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Business acquisition
 3 Months Ended
Dec. 31, 2022
Business Combination and Asset Acquisition [Abstract]  
Business acquisition Business acquisitionOn December 1, 2021, the Company acquired all of the outstanding stock of AbX Biologics, Inc. (“Abveris”), a privately-held company providing in vivo antibody discovery services. The acquisition date fair value of the consideration
transferred for Abveris was $102.6 million, consisting of cash totaling $9.5 million, 759,601 shares of the Company’s common stock valued at $66.1 million based on the Company’s closing stock price on December 1, 2021, employee stock awards issued to certain Abveris employees valued at $6.4 million, contingent consideration of $8.5 million, holdbacks of $12.8 million, and an estimated net working capital adjustment of $0.7 million.
The contingent consideration was subject to the attainment of the calendar year 2022 revenue target. The contingent consideration was payable after December 31, 2022 in a combination of cash and up to 334,939 shares of the Company’s common stock. The acquisition date fair value of the contingent consideration was based on forecasted revenue of Abveris relative to the 2022 revenue target as well as the Company’s stock price as of December 1, 2021.
The Company maintains an indemnity and adjustment holdback for the purposes of providing security against any adjustment to the amounts at closing. The indemnity holdback period extends for 18 months from the anniversary of the closing date. The indemnity holdback will be settled by transferring up to 128,351 shares of the Company’s stock, 15,304 options of the Company’s common stock and an immaterial amount of cash. The fair value of the indemnity holdback was $12.5 million as of the acquisition date. The adjustment holdback will be settled by transferring up to 3,416 shares of the Company’s stock, 408 options of the Company’s common stock and an immaterial amount of cash. The holdback adjustment liability was $0.3 million as of the acquisition date. During the three months ended December 31, 2022, the adjustment holdback liability was partially settled by transferring 166 shares.
As of the acquisition date, post-combination compensation expense excluded from the purchase price included employee stock awards issued to certain Abveris employees valued at $41.0 million. This included awards valued at $17.7 million which vest over a two year service period following the acquisition date and awards valued at $3.2 million with no future vesting requirements, which were deemed accelerated by the Company at the acquisition date and expensed within the three months ended December 31, 2021. Finally, post-combination expense included awards initially valued at approximately $20.1 million which may have vest based on achievement of the calendar year 2022 revenue target and continuing employment through the payout date, and for certain employees, additional continuing employment through the two year anniversary of the acquisition date. In the quarter ended December 31, 2022, management determined that the revenue target associated with the performance based awards was not met, and therefore none of these awards vested.
The following table summarizes the final fair value amounts of the assets acquired and liabilities assumed as of the acquisition date, as well as the purchase consideration:
(in thousands)December 1, 2021
Assets acquired 
Cash and cash equivalents$1,306 
Accounts receivable2,309
Other current assets and prepaid expenses1,654
Property, plant and equipment 1,078
Other non-current assets2,970
Intangible assets46,500
Liabilities assumed
Current liabilities3,549
Non-current liabilities846
Deferred tax liability10,545
Fair value of assets acquired and liabilities assumed$40,877 
Goodwill61,768
Total purchase price$102,645 
Consideration transferred
Cash$9,467 
Company common stock72,514
Contingent consideration8,500
Holdback liabilities12,838
Net working capital adjustment(674)
Fair value of purchase consideration$102,645 

The following table summarizes the preliminary estimate of the intangible assets as of the acquisition date:

(in thousands except for years)Estimated
Weighted
Average
Useful Lives
in Years		Estimated Fair
Value
Developed technology14$30,900
Customer relationships1014,700
Trade name3900
Estimated fair value of acquired intangible assets$46,500

The following table provides a reconciliation of contingent consideration and holdbacks balances from acquisition date to December 31, 2022:

(in thousands)Contingent
consideration		HoldbacksTotal
Balance at December 1, 2021 – acquisition date $8,500 $12,164 $20,664 
Change in fair value during the period (6,400)(7,071)(13,471)
Balance at September 30, 2022
$2,100 $5,093 $7,193 
Change in fair value during the period(2,100)(1,621)(3,721)
Balance at December 31, 2022
$— $3,472 $3,472 

The estimated fair value of the contingent consideration liability decreased as the revenue target for calendar year 2022 was not achieved. The estimated fair value of the holdback liability decreased as a result of the change in the Company’s stock price as of December 31, 2022. For the three months ended December 31, 2022, the Company recognized a gain of $3.7
million relating to the change in fair value of acquisition consideration in its condensed consolidated statement of operations.
Issuance of contingent consideration for iGenomX acquisition

In December 2022, the Company determined that the transition milestones specified in the iGenomX acquisition agreement were completed, and the Company became obligated to issue 171,551 shares of its common stock to satisfy the indemnity holdback. The shares of common stock, valued at $4.1 million, were subsequently issued by the Company during January 2023 along with an immaterial cash payment for fractional shares.

In December 2021, the Company determined that the transition milestones specified in the iGenomX acquisition agreement were completed, and the Company became obligated to issue 59,190 shares of its common stock to satisfy the contingent consideration. The shares of common stock, valued at $4.6 million, were subsequently issued by the Company during January 2022 along with an immaterial cash payment for fractional shares.



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