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SEC Filings

10-Q
HEARTWARE INTERNATIONAL, INC. filed this Form 10-Q on 11/02/2015
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Table of Contents

Note 6. Goodwill, In-Process Research and Development and Other Intangible Assets, Net

Goodwill

The carrying amount of goodwill and the change in the balance for the nine months ended September 30, 2015 and 2014 is as follows:

 

     2015      2014  
     (in thousands)  

Beginning balance

   $ 61,390       $ 61,596   

Additions

     —           —     

Impairment

     —           —     

Foreign currency translation impact

     (117      (138
  

 

 

    

 

 

 

Ending balance

   $ 61,273       $ 61,458   
  

 

 

    

 

 

 

In-Process Research and Development

The carrying value of our in-process research and development assets, which relate to the development and potential commercialization of certain technologies acquired during our acquisition of CircuLite in December 2013, consisted of the following at September 30, 2015 and December 31, 2014:

 

     September 30,
2015
     December 31,
2014
 
     (in thousands)  

SYNERGY System technology

   $ 32,850       $ 32,850   
  

 

 

    

 

 

 

In-process research and development has an indefinite life. At the time the economic life becomes determinable (upon project completion or abandonment) the amount will be amortized over its expected remaining life.

We evaluate the carrying value of intangible assets (not subject to amortization) related to in-process research and development (“IPR&D”) assets which are considered to be indefinite-lived until the completion or abandonment of the associated research and development projects. Accordingly, amortization of the IPR&D assets does not occur until the product reaches commercialization. During the period the assets are considered indefinite-lived, they are tested for impairment on an annual basis in the fourth quarter of each year, as well as between annual tests if we become aware of any events occurring or changes in circumstances that indicate that the fair values of the IPR&D assets are less than their carrying amounts. If and when development is complete, which generally occurs when regulatory approval to market the product is obtained, the associated IPR&D assets are deemed definite-lived and are then amortized based on their estimated useful lives at that point in time. If the related project is terminated or abandoned, we may have a full or partial impairment related to the IPR&D assets, calculated as the excess of their carrying value over fair value. During the fourth quarter of 2015 we will evaluate internal timelines and development plans for the SYNERGY System. Our evaluation will take into consideration, among other things, progress with respect to underlying MVAD pump technology and resources dedicated to SYNERGY System development. This evaluation may have an impact on overall development timelines and/or cash flows of the SYNERGY System, the effect of which may result in an impairment of related intangible assets.

Other Intangible Assets

Other intangible assets, net consisted of the following:

 

     September 30,
2015
     December 31,
2014
 
     (in thousands)  

Patents

   $ 6,983       $ 5,310   

Purchased intangible assets

     

Tradenames

     3,700         3,700   

Customer relationships

     1,800         1,800   

Acquired technology rights

     9,925         9,925   
  

 

 

    

 

 

 
     22,408         20,735   

Less: Accumulated amortization – Patents

     (1,430      (1,118

Less: Accumulated amortization – Purchased intangible assets

     (3,043      (1,810
  

 

 

    

 

 

 
   $ 17,935       $ 17,807   
  

 

 

    

 

 

 

 

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