NOTE 4. INTANGIBLE ASSETS, NET

The gross carrying amounts and net book value of intangible assets as of June 30, 2026, and December 31, 2025, are as follows (in thousands):

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The Company recognized amortization expense of $5.7 million and $11.3 million during the three and six months ended June 30, 2026, and $5.7 million and $11.1 million during the three and six months ended June 30, 2025, respectively, excluding non-cash amortization expense of the fair value step-up acquired inventory.

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The total estimated amortization of the Company’s intangible assets for the remainder of the year ending December 31, 2026, and the years ending December 31, 2027, 2028, 2029, and 2030 are $11.2 million, $22.5 million, $22.5 million, $22.5 million, and $22.5 million, respectively.

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The developed technology and assembled workforce intangible assets were acquired in May 2023 through the Company's acquisition of the worldwide rights for Proleukin® (aldesleukin) from Clinigen Holdings Limited and its affiliates (the "Proleukin Acquisition"). The Proleukin Acquisition was accounted for as an asset acquisition under ASC 805. The developed technology is amortized over a useful life of 15 years based on fair value estimated using a multi-period excess earnings income approach. The assembled workforce is amortized over a useful life of 3 years based on fair value estimated using a replacement cost less depreciation method. The weighted average amortization period the developed technology and assembled workforce is 14.8 years.

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The Proleukin Acquisition agreement provides for contingent cash payments consisting of (i) a milestone payment upon first approval of lifileucel in advanced melanoma, (ii) deferred consideration based on double-digit rates on global net sales over a deferred term consideration term of twelve-years, and (iii) after the deferred consideration term, earnout payments payable from the Company to sellers following the completion of the transaction if deferred consideration payments are equal or greater than the deferred consideration amount provided for in the agreement. These contingent payments are accounted for under ASC 450 and recognized when both probable and estimable.

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During the first quarter of 2024, the Company made the milestone payment of $52.6 million (£41.7 million) upon approval of Amtagvi^®, which was capitalized and is being amortized over the remaining useful life of the developed technology. An additional $17.5 million (£13.9 million) was recorded to reflect the related deferred tax liability.