XML 20 R11.htm IDEA: XBRL DOCUMENT v3.23.3
Acquisitions
 9 Months Ended
Sep. 30, 2023
Business Combination and Asset Acquisition [Abstract]  
Acquisitions Acquisitions
We engage in various forms of business development activities to enhance our product pipeline, including acquisitions, collaborations, investments, and licensing arrangements. In connection with these arrangements, our partners may be entitled to future royalties and/or commercial milestones based on sales should products be approved for commercialization and/or milestones based on the successful progress of compounds through the development process.
In December 2022, we completed the acquisition of Akouos, Inc. (Akouos). This transaction, as further discussed below in Acquisition of a Business, was accounted for as a business combination under the acquisition method of accounting. Under this method, the assets acquired and liabilities assumed were recorded at their respective fair values as of the acquisition date in our consolidated condensed financial statements. The determination of estimated fair value required management to make significant estimates and assumptions. The excess of the purchase price over the fair value of the acquired net assets, where applicable, has been recorded as goodwill. The results of operations of this acquisition is included in our consolidated condensed financial statements from the date of acquisition.
We also acquired assets in development which are further discussed below in Asset Acquisitions. Upon each acquisition, the cost allocated to acquired IPR&D was immediately expensed if the compound has no alternative future use. Milestone payment obligations incurred prior to regulatory approval of the compound are expensed as acquired IPR&D when the event triggering an obligation to pay the milestone occurs. We recognized acquired IPR&D charges of $2.98 billion and $3.18 billion for the three and nine months ended September 30, 2023, respectively, and $62.4 million and $668.4 million for the three and nine months ended September 30, 2022, respectively.
Acquisition of a Business
Akouos Acquisition
Overview of Transaction
In December 2022, we acquired all shares of Akouos for a purchase price that included $12.50 per share in cash (or an aggregate of $327.2 million, net of cash acquired) plus one non-tradable contingent value right (CVR) per share. The CVR entitles the Akouos shareholders up to an additional $3.00 per share in cash (or an aggregate of approximately $122 million) payable, subject to certain terms and conditions, upon the achievement of certain specified milestones.
Under the terms of the agreement, we acquired potential gene therapy treatments for hearing loss and other inner ear conditions. The lead gene therapies in clinical development that we acquired included GJB2 (which encodes connexin 26) for a common form of monogenic deafness and hearing loss; AK-OTOF for hearing loss due to mutations in the otoferlin gene; AK-CLRN1 for Usher Type 3A, an autosomal recessive disorder characterized by progressive loss of both hearing and vision; and AK-antiVEGF for vestibular schwannoma.
Assets Acquired and Liabilities Assumed
Our access to Akouos information was limited prior to the acquisition. As a consequence, we are in the process of determining fair values and tax bases of a significant portion of the assets acquired and liabilities assumed, including the identification and valuation of intangible assets and tax exposures. The final determination of these amounts will be completed as soon as possible but no later than one year from the acquisition date. The final determination may result in asset and liability fair values and tax bases that differ from the preliminary estimates and require changes to the preliminary amounts recognized.

The following table summarizes the preliminary amounts recognized for assets acquired and liabilities assumed as of the acquisition date:
Estimated Fair Value at December 1, 2022
Cash$153.2 
Acquired IPR&D(1)
184.0
Goodwill(2)
187.1
Other assets and liabilities, net23.0 
Acquisition date fair value of consideration transferred 547.3
Less:
Cash acquired(153.2)
Fair value of CVR liability(3)
(66.9)
Cash paid, net of cash acquired$327.2 
(1) Acquired IPR&D intangibles primarily relate to GJB2.
(2) The goodwill recognized from this acquisition is attributable primarily to future unidentified projects and products and the assembled workforce for Akouos and is not deductible for tax purposes.
(3) See Note 6 for a discussion on the estimation of the CVR liability.
The results of operations attributable to Akouos for the three and nine months ended September 30, 2023 were immaterial.
Pro forma information has not been included as this acquisition did not have a material impact on our consolidated condensed statements of operations for the three and nine months ended September 30, 2022.
Asset Acquisitions
The following table summarizes our significant asset acquisitions during the nine months ended September 30, 2023 and 2022:
CounterpartyCompound(s), Therapy or AssetAcquisition Month
Phase of Development(1)
Acquired IPR&D Expense
DICE Therapeutics, Inc.
DC-806, an oral IL-17 inhibitor for the treatment of chronic diseases in immunology
August 2023Phase II$1,915.5 
Versanis Bio, Inc.Bimagrumab, a monoclonal antibody for the treatment of people living with obesity and obesity-related complicationsAugust 2023Phase II604.1 
Emergence Therapeutics AGETx-22, a Nectin-4 antibody-drug conjugate for the treatment of urothelial cancerAugust 2023Pre-clinical406.5 
BioMarin Pharmaceutical Inc.Priority Review VoucherFebruary 2022Not applicable110.0 
(1) The phase of development presented is as of the date of the arrangement and represents the phase of development of the most advanced asset acquired, where applicable.
In connection with our acquisition of Petra Pharma Corporation (Petra), we were required to make milestone payments to Petra shareholders contingent upon the occurrence of certain future events linked to the success of the mutant-selective PI3Kα inhibitor. In the second quarter of 2022, we entered into agreements with substantially all Petra shareholders to acquire their rights to receive any future milestone payments in exchange for a one-time payment. As a result of these agreements, we recognized a charge of $333.8 million as acquired IPR&D during the nine months ended September 30, 2022. Any remaining contingent milestones payments linked to the success of the mutant-selective PI3Kα inhibitor are not expected to be material.
We recognized no other significant acquired IPR&D charges during the three and nine months ended September 30, 2023 and 2022.
Subsequent Events
In October 2023, we announced an agreement to acquire POINT Biopharma Global Inc. (POINT) for a purchase price of $12.50 per share in cash (an aggregate of approximately $1.4 billion) payable at closing. The proposed acquisition is subject to customary closing conditions, including the tender of a majority of the outstanding shares of POINT's common stock, the receipt of required antitrust clearance, and license transfer approval from the U.S. Nuclear Regulatory Commission.
Acquisitions Acquisitions
We engage in various forms of business development activities to enhance our product pipeline, including acquisitions, collaborations, investments, and licensing arrangements. In connection with these arrangements, our partners may be entitled to future royalties and/or commercial milestones based on sales should products be approved for commercialization and/or milestones based on the successful progress of compounds through the development process.
In December 2022, we completed the acquisition of Akouos, Inc. (Akouos). This transaction, as further discussed below in Acquisition of a Business, was accounted for as a business combination under the acquisition method of accounting. Under this method, the assets acquired and liabilities assumed were recorded at their respective fair values as of the acquisition date in our consolidated condensed financial statements. The determination of estimated fair value required management to make significant estimates and assumptions. The excess of the purchase price over the fair value of the acquired net assets, where applicable, has been recorded as goodwill. The results of operations of this acquisition is included in our consolidated condensed financial statements from the date of acquisition.
We also acquired assets in development which are further discussed below in Asset Acquisitions. Upon each acquisition, the cost allocated to acquired IPR&D was immediately expensed if the compound has no alternative future use. Milestone payment obligations incurred prior to regulatory approval of the compound are expensed as acquired IPR&D when the event triggering an obligation to pay the milestone occurs. We recognized acquired IPR&D charges of $2.98 billion and $3.18 billion for the three and nine months ended September 30, 2023, respectively, and $62.4 million and $668.4 million for the three and nine months ended September 30, 2022, respectively.
Acquisition of a Business
Akouos Acquisition
Overview of Transaction
In December 2022, we acquired all shares of Akouos for a purchase price that included $12.50 per share in cash (or an aggregate of $327.2 million, net of cash acquired) plus one non-tradable contingent value right (CVR) per share. The CVR entitles the Akouos shareholders up to an additional $3.00 per share in cash (or an aggregate of approximately $122 million) payable, subject to certain terms and conditions, upon the achievement of certain specified milestones.
Under the terms of the agreement, we acquired potential gene therapy treatments for hearing loss and other inner ear conditions. The lead gene therapies in clinical development that we acquired included GJB2 (which encodes connexin 26) for a common form of monogenic deafness and hearing loss; AK-OTOF for hearing loss due to mutations in the otoferlin gene; AK-CLRN1 for Usher Type 3A, an autosomal recessive disorder characterized by progressive loss of both hearing and vision; and AK-antiVEGF for vestibular schwannoma.
Assets Acquired and Liabilities Assumed
Our access to Akouos information was limited prior to the acquisition. As a consequence, we are in the process of determining fair values and tax bases of a significant portion of the assets acquired and liabilities assumed, including the identification and valuation of intangible assets and tax exposures. The final determination of these amounts will be completed as soon as possible but no later than one year from the acquisition date. The final determination may result in asset and liability fair values and tax bases that differ from the preliminary estimates and require changes to the preliminary amounts recognized.

The following table summarizes the preliminary amounts recognized for assets acquired and liabilities assumed as of the acquisition date:
Estimated Fair Value at December 1, 2022
Cash$153.2 
Acquired IPR&D(1)
184.0
Goodwill(2)
187.1
Other assets and liabilities, net23.0 
Acquisition date fair value of consideration transferred 547.3
Less:
Cash acquired(153.2)
Fair value of CVR liability(3)
(66.9)
Cash paid, net of cash acquired$327.2 
(1) Acquired IPR&D intangibles primarily relate to GJB2.
(2) The goodwill recognized from this acquisition is attributable primarily to future unidentified projects and products and the assembled workforce for Akouos and is not deductible for tax purposes.
(3) See Note 6 for a discussion on the estimation of the CVR liability.
The results of operations attributable to Akouos for the three and nine months ended September 30, 2023 were immaterial.
Pro forma information has not been included as this acquisition did not have a material impact on our consolidated condensed statements of operations for the three and nine months ended September 30, 2022.
Asset Acquisitions
The following table summarizes our significant asset acquisitions during the nine months ended September 30, 2023 and 2022:
CounterpartyCompound(s), Therapy or AssetAcquisition Month
Phase of Development(1)
Acquired IPR&D Expense
DICE Therapeutics, Inc.
DC-806, an oral IL-17 inhibitor for the treatment of chronic diseases in immunology
August 2023Phase II$1,915.5 
Versanis Bio, Inc.Bimagrumab, a monoclonal antibody for the treatment of people living with obesity and obesity-related complicationsAugust 2023Phase II604.1 
Emergence Therapeutics AGETx-22, a Nectin-4 antibody-drug conjugate for the treatment of urothelial cancerAugust 2023Pre-clinical406.5 
BioMarin Pharmaceutical Inc.Priority Review VoucherFebruary 2022Not applicable110.0 
(1) The phase of development presented is as of the date of the arrangement and represents the phase of development of the most advanced asset acquired, where applicable.
In connection with our acquisition of Petra Pharma Corporation (Petra), we were required to make milestone payments to Petra shareholders contingent upon the occurrence of certain future events linked to the success of the mutant-selective PI3Kα inhibitor. In the second quarter of 2022, we entered into agreements with substantially all Petra shareholders to acquire their rights to receive any future milestone payments in exchange for a one-time payment. As a result of these agreements, we recognized a charge of $333.8 million as acquired IPR&D during the nine months ended September 30, 2022. Any remaining contingent milestones payments linked to the success of the mutant-selective PI3Kα inhibitor are not expected to be material.
We recognized no other significant acquired IPR&D charges during the three and nine months ended September 30, 2023 and 2022.
Subsequent Events
In October 2023, we announced an agreement to acquire POINT Biopharma Global Inc. (POINT) for a purchase price of $12.50 per share in cash (an aggregate of approximately $1.4 billion) payable at closing. The proposed acquisition is subject to customary closing conditions, including the tender of a majority of the outstanding shares of POINT's common stock, the receipt of required antitrust clearance, and license transfer approval from the U.S. Nuclear Regulatory Commission.