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Intangible assets and goodwill

9 Months Ended

Sep. 30, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

12. Intangible assets and goodwill

Definite-lived intangibles

Definite-lived intangible assets consisted of the following at September 30, 2023 and December 31, 2022:


		Ending Balance at				Reclass from				Foreign		Ending Balance at
Definite-lived		December 31,				Indefinite Lived to				currency		September 30,
intangibles assets, gross		2022		Additions		Definite Lived		Impairment		translation		2023
Emflaza	$	420,253	$	76,454	$	—	$	—	$	—	$	496,707
Waylivra		9,316		157		—		—		(96)		9,377
Tegsedi		7,109		4,299		—		—		(183)		11,225
Upstaza		89,550		—		—		—		—		89,550
Total definite-lived intangibles, gross	$	526,228	$	80,910	$	—	$	—	$	(279)	$	606,859

Ending Balance at

Foreign

Ending Balance at

Definite-lived

December 31,

currency

September 30,

intangibles assets, accumulated amortization

2022

Amortization

translation

2023

Emflaza

(266,023)

(138,038)

—

(404,061)

Waylivra		(2,751)		(791)		45		(3,497)
Tegsedi		(1,709)		(1,035)		36		(2,708)
Upstaza		(3,420)		(5,597)		—		(9,017)
Total definite-lived intangibles, accumulated amortization	$	(273,903)	$	(145,461)	$	81	$	(419,283)

Total definite-lived intangibles, net							$	187,576

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 records the milestone payment when it becomes payable to Marathon and increases the cost basis for the Emflaza rights intangible asset. For the nine months ended September 30, 2023, total milestone payments of $76.5 million were recorded. These payments are being amortized over the remaining useful life of the Emflaza rights asset on a straight line basis. As of September 30, 2023, a milestone payable to Marathon of $43.9 million was recorded on the consolidated balance sheet within accounts payable and accrued expenses.

Akcea is also entitled to receive royalty payments subject to certain terms set forth in the Tegsedi-Waylivra Agreement related to sales of Waylivra and Tegsedi. In accordance with the guidance for an asset acquisition, the Company records royalty payments when they become payable to Akcea and increase the cost basis for the Waylivra and Tegsedi intangible assets. For the nine months ended September 30, 2023, royalty payments of $4.3 million and $0.2 million were recorded for Tegsedi and Waylivra, respectively. As of September 30, 2023, a royalty payable of $0.9 million and $0.2 million for Tegsedi and Waylivra, respectively, was recorded on the consolidated balance sheet within accounts payable and accrued expenses.

For the three months ended September 30, 2023 and 2022, the Company recognized amortization expense of $58.6 million and $31.0 million, respectively, related to the Emflaza rights, Upstaza, Waylivra, and Tegsedi intangible assets. For the nine months ended September 30, 2023 and 2022, the Company recognized amortization expense of $145.5 million and $80.8 million, respectively, related to the Emflaza rights, Upstaza, Waylivra, and Tegsedi intangible assets. The estimated future amortization of the Emflaza rights, Upstaza, Waylivra, and Tegsedi intangible assets is expected to be as follows:


	As of September 30, 2023
2023	$	58,640
2024		46,557
2025		10,041
2026		10,041
2027 and thereafter		62,297
Total	$	187,576

The weighted average remaining amortization period of the definite-lived intangibles as of September 30, 2023 is 5.3 years.

Indefinite-lived intangibles

Indefinite-lived intangible assets consisted of the following at September 30, 2023 and December 31, 2022:


		Ending Balance at				Reclass from				Foreign		Ending Balance at
Indefinite-lived		December 31,				Indefinite Lived to				currency		September 30,
intangibles assets		2022		Additions		Definite Lived		Impairment		translation		2023
Upstaza	$	235,766	$	—	$	—	$	—	$	—	$	235,766
PTC-FA		112,500		—		—		(112,500)		—		—
PTC-AS		105,300		—		—		(105,300)		—		—
Total indefinite-lived intangibles	$	453,566	$	—	$	—	$	(217,800)	$	—	$	235,766

Total intangible assets, net											$	423,342

In connection with the acquisition of the Company’s gene therapy platform from Agilis, the Company acquired rights to Upstaza, for the treatment of AADC deficiency. AADC deficiency is a rare CNS disorder arising from reductions in the enzyme AADC that result from mutations in the dopa decarboxylase gene. The gene therapy platform also includes PTC-FA, an asset targeting Friedreich ataxia, a rare and life-shortening neurodegenerative disease caused by a single defect in the FXN gene which causes reduced production of the frataxin protein. Additionally, the gene therapy platform includes two other programs targeting CNS disorders, including PTC-AS for Angelman syndrome, a rare, genetic, neurological disorder characterized by severe developmental delays.

In accordance with the acquisition method of accounting, the Company allocated the acquisition cost for the Agilis Merger to the underlying assets acquired and liabilities assumed, based upon the estimated fair values of those assets and liabilities at the date of acquisition. The Company classified the fair value of the acquired IPR&D as indefinite lived intangible assets until the successful completion or abandonment of the associated research and development efforts. As of December 31, 2022, the value allocated to the indefinite lived intangible assets was $453.6 million.

In May 2023, as part of the Company’s strategic portfolio prioritization, the Company decided to discontinue its preclinical and early research programs in its gene therapy platform, which included PTC-FA and PTC-AS. As a result, the Company determined that the PTC-FA and PTC-AS indefinite-lived intangible assets were fully impaired and recorded impairment expense of $217.8 million during the nine month period ended September 30, 2023, which is recorded as intangible asset impairment in the statement of operations. As of September 30, 2023, the remaining indefinite lived intangible asset balance is $235.8 million, consisting solely of Upstaza, which the Company plans to continue to develop and commercialize.

Goodwill

As a result of the Agilis Merger on August 23, 2018, the Company recorded $82.3 million of goodwill. As of September 30, 2023, there have been no changes to the balance of goodwill since the date of the Agilis Merger. Accordingly, the goodwill balance as of September 30, 2023 is $82.3 million.