BUSINESS COMBINATION (Tables)

9 Months Ended

Sep. 30, 2020

Business Combinations [Abstract]

Schedule of Merger Consideration to be transferred

The following is the Merger Consideration (as defined in the Merger Agreement) was transferred to effect the Merger:

(in thousands)	Total
Deemed (for accounting purposes only) issuance of Foamix shares to Menlo stockholders	$	123,757
Deemed (for accounting purposes only) conversion of Menlo equity awards	7,322
Total consideration*	$	131,079

* This amount reflects total consideration prior to reduction in respect of the CSRs (which had a fair value of $19.6 million as of the Merger Date) that were issued to Foamix shareholders and that reduced the Menlo stockholders’ relative ownership in the combined company. If the effect of the CSRs is included, the total consideration deemed paid by Foamix, as the accounting acquirer, to Menlo stockholders and equity award holders in the Merger would be reduced to approximately $111.4 million, as shown in the purchase price allocation table below.

Schedule of allocation of the purchase price to the fair values of assets acquired and liabilities assumed

The Company completed its analysis of the allocation of the purchase price to the fair values of assets acquired and liabilities assumed as follows:

(in thousands)	March 9, 2020
Cash and cash equivalents	$	38,641
Investment in marketable securities	22,703
Prepaid expenses and other current assets	1,581
In-process research and development	50,300
Goodwill	4,045
Total assets	117,270
Current liabilities	(5,827)
Total liabilities	(5,827)
Estimated purchase price*	$	111,443

* Reflects reduction in the purchase price deemed paid to Menlo stockholders in the Merger on the assumption that the CSRs, in an aggregate value of $19.6 million, convert into additional shares of the combined company for the Foamix shareholders, thereby resulting in a lower percentage of the combined company’s outstanding shares being owned by Menlo stockholders following the Merger.

Schedule of the calculation of goodwill from the merger

The purchase price of the transaction and the excess purchase price over the fair value of the identifiable net assets acquired, are calculated as follows:

(in thousands)	March 9, 2020
Purchase price	$	111,443
Less: fair value of net assets acquired, including other identifiable intangibles	(107,398)
Goodwill	$	4,045

Schedule of indefinite-lived intangible IPRD assets acquired in the merger

The IPR&D recognized relates to Menlo’s once-daily oral serlopitant for the treatment of pruritus (itch) associated with PN that has not reached technological feasibility as follows:

(in thousands)
Intangible asset	Estimated Fair Value
Acquired indefinite life intangible assets*	$	50,300
Fair value of identified intangible assets	$	50,300

* Represents acquired IPR&D assets which are initially recognized at fair value and are classified as indefinite-lived assets until the successful completion or abandonment of the associated research and development efforts. Accordingly, during the research and development period, these assets will not be amortized into earnings; instead these assets will be subject to periodic impairment testing.

Schedule of pro forma

Actual Menlo results of operations included in the condensed consolidated statement of operation for the three and nine months ended September 30, 2020:

(in thousands)	Three months ended September 30, 2020		Nine months ended September 30, 2020
	(Unaudited)
Revenues	$	—	$	—
Loss attributable to Menlo	$	4,100	$	23,737

	Three months ended September 30,				Nine months ended September 30,
	2020		2019		2020		2019
(in thousands, except per share data)	(Unaudited)				(Unaudited)
SUPPLEMENTAL PRO FORMA COMBINED RESULTS OF OPERATIONS:
Revenues	$	3,269	$	—	$	16,707	$	308
Net loss	$	24,912	$	40,016	$	229,994	$	109,563
Loss per share - basic and diluted	$	0.15	$	0.66	$	1.88	$	1.82
Adjustments to the supplemental pro forma combined results of operations, included in the above, are as follows:
Transaction costs	$	—	$	—	$	(14,931)	$	—
Acceleration of stock based compensation	—		—		(7,199)		—
Total Adjustments	$	—	$	—	$	(22,130)	$	—