Annual report pursuant to Section 13 and 15(d)

Balance Sheet Account Details

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Balance Sheet Account Details
12 Months Ended
Dec. 31, 2018
Other Balance Sheet Details [Abstract]  
Balance Sheet Account Details Balance Sheet Account DetailsShort-term Investments
The following table summarizes the various investment categories at December 31, 2018 and 2017 (in thousands):
Cost
Gross unrealized
gains
Gross unrealized
losses
Estimated
fair value
December 31, 2018
Short-term investments
Bank deposits $ 311,066  $ 26  $ (29) $ 311,063 
Corporate bonds 53,223  (45) 53,179 
Corporate equity securities 135  1,191  —  1,326 
Commercial paper 225,731  (76) 225,663 
U.S. Government bonds 7,982  —  (9) 7,973 
Municipal bonds 2,017  —  (4) 2,013 
$ 600,154  $ 1,226  $ (163) $ 601,217 
December 31, 2017
Short-term investments
Bank deposits $ 80,095  $ $ (42) $ 80,059 
Corporate bonds 55,335  —  (96) 55,239 
Corporate equity securities 207  1689  —  1,896 
Commercial paper 27,933  —  (20) 27,913 
Agency bonds 4,991  —  (1) 4,990 
U.S. Government bonds 8,939  —  (10) 8,929 
Municipal bonds 2,028  —  (13) 2,015 
$ 179,528  $ 1,695  $ (182) $ 181,041 

Other current assets consist of the following (in thousands):
  December 31,
  2018 2017
Restricted cash $ 2,616  $ — 
Investment in Viking warrants 9,257  — 
Other 8,545  1,514 
$ 20,418  $ 1,514 

Property and equipment is stated at cost and consists of the following (in thousands):
December 31,
2018 2017
Lab and office equipment $ 4,183  $ 3,460 
Leasehold improvements 2,418  1,917 
Computer equipment and software 936  697 
7,537  6,074 
Less accumulated depreciation and amortization (2,165) (1,862)
$ 5,372  $ 4,212 
Depreciation of equipment is computed using the straight-line method over the estimated useful lives of the assets which range from three to ten years. Leasehold improvements are amortized using the straight-line method over their estimated useful lives or their related lease term, whichever is shorter. Depreciation expense of $0.9 million, $0.4 million, and $0.2 million was recognized for the years ended December 31, 2018, 2017, and 2016, respectively, and is included in operating expenses.
Goodwill and identifiable intangible assets consist of the following (in thousands):
December 31,
2018 2017
Indefinite lived intangible assets
IPR&D $ —  $ 7,923 
Goodwill 86,646  85,959 
Definite lived intangible assets
Complete technology 235,413  222,900 
Less: Accumulated amortization (35,070) (23,301)
Trade name 2,642  2,642 
Less: Accumulated amortization (1,048) (916)
Customer relationships 29,600  29,600 
Less: Accumulated amortization (11,744) (10,264)
Total goodwill and other identifiable intangible assets, net $ 306,439  $ 314,543 

Amortization of finite lived intangible assets is computed using the straight-line method over the estimated useful life of the asset of 20 years. Amortization expense of $15.8 million, $11.3 million, and $10.6 million was recognized for the years ended December 31, 2018 and 2017, and 2016, respectively. Estimated amortization expense for the years ending December 31, 2018 through 2023 is $13.6 million per year. For each of the years ended December 31, 2018, 2017, and 2016, there was no impairment of intangible assets with finite lives.


Accrued liabilities consist of the following (in thousands):
  December 31,
  2018 2017
Compensation $ 4,045  $ 4,085 
Legal 942  430 
Amounts owed to former licensees 428  396 
Royalties owed to third parties 1,025  954 
Payments due to broker for share repurchases 4,613  — 
Return reserve 3,590  — 
Restructuring 1,093  — 
Other 3,464  1,512 
$ 19,200  $ 7,377 


Contingent liabilities:

In connection with the acquisition of CyDex in January 2011, we issued a series of CVRs and also assumed certain contingent liabilities. We may be required to make additional payments upon achievement of certain clinical and regulatory milestones to the CyDex shareholders and former license holders. We paid CyDex shareholders, through 2016, 20% of all CyDex-related revenue, but only to the extent that, and beginning only when, CyDex-related revenue for the year exceeds $15.0 million; plus an additional 10% of all CyDex-related revenue recognized during such year, but only to the extent, and beginning only when aggregate CyDex-related revenue for such year exceeds $35.0 million.

In connection with the acquisition of Metabasis in January 2010, we entered into four CVR agreements with Metabasis shareholders. The CVRs entitle the holders to cash payments as frequently as every six months as proceeds are received by us upon the sale or licensing of any of the Metabasis drug development programs and upon the achievement of specified milestones.
 
The following table summarizes contingent liabilities as of December 2018 and 2017 (in thousands):

December 31, 2016 Payments Fair Value Adjustment Additions December 31, 2017 Payments Fair Value Adjustment December 31, 2018
Cydex $ 6,600  $ (5,000) $ —  $ —  $ 1,600  $ (25) $ (1,050) $ 525 
Metabasis $ 1,500  $ —  $ 2,500  $ —  $ 4,000  $ (3,900) $ 5,400  $ 5,500 
Crystal $ —  $ —  $ —  $ 8,400  $ 8,400  $ (1,000) $ (924) $ 6,476 
Total $ 8,100  $ (5,000) $ 2,500  $ 8,400  $ 14,000  $ (4,925) $ 3,426  $ 12,501