Other Intangible Assets, Net

3 Months Ended

Mar. 31, 2014

Intangible Assets, Net (Excluding Goodwill) [Abstract]

Other Intangible Assets Disclosure

11.       Other intangible assets, net

		March 31,	December 31,
		2014	2013
		$’M	$’M
		________________	________________
Amortized intangible assets
	Intellectual property rights acquired for currently marketed products	4,914.5	2,573.3
	Other intangible assets	30.0	46.1
		________________	________________
		4,944.5	2,619.4
Unamortized intangible assets
	Intellectual property rights acquired for IPR&D	1,315.6	951.5
		________________	________________
		6,260.1	3,570.9
Less: Accumulated amortization		(1,316.7)	(1,258.3)
		________________	________________
		4,943.4	2,312.6
		________________	________________

The change in the net book value of other intangible assets for the three monthsto March 31, 2014 and 2013is shown in the table below:

	Other intangible assets
	2014	2013
	$’M	$’M
	________________	________________
As at January 1,	2,312.6	2,388.1
Acquisitions	2,854.0	328.5
Amortization charged	(57.8)	(36.1)
Amortization charged on DERMAGRAFT product technology, presented within discontinued operations in the consolidated income statement	-	(9.8)
Impairment charges	(166.0)	-
Foreign currency translation	0.6	(13.5)
	________________	________________
As at March 31,	4,943.4	2,657.2
	________________	________________

In the three months to March 31, 2014 the Company acquired intangible assets totaling $2,854 million, primarily relating to the preliminary fair value of currently marketed intangible assets of $2,320 million and IPR&D assets of $530 million, which were acquired with ViroPharma (see Note 2 for further details).

The Company reviews its intangible assets for impairment whenever events or circumstances suggest that their carrying value may not be recoverable. In the three months to March 31, 2014 the Company identified indicators of impairment in respect of its SHP602 IPR&D asset. These indicators includedthe decision to place the ongoing Phase 2 clinical trial in pediatric and adult patients on hold while certain nonclinical findings are analyzed and evaluated.

The Company therefore reviewed the recoverability of its SHP602 IPR&D asset and recorded an impairment charge of $166.0million within R&D expenses in the consolidated statement of income to record the SHP602 IPR&D asset to its revised fair value. This fair value was based on the revised discounted cash flow forecasts associated with SHP602, which included a reduced probability of commercial launch, and an overall delay in the forecast timing of launch.

Management estimates that the annual amortization charge in respect of intangible assets held at March 31, 2014will be approximately $259million for each of the five years to March 31, 2018.Estimated amortization expense can be affected by various factors including future acquisitions, disposals of product rights, regulatory approval and subsequent amortization of acquired IPR&D projects, foreign exchange movements and the technological advancement and regulatory approval of competitor products.