10-Q
MEDICINES CO /DE filed this form 10-Q on 9 Aug 2017
- velhartice.info
THE MEDICINES COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)


9. Intangible Assets and Goodwill

The following table sets forth the carrying amounts and accumulated amortization of the Company’s intangible assets:

 
As of June 30, 2017
 
As of December 31, 2016
 
Weighted Average
Useful Life
(years)
 
Gross
Carrying
Amount
 
Accumulated
Amortization and Other Charges
 
Net
Carrying
Amount
 
Gross
Carrying
Amount
 
Accumulated
Amortization and Other Charges
 
Net
Carrying
Amount
 
 
 
(in thousands)
Amortizable intangible assets:
 
 
 
 
 
 
 
 
 
 
 
 
 
Product licenses(1)
-
 
$

 
$

 
$

 
$
30,000

 
$
(3,013
)
 
$
26,987

Developed product rights(2)
15.3
 
120,560

 
(20,109
)
 
100,451

 
370,560

 
(35,946
)
 
334,614

Total amortizable intangible assets
15.3
 
120,560

 
(20,109
)
 
100,451

 
400,560

 
(38,959
)
 
361,601

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Intangible assets not subject to amortization:
 
 
 
 
 
 
 
 
 
 
 
 
 
In-process research and development
 
$
188,620

 
$

 
$
188,620

 
$
253,620

 
$

 
$
253,620

Total intangible assets not subject to amortization
 
188,620

 

 
188,620

 
253,620

 

 
253,620

Total intangible assets

 
$
309,180

 
$
(20,109
)
 
$
289,071

 
$
654,180

 
$
(38,959
)
 
$
615,221

_______________________________________
(1)
The Company amortizes intangible assets related to the product licenses over their expected useful lives.
(2)
The Company amortizes intangible assets related to developed product rights over the remaining life of the patents.

The Company recognized amortization expense of approximately $2.0 million and $6.6 million for the three months ended June 30, 2017 and 2016, respectively, and approximately $8.5 million and $12.9 million during the six months ended June 30, 2017 and 2016, respectively, related to its intangible assets. The Company expects amortization expense related to its intangible assets to be approximately $4.0 million for the last six months of 2017. The Company expects annual amortization expense related to its intangible assets to be approximately $7.9 million, $7.9 million, $7.9 million, $7.9 million and $7.9 million for the years ending December 31, 2018, 2019, 2020, 2021 and 2022, respectively, with the balance of $56.8 million being amortized thereafter. The Company records amortization expense in cost of revenue in the accompanying condensed consolidated statements of operations.

In the second quarter of 2017 the Company recorded impairment charges of $226.5 million and $26.2 million to reduce the unamortized carrying amounts of the product licenses and developed product rights, respectively, associated with Ionsys to their estimated fair values of zero which is a Level 3 fair value measurement, as a result of the discontinuation and market withdrawal of Ionsys which became effective on June 19, 2017. In the second quarter of 2017, the Company recorded impairment charges of $65.0 million to reduce the carrying amount of the in-process research and development associated with MDCO-700 to an estimated fair value of zero, which is a Level 3 fair value measurement, in connection with management’s decision to discontinue the MDCO-700 trials. These impairment charges were recorded in asset impairment charges in the accompanying condensed consolidated statements of operations. See Note 1, “Nature of Business,” for further details and Note 7, “Fair Value Measurements,” for definitions of hierarchy levels.

There were no changes in the carrying amount of goodwill for the six months ended June 30, 2017.



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