Goodwill and Intangible Assets

9 Months Ended

Sep. 25, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

8. Intangible Assets

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

	September 25, 2020				December 27, 2019
	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Amortizable:
Completed technology	$	10,394.6	$	4,417.0	$	10,456.9	$	3,822.8
License agreements	120.1		77.1		120.1		74.1
Trademarks	77.7		22.7		77.7		20.1
Total	$	10,592.4	$	4,516.8	$	10,654.7	$	3,917.0
Non-Amortizable:
Trademarks	$	35.0			$	35.0
In-process research and development	245.3				245.3
Total	$	280.3			$	280.3

Ofirmev®

During the three months ended June 26, 2020, due to decreased demand as a result of the deprioritization of non-critical medical treatment in the face of the COVID-19 pandemic, along with increased generic competition anticipated in the marketplace post the product's loss of exclusivity in December 2020, the Company identified a triggering event with respect to the Ofirmev intangible asset within the Specialty Brands segment and assessed the recoverability of the definite-lived asset. Additionally, the Company evaluated whether these events warranted a revision to the remaining period of amortization that previously extended to March 2022. As a result of this analysis, the Company revised the useful life to end December 25, 2020, commensurate with the final period of market exclusivity. After this change in estimate of the asset's useful life, the Company determined that the undiscounted cash flows related to the Ofirmev intangible asset were less than its net book value, which required the Company to record an impairment charge for the difference between the fair value of the Ofirmev intangible asset and its net book value.

The Company determined the fair value of the Ofirmev intangible asset using the income approach, a level three measurement technique. For purposes of determining fair value, the Company made various assumptions regarding estimated future cash flows, the discount rate and other factors in determining the fair value of the intangible asset. The Company's projections in relation to the Ofirmev intangible asset included long-term net sales and operating income at lower than historical levels. These changes in assumptions resulted in a fair value of the Ofirmev intangible asset that was less than its net book value. Therefore, the Company recorded an impairment charge of $63.5 million during the three months ended June 26, 2020. The remaining intangible asset value of $26.1 million as of September 25, 2020 will be amortized prospectively over the remaining useful life.

Terlipressin

During September 2020, the U.S. Food and Drug Administration ("FDA") issued a Complete Response Letter ("CRL") regarding the Company's New Drug Application ("NDA") seeking approval for the investigational agent terlipressin to treat adults with hepatorenal syndrome type 1 ("HRS-1"). The CRL stated that, based on the available data, the agency cannot approve the terlipressin NDA in its current form and requires more information to support a positive risk-benefit profile for terlipressin for patients with HRS-1.

In response to receipt of the CRL, on October 26, 2020, the Company had an End of Review Meeting with the FDA where both parties engaged in constructive dialogue in an effort to clarify a viable path to approval. As the Company continues to engage with the FDA over the coming months, it will continue to assess the impact of any changes to planned revenue or earnings on the fair value of the associated in-process research and development asset of $81.0 million included within intangible assets, net on the unaudited condensed consolidated balance sheets as of September 25, 2020 and December 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.

Intangible asset amortization expense

Intangible asset amortization expense was as follows:

	Three Months Ended				Nine Months Ended
	September 25, 2020		September 27, 2019		September 25, 2020		September 27, 2019
Amortization expense	$	210.6	$	210.4	$	599.8	$	649.8

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

Remainder of Fiscal 2020	$	171.4
Fiscal 2021	581.1
Fiscal 2022	581.1
Fiscal 2023	581.1
Fiscal 2024	581.1