Balance Sheet Account Details

12 Months Ended

Dec. 31, 2023

Other Balance Sheet Details [Abstract]

Short-term Investments

Excluding our investments in Viking, the following table summarizes the various investment categories at December 31, 2023 and 2022 (in thousands):


	Cost		Gross unrealized gains		Gross unrealized losses		Estimated fair value
December 31, 2023
Short-term investments
Bond Fund	$	63,763	$	—	$	(537)	$	63,226
Bank deposits	17,165		12		(1)		17,176
Corporate bonds	14,850		40		(2)		14,888
Commercial paper	11,578		9		(1)		11,586
U.S. government securities	6,736		18		(3)		6,751
Municipal bonds	1,007		—		(4)		1,003
Corporate equity securities	5,775		—		(5,235)		540
	$	120,874	$	79	$	(5,783)	$	115,170
December 31, 2022
Short-term investments
Bond fund	$	81,815	$	—	$	(1050)	$	80,765
Commercial paper	7,211		3		—		7,214
Corporate bonds	6,701		13		(58)		6,656
Bank deposits	5,012		2		(34)		4,980
U.S. government securities	2,232		—		(70)		2,162
Corporate equity securities	5,807		262		(4,239)		1,830
Warrants	—		135		—		135
	$	108,778	$	415	$	(5,451)	$	103,742

Gain (loss) from short-term investments on our consolidated statements of operations includes both realized and unrealized gain (loss) from our short-term investments in public equity and warrant securities, and realized gain (loss) from available-for-sale debt securities.

The following table summarizes our available-for-sale debt securities by contractual maturity (in thousands):


	December 31, 2023
	Amortized Cost		Fair Value
Within one year	$	55,361	$	55,380
After one year through five years	13,478		13,524

Total	$	68,839	$	68,904

The following table summarizes our available-for-sale debt securities in an unrealized loss position (in thousands):


	Less than 12 months				12 months or greater				Total
	Gross Unrealized Losses		Estimated Fair Value		Gross Unrealized Losses		Estimated Fair Value		Gross Unrealized Losses		Estimated Fair Value
December 31, 2023
Bank deposits	$	(1)	$	4,175	$	—	$	—	$	(1)	$	4,175
Corporate bonds	(1)		1,410		(1)		1,447		(2)		2,857
Commercial paper	(4)		10,222		—		—		(4)		10,222
Municipal bonds	(4)		1,004		—		—		(4)		1,004
U.S. Government Securities	—		998		(3)		1,502		(3)		2,500
Total	$	(10)	$	17,809	$	(4)	$	2,949	$	(14)	$	20,758

December 31, 2022
Bank deposits	$	(34)	$	2,470	$	—	$	—	$	(34)	$	2,470
Corporate bonds	(21)		3,887		(37)		947		(58)		4,834
Commercial paper	—		3,836		—		—		—		3,836
U.S. Government Securities	(70)		2,161		—		—		(70)		2,161
Total	$	(125)	$	12,354	$	(37)	$	947	$	(162)	$	13,301

Our investment policy is capital preservation and we only invested in U.S.-dollar denominated investments. We held a total of 31 positions which were in an unrealized loss position with a total of $0.01 million unrealized losses as of December 31, 2023. We believe that we will collect the principal and interest due on our debt securities that have an amortized cost in excess of fair value. The unrealized losses are largely due to changes in interest rates and not to unfavorable changes in the credit quality associated with these securities that impacted our assessment on collectability of principal and interest. We do not intend to sell these securities nor do we believe that we will be required to sell these securities before the recovery of the amortized cost basis. Accordingly, no credit losses were recognized for the year ended December 31, 2023.

Short-term Investments: Investment in Viking:

Our ownership in Viking was approximately 1.7% as of December 31, 2023, and we account for it as an investment in available-for-sale equity securities, which is measured at fair value, with changes in fair value recognized in net income.

As of December 31, 2023 and December 31, 2022, our investment in Viking is $32.2 million and $63.1 million, respectively, and included in short-term investments on the balance sheet. During the year ended December 31, 2023, we sold 5.0 million shares of Viking common stock and recognized a realized gain of $44.4 million. During the year ended December 31, 2021, we sold 0.6 million shares of Viking common stock and recognized a realized gain of $3.6 million. There were no sales of Viking common stock during the year ended December 31, 2022.

Property and equipment are stated at cost and consists of the following (in thousands):


	December 31,
	2023		2022
Lab and office equipment	$	9,264	$	14,172
Leasehold improvements	12,282		7,446
Computer equipment and software	716		989
	22,262		22,607
Less accumulated depreciation and amortization	(6,655)		(10,125)
	$	15,607	$	12,482

Depreciation of equipment is computed using the straight-line method over the estimated useful lives of the assets which ranges from one to nine years. Leasehold improvements are amortized using the straight-line method over their estimated useful lives or their related lease term, whichever is shorter. Depreciation expense of $2.9 million, $3.8 million, and $2.4 million was recognized for the years ended December 31, 2023, 2022, and 2021, respectively, and was included in operating expenses.

Goodwill and identifiable intangible assets consist of the following (in thousands):


	December 31,
	2023		2022
Indefinite-lived intangible assets
Goodwill	$	103,370	$	105,673
Definite-lived intangible assets
Completed technology	42,911		55,211
Less: Accumulated amortization	(20,894)		(22,560)
Trade name	2,642		2,642
Less: Accumulated amortization	(1,710)		(1,577)
Customer relationships	29,600		29,600
Less: Accumulated amortization	(19,161)		(17,670)
Contractual relationships	360,000		362,000
Less: Accumulated amortization	(93,782)		(65,191)
Total goodwill and other identifiable intangible assets, net	$	402,976	$	448,128

Amortization of finite-lived intangible assets is computed using the straight-line method over the estimated useful life of the asset of up to 20 years. Amortization expense of $33.7 million, $34.2 million, and $34.2 million was recognized for the years ended December 31, 2023, 2022, and 2021, respectively. Estimated amortization expense for the years ending December 31, 2024 through 2028 is $32.8 million per year. For each of the years ended December 31, 2023, 2022, and 2021, there was no material impairment of intangible assets with finite lives.

Accrued liabilities consist of the following (in thousands):


	December 31,
	2023		2022
Compensation	$	4,682	$	6,201
Professional fees	2,394		662
Customer deposit	621		621
Amounts owed to former licensees	45		3,989
Royalties owed to third parties	900		12


Subcontractor	1,756		1,756
Supplier	303		634
Other	1,766		1,806
	$	12,467	$	15,681

Other long-term liabilities consist of the following (in thousands):


	December 31,
	2023		2022
Unrecognized tax benefits	$	14,039	$	21,421
Novan contract liability	13,700		—
Other long-term liabilities	19		501
	$	27,758	$	21,922

Contingent liabilities:

In connection with the acquisition of CyDex in January 2011, we issued a series of CVRs and also assumed certain contingent liabilities. We may be required to make additional payments upon achievement of certain clinical and regulatory milestones to the CyDex shareholders and former license holders.

In connection with the acquisition of Metabasis in January 2010, we entered into four CVR agreements with Metabasis shareholders. The CVRs entitle the holders to cash payments as frequently as every six months as proceeds are received by us upon the sale or licensing of any of the Metabasis drug development programs and upon the achievement of specified milestones.

The following table summarizes roll-forward of contingent liabilities as of December 31, 2023 and 2022 (in thousands):


	December 31, 2021		Payments		Fair Value Adjustment		December 31, 2022		Payments		Fair Value Adjustment		Repurchases		December 31, 2023
Cydex	$	349	$	—	$	(265)	$	84	$	(50)	$	286	$	—	$	320
Metabasis	3,358		—		71		3,429		—		(551)		—		2,878
Total	$	3,707	$	—	$	(194)	$	3,513	$	(50)	$	(265)	$	—	$	3,198