4.	Intangible Assets

The reconciliation of intangible assets for the years ended June 30, 2012 and 2011 is as follows:


	June 30,
	2012			2011
Patented technologies
Gross carrying amount at beginning of year	$	55,422		$	53,275
Asset impairment write-down		(14,830	)		—
Foreign currency translation adjustments		(1,036	)		2,147

Gross carrying amount at end of year		39,556			55,422

Accumulated amortization at beginning of year		(33,858	)		(29,398	)
Amortization expense		(2,037	)		(3,302	)
Foreign currency translation adjustments		565			(1,158	)

Accumulated amortization at end of year		(35,330	)		(33,858	)

Net book value at end of year	$	4,226		$	21,564

In the 2011 CRL, the FDA did not grant marketing approval for ILUVIEN for DME and, as a result, the Company did not receive a $25.0 million milestone payment from Alimera and Alimera was unable to market ILUVIEN for DME in the U.S. Following the public announcement of the 2011 CRL, there was a significant decline in the Company’s share price, resulting in a decrease of the Company’s market capitalization from $82.0 million to $23.1 million at December 31, 2011. The combination of the 2011 CRL and the decline in the Company’s share price were determined to be impairment indicators of the Company’s finite-lived intangible assets.

As of December 31, 2011, the forecasted probability-weighted undiscounted cash flows for the intangible assets were not expected to be sufficient to recover the aggregate carrying value of $19.4 million, which consisted of $6.3 million for the Durasert technology and $13.1 million for the BioSilicon technology. To assess the recoverability of the combined intangible assets, management used a combination of market-based and income-based valuation methodologies. Using the market-based approach as the primary indicator of fair value, an enterprise value of $4.4 million (market capitalization less existing capital resources) was adjusted for an estimated control premium and for other working capital items to derive an implied fair value of the intangible assets of $4.6 million. Under the income-based approach, the forecasted cash flows expected for the intangible assets were discounted using after-tax cost of capital rates taking into account Company-specific risks. The resulting fair value under this approach supported the fair value determined under the market-based approach. Based on the above analyses, the fair value of the combined intangible assets was allocated to each intangible based on the values determined under the income-based approach, as follows:


	Pre-impairment Carrying Value at December 31, 2011		Impairment Charge			Post-impairment Carrying Value at December 31, 2011
Durasert	$	6,318	$	(3,141	)	$	3,177
BioSilicon		13,108		(11,689	)		1,419

	$	19,426	$	(14,830	)	$	4,596

The net book value of the Company’s intangible assets at June 30, 2012 and 2011 is summarized as follows:


	June 30,				Estimated Remaining Useful Life at June 30, 2012
	2012		2011		(Years)
Patented technologies
Durasert	$	2,912	$	6,845		5.5
BioSilicon		1,314		14,719		5.5

	$	4,226	$	21,564

The Company amortizes its intangible assets with finite lives on a straight-line basis over their respective estimated useful lives. Amortization expense for intangible assets totaled $2.0 million in fiscal 2012 and $3.3 million in each of fiscal 2011 and fiscal 2010. The carrying value of intangible assets at June 30, 2012 of $4.2 million is expected to be amortized on a straight-line basis over the remaining estimated life of 5.5 years, or approximately $770,000 per year.