Intangible Assets

12 Months Ended

Jun. 30, 2012

Intangible Assets

Intangible Assets

Note 8.  Intangible Assets

Intangible assets, net as of June 30, 2012 and 2011, consist of the following:

	Gross Carrying Amount				Accumulated Amortization						Intangible Assets, Net
(In thousands)	2012		2011		2012			2011			2012		2011
JSP Marketing and Dist. Rights	$	16,062	$	16,062	$	(12,939	)	$	(11,154	)	$	3,123	$	4,908
Cody Labs Import License	582		582		(154		)	(115		)	428		467
Morphine Sulfate Oral Solution NDA	398		—		(24		)	—			374		—
Other ANDA Product Rights(A)	600		600		(96		)	(65		)	504		535
	$	17,642	$	17,244	$	(13,213	)	$	(11,334	)	$	4,429	$	5,910

(A)The amounts above include the product line covered by the ANDA’s purchased in August 2009 for $149.  These ANDA’s are not being amortized at this time and will continue to be un-amortized intangible assets until such time as the Company begins shipping these products.

The following table summarizes intangible assets, net activity

(In thousands)	Intangible assets, net
Balances at July 1, 2010	$	7,785
Additions	—
Amortization	(1,875		)
Impairments	—
Balances at June 30, 2011	5,910
Additions	398
Amortization	(1,879		)
Impairments	—
Balances at June 30, 2012	$	4,429

There were no impairments related to intangible assets during fiscal year 2012 and 2011.

Fiscal Year 2012 Activity

As of July 2010, Lannett stopped manufacturing and distributing Morphine Sulfate Oral Solution.  Lannett filed a MS NDA in February 2010 and received FDA approval on the submission in June 2011.  As of August 2011, the Company has restarted shipments of the MS product, but, as of June 30, 2012, it has not received final determination on whether any of the fee is refundable.  As a result of the FDA approval of the MS NDA, an estimate of the nonrefundable amount totaling $398 determined, based upon input from a third party analysis, was reclassified to intangible assets upon shipment of the product.  Amortization began upon shipment of the product and will continue over the product’s estimated 15 year remaining useful life.  Amortization will be adjusted prospectively once the nonrefundable amount is finalized.

For the fiscal years ended June 30, 2012, 2011 and 2010, the Company incurred amortization expense of approximately $1,879, $1,875, and $1,833, respectively.

Future annual amortization expense consists of the following:

(In thousands) Fiscal Year Ending June 30,	Annual Amortization Expense
2013	$	1,882
2014	1,435
2015	97
2016	97
2017	97
Thereafter	672
	$	4,280

The amounts above do not include the product line covered by the ANDA’s purchased in August 2009 for $149, as amortization will begin when the Company starts shipping these products.