7.
Goodwill and Intangible Assets, Net
At
December 31, 2021 and 2020, goodwill and intangible assets, net consisted of the following: (in thousands):
| | |
December 31, | |
| | |
2021 | | |
2020 | |
| Goodwill (1) | |
$ | 10,672 | | |
$ | 10,672 | |
| | |
| | | |
| | |
| Intangible assets: | |
| | | |
| | |
| Acquired IPR&D – OPC1 (from the Asterias Merger) (2) | |
$ | 31,700 | | |
$ | 31,700 | |
| Acquired IPR&D – VAC2 (from the Asterias Merger) (2) | |
| 14,840 | | |
| 14,840 | |
| Intangible assets subject to amortization: | |
| | | |
| | |
| Acquired patents | |
| 18,953 | | |
| 18,953 | |
| Acquired royalty contracts (3) | |
| 650 | | |
| 650 | |
| Total intangible assets | |
| 66,143 | | |
| 66,143 | |
| Accumulated amortization (4) | |
| (19,321 | ) | |
| (19,111 | ) |
| Intangible assets, net | |
$ | 46,822 | | |
$ | 47,032 | |
| (1) |
Goodwill represents the
excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired and liabilities
assumed in the Asterias Merger. |
| |
|
| (2) |
Asterias
had two IPR&D intangible assets that were valued at $46.5 million as part of the purchase price allocation that was performed
in connection with the Asterias Merger. The fair value of these assets consisted of $31.7 million pertaining to the OPC1 program
and $14.8 million pertaining to the VAC2 program.
|
| (3) |
Asterias
had royalty cash flows under certain specific patent families that Asterias previously acquired from Geron Corporation (“Geron”).
The Geron patents are expected to continue to generate revenue and are not used in the OPC1 or the VAC platform, these patents are
considered to be separate long-lived intangible assets under ASC 805.
|
| (4) |
As of December 31, 2021
the acquired patents were fully amortized and the acquired royalty contracts had a remaining unamortized balance of $282,000. |
Lineage
amortizes its intangible assets over an estimated period of 5 to 10 years on a straight-line basis. Lineage recognized $0.2 million and
$1.2 million in amortization expense of intangible assets during the years ended December 31, 2021 and 2020, respectively.
Amortization
of intangible assets for periods subsequent to December 31, 2021 is as follows (in thousands):
| Year
Ended December 31, |
|
Amortization
Expense |
|
| 2022 |
|
$ |
130 |
|
| 2023 |
|
|
130 |
|
| 2024 |
|
|
22 |
|
| Total |
|
$ |
282 |
|
|