Goodwill and Intangible Assets

3 Months Ended

Sep. 30, 2022

Goodwill and Intangible Assets Disclosure [Abstract]


10.			Intangible Assets

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


	Successor				Predecessor
	September 30, 2022				December 31, 2021
	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Amortizable:
Completed technology	$	3,041.2	$	182.1	$	10,404.0	$	5,160.4
License agreements	—		—		120.1		82.1
Trademarks	—		—		77.7		26.9


Total	$	3,041.2	$	182.1	$	10,601.8	$	5,269.4
Non-Amortizable:
Trademarks	$	—			$	35.0
In-process research and development	121.3				81.0
Total	$	121.3			$	116.0

As part of fresh-start accounting, as of the Effective Date, the Company wrote-off the existing intangible assets and accumulated amortization of the Predecessor and recorded $3,152.2 million to reflect the fair value of intangible assets of the Successor (see also Note 3). Such adjustment included $100.0 million in relation to the Company's PRV that was awarded under a FDA program intended to encourage the development of certain product applications for therapies used to treat or prevent material threat medical countermeasures. On June 30, 2022, subsequent to the Effective Date, the Company completed the sale of its PRV for $100.0 million and received net proceeds of $65.0 million as the buyer remitted the remaining $35.0 million to the General Unsecured Claims Trustee pursuant to the terms of (i) the Plan, and (ii) that certain General Unsecured Claims Trust Agreement entered into in connection with the Plan.

Intangible assets of the Successor as of the Effective Date consisted of the following:


	Carrying Amount		Amortization Method	Amortization Period (in years)	Discount Rate	Segment
Amortizable completed technology:
Acthar Gel	$	1,069.0	Sum of the years digits	13.5	14.2%	Specialty Brands
Therakos	913.8		Sum of the years digits	10.0	14.0	Specialty Brands
Amitiza	84.5		Sum of the years digits	3.0	14.0	Specialty Brands
INOmax	652.9		Sum of the years digits	9.0	14.0	Specialty Brands
StrataGraft	56.8		Straight-line	11.0	14.0	Specialty Brands
Generics	71.4		Straight-line	5.0	13.3	Specialty Generics
APAP	70.5		Straight-line	20.5	13.0	Specialty Generics
	2,918.9

Non-Amortizable in-process research and development:
Terlivaz (1)	104.8		Straight-line	7.0	15.0	Specialty Brands
Generics IPR&D	128.5		Not applicable	Not applicable	14.0	Specialty Generics
	233.3
	$	3,152.2

(1)Subsequent to the Effective Date, Terlivaz was approved by the FDA and was transferred to amortizable, finite-lived completed technology. See further discussion below.

Amitiza

Beginning January 1, 2022 (Predecessor), 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 $21.7 million, which impacted basic loss per share by $0.26 for the period January 1, 2022 through June 16, 2022 (Predecessor), respectively.

Terlivaz

On June 9, 2022, the Company resubmitted its new drug application for Terlivaz to the FDA. On September 14, 2022, the Company announced that the FDA had approved Terlivaz for injection. Upon FDA approval, the Company transferred the total $104.8 million of asset value from non-amortizable indefinite-lived acquired IPR&D rights to amortizable, finite-lived completed technology and will begin amortization of the asset in tandem with the first commercial shipment of the product during the fourth quarter of fiscal 2022. The FDA approval gave rise to a $17.5 million milestone payable, which remained unpaid as of September 30, 2022 (Successor). A corresponding intangible asset was recorded as of September 30, 2022 (Successor), which will be amortized over the useful life of the related asset beginning with the first commercial shipment of the product during the fourth quarter of fiscal 2022.

Intangible asset amortization expense was as follows:



	Successor		Predecessor
	Three Months Ended September 30, 2022		Three Months Ended September 24, 2021
Amortization expense	$	136.6	$	145.3


	Successor		Predecessor
	Period from June 17, 2022 through September 30, 2022		Period from January 1, 2022 through June 16, 2022		Nine Months Ended September 24, 2021
Amortization expense	$	182.1	$	281.8	$	435.8

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


	Successor
Remainder of Fiscal 2022	$	136.5
Fiscal 2023	509.3
Fiscal 2024	446.1
Fiscal 2025	385.1
Fiscal 2026	337.5