SELLAS Life Sciences Group, Inc.SLS

SELLAS Life Sciences Group, Inc. Goodwill & Intangibles Disclosure

10-KFiled Mar 31, 20221 min read
Goodwill and Intangible Assets
A reconciliation of the change in goodwill and intangible assets for the year ended December 31, 2021 is as follows (in thousands):

 In-Process Research and DevelopmentGoodwill
December 31, 2020$5,700 $1,914 
Impairment charge(5,700)— 
December 31, 2021$— $1,914 

In the fourth quarter of 2021, the Company recognized an impairment charge in connection with our determination that consummating an out-licensing transaction of NPS for further development in breast cancer was unlikely and taking into account the deferred development timelines and a lower probability of success associated with earlier stages of clinical development for the potential development of NPS in other oncology indications. The Company determined that the carrying amount of the IPR&D associated with NPS exceeded the fair value and recorded a $5.7 million impairment charge during the year ended December 31, 2021 and reduced the fair value of the related IPR&D intangible asset to zero. See Note 2 for discussion on how the Company determined the fair value of its IPR&D. There was no impairment charge during the year ended December 31, 2020.

As of December 31, 2021 and 2020, there were no accumulated impairment losses related to goodwill.

Historical Timeline

Fiscal YearFiled
2021Mar 31, 2022Showing above
2020Mar 23, 2021
2019Mar 13, 2020
2018Mar 22, 2019

About Goodwill & Intangibles Disclosures

Goodwill and intangible asset disclosures reveal the premium paid in acquisitions and how management assesses whether that premium retains its value. Since goodwill is no longer amortized under US GAAP, the annual impairment test is the only mechanism that adjusts carrying values downward — making the assumptions behind that test critically important for investors.

Key signals: a history of goodwill impairments suggests management consistently overpays for acquisitions. Watch the gap between reporting unit fair value and carrying amount — when fair value exceeds carrying amount by less than 10-20%, a small decline in business performance could trigger a write-down. For finite-lived intangibles, examine useful life assumptions across customer relationships, technology, and trade names; aggressive estimates inflate near-term earnings. Compare total intangibles-to-total-assets ratios against peers to assess acquisition dependency. Rising goodwill as a percentage of equity can signal balance sheet fragility.

Other Available Disclosures

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