Goodwill and Intangible Assets

9 Months Ended

Sep. 27, 2019

Goodwill and Intangible Assets Disclosure [Abstract]



11.	Intangible Assets

Stannsoporfin

During the three months ended June 28, 2019, the Company recognized a full impairment on its in-process research and development ("IPR&D") asset related to stannsoporfin of $113.5 million as the Company will no longer pursue this development product.

VTS-270

VTS-270 is the Company’s development product to treat Niemann-Pick Type C, a complicated, ultra-rare neurodegenerative disease that typically presents in childhood and is ultimately fatal. The results of the Company’s completed registration trial for the product did not show a statistically significant separation from placebo. Neither the VTS-270 nor the placebo arm showed disease progression as would be expected for a neurodegenerative condition over 52 weeks of observation. The U.S. Food and Drug Administration ("FDA") indicated to the Company at a Type A meeting in August 2018 that their view on the potential approvability will be based on the totality of data, not a single study or endpoint. Accordingly, the Company’s review of the data from the Phase 2b/3 trial, including the longer term open label portion, continues to proceed and is being assessed in combination with several other available data sources. A better understanding of the potential benefit of VTS-270 will emerge as the Company carefully considers the totality of data available and continues to work with the primary investigators and the FDA to define a viable path to a new drug application (NDA). The Company will continue to assess the impact of any changes to planned revenue or earnings on the fair value of the associated IPR&D asset of $274.5 million included within intangible assets, net on the unaudited condensed consolidated balance sheet as of September 27, 2019.

The Company annually tests the indefinite-lived intangible assets for impairment, or whenever events or changes in circumstances indicate that the carrying value may not be recoverable by either a qualitative or income approach. Management relies on a number of qualitative factors when considering a potential impairment such as changes to planned revenue or earnings that could affect significant inputs used to determine the fair value of the indefinite-lived intangible asset.

The gross carrying amount and accumulated amortization of intangible assets were comprised of the following at the end of the respective period:



	September 27, 2019				December 28, 2018
	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Amortizable:
Completed technology	$	10,456.9	$	3,621.0	$	10,467.9	$	2,980.6
License agreements	120.1		73.1		120.1		70.1
Trademarks	77.7		19.3		81.9		18.1
Customer relationships	—		—		27.5		14.1
Total	$	10,654.7	$	3,713.4	$	10,697.4	$	3,082.9
Non-Amortizable:
Trademarks	$	35.0			$	35.0
In-process research and development	519.8				633.3
Total	$	554.8			$	668.3

Ofirmev^®

Since the Company's acquisition of Ofirmev in March 2014, the related completed technology intangible asset had been amortized using the straight-line method over a useful life of eight years. As the product nears loss of exclusivity, the Company believes it is better positioned to reliably determine the pattern in which the remaining economic benefits of the intangible asset are consumed. As a result, during the three months ended March 29, 2019, the Company concluded that the sum of the years digits method, an accelerated method of amortization, would more accurately reflect the consumption of the economic benefits over the remaining useful life of the asset. This change in amortization method resulted in additional amortization expense of $23.8 million and $89.5 million during the three and nine months ended September 27, 2019, respectively, which impacted basic earnings per share for the respective periods by $0.28 and $1.07 per share.

Intangible asset amortization expense

Intangible asset amortization expense was as follows:



	Three Months Ended				Nine Months Ended
	September 27, 2019		September 28, 2018		September 27, 2019		September 28, 2018
Amortization expense	$	210.4	$	184.2	$	649.8	$	546.5

The estimated aggregate amortization expense on intangible assets owned by the Company is expected to be as follows:



Remainder of Fiscal 2019	$	203.6
Fiscal 2020	754.2
Fiscal 2021	657.6
Fiscal 2022	585.1
Fiscal 2023	581.1