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SEC Filings

10-Q
ATHENEX, INC. filed this Form 10-Q on 05/09/2019
Entire Document
 

 

3. Inventories

Inventories consist of the following (in thousands):

 

 

 

March 31,

2019

 

 

December 31,

2018

 

Raw materials and purchased parts

 

$

3,962

 

 

$

4,092

 

Work in progress

 

 

3,174

 

 

 

3,166

 

Finished goods

 

 

18,055

 

 

 

21,529

 

Total inventories

 

$

25,191

 

 

$

28,787

 

 

4. Intangible Assets, net

The Company’s identifiable intangible assets, net, consist of the following (in thousands):

 

 

 

March 31, 2019

 

 

 

Cost/Fair

Value

 

 

Accumulated

Amortization

 

 

Impairments

 

 

Net

 

Amortizable intangible assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Licenses

 

$

8,935

 

 

$

2,432

 

 

$

 

 

$

6,503

 

Polymed customer list

 

 

1,593

 

 

 

974

 

 

 

 

 

 

619

 

Polymed technology

 

 

3,712

 

 

 

1,125

 

 

 

 

 

 

2,587

 

Product rights

 

 

530

 

 

 

295

 

 

 

 

 

 

235

 

Indefinite-lived intangible assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CDE in-process research and development (IPR&D)

 

 

728

 

 

 

 

 

 

 

 

 

728

 

Effect of currency translation adjustment

 

 

(311

)

 

 

 

 

 

 

 

 

(311

)

Total intangible assets, net

 

$

15,187

 

 

$

4,826

 

 

$

 

 

$

10,361

 

 

 

 

December 31, 2018

 

 

 

Cost/Fair

Value

 

 

Accumulated

Amortization

 

 

Impairments

 

 

Net

 

Amortizable intangible assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Licenses

 

$

8,935

 

 

$

2,060

 

 

$

 

 

$

6,875

 

Polymed customer list

 

 

1,593

 

 

 

938

 

 

 

 

 

 

655

 

Polymed technology

 

 

3,712

 

 

 

999

 

 

 

 

 

 

2,713

 

Product rights

 

 

530

 

 

 

263

 

 

 

 

 

 

267

 

Indefinite-lived intangible assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CDE in-process research and development (IPR&D)

 

 

1,026

 

 

 

 

 

 

298

 

 

 

728

 

Effect of currency translation adjustment

 

 

(390

)

 

 

 

 

 

 

 

 

(390

)

Total intangibles, net

 

$

15,406

 

 

$

4,260

 

 

$

298

 

 

$

10,848

 

 

As of March 31, 2019, licenses at cost include an Orascovery license of $0.4 million and licenses purchased from Gland Pharma Limited (“Gland”) of $4.3 million, and a license purchased from MAIA Pharmaceuticals, Inc. (“MAIA”) for $4.0 million. The Orascovery license with Hanmi Pharmaceuticals Co. Ltd. (“Hanmi”) was purchased directly from Hanmi and is being amortized on a straight-line basis over a period of 12.75 years, the remaining life of the license agreement at the time of purchase. The licenses purchased from Gland are being amortized on a straight-line basis over a period of 5 years, the remaining life of the license agreement at the time of purchase.  The license purchased from MAIA is being amortized over a period of 7 years, the remaining life of the license agreement at the time of purchase.

The remaining intangible assets were acquired in connection with the acquisitions of Athenex Pharma Solutions (“APS” or “Athenex Pharma Solutions,” and formerly known as QuaDPharma), Polymed Therapeutics, Inc. (“Polymed”), and Comprehensive Drug Enterprises (“CDE”). Intangible assets are amortized using an economic consumption model over their useful lives. The APS customer list was being amortized on a straight-line basis over 7 years. The Polymed customer list and technology are amortized on a straight-line basis over 6 and 12 years, respectively. The CDE in-process research and development, (“IPR&D”), will not be amortized until the related projects are completed. IPR&D will be tested annually for impairment, unless conditions exist causing an earlier impairment test (e.g., abandonment of project). No impairment charges were recorded during the three months ended March 31, 2019.  The weighted-average useful life for all intangible assets was 7.58 years as of March 31, 2019.

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