Goodwill and Intangible Assets

3 Months Ended

Apr. 01, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

9. Intangible Assets

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

	April 1, 2022				December 31, 2021
	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Amortizable:
Completed technology	$	10,404.0	$	5,313.5	$	10,404.0	$	5,160.4
License agreements	120.1		83.1		120.1		82.1
Trademarks	77.7		27.8		77.7		26.9
Total	$	10,601.8	$	5,424.4	$	10,601.8	$	5,269.4
Non-Amortizable:
Trademarks	$	35.0			$	35.0
In-process research and development	81.0				81.0
Total	$	116.0			$	116.0

Amitiza

Beginning January 1, 2022, the Company changed its amortization method used for the Amitiza intangible asset from the straight-line method to the sum of the years digits method, an accelerated method of amortization, to more accurately reflect the consumption of economic benefits over the remaining useful life of the asset. This change in amortization method resulted in additional amortization expense of $12.4 million during the three months ended April 1, 2022, which impacted basic loss per share by $0.15.

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, the Company had an End of Review Meeting on October 26, 2020 and a Type A Meeting on January 29, 2021 with the FDA where both parties engaged in constructive dialogue in an effort to clarify a viable path to U.S. approval. On August 18, 2021, the Company resubmitted its NDA for terlipressin to the FDA and on February 18, 2022, the Prescription Drug User Fee Act (or "PDUFA") date, the FDA issued a CRL. In the weeks leading up to the PDUFA date, it became necessary for the Company to identify a new packaging and labeling manufacturing facility, which meant that an inspection by the FDA could not be completed by the PDUFA date. A satisfactory inspection is required before the NDA can be approved. This is the only outstanding issue noted in the CRL, and it is important to note that there were no safety or efficacy issues cited. The Company remains committed to this critically ill patient population, who currently have no approved treatment option in the U.S. for HRS-1 and believes that there is a path to approval in fiscal 2022. The Company 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 April 1, 2022 and December 31, 2021.

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
	April 1, 2022		March 26, 2021
Amortization expense	$	155.1	$	145.3

The estimated aggregate amortization expense on intangible assets owned by the Company and being amortized as of April 1, 2022, is expected to be as follows:

Remainder of Fiscal 2022	$	458.7
Fiscal 2023	593.8
Fiscal 2024	573.5
Fiscal 2025	551.8
Fiscal 2026	526.0