Intangible Assets

9 Months Ended

Sep. 30, 2021

Intangible Assets Net Excluding Goodwill [Abstract]

Intangible Assets

5. INTANGIBLE ASSETS

On August 15, 2019, the Company received FDA approval of WAKIX (pitolisant) for the treatment of excessive daytime sleepiness (“EDS”) in adult patients with narcolepsy. This event triggered a milestone payment of $75,000 associated with the License Agreement (discussed below) which the Company capitalized as an intangible asset and paid in November of 2019. The Company determined a useful life of 10 years for such intangible asset and the remaining useful life was 8.00 years as of September 30, 2021. Prior to this event,

all other milestones associated with the License Agreement were expensed through research and development as they did not meet the criteria to be recognized as an intangible asset.

On October 13, 2020, the Company received notice that the FDA approved the New Drug Application (“NDA”) for WAKIX for the treatment of cataplexy in adult patients with narcolepsy. This event triggered a milestone payment of $100,000 associated with the License Agreement which the Company capitalized as an intangible asset and paid in January of 2021. The Company determined a useful life of 9 years for such intangible asset and the remaining useful life was 8.00 years as of September 30, 2021. Amortization expense was $4,573 and $1,867 for the three months ended September 30, 2021 and 2020, respectively, and $13,781 and $5,560, for the nine months ended September 30, 2021 and 2020, respectively, and is recorded in general and administrative expenses on the unaudited condensed consolidated statements of operations and comprehensive income (loss).

The Company expects the future annual amortization expense for the unamortized intangible assets to be as follows:

Years ending December 31,
2021 (excluding the nine months ended September 30, 2021)	$	4,643
2022		18,570
2023		18,570
2024		18,570
2025		18,570
Thereafter		69,639
Total	$	148,562

The gross carrying amount and net book value of the intangible assets is as follows:

	As of
	September 30,		December 31,
	2021		2020
Gross Carrying Amount	$	175,000	$	175,000
Accumulated Amortization		(26,438)		(12,657)
Net Book Value	$	148,562	$	162,343