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Revenues | 3 Months Ended
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Mar. 29, 2019
Revenue from Contract with Customer [Abstract] |
REVENUES | REVENUES Revenues by disaggregated category were as follows (in thousands):
| Three Months Ended March 31,
| 2019 |  | 2018
Product revenues: |  |  |
Gross product revenues | $ | 223,750 |  |  | $ | 159,436 |
Discounts and allowances | (44,169 | ) |  | (25,164 | )
Net product revenues | 179,581 |  |  | 134,272 |
Collaboration revenues: |  |  |
License revenues (1) | 24,509 |  |  | 69,030 |
Research and development service revenues (2) | 11,928 |  |  | 10,099 |
Other collaboration revenues (3) | (531 | ) |  | 318 |
Total collaboration revenues | 35,906 |  |  | 79,447 |
Total revenues | $ | 215,487 |  |  | $ | 213,719 |
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(1) | License revenues included the immediate recognition of the portion of milestones allocated to the transfer of intellectual property licenses for which it had become probable in the current period that the milestone would be achieved and a significant revenue reversal would not occur, as well as royalty revenues from Ipsen Pharma SAS (Ipsen) and Genentech.
(2) | Research and development service revenues included the recognition of deferred revenue for the portion of upfront and milestone payments that have been allocated to research and development service performance obligations, as well as development cost reimbursements earned on our collaboration agreements.
(3) | Other collaboration revenues included the profit on the U.S. commercialization of COTELLIC from Genentech and revenues on product supply services provided to Ipsen and Takeda Pharmaceutical Company Ltd. (Takeda), which were partially offset by the 3% royalty we are required to pay GlaxoSmithKline (GSK) on the net sales by Ipsen of any product incorporating cabozantinib.
Net product revenues, License revenues and Research and development services revenues were recorded in accordance with Topic 606 for all periods presented. 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. Other collaboration revenues, which included the p rofit on the U.S. commercialization of COTELLIC and net losses on product supply services, were recorded in accordance with ASC Topic 808, Collaborative Arrangements for all periods presented. Net product revenues disaggregated by product were as follows (in thousands):
| Three Months Ended March 31,
| 2019 |  | 2018
CABOMETYX | $ | 175,890 |  |  | $ | 128,934 |
COMETRIQ | 3,691 |  |  | 5,338 |
Net product revenues | $ | 179,581 |  |  | $ | 134,272 |
Total revenues disaggregated by significant customer were as follows (dollars in thousands):
| Three Months Ended March 31,
| 2019 |  | 2018
| Dollars |  | Percent of total |  | Dollars |  | Percent of total
Caremark L.L.C. | $ | 32,698 |  |  | 15 | % |  | $ | 26,388 |  |  | 12 | %
Affiliates of McKesson Corporation | 25,311 |  |  | 12 | % |  | 21,331 |  |  | 10 | %
Accredo Health, Incorporated | 22,495 |  |  | 10 | % |  | 18,286 |  |  | 9 | %
Affiliates of AmerisourceBergen Corporation | 21,902 |  |  | 10 | % |  | 15,736 |  |  | 7 | %
Ipsen | 21,868 |  |  | 10 | % |  | 53,809 |  |  | 25 | %
Others, individually less than 10% of Total revenues for all periods presented | 91,213 |  |  | 43 | % |  | 78,169 |  |  | 37 | %
Total revenues | $ | 215,487 |  |  | 100 | % |  | $ | 213,719 |  |  | 100 | %
Total revenues disaggregated by geographic region were as follows (in thousands):
| Three Months Ended March 31,
| 2019 |  | 2018
U.S. | $ | 182,126 |  |  | $ | 136,993 |
Europe | 21,868 |  |  | 53,809 |
Rest of the world | 11,493 |  |  | 22,917 |
Total revenues | $ | 215,487 |  |  | $ | 213,719 |
Net product revenues are attributed to geographic region based on the ship-to location. Collaboration revenues are attributed to geographic region 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, 2018 | $ | 2,322 |  |  | $ | 3,038 |  |  | $ | 11,916 |  |  | $ | — |  |  | $ | 17,276 |
Provision related to sales made in: |  |  |  |  |  |  |  |  |
Current period | 27,153 |  |  | 3,875 |  |  | 12,905 |  |  | — |  |  | 43,933 |
Prior periods | — |  |  | 9 |  |  | 227 |  |  | — |  |  | 236 |
Payments and customer credits issued | (27,367 | ) |  | (4,189 | ) |  | (8,073 | ) |  | — |  |  | (39,629 | )
Balance at March 31, 2019 | $ | 2,108 |  |  | $ | 2,733 |  |  | $ | 16,975 |  |  | $ | — |  |  | $ | 21,816 |
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, 2018 | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 15,897 |
Increases as a result of a change in transaction price and recognition of revenues as services are performed | 10,222 |  |  | 1,450 |  |  | — |  |  | — |
Transfer to receivables from contract assets recognized at the beginning of the period | (543 | ) |  | — |  |  | — |  |  | — |
Increases as a result of the deferral of milestones achieved in period, excluding amounts recognized as revenue | — |  |  | — |  |  | — |  |  | — |
Revenue recognized that was included in the contract liability balance at the beginning of the period | — |  |  | — |  |  | (1,313 | ) |  | — |
Other adjustments (1) | (2,435 | ) |  | (1,450 | ) |  | 3,689 |  |  | (7,574 | )
Balance at March 31, 2019 | $ | 7,244 |  |  | $ | — |  |  | $ | 2,376 |  |  | $ | 8,323 |
____________________
(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 months ended March 31, 2019 and 2018, we recognized $25.3 million and $71.3 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, Takeda and Bristol-Myers Squibb Company (BMS).

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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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