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Goodwill and Intangible Assets

12 Months Ended

Dec. 31, 2022

10. GOODWILL AND INTANGIBLE ASSETS

The Company’s goodwill resulted from the BDSI Acquisition. Refer to Note 4, Acquisitions, for more information.

The following tables summarizes the changes in the carrying amount of goodwill:


	Amount
Balance at December 31, 2021	$	—
Goodwill resulting from BDSI Acquisition		133,695
Balance at December 31, 2022	$	133,695

The following table sets forth the cost, accumulated amortization, and carrying amount of intangible assets as of December 31, 2022 and 2021:


		As of December 31, 2022						As of December 31, 2021
	Amortization Period (Years)		Cost		Accumulated Amortization		Carrying Amount		Cost		Accumulated Amortization		Carrying Amount
Belbuca	4.8	$	360,000	$	(58,428)	$	301,572	$	—	$	—	$	—
Nucynta Products	8.0		521,170		(319,628)		201,542		521,170		(252,447)		268,723
Symproic	9.6		70,000		(5,646)		64,354		—		—		—
Elyxyb	—		5,000		(5,000)		—		—		—		—
Total intangibles		$	956,170	$	(388,702)	$	567,468	$	521,170	$	(252,447)	$	268,723

The following table presents amortization and impairment expense recognized in cost of product revenues for the years ended December 31, 2022, 2021, and 2020:


	Years Ended December 31,
		2022		2021		2021
Belbuca	$	58,428	$	—	$	—
Nucynta Products		67,181		67,181		60,680
Symproic		5,646		—		—
Elyxyb (1)		5,000		—		—
Total amortization and impairment expense	$	136,255	$	67,181	$	60,680

(1)

Includes $214 of amortization expense and $4,786 of impairment expense.

Intangible Asset Impairment

During the three months ended December 31, 2022, the Company made the decision to discontinue the commercialization of Elyxyb. Accordingly, an asset impairment evaluation performed during the three months ended December 31, 2022 resulted in the Company recognizing $4,786 of impairment expense related to the Elyxyb intangible asset, which was equivalent to the carrying amount of the Elyxyb asset at the time of the impairment determination. The impairment expense reflects that no significant proceeds are expected to be realized from its disposition. The impairment expense is included in “Intangible asset amortization and impairment” in the Consolidated Statements of Operations. Other expenses associated with the discontinuation of Elyxyb were immaterial.

The revenues generated from sales of Elyxyb to date were immaterial. Elyxyb is not considered a significant component of the entity’s business and therefore, is not presented as a discontinued operation.

There were no employees impacted by the decision to discontinue the commercialization of Elyxyb and therefore, no severance or employee benefit expense were recognized. In addition, contract termination costs related to the

discontinuation were immaterial and expensed upon the termination of the contracts. The expected completion date of the remaining exit and other activities associated with the discontuation of Elyxyb is March 31, 2023.

In February 2023, the Company entered into the Elyxyb Sale Agreement with Scilex to transfer to Scilex all assets, rights, and obligations necessary to commercialize Elyxyb in the United States and Canada. Refer to Note 20, Subsequent Events, for more information.

As of December 31, 2022, the remaining amortization expense expected to be recognized is as follows:


Years ended December 31,	Belbuca		Nucynta Products		Symproic		Total
2023	$	75,393	$	67,181	$	7,285	$	149,859
2024		75,393		67,181		7,285		149,859
2025		75,393		67,180		7,285		149,858
2026		75,393		—		7,285		82,678
2027		—		—		7,285		7,285
Thereafter		—		—		27,929		27,929
Remaining amortization expense	$	301,572	$	201,542	$	64,354	$	567,468