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Goodwill and Intangible Assets

12 Months Ended

Dec. 31, 2023

11. 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 as of December 31, 2021	$	—
Goodwill resulting from BDSI Acquisition		133,695
Balance as of December 31, 2022	$	133,695
Measurement period adjustments from BDSI Acquisition		162
Balance as of December 31, 2023	$	133,857

The following table sets forth the cost, accumulated amortization, and carrying amount of intangible assets as of December 31, 2023 and 2022:


		As of December 31, 2023						As of December 31, 2022
	Amortization Period (Years)		Cost		Accumulated Amortization		Carrying Amount		Cost		Accumulated Amortization		Carrying Amount
Belbuca	4.8	$	360,000	$	(133,821)	$	226,179	$	360,000	$	(58,428)	$	301,572
Nucynta Products⁽¹⁾	8.5		521,170		(382,710)		138,460		521,170		(319,628)		201,542
Symproic	9.6		70,000		(12,931)		57,069		70,000		(5,646)		64,354
Elyxyb	—		—		—		—		5,000		(5,000)		—
Total intangibles		$	951,170	$	(529,462)	$	421,708	$	956,170	$	(388,702)	$	567,468

The following table presents amortization and impairment expense recognized in cost of product revenues for the years ended December 31, 2023, 2022, and 2021:


	Years Ended December 31,
		2023		2022		2021
Belbuca	$	75,393	$	58,428	$	—
Nucynta Products⁽¹⁾		63,082		67,181		67,181
Symproic		7,285		5,646		—
Elyxyb ⁽²⁾		—		5,000		—
Total amortization and impairment expense	$	145,760	$	136,255	$	67,181

(1)

During the three months ended September 30, 2023, the United States Food and Drug Administration (“FDA”) granted New Patient Population exclusivity in pediatrics for Nucynta IR which extends the period of U.S. exclusivity for Nucynta IR to July 3, 2026, resulting in an extension of the estimated useful life of the underlying intangible asset from 8.0 years to 8.5 years. This change in estimate resulted in a decrease of amortization expense of $4,099 and an increase in net income of $3,037 during the year ended December 31, 2023. The impact to earnings per share — basic and earnings per share — diluted was $0.09 and $0.07, respectively, during the year ended December 31, 2023.

(2)

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 expenses were recognized. In addition, contract termination costs related to the discontinuation were immaterial and expensed upon the termination of the contracts. 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.

As of December 31, 2023, the remaining amortization expense expected to be recognized is as follows:


Years ended December 31,	Belbuca		Nucynta Products		Symproic		Total
2024	$	75,393	$	55,384	$	7,285	$	138,062
2025		75,393		55,384		7,285		138,062
2026		75,393		27,692		7,285		110,370
2027		—		—		7,285		7,285
2028		—		—		7,285		7,285
Thereafter		—		—		20,644		20,644
Remaining amortization expense	$	226,179	$	138,460	$	57,069	$	421,708