6. Intangibles, net

VYNE Therapeutics Product Acquisition (“VYNE Product Acquisition”)

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In January 2022, Journey entered into a definitive agreement (the “VYNE APA”) to acquire two FDA-Approved Topical Minocycline Products, Amzeeq (minocycline) topical foam 4%, and Zilxi (minocycline) topical foam 1.5%, and a Molecule Stabilizing Technology^TM proprietary platform from VYNE Therapeutics, Inc. (“VYNE”) for an upfront payment of $20.0 million and an additional $5.0 million payment on the one (1)-year anniversary of the closing (The "VYNE Product Acquisition"). Journey also acquired the associated inventory.

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The VYNE APA also provides for contingent net sales milestone payments. In the first calendar year in which annual sales reach each of $100 million, $200 million, $300 million, $400 million and $500 million, a one-time payment of $10 million, $20 million, $30 million, $40 million and $50 million, respectively, will be paid in that year only, per product, totaling up to $450 million. In addition, Journey will pay VYNE 10% of any upfront payment received by Journey from a licensee or sublicensee of the products in any territory outside of the United States, subject to exceptions for certain jurisdictions as detailed in the VYNE APA.

The following table summarizes the aggregate consideration transferred for the assets acquired by Journey in connection with the VYNE Product Acquisition:

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The fair value of the deferred cash payment is being accreted to the $5.0 million January 2023 cash payment over a one-year period through interest expense. The fair value of the deferred cash payment of $4.9 million at September 30, 2022 is included in partner company installment payments – short term on the condensed consolidated balance sheets.

The following table summarizes the assets acquired in the VYNE Product Acquisition:

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The table below provides a summary of the Journey intangible assets as of September 30, 2022 and December 31, 2021, respectively:

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For the three months ended September 30, 2022 and 2021, Journey’s amortization expense related to its product licenses was $1.0 million and $0.7 million, respectively.  For the nine months ended September 30, 2022 and 2021, Journey’s amortization expense related to its product licenses was $3.1 million and $2.0 million, respectively.  Journey records amortization expense related to its product licenses as a component of cost of goods sold on the condensed consolidated statement of operations.

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The future amortization of these intangible assets is as follows:

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