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Revenues | 12 Months Ended
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Dec. 28, 2018
Revenue from Contract with Customer [Abstract] |
Revenues | REVENUES Revenues by disaggregated category were as follows (in thousands):
| Year Ended December 31,
| 2018 |  | 2017 |  | 2016
Product revenues: |  |  |  |  |
Gross product revenues | $ | 738,529 |  |  | $ | 402,569 |  |  | $ | 151,499 |
Discounts and allowances | (119,250 | ) |  | (53,561 | ) |  | (16,124 | )
Net product revenues | 619,279 |  |  | 349,008 |  |  | 135,375 |
Collaboration revenues: |  |  |  |  |
License revenues (1) | 192,188 |  |  | 96,637 |  |  | 56,286 |
Research and development service revenues (2) | 39,501 |  |  | 8,737 |  |  | — |
Other collaboration revenues (3) | 2,858 |  |  | (1,905 | ) |  | (207 | )
Total collaboration revenues | 234,547 |  |  | 103,469 |  |  | 56,079 |
Total revenues | $ | 853,826 |  |  | $ | 452,477 |  |  | $ | 191,454 |
____________________
(1) | Upon the adoption of Topic 606 as of January 1, 2018, the allocation of proceeds from our collaboration partners, including upfront and milestone payments, between intellectual property licenses and research and development services as well as the resulting timing of recognition have changed. License revenues for the year ended December 31, 2018 included the immediate recognition of the portion of milestones that were allocated to the transfer of intellectual property licenses for those milestones for which it had become probable that a significant revenue reversal would not occur, as well as royalty revenues from Ipsen and Genentech. License revenues for the years ended December 31, 2017 and 2016 included the full recognition of substantive milestones achieved during the period, recognition of deferred revenues from upfront payments and a non-substantive milestone, which were being amortized over various periods, as well as royalty revenues from Ipsen and Genentech.
(2) | Research and development service revenues for the year ended December 31, 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 service performance obligations which are being amortized through early 2030, as well as development cost reimbursements earned on our collaboration agreements. As described above, prior to the adoption of Topic 606, we did not allocate any of our upfront payments or milestones to research and development services; therefore, Research and development service revenues for the years ended December 31, 2017 included only development cost reimbursements earned on our collaboration agreements.
(3) | Other collaboration revenues for the year ended December 31, 2018 included royalties we paid to GSK on Ipsen’s sales of products containing cabozantinib, the profit on the U.S. commercialization of COTELLIC from Genentech and product supply revenues. Other collaboration revenues for the years ended years ended December 31, 2017 and 2016 included only royalties we paid to GSK on Ipsen’s sales of products containing cabozantinib and product supply revenues, as the profits and losses on the U.S. commercialization of COTELLIC for the period were included in Selling, general and administrative expenses.
Duri ng the year ended December 31, 2018, Net product revenues and License revenues related to goods and intellectual property licenses 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 royalties we paid to GSK on Ipsen’s sales of products containing cabozantinib, the profit on the U.S. commercialization of COTELLIC from Genentech and product supply revenue, were recorded in accordance with Topic 808 for all periods presented. Net product revenues disaggregated by product were as follows (in thousands):
| Year Ended December 31,
| 2018 |  | 2017 |  | 2016
CABOMETYX | $ | 599,946 |  |  | $ | 324,000 |  |  | $ | 93,481 |
COMETRIQ | 19,333 |  |  | 25,008 |  |  | 41,894 |
Net product revenues | $ | 619,279 |  |  | $ | 349,008 |  |  | $ | 135,375 |
Total revenues disaggregated by significant customer were as follows (dollars in thousands):
| Year Ended December 31,
| 2018 |  | 2017 |  | 2016
| Dollars |  | Percent of total |  | Dollars |  | Percent of total |  | Dollars |  | Percent of total
Ipsen | $ | 182,879 |  |  | 21 | % |  | $ | 69,792 |  |  | 15 | % |  | $ | 33,252 |  |  | 17 | %
Caremark L.L.C. | 110,698 |  |  | 13 | % |  | 73,921 |  |  | 16 | % |  | 17,746 |  |  | 9 | %
Affiliates of McKesson Corporation | 99,916 |  |  | 12 | % |  | 48,662 |  |  | 11 | % |  | 13,143 |  |  | 7 | %
Accredo Health, Incorporated | 81,028 |  |  | 9 | % |  | 50,716 |  |  | 11 | % |  | 16,631 |  |  | 9 | %
Diplomat Specialty Pharmacy | 74,244 |  |  | 9 | % |  | 83,059 |  |  | 18 | % |  | 63,826 |  |  | 33 | %
Others, individually less than 10% of Total revenues for all periods presented | 305,061 |  |  | 36 | % |  | 126,327 |  |  | 29 | % |  | 46,856 |  |  | 25 | %
Total revenues | $ | 853,826 |  |  | 100 | % |  | $ | 452,477 |  |  | 100 | % |  | $ | 191,454 |  |  | 100 | %
Total revenues disaggregated by geographic region were as follows (in thousands):
| Year Ended December 31,
| 2018 |  | 2017 |  | 2016
U.S. | $ | 632,927 |  |  | $ | 367,906 |  |  | $ | 140,709 |
Europe | 182,879 |  |  | 69,792 |  |  | 35,745 |
Rest of the world | 38,020 |  |  | 14,779 |  |  | 15,000 |
Total revenues | $ | 853,826 |  |  | $ | 452,477 |  |  | $ | 191,454 |
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 |  | Returns |  | Total
Balance at December 31, 2016 | $ | 1,802 |  |  | $ | 794 |  |  | $ | 2,627 |  |  | $ | 351 |  |  | $ | 5,574 |
Provision related to sales made in: |  |  |  |  |  |  |  |  |
Current period | 33,310 |  |  | 7,301 |  |  | 14,390 |  |  | — |  |  | 55,001 |
Prior periods | (817 | ) |  | — |  |  | (624 | ) |  | — |  |  | (1,441 | )
Payments and customer credits issued | (32,367 | ) |  | (6,300 | ) |  | (10,623 | ) |  | (351 | ) |  | (49,641 | )
Balance at December 31, 2017 | 1,928 |  |  | 1,795 |  |  | 5,770 |  |  | — |  |  | 9,493 |
Provision related to sales made in: |  |  |  |  |  |  |  |  |
Current period | 75,543 |  |  | 13,015 |  |  | 31,040 |  |  | 2 |  |  | 119,600 |
Prior periods | (403 | ) |  | 206 |  |  | (153 | ) |  | — |  |  | (350 | )
Payments and customer credits issued | (74,746 | ) |  | (11,978 | ) |  | (24,741 | ) |  | (2 | ) |  | (111,467 | )
Balance at December 31, 2018 | $ | 2,322 |  |  | $ | 3,038 |  |  | $ | 11,916 |  |  | $ | — |  |  | $ | 17,276 |
Chargebacks and discounts for prompt payment are recorded as a reduction of Trade receivables, net and the remaining reserve balances are classified as Other current liabilities in the accompanying 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 | 37,881 |  |  | 4,545 |  |  | — |  |  | — |
Transfer to receivables from contract assets recognized at the beginning of the period | (46,052 | ) |  | — |  |  | — |  |  | — |
Increases as a result of the deferral of milestones achieved in period, excluding amounts recognized as revenue | — |  |  | — |  |  | 1,718 |  |  | 7,237 |
Revenue recognized that was included in the contract liability balance at the beginning of the period | — |  |  | — |  |  | (8,683 | ) |  | — |
Other adjustments (1) | (1,417 | ) |  | (16,792 | ) |  | (1,428 | ) |  | (16,781 | )
Balance at December 31, 2018 | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 15,897 |
____________________
(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 year ended December 31, 2018, we recognized $198.1 million 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.

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -URI http://asc.fasb.org/topic&trid=49130388 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -URI http://asc.fasb.org/topic&trid=2122369 + Details
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