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Revenue recognition | 12 Months Ended
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Dec. 31, 2019
Revenue from Contract with Customer [Abstract] |
Revenue recognition | Revenue recognition Net product sales The Company views its operations and manages its business in one operating segment. During the twelve months ended December 31, 2019, 2018, and 2017, net product sales in the United States were $101.0 million, $92.0 million, and $28.8 million respectively, consisting solely of Emflaza, and net product sales not in the United States were $190.3 million, $171.0 million, and $145.2 million respectively, consisting of Translarna and Tegsedi. Three of the Company’s distributors each accounted for over 10% of the Company’s net product sales for the twelve months ended December 31, 2019, 2018, and 2017. The Company’s contract liabilities balances as of December 31, 2019 and 2018 were $11.7 million and $12.9 million, respectively. The Company did not have any contract assets for the twelve months ended December 31, 2019 and 2018. During the twelve months ended December 31, 2019 and 2018, the Company recognized revenues of $3.9 million and $0.0 million, respectively, related to amounts included in contract liability balance at the beginning of each period. The Company has not made significant changes to the judgments made in applying ASC Topic 606 for the twelve months ended December 31, 2019 and 2018. Remaining performance obligations Remaining performance obligations represent the transaction price for goods the Company has yet to provide. As of December 31, 2019 and 2018, the aggregate amount of transaction price allocated to remaining performance obligations relating to Translarna net product revenue was $11.7 million and $12.9 million, respectively. The Company expects to recognize revenue over the next one to two years as the specific timing for satisfying the performance obligations is contingent upon a number of factors, including customers’ needs and schedules. Collaboration revenue In November 2011, the Company and the Spinal Muscular Atrophy Foundation (SMA Foundation) entered into a licensing and collaboration agreement with F. Hoffman-La Roche Ltd and Hoffman- La Roche Inc. (collectively, 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 certain 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 SMA 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 SMA collaboration with Roche and the SMA Foundation which triggered a $10.0 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 SMA 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. In November 2019, the Company announced the filing of an NDA in the United States, which triggered a $15.0 million payment to the Company from Roche. Under ASC Topic 606, the acceptance of the NDA filing by the FDA resolved the uncertainty of whether the milestone was probable of being achieved, and the Company recorded it as collaboration revenue for the year ended December 31, 2019. The remaining potential research and development event milestones that can be received as of December 31, 2019 is $72.5 million. The remaining potential sales milestones as of December 31, 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 twelve months ended December 31, 2019, 2018, and 2017, the Company recognized revenue related to the licensing and collaboration agreement with Roche of $15.2 million, $0.2 million, and $20.3 million, respectively.

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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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