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Revenues | 3 Months Ended
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Apr. 03, 2020
Revenue from Contract with Customer [Abstract] |
REVENUES | REVENUES Revenues consisted of the following (in thousands):
| Three Months Ended March 31,
| 2020 |  | 2019
Product revenues: |  |  |
Gross product revenues | $ | 252,566 |  |  | $ | 223,750 |
Discounts and allowances | (58,686 | ) |  | (44,169 | )
Net product revenues | 193,880 |  |  | 179,581 |
Collaboration revenues: |  |  |
License revenues | 20,879 |  |  | 25,564 |
Collaboration services revenues | 12,156 |  |  | 10,342 |
Total collaboration revenues | 33,035 |  |  | 35,906 |
Total revenues | $ | 226,915 |  |  | $ | 215,487 |
Net product revenues and license revenues were recorded in accordance with Topic 606. The related goods and intellectual property license revenues have been recognized at a point in time. License revenues include the recognition of the portion of upfront and milestones payments 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 reversal of revenues would not occur, as well as royalty revenues and our share of profits on the U.S. commercialization of COTELLIC. Collaboration services revenues were recorded in accordance with Topic 808 and by analogy to Topic 606. Collaboration services revenues include the recognition of deferred revenue for the portion of upfront and milestone payments allocated to research and development services performance obligations, development cost reimbursements earned under our collaboration agreements, product supply revenues, net of product supply costs, and the royalties we paid to GlaxoSmithKline (GSK) on sales by Ipsen Pharma SAS (Ipsen) of products containing cabozantinib. Net product revenues by product were as follows (in thousands):
| Three Months Ended March 31,
| 2020 |  | 2019
CABOMETYX | $ | 189,216 |  |  | $ | 175,890 |
COMETRIQ | 4,664 |  |  | 3,691 |
Net product revenues | $ | 193,880 |  |  | $ | 179,581 |
The percentage of total revenues by customer who individually accounted for 10% or more of our total revenues were as follows:
| Three Months Ended March 31,
| 2020 |  | 2019
Affiliates of CVS Health Corporation | 18 | % |  | 15 | %
Affiliates of McKesson Corporation | 15 | % |  | 12 | %
Ipsen | 13 | % |  | 10 | %
Affiliates of AmerisourceBergen Corporation | 11 | % |  | 10 | %
Affiliates of Optum Specialty Pharmacy | 12 | % |  | 8 | %
Accredo Health, Incorporated | 8 | % |  | 10 | %
Revenues by geographic region were as follows (in thousands):
| Three Months Ended March 31,
| 2020 |  | 2019
U.S. | $ | 196,596 |  |  | $ | 182,126 |
Europe | 29,036 |  |  | 21,868 |
Japan | 1,283 |  |  | 11,493 |
Total revenues | $ | 226,915 |  |  | $ | 215,487 |
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 |  | Total
Balance at December 31, 2019 | $ | 7,514 |  |  | $ | 3,497 |  |  | $ | 15,222 |  |  | $ | 26,233 |
Provision related to sales made in: |  |  |  |  |  |  |
Current period | 37,686 |  |  | 4,586 |  |  | 15,821 |  |  | 58,093 |
Prior periods | 41 |  |  | (167 | ) |  | 719 |  |  | 593 |
Payments and customer credits issued | (32,584 | ) |  | (4,842 | ) |  | (11,830 | ) |  | (49,256 | )
Balance at March 31, 2020 | $ | 12,657 |  |  | $ | 3,074 |  |  | $ | 19,932 |  |  | $ | 35,663 |
The allowance for chargebacks and discounts for prompt payment is recorded as a reduction of trade receivables, net and the remaining reserves are recorded as rebates and fees due to customers in the accompanying Condensed Consolidated Balance Sheets. Contract Assets and Liabilities We receive payments from our collaboration partners based on billing schedules established in each contract. Amounts are recorded as accounts receivable when our right to consideration is unconditional. We may also recognize revenue in advance of the contractual billing schedule and such amounts are recorded, net of any allowance for credit losses, as a contract asset when recognized. Contract assets, which are presented in prepaid expenses and other current assets in the accompanying Condensed Consolidated Balance Sheets, were $0 and $1.1 million as of March 31, 2020 and December 31, 2019, respectively. We may be required to defer recognition of revenue for upfront and milestone payments until we perform our obligations under these arrangements, and such amounts are recorded as deferred revenue upon receipt or when due. Contract liabilities were $15.4 million and $6.6 million as of March 31, 2020 and December 31, 2019, respectively. The current portion of the contract liabilities, which are presented in other current liabilities in the accompanying Condensed Consolidated Balance Sheets, were $1.3 million and $0 as of March 31, 2020 and December 31, 2019, respectively. The remainder of the contract liabilities are presented in long-term portion of deferred revenue in the accompanying Condensed Consolidated Balance Sheets. For those contracts that have multiple performance obligations, contract assets and liabilities are reported on a net basis at the contract level. Significant changes in contract assets during the three months ended March 31, 2020, as compared to December 31, 2019, include the impact of a $10.0 million milestone from Takeda Pharmaceutical Company Limited (Takeda) which was achieved, invoiced and collected during the period. During the three months ended March 31, 2020 and 2019, we recognized $1.6 million and $1.3 million, respectively, in revenues that were included in the beginning deferred revenue balance for those years. During the three months ended March 31, 2020 and 2019, we recognized $18.8 million and $25.3 million, respectively, in revenues 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 Daiichi Sankyo. As of March 31, 2020, $65.1 million of the transaction price was allocated to performance obligations that had not yet been satisfied, which was considered in the determination of contract assets and liabilities. See “Note 3. Collaboration Agreements - Cabozantinib Commercial Collaborations - Performance Obligations and Transaction Prices for our Ipsen and Takeda Collaborations” to our Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2019 for information about the expected timing to satisfy these performance obligations.

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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/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -URI http://asc.fasb.org/topic&trid=49130388 + Details
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