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Revenue recognition
 12 Months Ended
Dec. 31, 2020
Revenue from Contract with Customer [Abstract]  
Revenue recognition

13. 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, 2020, 2019, and 2018, net product sales in the United States were $139.0 million, $101.0 million, and $92.0 million respectively, consisting solely of Emflaza, and net product sales not in the United States were $194.4 million, $190.3 million, and $171.0 million respectively, consisting of Translarna, Tegsedi, and Waylivra. For the twelve months ended December 31, 2020 and 2019, two of the Company’s distributors each accounted for over 10% of the Company’s net product sales. For the twelve months ended December 31, 2018, three of the Company’s distributors each accounted for over 10% of the Company’s net product sales.

The Company’s contract liabilities balances as of December 31, 2020 and 2019 were $4.2 million and $11.7 million, respectively. The Company did not have any contract assets for the twelve months ended December 31, 2020 and 2019. During the twelve months ended December 31, 2020 and 2019, the Company recognized revenues of $8.1 million and $3.9 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, 2020 and 2019.

Remaining performance obligations

Remaining performance obligations represent the transaction price for goods the Company has yet to provide. As of December 31, 2020 and 2019, the aggregate amount of transaction price allocated to remaining performance obligations relating to Translarna net product revenue was $4.2 million and $11.7 million, respectively. The Company expects to recognize revenue within the next one year, as the specific timing for satisfying the performance obligations is contingent upon a number of factors, including customers’ needs and schedules.

Collaboration revenue and Royalty 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 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 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 SMA program currently has one approved product, Evrysdi, which was approved in August 2020 by the FDA for the treatment of SMA in adults and children two months and older. The first commercial sale of Evrysdi in the United States was made in August 2020. This event triggered a $20.0 million milestone payment to the Company from Roche.  In August 2020, the EMA accepted the MAA filed by Roche for Evrysdi for the treatment of SMA, which triggered a $15.0 million milestone payment to the Company from Roche.  In October 2020, Chugai, a subsidiary of Roche, filed an NDA in Japan for Evrysdi for the treatment of SMA, which triggered a $7.5 million milestone payment to the Company from Roche. Under ASC Topic 606, the acceptance of the NDA filing resolved the uncertainty of whether the milestone was probable of being achieved. The Company recorded the three milestone payments as collaboration revenue for the year ended December 31, 2020.

The remaining potential research and development event milestones that can be received as of December 31, 2020 is $30.0 million. The remaining potential sales milestones as of December 31, 2020 is $325.0 million upon achievement of certain sales events.

For the twelve months ended December 31, 2020, 2019, and 2018, the Company recognized revenue related to the licensing and collaboration agreement with Roche of $42.6 million, $15.2 million, and $0.2 million, respectively.

In addition to research and development and sales milestones, the Company is eligible to receive up to double-digit royalties on worldwide annual net sales of a commercial product under the SMA License Agreement. For the twelve months ended December 31, 2020, the Company has recognized $4.8 million of royalty revenue related to Evrysdi. No royalty revenue was recognized in the years prior, as the first commercial sale of Evrysdi occurred in August 2020.