The Company views its operations and manages its business in one operating segment. During the three months ended June 30, 2019 and 2018, net product sales in the United States were $27.6 million and $20.3 million respectively, consisting solely of Emflaza, and net product sales not in the United States were $57.8 million and $47.8 million, respectively, consisting of Translarna and Tegsedi. During the six months ended June 30, 2019 and 2018, net product sales in the United States were $45.4 million and

$39.5 million respectively, consisting solely of Emflaza, and net product sales not in the United States were $93.0 million and $84.6 million, respectively, consisting of Translarna and Tegsedi.

The following table presents changes in the Company’s contract liabilities from December 31, 2018 to June 30, 2019 and December 31, 2017 to June 30, 2018:



	Balance as of December 31, 2018		Additions		Deductions		ASC 606 Adjustment		Balance as of June 30, 2019
Deferred Revenue	$	12,938	$	2,864	$	—	$	—	$	15,802



	Balance as of December 31, 2017		Additions		Deductions		ASC 606 Adjustment			Balance as of June 30, 2018
Deferred Revenue	$	11,891	$	2,586	$	—	$	(3,937	)	$	10,540

During the three and six month periods ended June 30, 2019 and 2018, the Company recognized revenue in the period from:



	Three Months Ended June 30, 2019		Three Months Ended June 30, 2018		Six Months Ended June 30, 2019		Six Months Ended June 30, 2018
Amounts included in contract liabilities at the beginning of the period	$	—	$	—	$	—	$	—
Performance obligations satisfied in previous period	—		—		—		—
Performance obligations satisfied in current period	85,476		68,170		138,530		124,151
Total product revenue	$	85,476	$	68,170	$	138,530	$	124,151

The Company has not made significant changes to the judgments made in applying ASC Topic 606 for the three and six month periods ended June 30, 2019 and 2018.

Remaining performance obligations represent the transaction price for goods the Company has yet to provide. As of June 30, 2019 and 2018, the aggregate amount of transaction price allocated to remaining performance obligations relating to Translarna net product revenue was $15.8 million and $10.5 million, respectively. The Company expects to recognize revenue over the next one to three years as the specific timing for satisfying the performance obligations is contingent upon a number of factors, including customers’ needs and schedules.

The Company has ongoing collaborations with the Spinal Muscular Atrophy Foundation ("SMA Foundation") and F. Hoffman-La Roche Ltd and Hoffman- La Roche Inc. (collectively, "Roche") and early stage discovery arrangements with other institutions. The following are the key terms to the Company’s (i) ongoing collaborations and (ii) early stage discovery and development arrangements.

In November 2011, the Company and the SMA Foundation entered into a licensing and collaboration agreement with Roche for a spinal muscular atrophy program. Under the terms of the agreement, Roche acquired an exclusive worldwide license to the Company’s spinal muscular atrophy program, which includes three compounds currently in preclinical development, as well as potential back-up compounds. The Company received a nonrefundable upfront cash payment of $30.0 million during the research term, which was terminated effective December 31, 2014, after which Roche provided the Company with funding, based on an agreed- upon full-time equivalent rate, for an agreed-upon number of full-time equivalent employees that the Company contributed to the research program.

The Company identified two material promises in the collaboration agreement, the license and the research activities. The Company evaluated whether these material promises are distinct and determined that the license does not have standalone functionality and there is a significant integration of the license and research activities. As such, both promises were bundled into one distinct performance obligation. As a result, the Company deferred the $30.0 million upfront payment which was recognized over the

estimated performance period of two years, which was the contracted research period. As of adoption of ASC Topic 606 on January 1, 2018, all performance obligations had been satisfied and the balance of the remaining deferred upfront payment was fully recognized.

Under the agreement, the Company is eligible to receive additional payments from Roche if specified events are achieved with respect to each licensed product, including up to $135.0 million in research and development event milestones, up to $325.0 million in sales milestones upon achievement of specified sales events, and up to double digit royalties on worldwide annual net sales of a commercial product.

In August 2013, a lead development compound, RG7800, was selected to move into IND-enabling studies, which triggered a milestone payment to the Company from Roche of $10.0 million. Under ASC Topic 605, the Company considered this milestone event substantive because the applicable criteria of its revenue recognition policy would be satisfied and recorded it as collaboration revenue for the year ended December 31, 2013.

In January 2014, the Company announced the initiation of a Phase 1 clinical program in its spinal muscular atrophy collaboration with Roche and the SMA Foundation which triggered a $7.5 million milestone payment from Roche. Under ASC Topic 605, the Company considered this milestone event substantive because the applicable criteria of its revenue recognition policy would be satisfied and recorded it as collaboration revenue for the year ended December 31, 2014.

In November 2014, the Company announced the initiation of a Phase 2 study in adult and pediatric patients in its spinal muscular atrophy collaboration with Roche and the SMA Foundation which triggered a $10 million payment from Roche. Under ASC Topic 605, the Company considered this milestone event substantive because the applicable criteria of its revenue recognition policy would be satisfied and recorded it as collaboration revenue for the year ended December 31, 2014.

In October 2017, the Company announced that the Sunfish, a two-part clinical trial in pediatric and adult type 2 and type 3 spinal muscular atrophy initiated in the fourth quarter of 2016 with Roche and SMA Foundation, had transitioned into the pivotal second part of its study. The achievement of this milestone triggered a $20.0 million payment to the Company from Roche. Under ASC Topic 605, the Company considered this milestone event substantive because the applicable criteria of its revenue recognition policy would be satisfied and recorded it as collaboration revenue for the year ended December 31, 2017.

The remaining potential research and development event milestones that can be received as of June 30, 2019 is $87.5 million. The remaining potential sales milestones as of June 30, 2019 is $325.0 million upon achievement of certain sales events. In addition, the Company is eligible to receive up to double digit royalties on worldwide annual net sales of a commercial product.

For the three months ended June 30, 2019 and 2018, the Company recognized revenue related to the licensing and collaboration agreement with Roche of $0.1 million and $0.1 million, respectively. For the six months ended June 30, 2019 and 2018, the Company recognized revenue related to the licensing and collaboration agreement with Roche of $0.1 million and $0.1 million, respectively.

From time to time, the Company has arrangements with several organizations pursuant to which the Company uses its discovery technologies to help identify potential drug candidates. The Company does not take ownership of the potential compounds, but rather provides research services to the collaborator using its specialized technology platform.

Generally, these arrangements are structured such that the collaborator and the Company work together to jointly select targets from which to apply its discovery technologies. The research period for the Company to apply its technology is generally three to four years. The Company will typically receive a nonrefundable, upfront cash payment and the collaborator agrees to provide funding for research activities performed on its behalf.

Generally, the two material promises in these arrangements are the license and the research activities. The Company evaluated whether these material promises are distinct and determined that the license does not have standalone functionality and there is a significant integration of the license and research activities. As such, both promises are bundled into one distinct performance obligation. As of adoption of ASC Topic 606 on January 1, 2018, all deferred revenue related to these arrangements had been recognized. For the three and six months ended June 30, 2019 and 2018, the Company did not recognize any revenue related to discovery agreements.