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Revenues
 6 Months Ended
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.