Note 8 - Acquired Intangible Assets, Net

12 Months Ended

Dec. 31, 2014

Intangible Assets Disclosure [Text Block]

8. Acquired Intangible Assets, Net

In November 2007, in connection with the termination of the agreement with Galderma which originally granted to Galderma the worldwide rights to commercialize, distribute, and market the ELEVESS product, the Company reacquired the worldwide rights and control of the future development and marketing of ELEVESS. The intangible asset realized during this process was the ELEVESS trade name.

On December 30, 2009, in connection with the acquisition of Anika S.r.l., the Company purchased various intangible assets. The Company finalized the purchase price allocation relative to this acquisition during the fourth quarter of 2010.

The Company completed its annual impairment review as of November 30, 2014 and concluded that no impairment in the carrying value exists as of that date with respect to both goodwill and IPR&D. Through December 31, 2014, there have not been any events or changes in circumstances that indicate that the carrying value of goodwill or acquired intangible assets may not be recoverable. The Company continues to monitor and evaluate the financial performance of the Anika S.r.l. business including the impact of general economic conditions, to assess the potential for the fair value of the reporting unit to decline below its book value.

Amortization expense was $2,092,803, $2,093,746, and $2,028,498 for the years ended December 31, 2014, 2013, and 2012, respectively. Amortization expense on intangible assets is expected to be approximately $1.0 million annually for the next five years and approximately $5.2 million in aggregate thereafter.

Intangible assets consist of the following:

			December 31, 2014								December 31, 2013
	Gross Value		Currency Translation Adjustment			Accumulated Amortization			Net Book Value		Net Book Value		Useful Life
Developed technology	$	16,700,000	$	(2,255,722	)	$	(5,034,341	)	$	9,409,937	$	11,753,003		15
In-process research & development		5,502,686		(849,812	)		-			4,652,874		5,286,127	Indefinite
Distributor relationships		4,700,000		(415,344	)		(4,284,656	)		-		863,655		5
Patents		1,000,000		(134,315	)		(284,486	)		581,199		719,574		16
Elevess trade name		1,000,000		-			(749,300	)		250,700		376,050		9
Total	$	28,902,686	$	(3,655,193	)	$	(10,352,783	)	$	14,894,710	$	18,998,409

Changes in the carrying value of goodwill were as follows:

	December 31,
	2014			2013
Balance, beginning	$	9,443,894		$	9,065,891
Effects of foreign currency adjustments		(1,105,195	)		378,003
Balance, ending	$	8,338,699		$	9,443,894