Intangible Assets

9 Months Ended

Mar. 31, 2021

Intangible Assets

Intangible Assets

Note 9. Intangible Assets

Intangible assets, net as of March 31, 2021 and June 30, 2020 consisted of the following:

	Weighted	Gross Carrying Amount				Accumulated Amortization				Intangible Assets, Net
	Avg. Life	March 31,		June 30,		March 31,		June 30,		March 31,		June 30,
(In thousands)	(Yrs.)	2021		2020		2021		2020		2021		2020
Definite-lived:
KUPI product rights	15		83,955		416,154		(2,099)		(125,327)		81,856		290,827
KUPI trade name	2		2,920		2,920		(2,920)		(2,920)		—		—
KUPI other intangible assets	15		19,000		19,000		(6,778)		(5,828)		12,222		13,172
Silarx product rights	15		20,000		20,000		(4,556)		(3,556)		15,444		16,444
Other product rights	10		55,218		50,718		(8,602)		(5,426)		46,616		45,292
Total definite-lived		$	181,093	$	508,792	$	(24,955)	$	(143,057)	$	156,138	$	365,735
Indefinite-lived:
KUPI in-process research and development	—	$	4,000	$	9,000	$	—	$	—	$	4,000	$	9,000
Total indefinite-lived			4,000		9,000		—		—		4,000		9,000
Total intangible assets, net		$	185,093	$	517,792	$	(24,955)	$	(143,057)	$	160,138	$	374,735

For the three months ended March 31, 2021 and 2020, the Company recorded amortization expense of $3.9 million and $8.3 million, respectively. For the nine months ended March 31, 2021 and 2020, the Company recorded amortization expense of $21.1 million and $23.5 million, respectively.

In December 2020, the Company reviewed its product portfolio and decided to discontinue 23 lower gross margin product lines, including product lines that were acquired through various past business and product acquisitions. As a result of the discontinuance and the reduction in net sales and gross margin of certain other product lines, the Company determined that such decision represents a “triggering event” and, therefore, commenced an analysis to determine the potential for impairment of certain long-lived assets, primarily its intangible assets. Based on that analysis, the Company recorded an impairment charge of $193.0 million related to the KUPI product rights intangible assets during the second quarter of Fiscal 2021. The impairment charge is primarily a result of the decline in net sales and gross margin of certain product lines acquired in connection with the KUPI acquisition, including those product lines being discontinued.

In the second quarter of Fiscal 2021, the Company also recorded a $5.0 million impairment charge to its KUPI in-process research and development intangible asset due to delays in the expected launch of a product within the portfolio, which resulted in reduced projected cash flows.

In November 2020, the Company entered into Amendment No. 2 to License and Supply Agreement (the “2020 Amendment”) with Recro Gainesville LLC (“Recro”), which amended the Company’s agreement with Recro to exclusively distribute Verelan PM ®, Verelan SR ®, and Verapamil PM. In accordance with the Company’s policy to expense costs to renew or extend the term of a recognized intangible asset as incurred, the Company recorded $5.0 million in consideration to renew the Company’s distribution agreement during the second quarter of Fiscal Year 2021, which is included within cost of sales on the Consolidated Statements of Operations.

Future annual amortization expense consisted of the following as of March 31, 2021:

(In thousands)	Amortization
Fiscal Year Ending June 30,	Expense
2021	$	3,857
2022		17,026
2023		16,726
2024		16,426
2025		16,026
Thereafter		86,077
	$	156,138