Revenues (Tables)

3 Months Ended

Mar. 30, 2018

Revenue from Contract with Customer [Abstract]

Total revenues disaggregated by significant customer were as follows (dollars in thousands):



	Three Months Ended March 31,
	2018				2017
	Dollars		Percent of total		Dollars		Percent of total
Ipsen	$	53,809	25	%	$	4,530	6	%
Caremark L.L.C.	$	26,388	12	%	$	13,819	17	%
Affiliates of McKesson Corporation	$	21,331	10	%	$	11,278	14	%
Diplomat Specialty Pharmacy	$	20,147	9	%	$	19,850	25	%
Accredo Health, Incorporated	$	18,286	9	%	$	9,440	12	%

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



	Three Months Ended March 31,
	2018			2017
Product revenues:
Gross product revenues	$	159,436		$	77,959
Discounts and allowances	(25,164		)	(9,082		)
Net product revenues	134,272			68,877
Collaboration revenues:
License revenues⁽¹⁾	69,030			11,214
Research and development services revenues⁽²⁾	10,099			1,132
Product supply revenues, net	(1,055		)	(336		)
Total collaboration revenues	78,074			12,010
Total revenues	$	212,346		$	80,887

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(1)

License revenues for the three months ended March 31, 2018 included revenues related to the portion of two milestones that were allocated to the transfer of intellectual property licenses and were fully recognized in the current period and royalty revenue from Ipsen and Genentech. License revenues for the three months ended March 31, 2017 included the recognition of deferred revenues from upfront payments and a non-substantive milestone that were being amortized over various periods, royalty revenues from Ipsen and Genentech and one milestone. Upon the adoption of Topic 606, the allocation of proceeds from our collaboration partners between licenses and research and development services as well as the timing of recognition has changed. Therefore, among other changes, as of January 1, 2018, the portion of proceeds allocated to intellectual property licenses for our Ipsen and Takeda collaboration agreements are recognized immediately and license revenues no longer includes revenues related to the amortization of deferred revenue.

(2)

Research and development services revenues for three months ended March 31, 2018 included the recognition of deferred revenue for the portion of the upfront payments and milestones that were allocated to the research and development services which are being amortized through early 2030, as well as development cost reimbursements earned on our collaboration agreements. As described above, we did not allocate any of our upfront payments or milestones to research and development services prior to the adoption of Topic 606 and therefore research and development services revenues for the three months ended March 31, 2017 included only development cost reimbursements earned on our collaboration agreements.

Net product revenues disaggregated by product were as follows (in thousands):



	Three Months Ended March 31,
	2018		2017
CABOMETYX	$	128,934	$	62,359
COMETRIQ	5,338		6,518
Net product revenues	$	134,272	$	68,877

Total revenues disaggregated by geographic region were as follows (in thousands):



	Three Months Ended March 31,
	2018		2017
U.S.	$	135,620	$	73,675
Europe	$	53,809	$	4,530
Rest of the world	$	22,917	$	2,682

Activities and Ending Reserve Balances for Significant Categories of Discounts and Allowances

The activities and ending reserve balances for each significant category of discounts and allowances (which constitute variable consideration) were as follows (in thousands):



	Chargebacks and Discounts for Prompt Payment			Other Customer Credits/Fees and Co-pay Assistance			Rebates			Returns		Total
Balance at December 31, 2017	$	1,928		$	1,795		$	5,770		$	—	$	9,493
Provision related to sales made in:
Current period	14,475			4,197			6,625			—		25,297
Prior periods	(331		)	—			199			—		(132		)
Payments and customer credits issued	(13,556		)	(3,294		)	(3,303		)	—		(20,153		)
Balance at March 31, 2018	$	2,516		$	2,698		$	9,291		$	—	$	14,505

Contract Assets and Liabilities under Topic 606

Changes in our contract assets and liabilities under Topic 606 were as follows (in thousands):



	Contract Assets: Unbilled Collaboration Revenue						Contract Liabilities: Deferred Revenue
	Current Portion			Long-term Portion			Current Portion			Long-term Portion
Balance at December 31, 2017	$	—		$	—		$	31,984		$	238,520
Adoption of Topic 606	9,588			12,247			(23,591		)	(213,079		)
Balance at January 1, 2018	9,588			12,247			8,393			25,441
Increases as a result of a change in transaction price and recognition of revenues as services are performed	46,006			1,166			—			—
Transfer to receivables from contract assets recognized at the beginning of the period	(9,159		)	—			—			—
Increases as a result of the deferral of milestones earned in period, excluding amounts recognized as revenue	—			—			173			666
Revenue recognized that was included in the contract liability balance at the beginning of the period	—			—			(3,492		)	—
Other adjustments ⁽¹⁾	(14,591		)	(13,413		)	(5,074		)	(22,930		)
Balance at March 31, 2018	$	31,844		$	—		$	—		$	3,177

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(1)	Includes reclassification of deferred revenue from long-term to current and adjustments made due to netting of contract assets and liabilities by collaboration agreement.