Company: PACB
Filing Date: 2025-03-17
Form Type: 10-K
Source: 0001299130-25-000061
Chunk: 151

Company: PACIFIC BIOSCIENCES OF CALIFORNIA, INC.
Filing Date: 2025-03-17
Form: 10-K
Item: Item 1
Chunk 151
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 income approach, which represent a Level 3 fair value measurement, include revenue growth assumptions, a selected discount rate of 14.0%, and a selected obsolescence factor of 13 years. The discount rate was based primarily on the weighted average cost of capital, determined using market, peer company, industry data, and related risk factors. Based on our analysis, the carrying value of the IPR&D exceeded its estimated fair value, and we recorded an impairment of $40.0 million in the fourth quarter of 2024. The impairment charge is included on our consolidated statements of operations and comprehensive loss for the year ended December 31, 2024.The assumptions used were inherently subject to uncertainty and small changes in these assumptions could have had a significant impact on the concluded value. An increase of 100 basis points to the discount rate used in our analysis would have resulted in additional IPR&D impairment of approximately $5 million. A decrease of one year to the obsolescence factor used in our analysis would have resulted in additional IPR&D impairment of approximately $5 million. We also performed a recoverability test for the definite-lived asset group, which includes developed technology, noting no impairment.As a result of the impairment, the carrying value of the IPR&D now approximates fair value. Changes in macroeconomic conditions, industry-specific conditions and company-specific conditions may impact the estimates and assumptions used when conducting future IPR&D impairment tests. These changes could affect the estimated fair value of the IPR&D and may result in additional impairment charges in the future.Changes to IPR&D during the year ended December 31, 2024 were as follows:(in thousands)Balance as of December 31, 2023$55,000 Impairment charge(40,000)Balance as of December 31, 2024$15,000 In addition to IPR&D, we had the following acquired finite-lived intangible assets as of December 31, 2024:(in thousands, except years)Estimated Useful Life(in years)GrossCarryingAmountAccumulatedAmortizationNetCarryingAmountDeveloped technology15$411,179 $(36,607)$374,572 Customer relationships2360 (360)— Total$411,539 $(36,967)$374,572 Amortization expense of intangibles was $27.4 million, $8.3 million and $0.9 million for the years ended December 31, 2024