GOODWILL IPRANDD AND OTHER INTANGIBLE ASSETS, NET

9 Months Ended

Sep. 30, 2013

GOODWILL, IPR&D AND OTHER INTANGIBLE ASSETS, NET

GOODWILL, IPR&D AND OTHER INTANGIBLE ASSETS, NET

H. GOODWILL, IPR&D AND OTHER INTANGIBLE ASSETS, NET

Goodwill

The Company’s goodwill balance as of September 30, 2013, changed from the goodwill balance as of December 31, 2012 as follows:

	Goodwill
	(in thousands)
Beginning balance as of December 31, 2012	$	114,130
Goodwill acquired	159,442
Ending balance as of September 30, 2013	$	273,572

Goodwill of $159.4 million was recognized in connection with the acquisition of Trius in September 2013. See Note C., “Business Combinations and Acquisitions,” for additional information. As of September 30, 2013, there were no accumulated impairment losses. Goodwill has been assigned to the Company’s single reporting unit, which is the single operating segment by which the chief decision maker manages the Company. See Note M., “Segment Information,” for additional information.

IPR&D

The carrying value of the Company’s IPR&D assets consisted of the following at:

	September 30, 2013		December 31, 2012
	(in thousands)
Development and potential commercialization of:
Tedizolid phosphate	$	659,000	$	—
Bevenopran	78,700		78,700
Ceftolozane/tazobactam for HABP and VABP	174,000		174,000
Ceftolozane/tazobactam for cUTI and cIAI	20,000		20,000
Total IPR&D	$	931,700	$	272,700

IPR&D of $659.0 million was recognized in connection with the acquisition of Trius in September 2013. See Note C., “Business Combinations and Acquisitions,” for additional information.

Other Intangible Assets

Other intangible assets, net consisted of the following at:

		September 30, 2013			December 31, 2012
		(in thousands)
Patents		$	2,627		$	2,627
Acquired technology rights		191,800			191,800
		194,427			194,427
Less:	accumulated amortization — patents	(2,477		)	(2,431		)
	accumulated amortization — acquired technology rights	(54,539		)	(39,166		)
Other intangible assets, net		$	137,411		$	152,830

Amortization expense was $5.2 million for each of the three months ended September 30, 2013 and 2012, and $15.4 million and $15.7 million for the nine months ended September 30, 2013 and 2012, respectively.

The estimated aggregate amortization of intangible assets as of September 30, 2013, for each of the five succeeding years and thereafter is as follows:

	(in thousands)
Remainder of 2013	$	5,182
2014	20,729
2015	20,729
2016	19,449
2017	18,210
2018 and thereafter	53,112
Total	$	137,411

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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