Consolidated Financial Statement Details

12 Months Ended

Dec. 31, 2024

Consolidated Financial Statement Details

Note 3 — Consolidated Financial Statement Details

Inventory

Inventory consists of the following (in thousands):


	December 31,
	2024		2023
Raw materials	$	—	$	1,861
Work-in-process		—		12,880
Finished goods		—		1,360
Total inventory	$	—	$	16,101

For the year ended December 31, 2023, we recorded a provision of $2.0 million for the net realizable value of our batches as an increase to cost of goods sold. Our manufacturing agreement with UCB Pharma (UCB) for the reagent used in the manufacture of CIMZIA® provided for a fixed selling price which we had negotiated in exchange for a higher royalty rate. Accordingly, when evaluating the net realizable value of our inventory for UCB, we included the negotiated increase of the royalties in our analysis, and the aggregate revenue has historically been greater than our manufacturing cost. Due to the decreases in the royalty rates for 2024 as a result of a settlement agreement with UCB, the aggregate revenue was expected to be less than our manufacturing cost for these years, and therefore we previously recorded a provision for net realizable value. As further disclosed in Note 9, on July 31, 2024, we entered into a long-term supply agreement with UCB that increases the selling price of the reagent used in the manufacture of CIMZIA®, which resulted in the aggregate revenue exceeding our manufacturing costs. As a result, we reduced the provision to $0 during the three months ended September 30, 2024. See Note 9 for additional information on the settlement agreement with UCB.

As of December 2, 2024, we sold all of our inventory to Gannet BioChem.

Other Current Assets

Other current assets consists of the following (in thousands):


	December 31,
	2024		2023
Prepaid research and development expenses	$	1,947	$	4,325
Interest and other non-trade receivables		1,609		1,047
Other prepaid expenses		2,510		4,407
Total other current assets	$	6,066	$	9,779

Property, Plant and Equipment

Property, plant and equipment consists of the following (in thousands):


	December 31,
	2024			2023
Building and leasehold improvements	$	3,881		$	43,184
Laboratory equipment		552			14,537
Computer equipment and software		14,616			22,438
Manufacturing equipment		—			24,315
Furniture, fixtures, and other		27			541
Depreciable property, plant and equipment at cost		19,076			105,015
Less: accumulated depreciation		(15,910	)		(86,898	)
Depreciable property, plant and equipment, net		3,166			18,117
Construction-in-progress		245			739
Property, plant and equipment, net	$	3,411		$	18,856

Laboratory and manufacturing equipment, including construction-in-process, include assets that support both our manufacturing and research and development activities.

On December 2, 2024, we sold the Facility, including buildings and the Facility’s associated manufacturing equipment, laboratory equipment and computer equipment and software, to Gannet BioChem.

Due to the weakening lease markets, during the years ended December 31, 2024 and 2023, we have recorded non-cash impairment charges on our lease-related property, plant and equipment, primarily for our leasehold improvements, including $1.0 million during the three months ended June 30, 2024, which we report in restructuring and impairment in our Consolidated Statement of Operations. See Note 10 for additional information.

Depreciation and amortization expense for property, plant and equipment for the years ended December 31, 2024 and 2023 totaled $4.1 million and $7.0 million, respectively.

Goodwill

The following is a reconciliation of the change in our goodwill for the year ended December 31, 2023 (in thousands):


	Year Ended December 31, 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 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 11 for additional information.

Accrued Expenses

Accrued expenses consist of the following (in thousands):


	December 31,
	2024		2023
Accrued compensation	$	2,832	$	5,553
Accrued research and development expenses		14,453		10,118
Accrued contract termination costs		2,767		3,020
Other accrued expenses		9,920		3,471
Total accrued expenses	$	29,972	$	22,162

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 (Loss)
Balance at December 31, 2022	$	(5,131	)	$	(1,776	)	$	(6,907	)
Foreign currency translation gain (loss)		62			—			62
Unrealized gain on available-for-sale securities		—			1,826			1,826
Reclassification adjustments to income		5,099			—			5,099
Balance at December 31, 2023		30			50			80
Foreign currency translation gain (loss)		(4	)		—			(4	)
Unrealized gain on available-for-sale securities		—			(15	)		(15	)
Balance at December 31, 2024	$	26		$	35		$	61

The reclassification from accumulated other comprehensive loss relates to the closure of the operations of our foreign subsidiaries and has been included within other income (expense), net in our Consolidated Statement of Operations for the year ended December 31, 2023.