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Revenues | 9 Months Ended
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Sep. 29, 2023
Revenue from Contract with Customer [Abstract] |
REVENUES | REVENUES Revenues consisted of the following (in thousands):
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2023 |  | 2022 |  | 2023 |  | 2022 |  |
Product revenues: |  |  |  |  |  |  |  |  |
Gross product revenues | $ | 590,442 |  |  | $ | 496,141 |  |  | $ | 1,674,937 |  |  | $ | 1,427,451 |  |  |
Discounts and allowances | (163,945) |  |  | (129,659) |  |  | (475,394) |  |  | (403,627) |  |  |
Net product revenues | 426,497 |  |  | 366,482 |  |  | 1,199,543 |  |  | 1,023,824 |  |  |
Collaboration revenues: |  |  |  |  |  |  |  |  |
License revenues | 42,367 |  |  | 34,384 |  |  | 133,406 |  |  | 123,977 |  |  |
Collaboration services revenues | 3,056 |  |  | 10,872 |  |  | 17,607 |  |  | 39,344 |  |  |
Total collaboration revenues | 45,423 |  |  | 45,256 |  |  | 151,013 |  |  | 163,321 |  |  |
Total revenues | $ | 471,920 |  |  | $ | 411,738 |  |  | $ | 1,350,556 |  |  | $ | 1,187,145 |  |  |
The percentage of total revenues by customer who individually accounted for 10% or more of our total revenues were as follows:
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2023 |  | 2022 |  | 2023 |  | 2022 |  |
Affiliates of McKesson Corporation | 18 | % |  | 18 | % |  | 17 | % |  | 18 | % |  |
Affiliates of AmerisourceBergen Corporation | 18 | % |  | 18 | % |  | 17 | % |  | 16 | % |  |
Affiliates of CVS Health Corporation | 17 | % |  | 19 | % |  | 17 | % |  | 17 | % |  |
Accredo Health, Incorporated | 12 | % |  | 11 | % |  | 12 | % |  | 10 | % |  |
Affiliates of Optum Specialty Pharmacy | 10 | % |  | 9 | % |  | 10 | % |  | 9 | % |  |
Ipsen Pharma SAS | 8 | % |  | 8 | % |  | 8 | % |  | 11 | % |  |
The percentage of trade receivables by customer who individually accounted for 10% or more of our trade receivables were as follows:
| September 30, 2023 |  | December 31, 2022 |  |  |  |
Affiliates of McKesson Corporation | 22 | % |  | 22 | % |  |  |  |
Affiliates of AmerisourceBergen Corporation | 19 | % |  | 18 | % |  |  |  |
Ipsen Pharma SAS | 18 | % |  | 20 | % |  |  |  |
Affiliates of CVS Health Corporation | 14 | % |  | 18 | % |  |  |  |
Cardinal Health, Inc. | 9 | % |  | 11 | % |  |  |  |
Revenues by geographic region were as follows (in thousands):
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2023 |  | 2022 |  | 2023 |  | 2022 |  |
U.S. | $ | 429,605 |  |  | $ | 369,480 |  |  | $ | 1,213,089 |  |  | $ | 1,033,160 |  |  |
Europe | 36,021 |  |  | 34,818 |  |  | 106,286 |  |  | 131,585 |  |  |
Japan | 6,294 |  |  | 7,440 |  |  | 31,181 |  |  | 22,400 |  |  |
Total revenues | $ | 471,920 |  |  | $ | 411,738 |  |  | $ | 1,350,556 |  |  | $ | 1,187,145 |  |  |
Total revenues include net product revenues attributed to geographic regions based on the ship-to location and license and collaboration services revenues attributed to geographic regions based on the location of our collaboration partners’ headquarters. Net product revenues and license revenues are recorded in accordance with Accounting Standards Codification (ASC) Topic 606, Revenue from Contracts with Customers. License revenues include the recognition of the portion of milestone 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 are recorded in accordance with ASC Topic 808, Collaborative Arrangements. 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 pay on sales of products containing cabozantinib by our collaboration partners. Net product revenues by product were as follows (in thousands):
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2023 |  | 2022 |  | 2023 |  | 2022 |  |
CABOMETYX | $ | 422,155 |  |  | $ | 361,385 |  |  | $ | 1,187,220 |  |  | $ | 1,003,356 |  |  |
COMETRIQ | 4,342 |  |  | 5,097 |  |  | 12,323 |  |  | 20,468 |  |  |
Net product revenues | $ | 426,497 |  |  | $ | 366,482 |  |  | $ | 1,199,543 |  |  | $ | 1,023,824 |  |  |
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, Discounts for Prompt Payment and Other |  | Other Customer Credits/Fees and Co-pay Assistance |  | Rebates |  |  |  | Total
Balance at December 31, 2022 | $ | 26,881 |  |  | $ | 14,924 |  |  | $ | 35,426 |  |  |  |  | $ | 77,231 |
Provision related to sales made in: |  |  |  |  |  |  |  |  |
Current period | 308,103 |  |  | 40,923 |  |  | 129,922 |  |  |  |  | 478,948 |
Prior periods | 293 |  |  | (1,168) |  |  | (2,679) |  |  |  |  | (3,554) |
Payments and customer credits issued | (313,660) |  |  | (38,497) |  |  | (124,477) |  |  |  |  | (476,634) |
Balance at September 30, 2023 | $ | 21,617 |  |  | $ | 16,182 |  |  | $ | 38,192 |  |  |  |  | $ | 75,991 |
The allowance for chargebacks, discounts for prompt payment and other are 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 as a contract asset when recognized. 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. For those contracts that have multiple performance obligations, contract assets and liabilities are reported on a net basis at the contract level. Contract assets are primarily related to Ipsen Pharma SAS (Ipsen) and contract liabilities are primarily related to deferred revenues from Takeda Pharmaceutical Company Limited (Takeda). Contract assets and liabilities were as follows (in thousands):
| September 30, 2023 |  | December 31, 2022
Contract assets (1) | $ | 635 |  |  | $ | 1,659 |
Contract liabilities: |  |  |
Current portion (2) | $ | 6,974 |  |  | $ | 7,488 |
Long-term portion (3) | 6,371 |  |  | 6,582 |
Total contract liabilities | $ | 13,345 |  |  | $ | 14,070 |
____________________ (1) Presented in other long-term assets in the accompanying Condensed Consolidated Balance Sheets. (2) Presented in other current liabilities in the accompanying Condensed Consolidated Balance Sheets. (3) Presented in other long-term liabilities in the accompanying Condensed Consolidated Balance Sheets. During the nine months ended September 30, 2023 and 2022, we recognized $4.9 million and $6.6 million, respectively, in revenues that were included in the beginning deferred revenues balance for those periods. During the three and nine months ended September 30, 2023, we recognized $41.1 million and $133.0 million, respectively, in revenues for performance obligations satisfied in previous periods, as compared to $33.9 million and $125.0 million for the corresponding prior year periods. Such revenues were primarily related to royalty payments allocated to our license performance obligations for our collaborations with Ipsen, Takeda, Daiichi Sankyo and Genentech and the recognition of license revenues for the achievement of certain milestones allocated to the license performance obligations for our collaborations with Ipsen and Takeda. As of September 30, 2023, $63.8 million of t he co mbined transaction prices for our Ipsen a nd Takeda collaborations were allocated to research and development services performance obligations that had not yet been satisfied. See “Note 3. Collaboration Agreements and Business Development Activities” of the “Notes to Consolidated Financial Statements” included in Part II, Item 8 of our Fiscal 2022 Form 10-K for additional 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 -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 9 -Publisher FASB -URI https://asc.fasb.org//1943274/2147479806/606-10-50-9 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 10 -Publisher FASB -URI https://asc.fasb.org//1943274/2147479806/606-10-50-10 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 15 -Publisher FASB -URI https://asc.fasb.org//1943274/2147479806/606-10-50-15 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479806/606-10-50-12 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479806/606-10-50-12 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Subparagraph (c) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479806/606-10-50-12 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479806/606-10-50-12 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Subparagraph (e) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479806/606-10-50-12 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 13 -Subparagraph (b)(2) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479806/606-10-50-13 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Name Accounting Standards Codification -Topic 606 -Publisher FASB -URI https://asc.fasb.org//606/tableOfContent + Details
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