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Acquisition | 12 Months Ended
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Dec. 31, 2023
Business Combination and Asset Acquisition [Abstract] |
Acquisition | 3. Acquisition In May 2022, the Company purchased certain assets and assumed certain liabilities associated with the V-Go wearable insulin delivery device from Zealand Pharma A/S and Zealand Pharma US, Inc. (together “Zealand”). Under the terms of the agreement with Zealand, the Company paid up-front consideration of $15.3 million for certain assets and assumed liabilities related to V-Go. In addition, the Company will be obligated to make one-time, sales-based milestone payments to Zealand totaling up to a maximum of $10.0 million upon the achievement of specified annual revenue milestones between $40 million and $100 million. The total purchase consideration for V-Go was as follows (in thousands):
Fair value of consideration: |  | Amount |
Cash consideration |  | $ | 15,341 |
Fair value of contingent consideration(1) |  |  | 610 |
Total |  | $ | 15,951 |
___________________________ (1) Subsequent changes in the fair value are reported in general and administrative expenses. See Note 12 – Fair Value of Financial Instruments for subsequent fair value disclosures. The fair value of the contingent milestone liability was estimated using the Monte Carlo simulation method for the calculation of the potential payment and the Geometric Brownian Motion forecasting model to estimate the underlying revenue. Market-based inputs and other level 3 inputs were used to forecast future revenue. The key inputs used included a risk-free rate of 2.95%, dividend yield of 0%, volatility of 65%, period of 15 years and credit risk of 12%. The transaction was accounted for using the acquisition method of accounting, which requires, among other things, the assets acquired and liabilities assumed to be recognized at their respective fair values as of the acquisition date. The excess of the purchase price over those fair values was recorded as goodwill, which will be amortized over a period of 15 years for tax purposes. The estimates and assumptions used include the projected timing and amount of future cash flows and discount rates to reflect the risk inherent in the future cash flows. In May 2023, the Company finalized the fair value for assets acquired and liabilities assumed for V-Go. Inventory of $11.2 million consisted of raw materials, semi-finished goods and finished goods. The fair value of the inventory was determined based on the estimated selling price to be generated from the finished goods, less costs to sell, including a reasonable margin, which are level 3 inputs not observable in the market. Property and equipment and assumed liabilities were recorded at their carrying amounts which were deemed to approximate their fair values based on level 3 unobservable inputs. The fair values of the right-of-use assets and lease liabilities for assumed operating leases were assessed in accordance with ASC 842, Leases, based on discounted cash flow from lease payments, utilizing the Company’s incremental borrowing rate of 7.25%. The fair value of the intangible asset was determined by applying the income approach based on significant level 3 unobservable inputs. The income approach estimates fair value based on the present value of cash flow that the assets could be expected to generate in the future. The Company developed internal estimates for expected cash flows in the present value calculation using inputs and significant assumptions that include historical revenues and earnings, long-term growth rate, discount rate, contributory asset charges and future tax rates, among others. The information below reflects the preliminary amounts of identifiable assets acquired and liabilities assumed as of May 31, 2023 (in thousands):
|  | Amount |
Assets: |  |  |
Inventory(1) |  | $ | 11,152 |
Property and equipment |  |  | 2,921 |
Goodwill(1) |  |  | 1,931 |
Intangible asset - Developed technology |  |  | 1,200 |
Operating lease right-of-use assets |  |  | 1,812 |
Total assets |  |  | 19,016 |
Liabilities: |  |  |
Liabilities assumed(1) |  |  | 1,253 |
Operating lease liability |  |  | 1,812 |
Total liabilities |  |  | 3,065 |
Net assets acquired |  | $ | 15,951 |
___________________________ (1) Through May 2023, goodwill related to the acquisition of V-Go was adjusted for a reduction in rebate-related liabilities partially offset by a reserve for inventory obsolescence. The Company incurred acquisition-related costs of approximately $0.4 million for the year ended December 31, 2022. There were no acquisition-related costs incurred for the year ended December 31, 2023.

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- Definition The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable). + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 805 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 5 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479907/805-20-50-5 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 805 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//805/tableOfContent + Details
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