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This excerpt taken from the EYE 10-K filed Feb 24, 2009. In-process research and development IntraLase had two development projects in-process as of the acquisition date. The first project involves technology advancements to reduce the pulse energy and provide smoother, more precise dissections, and enables thinner flaps with the femtosecond laser. The fair value assigned to this project was $81.3 million. The second project involved the development of technologies to allow for ease of transport of femtosecond lasers from one location to another. The fair value assigned to this project was $4.1 million. Subsequent to the acquisition date, management of AMO decided to cancel the second project. The allocation of the purchase price assigned to IPR&D represented the estimated fair value of projects that, as of the acquisition date, had not reached technological feasibility and had no alternative future use. The fair value of these IPR&D projects was estimated by performing a discounted cash flow analysis using the “income” approach. Net cash flows attributable to the projects were discounted to their present values at a rate commensurate with the perceived risk, which for these projects was estimated between 14-16%. The following assumptions underlie the projected cash flows as of the IntraLase acquisition date:
In addition, solely for the purposes of estimating the fair value of the IPR&D projects, the following assumptions were made:
The major risks and uncertainties associated with the timely and successful completion of the first project consist of the ability to confirm the safety and efficacy of the technology based on the data from clinical trials and obtaining necessary regulatory approvals. No assurance can be given that the underlying assumptions used to forecast the cash flows or the timely and successful completion of this project will materialize, as estimated. For these reasons, among others, actual results may vary significantly from the estimated results.
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Table of ContentsThe following unaudited pro forma information assumes the IntraLase acquisition occurred at the beginning of each period presented below. These unaudited pro forma results have been prepared for informational purposes only and do not purport to represent what the results of operations would have been had the IntraLase acquisition occurred as of the date indicated, nor of future results of operations. The unaudited pro forma results for years ended December 31, 2007 and 2006 were as follows (in thousands, except per share data):
This excerpt taken from the EYE 10-K filed Mar 1, 2007. In-process research and development.
In 2005, we incurred an in-process research and development (IPR&D)
charge of $488.5 million related to the VISX Acquisition. This charge represented the estimated fair value
of projects that, as of the acquisition date, had not reached technological
feasibility and had no alternative future use. The Company recorded $449.2
million of this amount in the second quarter of 2005 and $39.3 million in the
third quarter of 2005. The additional charge in the third quarter of 2005
resulted primarily from the completion of the IPR&D valuation. The fair
value assigned to IPR&D comprised the following projects: High Myopia for CustomVue - $14.7 million, Excimer Laser
Improvements - $56.2 million and Presbyopia - $417.6 million. The fair value of these projects was
determined by performing a discounted cash flow analysis using the “income”
approach. Net cash flows attributable to
these projects were discounted to their present values at a rate commensurate
with the perceived risk, which for these projects ranged from 19.0 to 21.0
percent. High myopia for CustomVue was forecasted to be approved
for sale in the U.S. in late 2005. FDA
approval was received in September 2005.
A procedure to treat presbyopia is forecasted to be approved for sale in
the U.S. in mid-2007. Management’s best
estimate of additional research and development expenses needed prior to
expected FDA approval for these procedures ranges from $4 million to $6
million. Additional research and
development expenses in the range of $8 million to $10 million represent
management’s best estimate as to the additional R&D expenses to bring
excimer laser system improvements to market. Forecasted discounted cash flows
for each product once launched include estimates for normal sustaining
engineering and maintenance R&D.
These projects are currently on track for the expected approval
dates. However, the major risks and
uncertainties associated with the timely and successful completion of these
projects consist of the ability to confirm the safety and efficacy of the
technology based on the data from clinical trials and obtaining the necessary
approvals. We can provide no assurance that the approvals will be received on
this schedule or at all.
This excerpt taken from the EYE 10-Q filed Nov 8, 2006. In-process
research and development. In
the three and nine months ended September 30, 2005, we recorded a $39.3 million
and a $490.8 million in-process research
and development (“IPR&D”) charge, respectively. Included in this charge is a $39.3 million
and a $488.5 million charge resulting from the VISX acquisition. This charge represented the estimated fair
value of projects that, as of the acquisition date, had not reached
technological feasibility and had no alternative future use.
This excerpt taken from the EYE 10-Q filed Aug 9, 2006. In-process
research and development. In
the three and six months ended June 24, 2005, we recorded a $451.5 million
in-process research and development (IPR&D) charge primarily comprised of a
$449.2 million charge resulting from the VISX acquisition. This charge represented the estimated fair
value of projects that, as of the acquisition date, had not reached
technological feasibility and had no alternative future use.
This excerpt taken from the EYE 10-K filed Mar 14, 2006. In-process research and development. In 2005, we incurred an in-process
research and development (IPR&D) charge of $488.5 million related to the
VISX Acquisition. This charge represented the estimated fair value of projects
that, as of the
37
acquisition date, had not reached technological feasibility and had no alternative future use. The Company recorded $449.2 million of this amount in the second quarter of 2005 and $39.3 million in the third quarter of 2005. The additional charge in the third quarter of 2005 resulted primarily from the completion of the IPR&D valuation. The fair value assigned to IPR&D comprised the following projects: High Myopia for CustomVue - $14.7 million, Excimer Laser Improvements - $56.2 million and Presbyopia - $417.6 million. The fair value of these projects was determined by performing a discounted cash flow analysis using the “income” approach. Net cash flows attributable to these projects were discounted to their present values at a rate commensurate with the perceived risk, which for these projects ranged from 19.0 to 21.0 percent. High myopia for CustomVue was forecasted to be approved for sale in the U.S. in late 2005. FDA approval was received in September 2005. A procedure to treat presbyopia is forecasted to be approved for sale in the U.S. in late 2006. Additional research and development expenses needed prior to expected FDA approval for these procedures are expected to range from $4 million to $6 million. This range represents management’s best estimate as to the additional R&D expenses required to bring these products to market in the U.S. Additional research and development expenses in the range of $8 million to $10 million represent management’s best estimate as to the additional R&D expenses to bring excimer laser system improvements to market. Forecasted discounted cash flows for each product once launched include estimates for normal sustaining engineering and maintenance R&D. These projects are currently on track for the expected approval dates. However, the major risks and uncertainties associated with the timely and successful completion of these projects consist of the ability to confirm the safety and efficacy of the technology based on the data from clinical trials and obtaining the necessary approvals. We can provide no assurance that the approvals will be received on this schedule or at all.
In 2004, we incurred an IPR&D charge of $28.1 million related to the Pfizer Acquisition. This charge represented the estimated fair value of projects that, as of the acquisition date, had not reached technological feasibility and had no alternative future use. The estimated fair value assigned to IPR&D comprised the following projects: Tecnis Monofocal - $1.6 million and Tecnis Multifocal - $26.5 million. The estimated fair value of these IPR&D projects was estimated by performing a discounted cash flow analysis using the “income” approach. These cash flows were then discounted to a present value using a discount rate of 14.5%. Regulatory approval for the Tecnis Monofocal in Japan was expected and received in 2005. We also estimate that the Tecnis Multifocal will receive its PMA in the U.S. in 2008, with approval in Japan in 2008. Additional research and development expenses in the range of $2.5 million to $3.0 million for the Tecnis Multifocal represents our best estimate as to the additional research and development expenses to bring these products to market. These projects are currently on track for the expected approval dates. However, the major risks and uncertainties associated with the timely and successful completion of these projects consist of the ability to confirm the safety and efficacy of the technology based on the data from clinical trials and obtaining the necessary approvals. We can provide no assurance that the approvals will be received on this schedule or at all.
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