December 31, 2022, 2021 and 2020 was $366.5 million, $336.3 million and $255.1 million, respectively. IPR&D is not amortized until successful regulatory approval of a project. As of December 31, 2022, estimated future amortization expense was as follows (in thousands):


2023	$	359,377
2024		359,377
2025		359,377
2026		304,114
2027		253,637
Thereafter		1,028,895
Total	$	2,664,777