Intangible assets

On April 20, 2017, the Company completed its previously announced acquisition of all rights to Emflaza pursuant to the Asset Purchase Agreement, dated March 15, 2017, and amended on April 20, 2017, by and between the Company and Marathon. The assets acquired by the Company in the Transaction include intellectual property rights related to Emflaza, inventories of Emflaza, and certain contractual rights related to Emflaza. In accordance with ASU No. 2017-01, the Company determined that substantially all of the fair value is concentrated in the Emflaza rights intangible asset and as such accounted for the transaction as an asset acquisition under ASC 805-50.

The Emflaza rights intangible asset is being amortized to cost of product sales over its expected useful life of approximately seven years on a straight line basis.

Marathon is entitled to receive contingent payments from the Company based on annual net sales of Emflaza beginning in 2018, up to a specified aggregate maximum amount over the expected commercial life of the asset. In accordance with the guidance for an asset acquisition, the Company will record the milestone payment when it becomes payable to Marathon and increase the cost basis for the Emflaza rights intangible asset.

As of June 30, 2018, the Company recorded a contingent payment of $3.9 million payable to Marathon as an increase to the cost of the Emflaza rights intangible asset and that will be amortized prospectively on a straight-line basis over the remaining life of the Emflaza rights intangible asset.

For the six months ended June 30, 2018, the Company recognized amortization expense of $11.0 million with respect to the Emflaza rights intangible asset. The estimated future amortization of the Emflaza rights intangible asset is expected to be as follows:



	As of June 30, 2018
2018(1)	$	11,238
2019	22,477
2020	22,477
2021	22,477
2022 and thereafter	47,621
Total	$	126,290

(1) For the six months ended December 31, 2018.