Quarterly report pursuant to Section 13 or 15(d)

REVENUES

v3.21.2
REVENUES
 9 Months Ended
Sep. 30, 2020
Revenue From Contract With Customer [Abstract]  
REVENUES

NOTE 3 — REVENUES

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

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Endari®

 

$

5,485

 

 

$

5,669

 

 

$

16,548

 

 

$

15,661

 

Other

 

 

116

 

 

 

91

 

 

 

367

 

 

 

299

 

Revenues, net

 

$

5,601

 

 

$

5,760

 

 

$

16,915

 

 

$

15,960

 

 

The following table summarizes the revenue allowance and accrual activities for the nine months ended September 30, 2020 and 2019 (in thousands):

 

 

Trade Discounts, Allowances and Chargebacks

 

 

Government Rebates and Other Incentives

 

 

Returns

 

 

Total

 

Balance as of December 31, 2019

 

$

228

 

 

$

1,354

 

 

$

315

 

 

$

1,897

 

Provision related to sales in the current year

 

 

2,106

 

 

 

2,917

 

 

 

180

 

 

 

5,203

 

Adjustments related prior period sales

 

 

15

 

 

 

(43

)

 

 

(65

)

 

 

(93

)

Credit and payments made

 

 

(2,144

)

 

 

(1,762

)

 

 

—

 

 

 

(3,906

)

Balance as of September 30, 2020

 

$

205

 

 

$

2,466

 

 

$

430

 

 

$

3,101

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance as of December 31, 2018

 

$

84

 

 

$

798

 

 

$

99

 

 

$

981

 

Provision related to sales in the current year

 

 

1,039

 

 

 

2,368

 

 

 

190

 

 

 

3,597

 

Credit and payments made

 

 

(866

)

 

 

(1,816

)

 

 

—

 

 

 

(2,682

)

Balance as of September 30, 2019

 

$

257

 

 

$

1,350

 

 

$

289

 

 

$

1,896

 

 

The following table summarizes revenues attributable to each of our customers that accounted for 10% or more of our total revenues (as a percentage of total revenues):

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Customer A

 

 

49

%

 

 

62

%

 

 

53

%

 

 

60

%

Customer B

 

 

32

%

 

 

22

%

 

 

27

%

 

 

21

%

The Company is party to a distributor agreement with Telcon pursuant to which it granted Telcon exclusive rights to the Company’s prescription grade L-glutamine (“PGLG”) oral powder for the treatment of diverticulosis in South Korea, Japan and China in exchange for Telcon’s payment of a $10 million upfront fee and agreement to purchase from us specified minimum quantities of the

finished product. In a related license agreement with Telcon, the Company agreed to use commercially reasonable best efforts to obtain product registration in these territories within three years of obtaining FDA marketing authorization for PGLG in this indication. Telcon has the right to terminate the distributor agreement in certain circumstances for failure to obtain such product registrations, in which event the Company would be obliged to return to Telcon the $10 million upfront fee. The upfront fee of $10 million is included in other long-term liabilities as unearned revenue as of September 30, 2020 and December 31, 2019.  See Note 10 for additional details.  

The Company received an upfront payment of $500,000 in connection with entering into a distribution agreement with a strategic partner in 2018 to distribute Endari® in the Middle East and North Africa region. The payment was recorded as unearned revenue and included in other long-term liabilities to be recognized as revenue when the performance obligations are satisfied. The upfront payment of $500,000 is included in other long-term liabilities as unearned revenue as of December 31, 2019. During the nine months ended September 30, 2020, the distribution agreement was terminated, and the Company recognized the $500,000 up front payment as other income in the Consolidated Comprehensive Statements of Income (Loss).