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, 2020
Other Balance Sheet Details [Abstract]  
Balance Sheet Account Details Balance Sheet Account DetailsShort-term Investments
Excluding our investments in Viking, the following table summarizes the various investment categories at December 31, 2020 and 2019 (in thousands):
Cost
Gross unrealized
gains
Gross unrealized
losses
Estimated
fair value
December 31, 2020
Short-term investments
     Mutual fund $ 151,512  $ 386  $ —  $ 151,898 
     Bank deposits 84,120  35  (1) 84,154 
     Commercial paper 45,459  27  (1) 45,485 
     Corporate bonds 30,512  99  (1) 30,610 
     Agency bonds 4,499  —  4,501 
     Corporate equity securities 4,466  360  (1,388) 3,438 
     Treasury bill 3,999  —  —  3,999 
     Warrants —  393  —  393 
$ 324,567  $ 1,302  $ (1,391) $ 324,478 
December 31, 2019
Short-term investments
     Bank deposits $ 411,690  $ 188  $ (3) $ 411,875 
     Corporate bonds 63,818  161  —  63,979 
     Corporate equity securities 4,506  416  (1,850) 3,072 
     Commercial paper 210,525  43  (16) 210,552 
     Warrants —  125  —  125 
     Mutual Fund 250,636  —  (249) 250,387 
$ 941,175  $ 933  $ (2,118) $ 939,990 

In addition, as of December 31, 2020 and December 31, 2019, we recorded shares of Viking common stock we own at fair value of $32.8 million and $48.4 million, respectively, in “Short-term investments” in our consolidated balance sheets. We also own warrants to purchase up to 1.5 million shares of Viking's common stock at an exercise price of $1.50 per share. We recorded the warrants in “Short-term investments” in our consolidated balance sheet at fair value of $6.3 million and $9.9 million at December 31, 2020 and December 31, 2019, respectively.

Gain (loss) from short-term investments on our consolidated statements of operations includes both realized and unrealized gain (loss) from our short-term investments in public equity and warrant securities.

The following table summarizes our available-for-sale debt securities by contractual maturity (in thousands):
December 31, 2020
Amortized Cost Fair Value
Within one year $ 141,732  $ 141,793 
After one year through five years 26,856  26,956 
After five years —  — 
     Total $ 168,588  $ 168,749 


The following table summarizes our available-for-sale debt securities in an unrealized loss position (in thousands):
Less than 12 months 12 months or greater Total
Gross
Unrealized
Losses
Estimated
Fair Value
Gross
Unrealized
Losses
Estimated
Fair Value
Gross
Unrealized
Losses
Estimated
Fair Value
December 31, 2020
Bank deposits $ (1) $ 14,013  $ —  $ —  $ (1) $ 14,013 
Corporate bonds (1) 4,526  —  —  (1) 4,526 
Commercial paper (1) 7,693  —  —  (1) 7,693 
     Total $ (3) $ 26,232  $ —  $ —  $ (3) $ 26,232 
December 31, 2019
Bank deposits $ (3) $ 58,584  $ —  $ —  $ (3) $ 58,584 
Commercial paper (16) 79,362  —  —  (16) 79,362 
     Total $ (19) $ 137,946  $ —  $ —  $ (19) $ 137,946 

Our investment policy is capital preservation and we only invested in U.S.-dollar denominated investments. We held a total of 14 positions which were in an unrealized loss position as of December 31, 2020. We believe that we will collect the principal and interest due on our debt securities that have an amortized cost in excess of fair value. The unrealized losses are largely due to changes in interest rates and not to unfavorable changes in the credit quality associated with these securities that impacted our assessment on collectability of principal and interest. We do not intend to sell these securities nor do we believe that we will be required to sell these securities before the recovery of the amortized cost basis. Accordingly, no credit losses were recognized for the twelve months ended December 31, 2020.

Property and equipment are stated at cost and consists of the following (in thousands):
December 31,
2020 2019
Lab and office equipment $ 14,666  $ 6,307 
Leasehold improvements 3,519  2,729 
Computer equipment and software 1,056  999 
19,241  10,035 
Less accumulated depreciation and amortization (4,807) (2,850)
$ 14,434  $ 7,185 
Depreciation of equipment is computed using the straight-line method over the estimated useful lives of the assets which ranges 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 $1.8 million, $1.5 million, and $0.9 million was recognized for the twelve months ended December 31, 2020, 2019, and 2018, respectively, and was included in operating expenses.
Goodwill and identifiable intangible assets consist of the following (in thousands):
As of December 31,
2020 2019
Indefinite-lived intangible assets
     Goodwill $ 189,662  $ 95,229 
Definite-lived intangible assets
     Complete technology 277,740  242,813 
          Less: Accumulated amortization (63,600) (50,203)
     Trade name 2,642  2,642 
          Less: Accumulated amortization (1,312) (1,180)
     Customer relationships 40,700  29,600 
          Less: Accumulated amortization (15,597) (13,224)
     Contractual relationships 362,000  — 
Less: Accumulated amortization (7,243) — 
Total goodwill and other identifiable intangible assets, net $ 784,992  $ 305,677 

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 $23.4 million, $16.9 million, and $15.8 million was recognized for the years ended December 31, 2020 and 2019, and 2018, respectively. Estimated amortization expense for the years ending December 31, 2021 through 2025 is $47.1 million per year. For each of the years ended December 31, 2020, 2019, and 2018, there was no material impairment of intangible assets with finite lives.


Accrued liabilities consist of the following (in thousands):
  December 31,
  2020 2019
Compensation $ 8,810  $ 1,986 
Professional fees 977  1,135 
Amounts owed to former licensees 421  381 
Royalties owed to third parties 693  — 
Return reserve 687  3,027 
Acquisition related liabilities 1,500  — 
Subcontractor 733  — 
Supplier 604  — 
Other 4,105  2,052 
$ 18,530  $ 8,581 

Contingent liabilities:

In connection with the acquisition of Crystal in October 2017, we entered into contingent liabilities based on achievement of certain research and business milestones as well as certain revenue goal.

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.

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.
For CVRs associated with the Pfenex and Icagen acquisitions, see “Note (4), Acquisitions” for more information.

The following table summarizes rollfoward of contingent liabilities as of December 2020 and 2019 (in thousands):

December 31, 2018 Payments Fair Value Adjustment Repurchases December 31, 2019 Additional Contingent Liabilities Payments Fair Value Adjustment Repurchases December 31, 2020
Cydex $ 514  $ (50) $ (116) $ —  $ 348  $ —  $ —  $ 160  $ —  $ 508 
Metabasis 5,551  —  904  (520) 5,935  —  —  (1,867) (247) 3,821 
Crystal 6,477  (3,000) (818) —  2,659  —  (1,800) (59) —  800 
Icagen —  —  —  —  —  4,800  (525) 2,129  —  6,404 
Pfenex —  —  —  —  —  37,000  —  600  —  37,600 
Total $ 12,542  $ (3,050) $ (30) $ (520) $ 8,942  $ 41,800  $ (2,325) $ 963  $ (247) $ 49,133