v3.26.1
Acquisition of Biovire
 6 Months Ended
Jun. 30, 2026
Business Combination [Abstract]  
Acquisition of Biovire

15. Acquisition of Biovire

On July 20, 2025, the Company obtained control of the SPV through the Conversion Event, resulting in SafeGuard owning 100% of the membership interest of the SPV. As a result of the Conversion Event, the Company also indirectly obtained control of Biovire as the SPV owns 99.96% of the capital stock of Biovire. As a result of this change in control, purchase accounting was applied by the Company and the operations of Biovire are consolidated as of the effective date of the conversion. See footnote 1 for more information on the Note.

Biovire is a contract manufacturer specializing in the fill and finish of novel drugs and medical devices for pharmaceutical and biotech companies. Prior to becoming a majority-owned subsidiary, Biovire was a vendor to the Company and continues to provide clinical supply of cretostimogene used in the Company’s clinical trials. The acquisition provides the Company the ability to supply its requirements of cretostimogene during the remainder of its clinical trials.

Consideration was determined to be the fair value of the note receivable that was exchanged for the majority of shares of the SPV and Biovire. The acquisition was accounted for as a business combination using the acquisition method of accounting, under which the acquired assets, including intangible assets, and assumed liabilities were recognized at their estimated fair values as of July 20, 2025, with the excess of the fair value of consideration transferred over the fair value of the net assets acquired recognized as goodwill. The Company's unaudited condensed consolidated financial statements include the operating results of the SPV and Biovire from the date of acquisition through June 30, 2026.

The purchase price allocation is set forth in the table below and represents the Company’s fair value estimates related to the acquisition as of July 20, 2025.

 

 

Estimated fair value

 

Identifiable assets acquired

 

 

 

Cash

 

$

4,033

 

Current assets

 

 

2,565

 

Operating lease right-of-use assets

 

 

3,413

 

Property and equipment, net

 

 

16,610

 

Intangible assets

 

 

600

 

Total identifiable assets acquired

 

 

27,221

 

Liabilities assumed

 

 

 

Current liabilities

 

 

2,410

 

Operating lease liabilities, non-current portion

 

 

2,800

 

Long-term debt

 

 

3,000

 

Deferred tax liability

 

 

307

 

Other long-term liabilities

 

 

2,157

 

Total liabilities assumed

 

 

10,674

 

Net identifiable assets acquired

 

 

16,547

 

Goodwill

 

 

10,297

 

Total fair value of consideration paid

 

$

26,844

 

The purchase price was allocated to the tangible assets and identifiable intangible assets acquired and liabilities assumed based on their acquisition date estimated fair values. The carrying amount of accounts receivable and inventory acquired represented their fair value. Property and equipment were assigned a fair value of $16.6 million and will be amortized over a weighted average of 5.5 years. The identifiable intangible assets consist of trade names and trademarks and customer relationships which were each assigned fair values of approximately $0.3 million and will be amortized on a straight-line basis over their estimated useful lives of 10 years. The acquired property and equipment and intangible assets were valued utilizing either the relief from royalty method or the multi-period excess earnings method as deemed most applicable. These approaches require judgment, including those related to projected net cash flows, revenue growth rates, and the weighted average cost of capital used to discount the cash flows.

Goodwill represents the excess of the purchase price over the identifiable tangible and intangible assets acquired in addition to liabilities assumed arising from the business combination. The Company believes the goodwill related to the acquisition was attributable to the expected synergies, value of the assembled workforce, and the collective experience of the management team with regards to its operations, customers, and industry.