Quarterly report pursuant to Section 13 or 15(d)

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

v3.23.2
Basis of Presentation and Summary of Significant Accounting Policies (Tables)
 6 Months Ended
Jun. 30, 2023
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 Six months ended
June 30, June 30,
2023 2022 2023 2022
Royalties
Kyprolis $ 8,097  $ 7,127  $ 14,325  $ 11,749 
Evomela 2,357  2,394  4,907  5,095 
Teriparatide injection 3,613  5,502  7,113  8,413 
Rylaze 3,028  2,317  5,637  3,966 
Other 3,335  480  5,602  2,029 
$ 20,430  $ 17,820  $ 37,584  $ 31,252 
Captisol
     Captisol - Core $ 5,220  $ 3,325  $ 15,842  $ 9,551 
     Captisol - COVID(1)
—  26,220  —  32,116 
$ 5,220  $ 29,545  $ 15,842  $ 41,667 
Contract revenue
License Fees 508  558  622  2,639 
Milestone —  —  15,300  5,993 
Other 208  2,203  997  5,091 
$ 716  $ 2,761  $ 16,919  $ 13,723 
Total $ 26,366  $ 50,126  $ 70,345  $ 86,642 

(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 June 30, 2023 and December 31, 2022 (in thousands):
June 30, 2023 Amortized cost Gross unrealized gains Gross unrealized losses Estimated fair value
     Bank deposits $ 36,327  $ 7  $ (22) $ 36,312 
     Bond fund 83,695  —  (808) 82,887 
     Commercial paper 18,582  1  (8) 18,575 
     Corporate bonds 6,197  1  (39) 6,159 
     Corporate equity securities 5,775  —  (3,436) 2,339 
     Municipal bonds 1,016  —  (10) 1,006 
US government securities 6,916  1  (17) 6,900 
     Warrants —  278  —  278 
$ 158,508  $ 288  $ (4,340) $ 154,456 
      Viking common stock 36,140 
Total short-term investments $ 190,596 
December 31, 2022
     Bank deposits $ 5,012  $ 2  $ (34) $ 4,980 
     Bond fund 81,815  —  (1050) 80,765 
     Commercial paper 7,211  3  —  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 
     Viking common stock 63,122 
Total short-term investments $ 166,864 
Schedule of Available-for-Sale Debt Securities
The following table summarizes our available-for-sale debt securities by contractual maturity (in thousands):
June 30, 2023
Amortized Cost Fair Value
Within one year $ 89,245  $ 89,187 
After one year through five years 5,846  5,816 
Total $ 95,091  $ 95,003 
Schedule of Goodwill and Other Identifiable Intangible Assets
Goodwill and other identifiable intangible assets consist of the following (in thousands):
June 30, December 31,
2023 2022
Indefinite-lived intangible assets
     Goodwill $ 105,673  $ 105,673 
Definite lived intangible assets
     Complete technology 55,211  55,211 
          Less: accumulated amortization (24,339) (22,560)
     Trade name 2,642  2,642 
          Less: accumulated amortization (1,644) (1,577)
     Customer relationships 29,600  29,600 
          Less: accumulated amortization (18,416) (17,670)
     Contractual relationships 362,000  362,000 
          Less: accumulated amortization (79,677) (65,191)
Total goodwill and other identifiable intangible assets, net $ 431,050  $ 448,128 
Schedule of Commercial License Rights
Commercial license rights consist of the following (in thousands):
June 30, 2023 December 31, 2022
Gross
Adjustments(1)
Net Gross
Adjustments(2)
Net
Aziyo and CorMatrix $ 17,696  $ (8,691) $ 9,005  $ 17,696  $ (9,538) $ 8,158 
Selexis and Dianomi 10,602  (8,824) 1,778  10,602  (8,578) 2,024 
    Total $ 28,298  $ (17,515) $ 10,783  $ 28,298  $ (18,116) $ 10,182 
(1) Amounts represent accumulated amortization to principal of $11.0 million and credit loss adjustments of $6.5 million as of June 30, 2023.
(2) Amounts represent accumulated amortization to principal of $11.6 million and credit loss adjustments of $6.5 million as of December 31, 2022.
Schedule of Accrued Liabilities Accrued liabilities consist of the following (in thousands):
June 30, December 31,
2023 2022
Compensation $ 2,343  $ 6,201 
Subcontractor 1,756  1,756 
Professional fees 807  662 
Customer deposit 621  621 
Supplier 268  634 
Royalties owed to third parties 180  12 
Amounts owed to former licensees 45  3,989 
Other 1,271  1,806 
     Total accrued liabilities $ 7,291  $ 15,681 
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 Six months ended
June 30, June 30,
2023
2022(a)
2023
2022(a)
SBC - Research and development expenses $ 2,016  $ 2,447  $ 3,723  $ 4,643 
SBC - General and administrative expenses 5,191  4,554  9,415  9,467 
$ 7,207  $ 7,001  $ 13,138  $ 14,110 
(a) Prior period amounts have been retrospectively adjusted to reflect the effects of the Separation.
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 Six months ended
June 30, June 30,
2023 2022 2023 2022
Risk-free interest rate 3.9% 3.0% 4.1% 3.0%
Dividend yield — — — —
Expected volatility 49.4% 50.0% 52.6% 50.0%
Expected term (years) 4.8 4.8 5.3 4.8
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 Six months ended
June 30, June 30,
2023 2022 2023 2022
Weighted average shares outstanding: 17,276  16,868  17,170  16,846 
Dilutive potential common shares:
     Restricted stock 83  26  85  — 
     Stock options 371  164  356  — 
2023 convertible senior notes —  —  240  — 
Shares used to compute diluted income per share 17,730  17,058  17,851  16,846 
Potentially dilutive shares excluded from calculation due to anti-dilutive effect 4,862  6,794  6,400