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

____________________


(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 profit 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).