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Intangible Assets | 12 Months Ended
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Sep. 30, 2013
Intangible Assets | NOTE 5. INTANGIBLE ASSETS Intangible assets consist of in-process research and development (IPR&D) not subject to amortization, and patents and other intangible assets subject to amortization, which were capitalized as a part of a business combination. IPR&D represents projects that have not yet received regulatory approval and are required to be classified as indefinite assets until the successful completion or the abandonment of the associated R&D efforts. Accordingly, during the development period after the date of acquisition, these assets will not be amortized until approval is obtained in one or more jurisdictions which, individually or combined, are expected to generate a significant portion of the total revenue expected to be earned by an IPR&D project. At that time, we will determine the useful life of the asset, reclassify the asset out of IPR&D and begin amortization. If the associated R&D effort is abandoned the related IPR&D assets will likely be written off and we would record an impairment loss. Intangible assets subject to amortization include patents capitalized as part of a business combination as well as license agreements capitalized as part of a business combination from the acquisition of Roche Madison. The license agreements are being amortized over the estimated life remaining at the time of acquisition which was 4 years. Patents are amortized over a period of three years to twenty years. The weighted average original amortization period is twelve years. Amortization of license agreements and patents is expected to be approximately $55,000 for fiscal years 201 4 and 201 5, $13,000 in 2016, and zero thereafter. On August 5, 2013, Calando terminated a License Agreement with the California Institute of Technology (the “License”). The License provided Calando with exclusive rights to develop and commercialize therapeutics based on the linear cyclodextrin drug delivery technology invented at Caltech. The drug delivery technology platforms, Cyclosert TM and RONDEL TM, as well as the drug candidates IT-101 and CALAA-01, were developed based on the licensed technology. Calando was responsible to direct and pay for the prosecution of the patents and patent applications covered by the License and to progress the technology. In conjunction with a previous business acquisition, the patents covered by this license agreement had been capitalized, and had a net book value of $1.3 million at June 30, 2013. Management has determined that the value of the patents was impaired as of June 30, 2013, and the Company recorded an impairment charge of $1.3 million, and is presented as a part of operating expenses for the year ended September 30, 2013. We review amounts capitalized as IPR&D for impairment at least annually in the fourth quarter, and whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. In the event the carrying value of the assets is not expected to be recovered, the assets are written down to their estimated fair values. We continue to test our indefinite-lived IPR&D assets for potential impairment until the projects are completed or abandoned. The below table provides details on our intangible asset balances:
| Intangible assets not subject to amortization |  |  | Intangible assets subject to amortization |  |  | Total Intangible assets |
--- | --- | --- | --- | --- | --- | --- | --- | ---
Balance at September 30, 2011 | $ |  | - |  |  | $ |  | 1,731,211 |  |  | $ |  | 1,731,211 |
Additions—Madison acquisition |  | 944,935 |  |  |  | 230,000 |  |  |  | 1,174,935 |
Additions—Alvos acquisition |  | 2,172,387 |  |  |  | - |  |  |  | 2,172,387 |
Amortization |  | - |  |  |  | (293,964 | ) |  |  | (293,964 | )
Balance at September 30, 2012 | $ |  | 3,117,322 |  |  | $ |  | 1,667,247 |  |  | $ |  | 4,784,569 |
Impairment |  | - |  |  |  | (1,308,047 | ) |  |  | (1,308,047 | )
Amortization |  | - |  |  |  | (236,009 | ) |  |  | (236,009 | )
Balance at September 30, 2013 | $ |  | 3,117,322 |  |  | $ |  | 123,191 |  |  | $ |  | 3,240,513 |

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- Definition The entire disclosure for all or part of the information related to intangible assets. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 30 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=7658586&loc=d3e16323-109275 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 30 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=7658586&loc=d3e16373-109275 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 30 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=7658586&loc=d3e16265-109275 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 142 -Paragraph 44, 45, 46 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. + Details
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