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INTANGIBLE ASSETS AND GOODWILL | 9 Months Ended
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Sep. 30, 2021
Goodwill and Intangible Assets Disclosure [Abstract] |
INTANGIBLE ASSETS AND GOODWILL | INTANGIBLE ASSETS AND GOODWILLIntangible Assets Intangible assets on the Company's condensed consolidated balance sheets are the result of the Viventia Acquisition in September 2016. The following table sets forth the composition of intangible assets as of September 30, 2021 and December 31, 2020 (in thousands):
| September 30, 2021 |  | December 31, 2020
IPR&D intangible assets: |  |  |
Vicineum United States rights | $ | — |  |  | $ | 31,700 |
Vicineum European Union rights | 14,700 |  |  | 14,700 |
Total Intangibles | $ | 14,700 |  |  | $ | 46,400 |
The fair value of the acquired intangible asset for the U.S. and E.U. rights of Vicineum is determined using a risk-adjusted discounted cash flow approach, which includes probability adjustments for projected revenues and operating expenses based on the success rates assigned to each stage of development for each geographical region; as well as discount rates applied to the projected cash flows. In August 2021, the Company received a CRL from the FDA regarding its BLA for Vicineum for the treatment of NMIBC, the Company’s lead product candidate. In the CRL, the FDA determined that it could not approve the BLA for Vicineum in its present form and provided recommendations specific to additional clinical/statistical data and analyses in addition to CMC issues pertaining to a recent pre-approval inspection and product quality. The Company participated in a Type A Meeting with the FDA on October 29, 2021 to discuss questions related to CMC raised in the CRL, and expects to engage in a Type A meeting with the FDA in the fourth quarter of 2021 to discuss the clinical issues raised in the CRL. Both meetings are intended to help the Company determine the appropriate path forward for Vicineum. Given the inherent uncertainty at this time in the development plans for Vicineum as a result of the CRL, an impairment analysis was conducted, which concluded that the carrying value of our intangible assets of Vicineum United States rights was fully impaired as of September 30, 2021. However, while similar delays in timelines and reduced probabilities of success also affected the carrying value of our intangible assets of Vicineum E.U. rights, this asset was not impaired as of September 30, 2021. The $31.7 million of impairment charges for the period ended September 30, 2021 are due to delays in the expected start of commercialization and lower probabilities of success, combined with higher operating expenses expected to be incurred prior to commercialization, resulting in lower expected future cash flows estimated in the US market as of September 30, 2021. However, while similar delays in timelines and reduced probabilities of success also affected the estimated fair value of our intangible assets of Vicineum E.U. rights, this asset was not impaired as of September 30, 2021. At this time, management has assessed that the carrying value of the Vicineum EU rights is not at significant risk of impairment in the future within the current range of commercialization timelines and POS assumptions. This is primarily due to the fact that the EU asset is burdened with significantly less expense than the US asset, as our strategic operating plan is to sublicense Vicineum to business development partners in all regions outside the US, including the EU, with the Company earning a potential combination of upfront, milestone, and royalty payments, and the business development partner bearing the majority of regulatory and commercialization costs. Goodwill Goodwill on the Company's condensed consolidated balance sheets is the result of the Viventia Acquisition in September 2016. Goodwill had a carrying value of $13.1 million as of September 30, 2021 and December 31, 2020. Given the inherent uncertainty at this time in the development plans for Vicineum as a result of the CRL, a quantitative impairment analysis was conducted during the quarter, in advance of the Company's typical annual assessment date of October 1. While an impairment was recognized in one of its intangible assets, Vicineum U.S. Rights, the Company concluded that the carrying value of its goodwill of $13.1 million was not impaired as of September 30, 2021, with the fair value of equity of the reporting unit exceeding the estimated carrying value of the reporting unit by approximately 45%. The Company believes it has sufficient future cash flows from additional geographic regions outside the US to support the value of its goodwill. The Company projects future cash flows based on various timeline assumptions and applies a probability to each outcome based on management’s best estimate. In addition, probabilities of success in achieving certain clinical and regulatory success in our current development profile (ranging from 45% to 55% globally) also have a material effect on the estimated fair value of its reporting unit as of the impairment assessment date. The Company will continue to evaluate its timelines for commercialization and probability of success of development of Vicineum for the treatment of BCG-unresponsive NMIBC. The Company participated in a Type A Meeting with the FDA on October 29, 2021 to discuss questions related to CMC raised in the CRL, and expects to engage in a Type A meeting with the FDA in the fourth quarter of 2021 to discuss questions related to clinical matters raised in the CRL. Both meetings are intended to help the Company determine the appropriate path forward for Vicineum, and will assess the outcome of those meetings, and other information obtained, to determine if further impairment testing is required. Further reductions to probabilities of success, additional development and commercial launch delays, or increases in underlying discount rates have the potential to result in future goodwill impairment.

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