Quarterly report pursuant to Section 13 or 15(d)

Basis of Presentation and Summary of Significant Accounting Policies (Tables)

v3.22.1
Basis of Presentation and Summary of Significant Accounting Policies (Tables)
3 Months Ended
Mar. 31, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Schedule of Revenue by Source
The following table represents disaggregation of royalties, Captisol and contract revenue (in thousands):
Three months ended
March 31,
2022 2021
Royalties
Kyprolis $ 4,622  $ 4,287 
Evomela 2,701  2,333 
Teriparatide injection 2,911  16 
Rylaze 1,649  — 
Other 1,812  476 
$ 13,695  $ 7,112 
Captisol
     Captisol - Core $ 6,226  $ 1,253 
     Captisol - COVID(1)
5,896  30,019 
$ 12,122  $ 31,272 
Contract revenue
Service Revenue $ 5,146  $ 5,462 
License Fees 3,086  1,043 
Milestone 9,089  8,417 
Other 2,555  1,844 
$ 19,876  $ 16,766 
Total $ 45,693  $ 55,150 
(1) Captisol - COVID represents revenue on Captisol supplied for use in formulation with remdesivir, an antiviral treatment for COVID-19.
Schedule of Short-Term Investments Our short-term investments consist of the following at March 31, 2022 and December 31, 2021 (in thousands):
Amortized cost Gross unrealized gains Gross unrealized losses Estimated fair value
March 31, 2022
     Bank deposits $ 6,231  $ —  $ (50) $ 6,181 
     Corporate bonds 4,899  —  (84) 4,815 
     Commercial paper —  —  —  — 
     Corporate equity securities 5,807  344  (3,043) 3,108 
     Mutual fund 152,253  —  (854) 151,399 
US government securities 3,245  —  (74) 3,171 
     Warrants —  187  —  187 
$ 172,435  $ 531  $ (4,105) $ 168,861 
      Viking common stock 20,145 
Total short-term investments $ 189,006 
December 31, 2021
     Bank deposits $ 63,389  $ 13  $ (21) $ 63,381 
     Corporate bonds 29,308  17  (38) 29,287 
     Commercial paper 36,008  (12) 35,998 
     Corporate equity securities 5,807  402  (2,027) 4,182 
     Mutual fund 152,136  —  (249) 151,887 
     US government securities 5,577  —  (23) 5,554 
     Warrants —  408  —  408 
$ 292,225  $ 842  $ (2,370) $ 290,697 
     Viking common stock 30,889 
Total short-term investments $ 321,586 
Schedule of Available-for-Sale Debt Securities
The following table summarizes our available-for-sale debt securities by contractual maturity (in thousands):
March 31, 2022
Amortized Cost Fair Value
Within one year $ 10,095  $ 10,011 
After one year through five years 6,523  6,398 
Total $ 16,618  $ 16,409 
Schedule of Goodwill and Other Identifiable Intangible Assets
Goodwill and other identifiable intangible assets consist of the following (in thousands):

March 31, December 31,
2022 2021
Indefinite-lived intangible assets
     Goodwill $ 181,206  $ 181,206 
Definite lived intangible assets
     Complete technology 281,097  280,617 
          Less: accumulated amortization (82,861) (78,991)
     Trade name 2,642  2,642 
          Less: accumulated amortization (1,477) (1,444)
     Customer relationships 40,700  40,700 
          Less: accumulated amortization (18,934) (18,267)
     Contractual relationships 362,000  362,000 
          Less: accumulated amortization (43,460) (36,217)
Total goodwill and other identifiable intangible assets, net $ 720,913  $ 732,246 
Schedule of Commercial License Rights
Commercial license rights consist of the following (in thousands):
March 31, 2022 December 31, 2021
Gross
Adjustments(1)
Net Gross
Adjustments(2)
Net
Aziyo and CorMatrix $ 17,696  $ (9,456) $ 8,240  $ 17,696  $ (9,461) $ 8,235 
Selexis and Dianomi 10,602  (8,721) 1,881  10,602  (8,727) 1,875 
    Total $ 28,298  $ (18,177) $ 10,121  $ 28,298  $ (18,188) $ 10,110 
(1) Amounts represent accumulated amortization to principal of $11.7 million and credit loss adjustments of $6.5 million as of March 31, 2022.
(2) Amounts represent accumulated amortization to principal of $11.7 million and credit loss adjustments of $6.5 million as of December 31, 2021.
Schedule of Accrued Liabilities
Accrued liabilities consist of the following (in thousands):
March 31, December 31,
2022 2021
Compensation $ 3,620  $ 6,532 
Professional fees 3,974  2,046 
Amounts owed to former licensees 2,677  630 
Royalties owed to third parties —  149 
Return reserve —  2,420 
Acquisition related liabilities —  1,000 
Subcontractor 1,757  1,759 
Supplier 1,697  848 
Accrued interest 394  291 
Other 1,758  1,904 
     Total accrued liabilities $ 15,877  $ 17,579 
Schedule of Accounting for Share-Based Compensation The following table summarizes share-based compensation expense recorded as components of research and development expenses and general and administrative expenses for the periods indicated (in thousands):
Three months ended
March 31,
2022 2021
SBC - Research and development expenses $ 3,914  $ 3,939 
SBC - General and administrative expenses 5,130  4,466 
$ 9,044  $ 8,405 
Schedule of Fair-Value Options Awarded to Employees and Directors
The fair-value for options that were awarded to employees and directors was estimated at the date of grant using the Black-Scholes option valuation model with the following weighted-average assumptions:

Three months ended
March 31,
2022 2021
Risk-free interest rate 1.6% 0.5%
Dividend yield
Expected volatility 50% 63%
Expected term (years) 4.7 5
Schedule of Computation of Basic and Diluted Earnings per Share
The following table presents the calculation of weighted average shares used to calculate basic and diluted earnings per share (in thousands):

Three months ended
March 31,
2022 2021
Weighted average shares outstanding: 16,824  16,435 
Dilutive potential common shares:
     Restricted stock —  112 
     Stock options —  701 
Shares used to compute diluted income per share 16,824  17,248 
Potentially dilutive shares excluded from calculation due to anti-dilutive effect 6,001  4,277