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Condensed Consolidated Financial Statement Details | 9 Months Ended
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Sep. 30, 2023
Inventory Disclosure [Abstract] |
Condensed Consolidated Financial Statement Details | Note 3 — Condensed Consolidated Financial Statement Details Inventory Inventory consists of the following (in thousands):
|  | September 30, 2023 |  |  | December 31, 2022 |
Raw materials |  | $ | 1,918 |  |  | $ | 2,575 |
Work-in-process |  |  | 12,291 |  |  |  | 10,749 |
Finished goods |  |  | 921 |  |  |  | 5,878 |
Total inventory, net |  | $ | 15,130 |  |  | $ | 19,202 |
We manufacture finished goods inventory upon receipt of firm purchase orders, and we may manufacture certain intermediate work-in-process materials and purchase raw materials based on purchase forecasts from our partners. We include direct materials, direct labor, and manufacturing overhead in inventory and determine cost on a first-in, first-out basis for raw materials and on a specific identification basis for work-in-process and finished goods. We value inventory at the lower of cost or net realizable value, and we write down defective or excess inventory to net realizable value based on historical experience or projected usage. We expense inventory related to our research and development activities as manufactured by us or when purchased. During the three months ended September 30, 2023, we recorded a provision for inventory obsolescence of $3.7 million for certain production batches manufactured in our Huntsville, Alabama facility. As a result of our identification of a quality concern of a solvent obtained from a third party that was used in the manufacturing of these batches, the batches are currently being held from further processing pending an investigation and assessment. If the results of the investigation and assessment determine that the held batches can be used for further processing, we may release these batches to our partner. Other Current Assets Other current assets consist of the following (in thousands):
|  | September 30, 2023 |  |  | December 31, 2022 |
Prepaid research and development expenses |  | $ | 2,014 |  |  | $ | 7,398 |
Non-trade receivables and other |  |  | 1,226 |  |  |  | 2,423 |
Other prepaid expenses |  |  | 5,793 |  |  |  | 5,987 |
Total other current assets |  | $ | 9,033 |  |  | $ | 15,808 |
Property, Plant and Equipment Property, plant and equipment consists of the following (in thousands):
|  | September 30, 2023 |  |  | December 31, 2022 |
Building and leasehold improvements |  | $ | 42,641 |  |  | $ | 74,889 |
Computer equipment and computer software |  |  | 24,586 |  |  |  | 26,205 |
Manufacturing equipment |  |  | 25,352 |  |  |  | 25,052 |
Laboratory equipment |  |  | 14,592 |  |  |  | 24,243 |
Furniture, fixtures and other |  |  | 533 |  |  |  | 4,263 |
Depreciable property, plant and equipment at cost |  |  | 107,704 |  |  |  | 154,652 |
Less: accumulated depreciation |  |  | (88,243 | ) |  |  | (124,731 | )
Depreciable property, plant and equipment, net |  |  | 19,461 |  |  |  | 29,921 |
Construction in process |  |  | 488 |  |  |  | 2,530 |
Property, plant and equipment, net |  | $ | 19,949 |  |  | $ | 32,451 |
As a result of the sustained decrease in the fair value of our single reporting unit during the three months ended March 31, 2023, plans to sublease all of our laboratory and office space, and the weakening sublease markets, we have recorded non-cash impairment charges of $6.1 million for property, plant and equipment for the nine months ended September 30, 2023, which we report in restructuring, impairment and costs of terminated program in our Condensed Consolidated Statement of Operations. See Note 6 for additional information. Goodwill The following is a reconciliation of the changes in our goodwill for the nine months ended September 30, 2023 (in thousands):
|  | Nine months ended September 30, 2023 |
Goodwill – beginning balance |  | $ | 76,501 |
Impairment of goodwill |  |  | (76,501 | )
Goodwill – ending balance |  | $ | — |
As a result of the decrease in the fair value of our single reporting unit during the three months ended March 31, 2023, we recorded a non-cash goodwill impairment charge of $76.5 million, which we report as impairment of goodwill in our Condensed Consolidated Statement of Operations. We had previously recognized goodwill primarily from our acquisitions of Shearwater Corp. and Aerogen, Inc. in 2001 and 2005, respectively. See Note 6 for additional information. Accrued Expenses Accrued expenses consist of the following (in thousands):
|  | September 30, 2023 |  |  | December 31, 2022 |
Accrued compensation |  | $ | 11,477 |  |  | $ | 9,582 |
Accrued clinical trial expenses |  |  | 4,236 |  |  |  | 12,262 |
Liability to collaboration partners |  |  | 4,444 |  |  |  | 3,808 |
Accrued contract termination costs |  |  | 2,624 |  |  |  | 3,902 |
Other accrued expenses |  |  | 6,948 |  |  |  | 7,003 |
Total accrued expenses |  | $ | 29,729 |  |  | $ | 36,557 |
Liabilities Related to the Sales of Future Royalties In 2012 and 2020, we sold to RPI Finance Trust (RPI) and entities managed by Healthcare Royalty Management, LLC (collectively, HCR), respectively, our rights to receive royalties under our license and manufacturing agreements with certain pharmaceutical partners under the 2012 Purchase and Sale Agreement and the 2020 Purchase and Sale Agreement, respectively. We account for these transactions as debt and recognize non-cash royalty revenue and non-cash interest expense to amortize the proceeds over the lives of the respective arrangements. We periodically update our prospective non-cash interest rate based on our estimates of future royalties. As of September 30, 2023, our imputed interest rates for the arrangements with RPI and HCR were 10% and 20%, respectively. The following is a reconciliation of the changes in our liabilities related to the sales of future royalties for the nine months ended September 30, 2023 (in thousands):
|  | Nine Months Ended September 30, 2023 |
|  | 2012 Purchase and Sale Agreement |  |  | 2020 Purchase and Sale Agreement |  |  | Total |
Liabilities related to the sales of future royalties, net – beginning balance |  | $ | 55,167 |  |  | $ | 100,211 |  |  | $ | 155,378 |
Non-cash royalty revenue |  |  | (28,035 | ) |  |  | (22,825 | ) |  |  | (50,860 | )
Non-cash interest expense |  |  | 3,551 |  |  |  | 14,916 |  |  |  | 18,467 |
Amortization of transaction costs |  |  | — |  |  |  | 625 |  |  |  | 625 |
Liabilities related to the sales of future royalties, net – ending balance |  | $ | 30,683 |  |  | $ | 92,927 |  |  | $ | 123,610 |
Accumulated Other Comprehensive Income (Loss) The following table summarizes the changes in accumulated other comprehensive income (loss) by component (in thousands):
|  | Foreign currency translation |  |  | Available-for-sale securities |  |  | Accumulated Other Comprehensive Income |
Balance at December 31, 2022 |  | $ | (5,131 | ) |  | $ | (1,776 | ) |  | $ | (6,907 | )
Foreign currency translation adjustments |  |  | 139 |  |  |  | — |  |  |  | 139 |
Unrealized gain on available-for-sale securities |  |  | — |  |  |  | 1,087 |  |  |  | 1,087 |
Balance at March 31, 2023 |  | $ | (4,992 | ) |  | $ | (689 | ) |  | $ | (5,681 | )
Foreign currency translation adjustments |  |  | 13 |  |  |  | — |  |  |  | 13 |
Unrealized gain on available-for-sale securities |  |  | — |  |  |  | 244 |  |  |  | 244 |
Reclassification adjustments to income |  |  | (1,026 | ) |  |  | — |  |  |  | (1,026 | )
Balance at June 30, 2023 |  | $ | (6,005 | ) |  | $ | (445 | ) |  | $ | (6,450 | )
Foreign currency translation adjustments |  |  | (98 | ) |  |  | — |  |  |  | (98 | )
Unrealized gain on available-for-sale securities |  |  | — |  |  |  | 196 |  |  |  | 196 |
Balance at September 30, 2023 |  | $ | (6,103 | ) |  | $ | (249 | ) |  | $ | (6,352 | )
The reclassification from accumulated other comprehensive loss relates to the closure of one of our foreign subsidiaries and has been included within interest income and other income (expense), net in our Condensed Consolidated Statement of Operations for the nine months ended September 30, 2023.

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- Definition The entire disclosure for inventory. Includes, but is not limited to, the basis of stating inventory, the method of determining inventory cost, the classes of inventory, and the nature of the cost elements included in inventory. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 330 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//330/tableOfContent + Details
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