Annual report pursuant to Section 13 and 15(d)

REVENUES

v3.19.3.a.u2
REVENUES
12 Months Ended
Dec. 31, 2019
REVENUES  
REVENUES

2. REVENUES

Revenues disaggregated by category were as follows (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31,

 

 

 

2019

    

2018

    

2017

Product sales:

 

 

 

 

 

 

 

 

 

 

Gross product sales

 

 

$

53,082

 

$

16,953

 

$

 —

Discounts and allowances

 

 

 

(9,310)

 

 

(3,006)

 

 

 —

Product sales, net

 

 

$

43,772

 

$

13,947

 

$

 —

 

 

 

 

 

 

 

 

 

 

 

Revenues from collaborations:

 

 

 

 

 

 

 

 

 

 

License revenues

 

 

 

8,696

 

$

30,562

 

 

250

Development milestones

 

 

 

5,500

 

 

 —

 

 

4,234

Research and development services and others

 

 

 

1,320

 

 

 —

 

 

 —

Total revenues from collaborations

 

 

 

15,516

 

 

30,562

 

 

4,484

Total revenues

 

 

$

59,288

 

$

44,509

 

$

4,484

 

The following table summarizes revenues from each of our customers who individually accounted for 10% or more of our gross revenues (as a percentage of gross revenues):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31,

 

 

 

2019

    

2018

 

2017

ASD Healthcare and Oncology Supply

 

 

 

37%

 

 

17%

 

 

 —

McKesson Specialty Care Distribution Corporation

 

 

 

30%

 

 

11%

 

 

 —

Kissei

 

 

 

 —

 

 

69%

 

 

 —

BerGenBio

 

 

 

 —

 

 

 —

 

 

74%

 

Our first and only FDA approved product, TAVALISSE®, was approved by the U.S. FDA in April 2018. We commenced commercial sale of TAVALISSE in the U.S. in May 2018. There were no product sales during the year ended December 31, 2017. Our marketing authorization application (MAA) for fostamatinib for the treatment of chronic ITP in adult patients who are refractory to other treatments was approved by the EC in January 2020 (see Note 15).

 

In addition to the distribution agreements with our customers, the SDs, we also enter into arrangements with specialty pharmacy providers, in-office dispensing providers, group purchasing organizations, and government entities that provide for government-mandated and/or privately-negotiated rebates, chargebacks and discounts with respect to the purchase of our products which reduced our gross product sales. Also refer to Revenue Recognition policy discussion in Note 1.

 

The following tables summarize activity in each of the product revenue allowances and discounts during the year ended December 31, 2019 (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Chargebacks,

 

Government

 

 

 

 

 

 

Discounts and

 

and Other

 

 

 

 

 

 

Fees

 

Rebates

 

Returns

 

Total

Balance at January 1, 2019

    

$

623

 

$

843

 

$

170

 

$

1,636

Provision related to current period sales

 

 

5,170

 

 

2,864

 

 

99

 

 

8,133

Credit or payments made during the period

 

 

(4,500)

 

 

(1,906)

 

 

(31)

 

 

(6,437)

Balance at December 31, 2019

 

$

1,293

 

$

1,801

 

$

238

 

$

3,332

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Chargebacks,

 

Government

 

 

 

 

 

 

 

 

Discounts and

 

and Other

 

 

 

 

 

 

 

 

Fees

 

Rebates

 

Returns

 

Total

Balance at January 1, 2018

    

$

 —

 

$

 —

 

$

 —

 

$

 —

Provision related to current period sales

 

 

1,484

 

 

1,068

 

 

170

 

 

2,722

Credit or payments made during the period

 

 

(861)

 

 

(225)

 

 

 —

 

 

(1,086)

Balance at December 31, 2018

 

$

623

 

$

843

 

$

170

 

$

1,636

 

We incurred discounts and allowances for the year ended December 31, 2019 of $9.3 million, which includes the provision for current period sales of $8.1 million in the first table above, which is included as part of the Other Accrued Liabilities in the balance sheet, of which $3.3 million remained outstanding as of December 31, 2019. The remaining $1.2 million in discounts and allowances incurred related to current period sales not included in the above table for year ended December 31, 2019 relates to chargebacks, discounts and fees recorded as reductions in accounts receivable and prepaid and other current assets in the balance sheet.

 

We incurred discounts and allowances for the year ended December 31, 2018 of $3.0 million, which includes the provision for period sales of $2.7 million in the second table above, which is included as part of the Other Accrued Liabilities in the balance, of which $1.6 million remained outstanding as of December 31, 2018. The remaining $285,000 in discounts and allowances incurred related to period sales not included in the above table for year ended December 31, 2018 is recorded as reduction of accounts receivable and prepaid and other current assets in the balance sheet.

 

As of December 31, 2019, we have accounts receivable from Aclaris of $1.5 million, relative to the first amendment to the license and collaboration agreement with Aclaris. We determined that no allowance for doubtful accounts was necessary for our accounts receivable as of the years ended December 31, 2019 and 2018.