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Revenues | 6 Months Ended
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Jul. 03, 2020
Revenue from Contract with Customer [Abstract] |
REVENUES | REVENUES Revenues consisted of the following (in thousands):
| Three Months Ended June 30, |  | Six Months Ended June 30,
| 2020 |  | 2019 |  | 2020 |  | 2019
Product revenues: |  |  |  |  |  |  |
Gross product revenues | $ | 229,898 |  |  | $ | 240,418 |  |  | $ | 482,464 |  |  | $ | 464,168 |
Discounts and allowances | (51,168 | ) |  | (46,743 | ) |  | (109,854 | ) |  | (90,912 | )
Net product revenues | 178,730 |  |  | 193,675 |  |  | 372,610 |  |  | 373,256 |
Collaboration revenues: |  |  |  |  |  |  |
License revenues | 59,234 |  |  | 37,742 |  |  | 80,113 |  |  | 63,306 |
Collaboration services revenues | 21,515 |  |  | 8,858 |  |  | 33,671 |  |  | 19,200 |
Total collaboration revenues | 80,749 |  |  | 46,600 |  |  | 113,784 |  |  | 82,506 |
Total revenues | $ | 259,479 |  |  | $ | 240,275 |  |  | $ | 486,394 |  |  | $ | 455,762 |
Net product revenues and license revenues are recorded in accordance with Topic 606. License revenues include the recognition of the portion of 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 under our collaboration agreement with Genentech. Collaboration services revenues were recorded in accordance with Topic 808 and by analogy to Topic 606. Collaboration services revenues include the recognition of deferred revenues for the portion of upfront and milestone payments allocated to our 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 of products containing cabozantinib by our collaboration partners. Net product revenues by product were as follows (in thousands):
| Three Months Ended June 30, |  | Six Months Ended June 30,
| 2020 |  | 2019 |  | 2020 |  | 2019
CABOMETYX | $ | 173,610 |  |  | $ | 189,015 |  |  | $ | 362,826 |  |  | $ | 364,905 |
COMETRIQ | 5,120 |  |  | 4,660 |  |  | 9,784 |  |  | 8,351 |
Net product revenues | $ | 178,730 |  |  | $ | 193,675 |  |  | $ | 372,610 |  |  | $ | 373,256 |
The percentage of total revenues by customer who individually accounted for 10% or more of our total revenues were as follows:
| Three Months Ended June 30, |  | Six Months Ended June 30,
| 2020 |  | 2019 |  | 2020 |  | 2019
Ipsen Pharma SAS (Ipsen) | 20 | % |  | 9 | % |  | 17 | % |  | 10 | %
Affiliates of CVS Health Corporation | 13 | % |  | 15 | % |  | 15 | % |  | 15 | %
Affiliates of McKesson Corporation | 11 | % |  | 13 | % |  | 13 | % |  | 12 | %
Affiliates of AmerisourceBergen Corporation | 11 | % |  | 10 | % |  | 11 | % |  | 10 | %
Affiliates of Optum Specialty Pharmacy | 10 | % |  | 8 | % |  | 11 | % |  | 8 | %
Takeda Pharmaceutical Company Limited (Takeda) | 10 | % |  | 1 | % |  | 5 | % |  | 3 | %
Accredo Health, Incorporated | 10 | % |  | 8 | % |  | 9 | % |  | 9 | %
Revenues by geographic region were as follows (in thousands):
| Three Months Ended June 30, |  | Six Months Ended June 30,
| 2020 |  | 2019 |  | 2020 |  | 2019
U.S. | $ | 181,231 |  |  | $ | 196,347 |  |  | $ | 377,827 |  |  | $ | 378,473 |
Europe | 52,917 |  |  | 22,249 |  |  | 81,953 |  |  | 44,117 |
Japan | 25,331 |  |  | 21,679 |  |  | 26,614 |  |  | 33,172 |
Total revenues | $ | 259,479 |  |  | $ | 240,275 |  |  | $ | 486,394 |  |  | $ | 455,762 |
Net product revenues are attributed to geographic region based on the ship-to location. License and collaboration services 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 | 72,874 |  |  | 8,339 |  |  | 28,226 |  |  | 109,439 |
Prior periods | 39 |  |  | (364 | ) |  | 740 |  |  | 415 |
Payments and customer credits issued | (72,169 | ) |  | (9,111 | ) |  | (29,592 | ) |  | (110,872 | )
Balance at June 30, 2020 | $ | 8,258 |  |  | $ | 2,361 |  |  | $ | 14,596 |  |  | $ | 25,215 |
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 revenues 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 $13.8 million and $1.1 million as of June 30, 2020 and December 31, 2019, respectively. We may be required to defer recognition of revenues for upfront and milestone payments until we perform our obligations under these arrangements, and such amounts are recorded as deferred revenues upon receipt or when due. Contract liabilities were $16.3 million and $6.6 million as of June 30, 2020 and December 31, 2019, respectively. The current portion of the contract liabilities totaling $1.3 million and $0 as of June 30, 2020 and December 31, 2019, respectively, are presented in other current liabilities and the remainder of the contract liabilities are presented in long-term portion of deferred revenues as of those dates 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 six months ended June 30, 2020 include the impact of a $20.0 million development milestone from Ipsen we determined was probable of achievement, which was offset by the impact of a $10.0 million milestone from Takeda which was recognized as revenues during the year ended December 31, 2019 and was achieved, invoiced and collected during the current period. During the six months ended June 30, 2020 and 2019, we recognized $3.4 million and $1.8 million, respectively, in revenues that were included in the beginning deferred revenues balance for those periods. During the three and six months ended June 30, 2020, we recognized $62.0 million and $82.2 million, respectively, in revenues for performance obligations satisfied in previous periods as compared to $36.1 million and $61.4 million during the comparable periods in 2019. Such revenues primarily related to milestone and royalty payments allocated to the license performance obligations for our collaborations with Ipsen, Takeda, Daiichi Sankyo and Genentech. As of June 30, 2020, $71.4 million of the transaction price was allocated to performance obligations that had not yet been satisfied. 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 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 10 -URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130551-203045 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 13 -Subparagraph (b)(2) -URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130556-203045 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 12 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130550-203045 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 12 -Subparagraph (e) -URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 12 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 12 -Subparagraph (d) -URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130558-203045 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 12 -Subparagraph (c) -URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045 + Details
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