|6 Months Ended|
Jun. 30, 2022
NOTE 5. ASSET ACQUISITION
On January 12, 2022, the Company acquired two United States Food and Drug Administration (“FDA”) approved topical minocycline products, Amzeeq® (minocycline) topical foam, 4%, and Zilxi® (minocycline) topical foam, 1.5%, and a Molecule Stabilizing Technology™ proprietary platform from Vyne Therapeutics Inc. (“Vyne”) for an upfront payment of $20.0 million and an additional $5.0 million payment on the one (1)-year anniversary of the closing (the “Vyne Product Acquisition”). This expanded the Company’s product portfolio to nine marketed branded dermatology products. The Company also acquired certain associated inventory.
The Vyne Product Acquisition also provides for contingent net sales milestone payments, on a product by product basis. In the first calendar year in which annual sales reach each of $100 million, $200 million, $300 million, $400 million and $500 million, a one-time payment of $10 million, $20 million, $30 million, $40 million and $50 million, respectively, will be paid in that year only, per product, totaling up to $450 million. In addition, the Company will pay Vyne 10% of any upfront payment received by the Company from a licensee or sublicensee of the products in any territory outside of the United States, subject to exceptions for certain jurisdictions as detailed in the Vyne Product Acquisition purchase agreement.
The following table summarizes the aggregate consideration transferred for the assets acquired by the Company in connection with the Vyne Product Acquisition:
The fair value of the deferred cash payment is being accreted to the $5.0 million January 2023 cash payment over a one-year period through interest expense.
The following table summarizes the assets acquired in the Vyne Product Acquisition:
The intangible assets were valued using an income approach, while the inventory was valued using a final sales value less cost to dispose approach.
The entire disclosure for asset acquisition.
Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef