Quarterly report pursuant to Section 13 or 15(d)

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

v3.23.3
Basis of Presentation and Summary of Significant Accounting Policies (Tables)
 9 Months Ended
Sep. 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 Nine months ended
September 30, September 30,
2023 2022 2023 2022
Royalties
Kyprolis $ 10,537  $ 9,123  $ 24,862  $ 20,872 
Evomela 2,497  3,123  7,404  8,218 
Teriparatide injection 2,800  4,071  9,913  12,484 
Rylaze 3,678  2,099  9,315  6,065 
Other 4,351  839  9,953  2,868 
$ 23,863  $ 19,255  $ 61,447  $ 50,507 
Captisol
     Captisol - Core $ 8,608  $ 3,582  $ 24,450  $ 13,133 
     Captisol - COVID(1)
—  32,367  —  64,483 
$ 8,608  $ 35,949  $ 24,450  $ 77,616 
Contract revenue
Service revenue 263  90  534  1,047 
Milestone —  2,658  15,300  8,651 
Other 134  1,269  1,482  8,042 
$ 397  $ 4,017  $ 17,316  $ 17,740 
Total $ 32,868  $ 59,221  $ 103,213  $ 145,863 

(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 September 30, 2023 and December 31, 2022 (in thousands):
September 30, 2023 Amortized cost Gross unrealized gains Gross unrealized losses Estimated fair value
     Bank deposits $ 28,972  $ 11  $ (11) $ 28,972 
     Bond fund 84,811  —  (808) 84,003 
     Commercial paper 18,935  —  (4) 18,931 
     Corporate bonds 8,077  1  (35) 8,043 
     Corporate equity securities 5,775  —  (4,903) 872 
     Municipal bonds 1,027  —  (6) 1,021 
US government securities 4,702  —  (19) 4,683 
     Warrants —  22  —  22 
$ 152,299  $ 34  $ (5,786) $ 146,547 
      Viking common stock 24,680 
Total short-term investments $ 171,227 
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):
September 30, 2023
Amortized Cost Fair Value
Within one year $ 71,095  $ 71,070 
After one year through five years 6,966  6,927 
Total $ 78,061  $ 77,997 
Schedule of Goodwill and Other Identifiable Intangible Assets
Goodwill and other identifiable intangible assets consist of the following (in thousands):
September 30, December 31,
2023 2022
Indefinite-lived intangible assets
     Goodwill $ 103,770  $ 105,673 
Definite lived intangible assets
     Complete technology 49,810  55,211 
          Less: accumulated amortization (20,176) (22,560)
     Trade name 2,642  2,642 
          Less: accumulated amortization (1,677) (1,577)
     Customer relationships 29,600  29,600 
          Less: accumulated amortization (18,788) (17,670)
     Contractual relationships 360,000  362,000 
          Less: accumulated amortization (86,568) (65,191)
Total goodwill and other identifiable intangible assets, net $ 418,613  $ 448,128 
Schedule of Commercial License Rights
Commercial license rights consist of the following (in thousands):
September 30, 2023 December 31, 2022
Gross
Adjustments(1)
Net Gross
Adjustments(2)
Net
Elutia and CorMatrix $ 17,696  $ (11,881) $ 5,815  $ 17,696  $ (9,538) $ 8,158 
Selexis and Dianomi 10,602  (9,815) 787  10,602  (8,578) 2,024 
    Total $ 28,298  $ (21,696) $ 6,602  $ 28,298  $ (18,116) $ 10,182 
(1) Amounts represent accumulated amortization to principal of $11.1 million, credit loss adjustments of $9.7 million and impairment of $0.9 million as of September 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):
September 30, December 31,
2023 2022
Compensation $ 2,890  $ 6,201 
Subcontractor 1,966  1,756 
Professional fees 3,229  662 
Customer deposit 621  621 
Supplier 303  634 
Royalties owed to third parties —  12 
Amounts owed to former licensees 45  3,989 
Other 1,581  1,806 
     Total accrued liabilities $ 10,635  $ 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 Nine months ended
September 30, September 30,
2023
2022(a)
2023
2022(a)
SBC - Research and development expenses $ 1,639  $ 3,277  $ 5,362  $ 7,920 
SBC - General and administrative expenses 5,245  5,830  14,660  15,297 
$ 6,884  $ 9,107  $ 20,022  $ 23,217 
(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 Nine months ended
September 30, September 30,
2023 2022 2023 2022
Risk-free interest rate 4.3% 2.8% 4.1% 2.9%
Dividend yield — — — —
Expected volatility 44.7% 50.0% 51.5% 50.0%
Expected term (years) 5.2 4.9 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 Nine months ended
September 30, September 30,
2023 2022 2023 2022
Weighted average shares outstanding: 17,380  16,888  17,241  16,860 
Dilutive potential common shares:
     Restricted stock —  65  82  54 
     Stock options —  179  302  214 
2023 convertible senior notes —  —  159  — 
Shares used to compute diluted income per share 17,380  17,132  17,784  17,128 
Potentially dilutive shares excluded from calculation due to anti-dilutive effect 4,762  6,706  4,663  6,503