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14 Intangible assets
(In thousand euro)
Cost
Licences
and software
Inprocess
R&D
Total
At January 1, 2010 285 11,933 12,218
Additions 36 0 36
At December 31, 2010 321 11,933 12,254
Accumulated amortization
and impairment
At January 1, 2010 (250) (2,989) (3,239)
Impairments 0 (3,800) (3,800)
Additions (27) 0 (27)
At December 31, 2010 (277) (6,789) (7,066)
Net book value –
Newron Group
Cost
44 5,144 5,188
At January 1, 2011 321 11,933 12,254
At December 31, 2011 321 11,933 12,254
Accumulated amortization
and impairment
At January 1, 2011 (277) (6,789) (7,066)
Additions (17) 0 (17)
At December 31, 2011 (294) (6,789) (7,083)
Upon the acquisition of Hunter-Fleming Ltd. in 2008,
an amount of EUR 11,933 was allocated to four development
projects – currently three as in year 2009 one
compound was returned to its inventor – based on a
risk-adjusted Net Present Value (NPV) assessment.
These projects have been classified as in-process R&D.
IAS 36 requires assessing an asset not in use for impairment
on an annual basis by comparing the carrying
value to its recoverable amount. The recoverable amount
is the higher of the fair value less cost to sell and the
value in use. Management used a risk-adjusted NPV
assessment to test for impairment the above intangible
assets. The assessment was performed based on industry
average rates for successful development of the
projects to the market (5% by end of drug discovery, 13%
by end of preclinical development, 21% by end of
clinical phase I, 46% by end of clinical phase II and 76%
by end of clinical phase III), a usual discount rate to
future cashin- and outflows (15 p.a.), the properties of
the compounds and their target product profile, the
sales potential as well as comparable transaction terms
for licensing of the compounds usually after phase II
proof of concept.
Net book value –
Newron Group
27 5,144 5,171
58 Newron Annual Report 2011