Goodwill and Intangible Assets

12 Months Ended

Dec. 31, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

In connection with the acquisitions, the Company initially recognized IPR&D of $486.7 million and goodwill of $197.8 million. Intangible assets related to IPR&D assets are considered to be indefinite-lived until the completion or abandonment of the associated research and development efforts. During the period the assets are considered indefinite-lived, they will not be amortized but will be tested for impairment on an annual basis and between annual tests if the Company becomes aware of any events occurring or changes in circumstances that would indicate a reduction in the fair value of the IPR&D assets below their respective carrying amounts.

Goodwill and intangible assets are assessed annually for impairment on October 1 and whenever events or circumstances indicate that the carrying amount of an asset may not be recoverable. If it is determined that the full carrying amount of an asset is not recoverable, an impairment loss is recorded in the amount by which the carrying amount of the asset exceeds its fair value.

As discussed in "— Note 3. Acquisitions", in September 2017, the Company reported that top-line data from the randomized, double-blind, placebo-controlled Phase 3 clinical study ("ESSENCE, SD-005") to assess the efficacy and safety of the novel topical wound-healing agent SD-101 did not meet the primary endpoints or secondary endpoints in participants with EB. This event led to an assessment to determine if an impairment had occurred for goodwill and IPR&D. Based on tests for impairment, the Company determined that IPR&D had been impaired, however goodwill was not impaired based on qualitative and market capitalization tests performed. The loss on impairment of IPR&D of $463.7 million was recorded within loss on impairment of assets in the Consolidated Statements of Operations for the year ended December 31, 2017.

The following table represents the changes in IPR&D for the years ended December 31, 2019 and 2018, respectively:



	(in millions)
Balance at December 31, 2017	$	23.0
Change in IPR&D	—
Balance at December 31, 2018	$	23.0
Change in IPR&D	—
Balance at December 31, 2019	$	23.0

The following table represents the changes in Goodwill for the years ended December 31, 2019 and 2018, respectively:



	(in millions)
Balance at December 31, 2017	$	197.8
Change in goodwill	—
Balance at December 31, 2018	$	197.8
Change in goodwill	—
Balance at December 31, 2019	$	197.8