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Revenues | 6 Months Ended
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Jun. 29, 2018
Revenue from Contract with Customer [Abstract] |
REVENUES | REVENUES Revenues by disaggregated category were as follows (in thousands):
| Three Months Ended June 30, |  | Six Months Ended June 30,
| 2018 |  | 2017 |  | 2018 |  | 2017
Product revenues: |  |  |  |  |  |  |
Gross product revenues | $ | 172,646 |  |  | $ | 100,258 |  |  | $ | 332,082 |  |  | $ | 178,217 |
Discounts and allowances | (26,810 | ) |  | (12,254 | ) |  | (51,974 | ) |  | (21,336 | )
Net product revenues | 145,836 |  |  | 88,004 |  |  | 280,108 |  |  | 156,881 |
Collaboration revenues: |  |  |  |  |  |  |
License revenues (1) | 31,908 |  |  | 9,156 |  |  | 100,938 |  |  | 20,370 |
Research and development services revenues (2) | 6,805 |  |  | 2,175 |  |  | 16,904 |  |  | 3,307 |
Other collaboration revenues (3) | 1,559 |  |  | (327 | ) |  | 1,877 |  |  | (663 | )
Total collaboration revenues | 40,272 |  |  | 11,004 |  |  | 119,719 |  |  | 23,014 |
Total revenues | $ | 186,108 |  |  | $ | 99,008 |  |  | $ | 399,827 |  |  | $ | 179,895 |
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(1) | License revenues for the three and six months ended June 30, 2018 included revenues related to the portion of three milestones that were allocated to the transfer of intellectual property licenses and were recognized in the current period and royalty revenue from Ipsen and Genentech. License revenues for the three and six months ended June 30, 2017 included the recognition of deferred revenues from upfront payments and a non-substantive milestone that were being amortized over various periods, as well as royalty revenues from Ipsen and Genentech. License revenues for the six months ended June 30, 2017 also included a milestone payment from Bristol-Myers Squibb Company (“BMS”). 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 the three and six months ended June 30, 2018 included the recognition of deferred revenue for the portion of the upfront and milestone payments that have been allocated to the research and development services performance obligation 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 and six months ended June 30, 2017 included only development cost reimbursements earned on our collaboration agreements.
(3) | Other collaboration revenues for three and six months ended June 30, 2018 included net product supply revenues from Ipsen and Takeda and the profit on the U.S. commercialization of COTELLIC from Genentech. Losses on the U.S. commercialization of COTELLIC for the three and six months ended June 30, 2017 were included in Selling, general and administrative expenses in the accompanying Condensed Consolidated Statements of Operations and therefore Other collaboration revenues for the three and six months ended June 30, 2017 included only net product supply revenues.
Duri ng the three and six months ended June 30, 2018, Net product revenues and License revenues related to goods transferred at a point in time and Research and development services revenues related to services performed over time. License revenues and Research and development services revenues were recorded in accordance with Topic 606 during 2018 and Topic 605 in prior periods. Other collaboration revenues, which included the p rofit on the U.S. commercialization of COTELLIC and net product supply revenues, were recorded in accordance with Topic 808 for all periods presented. Net product revenues disaggregated by product were as follows (in thousands):
| Three Months Ended June 30, |  | Six Months Ended June 30,
| 2018 |  | 2017 |  | 2018 |  | 2017
CABOMETYX | $ | 141,121 |  |  | $ | 80,861 |  |  | $ | 270,055 |  |  | $ | 143,220 |
COMETRIQ | 4,715 |  |  | 7,143 |  |  | 10,053 |  |  | 13,661 |
Net product revenues | $ | 145,836 |  |  | $ | 88,004 |  |  | $ | 280,108 |  |  | $ | 156,881 |
Total revenues disaggregated by significant customer were as follows (dollars in thousands):
| Three Months Ended June 30,
| 2018 |  | 2017
| Dollars |  | Percent of total |  | Dollars |  | Percent of total
Ipsen | $ | 34,043 |  |  | 18 | % |  | $ | 5,494 |  |  | 6 | %
Caremark L.L.C. | $ | 26,421 |  |  | 14 | % |  | $ | 18,435 |  |  | 19 | %
Affiliates of McKesson Corporation | $ | 23,321 |  |  | 13 | % |  | $ | 12,846 |  |  | 13 | %
Diplomat Specialty Pharmacy | $ | 18,475 |  |  | 10 | % |  | $ | 22,599 |  |  | 23 | %
Accredo Health, Incorporated | $ | 19,714 |  |  | 11 | % |  | $ | 13,619 |  |  | 14 | %
Others, individually less than 10% of Total revenues for all periods presented | $ | 64,134 |  |  | 34 | % |  | $ | 26,015 |  |  | 25 | %
Total revenues | $ | 186,108 |  |  | 100 | % |  | $ | 99,008 |  |  | 100 | %
| Six Months Ended June 30,
| 2018 |  | 2017
| Dollars |  | Percent of total |  | Dollars |  | Percent of total
Ipsen | $ | 87,852 |  |  | 22 | % |  | $ | 10,024 |  |  | 6 | %
Caremark L.L.C. | $ | 52,809 |  |  | 13 | % |  | $ | 32,254 |  |  | 18 | %
Affiliates of McKesson Corporation | $ | 44,652 |  |  | 11 | % |  | $ | 24,124 |  |  | 13 | %
Diplomat Specialty Pharmacy | $ | 38,622 |  |  | 10 | % |  | $ | 42,449 |  |  | 24 | %
Accredo Health, Incorporated | $ | 38,000 |  |  | 10 | % |  | $ | 23,059 |  |  | 13 | %
Others, individually less than 10% of Total revenues for all periods presented | $ | 137,892 |  |  | 34 | % |  | $ | 47,985 |  |  | 26 | %
Total revenues | $ | 399,827 |  |  | 100 | % |  | $ | 179,895 |  |  | 100 | %
Total revenues disaggregated by geographic region were as follows (in thousands):
| Three Months Ended June 30, |  | Six Months Ended June 30,
| 2018 |  | 2017 |  | 2018 |  | 2017
U.S. | $ | 150,079 |  |  | $ | 89,371 |  |  | $ | 287,072 |  |  | $ | 163,046 |
Europe | 34,043 |  |  | 5,494 |  |  | 87,852 |  |  | 10,024 |
Rest of the world | 1,986 |  |  | 4,143 |  |  | 24,903 |  |  | 6,825 |
Total revenues | $ | 186,108 |  |  | $ | 99,008 |  |  | $ | 399,827 |  |  | $ | 179,895 |
Net product revenues are attributed to regions based on the ship-to location. Collaboration revenues are attributed to regions based on the location of our collaboration partners’ headquarters. Product Sales 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 |  | Total
Balance at December 31, 2017 | $ | 1,928 |  |  | $ | 1,795 |  |  | $ | 5,770 |  |  | $ | 9,493 |
Provision related to sales made in: |  |  |  |  |  |  |
Current period | 32,088 |  |  | 6,336 |  |  | 14,318 |  |  | 52,742 |
Prior periods | (737 | ) |  | — |  |  | (32 | ) |  | (769 | )
Payments and customer credits issued | (30,675 | ) |  | (6,850 | ) |  | (10,194 | ) |  | (47,719 | )
Balance at June 30, 2018 | $ | 2,604 |  |  | $ | 1,281 |  |  | $ | 9,862 |  |  | $ | 13,747 |
Chargebacks and discounts for prompt payment are recorded as a reduction of trade receivables and the remaining reserve balances are classified as Other current liabilities in the accompanying Condensed Consolidated Balance Sheets. Contract Assets and Liabilities We receive payments from our licensees based on billing schedules established in each contract. Amounts are recorded as accounts receivable when our right to consideration is unconditional. Upfront and milestone payments may require deferral of revenue recognition to a future period until we perform our obligations under these arrangements and are recorded as deferred revenue upon receipt or when due. We may also recognize revenue in advance of the contractual billing schedule and such amounts are recorded as unbilled collaboration revenue when recognized. 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 | 471 |  |  | 2,534 |  |  | — |  |  | — |
Transfer to receivables from contract assets recognized at the beginning of the period | (9,109 | ) |  | — |  |  | — |  |  | — |
Increases as a result of the deferral of milestones achieved in period, excluding amounts recognized as revenue | — |  |  | — |  |  | 948 |  |  | 3,835 |
Revenue recognized that was included in the contract liability balance at the beginning of the period | — |  |  | — |  |  | (4,977 | ) |  | — |
Other adjustments (1) | (950 | ) |  | (14,781 | ) |  | 1,575 |  |  | (17,306 | )
Balance at June 30, 2018 | $ | — |  |  | $ | — |  |  | $ | 5,939 |  |  | $ | 11,970 |
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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.
During the three and six months ended June 30, 2018, we recognized $32.2 million and $103.8 million, respectively, in revenues under Topic 606 for performance obligations satisfied in previous periods. Such revenues primarily related to milestone and royalty payments allocated to our license performance obligations of our collaborations with Ipsen and Daiichi Sankyo Company, Limited (“Daiichi Sankyo”).

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- Definition The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -URI http://asc.fasb.org/topic&trid=2122369 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -URI http://asc.fasb.org/topic&trid=49130388 + Details
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