Horizon Therapeutics (HZNP)

Management Discussion

• Developed technology and other intangible assets, net. Developed technology and other intangible assets, net, decreased $88.1 million, from $2,960.1 million as of December 31, 2021 to $2,872.0 million as of March 31, 2022, primarily related to amortization of developed technology during the three months ended March 31, 2022.
• In-process research and development. In April 2022, the European Commission granted marketing authorization for UPLIZNA for the treatment of adult patients with NMOSD in the European Union. As a result, we expect to reclass $70.0 million of in-process research and development to developed technology in the second quarter of 2022.
• Goodwill. At September 30, 2021, we determined that an interim impairment analysis of the inflammation reporting unit’s $56.2 million goodwill balance was warranted. The fair value of the inflammation reporting unit exceeded its carrying value by more than 30% as of September 30, 2021, the interim testing date, resulting in no impairment. In order to evaluate the sensitivity of the fair value calculations on the goodwill impairment test, we applied a hypothetical 10 percent decrease to the fair values of the reporting unit. A 10% decrease in fair value would reduce the excess of the reporting unit’s fair value over its carrying value to approximately 19%.