Intangible Assets and Goodwill
 9 Months Ended
Sep. 30, 2016
Goodwill And Intangible Assets Disclosure [Abstract]  
Intangible Assets and Goodwill

7. Intangible Assets and Goodwill

IPR&D intangible assets and goodwill were established as part of the purchase accounting of EOS (see Note 3) and consisted of the following (in thousands):

 

 

 

September 30,

 

 

December 31,

 

 

 

2016

 

 

2015

 

IPR&D intangible assets:

 

 

 

 

 

 

 

 

Balance at beginning of period

 

$

101,500

 

 

$

212,900

 

Impairment of intangible asset (a)

 

 

(104,517

)

 

 

(89,557

)

Change in foreign currency gains (losses)

 

 

3,017

 

 

 

(21,843

)

Balance at end of period

 

$

—

 

 

$

101,500

 

 

 

 

 

 

 

 

 

 

Goodwill:

 

 

 

 

 

 

 

 

Balance at beginning of period

 

$

59,327

 

 

$

66,055

 

Change in foreign currency gains (losses)

 

 

1,421

 

 

 

(6,728

)

Balance at end of period

 

$

60,748

 

 

$

59,327

 

 

(a)

During the second quarter of 2016, we recorded a $104.5 million impairment charge due to our and our development partner’s decision to discontinue the development of lucitanib for breast cancer. At September 30, 2016, the IPR&D intangible asset recorded on the Consolidated Balance Sheets was zero.

 

During the fourth quarter of 2015, we recorded an $89.6 million impairment charge due to our and our development partner’s decision to discontinue the development of lucitanib for lung cancer, as well as updates to the probability-weighted discounted cash flow assumptions for the breast cancer indication.

IPR&D intangible assets are evaluated for impairment at least annually in the fourth quarter or more frequently if impairment indicators exist and any reduction in fair value is recorded as impairment of intangible asset on the Consolidated Statements of Operations.

As part of the acquisition of EOS, we recorded a deferred tax liability to recognize the difference between the book and tax basis of the assets and liabilities acquired. During the first quarter of 2016, we updated the annual effective tax rate to reflect a reduction in the statutory rate of the foreign jurisdiction, resulting in the recognition of a $3.6 million income tax benefit.

During the second quarter of 2016, we recognized a $29.2 million deferred tax benefit associated with the impairment of the IPR&D intangible asset.