Annual report pursuant to Section 13 and 15(d)

Balance Sheet Account Details

v3.22.4
Balance Sheet Account Details
12 Months Ended
Dec. 31, 2022
Other Balance Sheet Details [Abstract]  
Balance Sheet Account Details Balance Sheet Account Details
Short-term Investments
Excluding our investments in Viking, the following table summarizes the various investment categories at December 31, 2022 and 2021 (in thousands):
Cost
Gross unrealized
gains
Gross unrealized
losses
Estimated
fair value
December 31, 2022
Short-term investments
Mutual Funds $ 81,815  $ —  $ (1050) $ 80,765 
Bank deposits 5,012  (34) 4,980 
     Commercial paper 7,211  —  7,214 
Corporate bonds 6,701  13  (58) 6,656 
Corporate equity securities 5,807  262  (4,239) 1,830 
U.S. government securities 2,232  —  (70) 2,162 
Warrants —  135  —  135 
$ 108,778  $ 415  $ (5,451) $ 103,742 
December 31, 2021
Short-term investments
     Mutual fund $ 152,136  $ —  $ (249) $ 151,887 
     Bank deposits 63,389  13  (21) 63,381 
     Commercial paper 36,008  (12) 35,998 
     Corporate bonds 29,308  17  (38) 29,287 
     Corporate equity securities 5,807  402  (2,027) 4,182 
     U.S. government securities 5,577  —  (23) 5,554 
     Warrants —  408  —  408 
$ 292,225  $ 842  $ (2,370) $ 290,697 

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, and realized gain (loss) from available-for-sale debt securities.
The following table summarizes our available-for-sale debt securities by contractual maturity (in thousands):
December 31, 2022
Amortized Cost Fair Value
Within one year $ 57,158  $ 57,036 
After one year through five years 2,794  2,769 
     Total $ 59,952  $ 59,805 
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, 2022
Bank deposits $ (34) $ 2,470  $ —  $ —  $ (34) $ 2,470 
Corporate bonds (21) 3,887  (37) 947  (58) 4,834 
Commercial paper —  3,836  —  —  —  3,836 
U.S. Government Securities (70) 2,161  —  —  (70) 2,161 
     Total $ (125) $ 12,354  $ (37) $ 947  $ (162) $ 13,301 
December 31, 2021
Bank deposits $ (13) $ 20,008  $ —  $ —  $ (13) $ 20,008 
Corporate bonds (15) 27,252  (5) 2,996  (20) 30,248 
Commercial paper (6) 6,689  (32) 10,125  (38) 16,814 
U.S. Government Securities —  —  (23) 5,553  (23) 5,553 
     Total $ (34) $ 53,949  $ (60) $ 18,674  $ (94) $ 72,623 

Our investment policy is capital preservation and we only invested in U.S.-dollar denominated investments. We held a total of 12 positions which were in an unrealized loss position as of December 31, 2022. 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, 2022.
Property and equipment are stated at cost and consists of the following (in thousands):
December 31,
2022 2021
Lab and office equipment $ 14,172  $ 13,417 
Leasehold improvements 7,446  5,265 
Computer equipment and software 989  924 
22,607  19,606 
Less accumulated depreciation and amortization (10,125) (6,415)
$ 12,482  $ 13,191 
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 $3.8 million, $2.4 million, and $1.5 million was recognized for the twelve months ended December 31, 2022, 2021, and 2020, respectively, and was included in operating expenses.
Goodwill and identifiable intangible assets consist of the following (in thousands):
December 31,
2022 2021
Indefinite-lived intangible assets
     Goodwill $ 105,673  $ 105,673 
Definite-lived intangible assets
     Complete technology 55,211  55,211 
          Less: Accumulated amortization (22,560) (18,916)
     Trade name 2,642  2,642 
          Less: Accumulated amortization (1,577) (1,444)
     Customer relationships 29,600  29,600 
          Less: Accumulated amortization (17,670) (16,184)
     Contractual relationships 362,000  362,000 
Less: Accumulated amortization (65,191) (36,218)
Total goodwill and other identifiable intangible assets, net $ 448,128  $ 482,364 

Amortization of finite-lived intangible assets is computed using the straight-line method over the estimated useful life of the asset of up to 20 years. Amortization expense of $34.2 million, $34.2 million, and $11.6 million was recognized for the years ended December 31, 2022, 2021, and 2020, respectively. Estimated amortization expense for the years ending December 31, 2023 through 2027 is $34.1 million per year. For each of the years ended December 31, 2022, 2021, and 2020, there was no material impairment of intangible assets with finite lives.
Accrued liabilities consist of the following (in thousands):
  December 31,
  2022 2021
Compensation $ 6,201  $ 6,532 
Professional fees 662  2,046 
Amounts owed to former licensees 3,989  630 
Royalties owed to third parties 12  149 
Return reserve and customer refunds —  2,420 
Acquisition related liabilities —  1,000 
Subcontractor —  1,759 
Supplier 634  848 
Other 4,183  2,195 
$ 15,681  $ 17,579 

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.
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, see “Note (4), Acquisitions” for more information.
The following table summarizes roll-forward of contingent liabilities as of December 2022 and 2021 (in thousands):
December 31, 2020 Payments Fair Value Adjustment December 31, 2021 Payments Fair Value Adjustment Repurchases December 31, 2022
Cydex $ 507  $ (50) $ (108) $ 349  $ —  $ (265) $ —  $ 84 
Metabasis 3,822  —  (464) 3,358  —  71  —  3,429 
Pfenex 37,600  —  (37,600) —  —  —  —  — 
Total $ 41,929  $ (50) $ (38,172) $ 3,707  $   $ (194) $   $ 3,513