Balance Sheets Details

9 Months Ended

Sep. 30, 2023

Cash Equivalents

Cash equivalents as of September 30, 2023 and December 31, 2022, consisted of the following (in thousands):


	September 30, 2023				December 31, 2022
	Adjusted Cost		Estimated Fair Value		Adjusted Cost		Estimated Fair Value
Money market funds (1)	$	65,585	$	65,585	$	77,309	$	77,309

(1) Money market funds are classified in cash and cash equivalents on our unaudited condensed consolidated balance sheets. Average contractual maturities (in days) is not applicable.

As of September 30, 2023, the total cash and cash equivalents balance of $74.6 million consisted of money market funds of $65.6 million and cash of $9.0 million held with major financial institutions. As of December 31, 2022, the total cash and cash equivalents balance of $114.0 million consisted of money market funds of $77.3 million and cash of $36.7 million held with major financial institutions.

Inventories

Inventories consisted of the following (in thousands):


	September 30, 2023		December 31, 2022
Raw materials	$	108	$	108
Work-in-process	—		91
Finished goods	2,197		1,830
Total Inventories	$	2,305	$	2,029

Inventories are recorded net of reserves of $1.4 million as of September 30, 2023 and December 31, 2022.

Property and Equipment, net

Property and equipment, net consisted of the following (in thousands):


	September 30, 2023		December 31, 2022
Laboratory equipment	$	36,376	$	39,679
Leasehold improvements	11,750		16,633
Computer equipment and software	3,096		3,039
Office equipment and furniture	1,366		1,345
Construction in progress	1,781		1,739
Property and equipment	54,369		62,435
Less: accumulated depreciation and amortization	(39,087)		(39,821)
Property and equipment, net	$	15,282	$	22,614

During the three and nine months ended September 30, 2023, the Company recorded a non-cash impairment charge of $4.7 million associated with the San Carlos facility leasehold improvements. For additional information, see Note 10, “Commitments and Contingencies.”

As of September 30, 2023, the Company had classified $2.1 million of laboratory equipment, net of accumulated depreciation, that it intends to sell within the next quarter and that meets the held for sale criteria, to assets held for sale. The Company determined that the carrying value of the assets held for sale exceeds fair value less costs to sell, which resulted in a write-down of $1.5 million, presented within the asset impairment and other charges line item in the condensed consolidated statements of operations, for the quarter ended September 30, 2023. As of September 30, 2023, the Company has presented $0.6 million of assets held for sale in the condensed consolidated balance sheet. For additional information, see Note 15, “Assets Held For Sale.”

Depreciation expense included in both research and development expenses and selling, general and administrative expenses in the unaudited condensed consolidated statements of operations was as follows (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Depreciation expense	$	1,357	$	1,405	$	4,302	$	3,961


Goodwill
	Goodwill
Balance at January 1, 2023	$	3,241
Impairment	(778)
Balance at September 30, 2023	$	2,463

Goodwill was allocated to each of the Company's reporting units. In July 2023, we announced a restructuring of our business and that we are discontinuing investment in certain development programs, primarily in Novel Biotherapeutics. As a result of this plan, the Company determined that a triggering event had occurred that required an interim goodwill impairment test during the third quarter of 2023. Based on the results of the impairment evaluation, the Company determined that the goodwill within the Novel Biotherapeutics reporting unit was impaired, which resulted in a non-cash impairment charge of $0.8 million to write off all of the associated goodwill. The impairment charge is recorded within the asset impairment and other charges in the condensed consolidated statements of operation for the three and nine months ended September 30, 2023. Goodwill had a carrying value of $2.5 million and $3.2 million as of September 30, 2023 and December 31, 2022, respectively.

Other Accrued Liabilities

Other accrued liabilities consisted of the following (in thousands):


	September 30, 2023		December 31, 2022
Accrued professional and outside service fees	$	5,149	$	3,495
Accrued purchases	2,644		10,852
Other	1,003		932
Total other accrued liabilities	$	8,796	$	15,279