Intangible Assets

12 Months Ended

Dec. 31, 2022

Intangible Assets

Intangible Assets

7. INTANGIBLE ASSETS

In August 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 under the provisions of the 2017 LCA (defined below) which the Company capitalized as an intangible asset. The Company determined a useful life of 10 years for such intangible asset, and, as of December 31, 2022 the remaining useful life was 6.8 years.

In October 2020, the Company received FDA approval for 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 under the provisions of the 2017 LCA 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, as of December 31, 2022 the remaining useful life was 6.8 years.

In February 2022, the Company attained $500,000 in life-to-date aggregate net sales of WAKIX in the United States. This event triggered a final $40,000 payment under the provisions of the 2017 LCA which the Company capitalized as an intangible asset and paid in March of 2022. The Company determined a useful life of 7.6 years for such intangible asset, and, as of December 31, 2022, the remaining useful life was 6.8 years.

Amortization expense was $22,966, $18,424 and $9,843 for the years ended December 31, 2022, 2021 and 2020, respectively, and is recorded in general and administrative expenses in the 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,
2023	$	23,845
2024		23,845
2025		23,845
2026		23,845
2027		23,845
Thereafter		41,728
Total	$	160,953

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

	As of
	December 31,		December 31,
	2022		2021
Gross Carrying Amount	$	215,000	$	175,000
Accumulated Amortization		(54,047)		(31,081)
Net Book Value	$	160,953	$	143,919