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Revenue from Contracts with Customers | 9 Months Ended
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Sep. 30, 2022
Revenue From Contract With Customer [Abstract] |
Revenue from Contracts with Customers | 3. REVENUE FROM CONTRACTS WITH CUSTOMERS Product Sales, Net The Company’s product sales, net consist of sales in the U.S. of VIVITROL, ARISTADA and ARISTADA INITIO and, following its commercial launch in October 2021, LYBALVI, primarily to wholesalers, specialty distributors and pharmacies. During the three and nine months ended September 30, 2022 and 2021, the Company recorded product sales, net, as follows:
|  | Three Months Ended September 30, |  |  | Nine Months Ended September 30, |
(In thousands) |  | 2022 |  |  | 2021 |  |  | 2022 |  |  | 2021 |
VIVITROL |  | $ | 96,534 |  |  | $ | 88,864 |  |  | $ | 277,493 |  |  | $ | 251,815 |
ARISTADA and ARISTADA INITIO |  |  | 75,719 |  |  |  | 68,873 |  |  |  | 222,826 |  |  |  | 196,693 |
LYBALVI |  |  | 27,127 |  |  |  | — |  |  |  | 61,116 |  |  |  | — |
Total product sales, net |  | $ | 199,380 |  |  | $ | 157,737 |  |  | $ | 561,435 |  |  | $ | 448,508 |
Manufacturing and Royalty Revenues During the three and nine months ended September 30, 2022 and 2021, the Company recorded manufacturing and royalty revenues as follows:
|  | Three Months Ended September 30, 2022 |  |  | Nine Months Ended September 30, 2022 |
(In thousands) |  | Manufacturing Revenue |  |  | Royalty Revenue |  |  | Total |  |  | Manufacturing Revenue |  |  | Royalty Revenue |  |  | Total |
Long-acting INVEGA products(1) |  | $ | — |  |  | $ | 26,737 |  |  | $ | 26,737 |  |  | $ | — |  |  | $ | 90,439 |  |  | $ | 90,439 |
VUMERITY |  |  | 5,584 |  |  |  | 20,666 |  |  |  | 26,250 |  |  |  | 22,629 |  |  |  | 60,386 |  |  |  | 83,015 |
RISPERDAL CONSTA |  |  | 8,380 |  |  |  | 1,848 |  |  |  | 10,228 |  |  |  | 32,529 |  |  |  | 5,516 |  |  |  | 38,045 |
Other |  |  | 3,265 |  |  |  | (13,539 | ) |  |  | (10,274 | ) |  |  | 26,472 |  |  |  | 5,466 |  |  |  | 31,938 |
|  | $ | 17,229 |  |  | $ | 35,712 |  |  | $ | 52,941 |  |  | $ | 81,630 |  |  | $ | 161,807 |  |  | $ | 243,437 |
|  | Three Months Ended September 30, 2021 |  |  | Nine Months Ended September 30, 2021 |
(In thousands) |  | Manufacturing Revenue |  |  | Royalty Revenue |  |  | Total |  |  | Manufacturing Revenue |  |  | Royalty Revenue |  |  | Total |
Long-acting INVEGA products(1) |  | $ | — |  |  | $ | 79,323 |  |  | $ | 79,323 |  |  | $ | — |  |  | $ | 221,965 |  |  | $ | 221,965 |
VUMERITY |  |  | 8,499 |  |  |  | 18,250 |  |  |  | 26,749 |  |  |  | 17,671 |  |  |  | 42,866 |  |  |  | 60,537 |
RISPERDAL CONSTA |  |  | 8,725 |  |  |  | 2,245 |  |  |  | 10,970 |  |  |  | 31,411 |  |  |  | 8,172 |  |  |  | 39,583 |
Other |  |  | 6,762 |  |  |  | 12,490 |  |  |  | 19,252 |  |  |  | 29,282 |  |  |  | 47,068 |  |  |  | 76,350 |
|  | $ | 23,986 |  |  | $ | 112,308 |  |  | $ | 136,294 |  |  | $ | 78,364 |  |  | $ | 320,071 |  |  | $ | 398,435 |
(1) “Long-acting INVEGA products”: INVEGA SUSTENNA/XEPLION (paliperidone palmitate), INVEGA TRINZA/TREVICTA (paliperidone palmitate) and INVEGA HAFYERA/BYANNLI (paliperidone palmitate) On October 13, 2022, an arbitration panel found that the Company must return to Acorda approximately $16.5 million (inclusive of prejudgment interest and administrative fees) previously paid by Acorda under a license agreement between the Company and Acorda. This amount represents royalty revenue paid by Acorda since July 2020 related to AMPYRA. The Company expects it may be required to repay to Acorda an additional $1.8 million in royalty revenue previously paid by Acorda. The Company paid the $16.5 million arbitration award amount in October 2022 and expects to pay the $1.8 million in the fourth quarter of 2022. In addition, during the three months ended June 30, 2022, the Company had recorded $3.2 million of royalty revenue related to AMPYRA as the Company believed that it had met the necessary revenue recognition criteria under Accounting Standards Codification (”ASC”) 606, Revenue from Contracts with Customers (”ASC 606”). However, as a result of the arbitration ruling, the Company reversed the $3.2 million as the panel found that the Company was no longer entitled to be paid those royalties. During the three and nine months ended September 30, 2022, the Company recorded both the $18.3 million in repayments and the $3.2 million reversal as reversals of royalty revenue within “Manufacturing and royalty revenue” in the accompanying condensed consolidated statements of operations and comprehensive loss. As a result of the panel’s ruling, the Company no longer has a contractual obligation to manufacture and supply AMPYRA or a contractual right to receive future manufacturing or royalty revenue for AMPYRA. In November 2021, the Company received notice of partial termination of an exclusive license agreement with Janssen Pharmaceutica N.V., a subsidiary of Johnson & Johnson Corporation (“Janssen Pharmaceutica”). Under this license agreement the Company provided Janssen Pharmaceutica with rights to, and know-how, training and technical assistance in respect of, the Company’s small particle pharmaceutical compound technology, known as NanoCrystal Technology, to develop dosage forms of paliperidone palmitate, including INVEGA SUSTENNA/XEPLION, INVEGA TRINZA/TREVICTA and INVEGA HAFYERA/BYANNLI. When the partial termination became effective in February 2022, Janssen Pharmaceutica ceased paying royalties related to sales of INVEGA SUSTENNA, INVEGA TRINZA and INVEGA HAFYERA in the U.S. and the Company stopped recognizing royalty revenue related to net sales of these products in the U.S. In April 2022, the Company commenced binding arbitration proceedings related to, among other things, Janssen Pharmaceutica’s partial termination of the license agreement and Janssen Pharmaceutica’s royalty and other obligations under the agreement. Refer to Note 15, Commitments and Contingencies within the “Notes to Condensed Consolidated Financial Statements” in this Form 10-Q for additional information regarding the arbitration proceedings with Janssen Pharmaceutica. Contract Assets Contract assets include unbilled amounts resulting from sales under certain of the Company’s manufacturing contracts where revenue is recognized over time and $5.0 million of expected consideration from the Company’s collaboration with Biogen related to VUMERITY. The amounts included in the contract assets table below are classified as “Current assets” in the accompanying condensed consolidated balance sheets, as they relate to manufacturing processes that are completed in ten days to eight weeks and, in the case of the $5.0 million of consideration, an amount that is expected to be received in November 2022. Total contract assets at September 30, 2022 were as follows:
(In thousands) |  | Contract Assets |
Contract assets at December 31, 2021 |  | $ | 13,363 |
Additions |  |  | 30,215 |
Transferred to receivables, net |  |  | (33,473 | )
Contract assets at September 30, 2022 |  | $ | 10,105 |
Contract Liabilities Contract liabilities consist of contractual obligations related to deferred revenue. At September 30, 2022 and December 31, 2021, $4.0 million and $6.3 million of the contract liabilities, respectively, were classified as “Contract liabilities–short-term” in the accompanying condensed consolidated balance sheets and $4.6 million and $11.5 million of the contract liabilities, respectively, were classified as “Other long-term liabilities” in the accompanying condensed consolidated balance sheets. Total contract liabilities at September 30, 2022 were as follows:
(In thousands) |  | Contract Liabilities |
Contract liabilities at December 31, 2021 |  | $ | 17,830 |
Additions |  |  | 2,595 |
Amounts recognized into revenue |  |  | (5,402 | )
Amounts recognized into other (expense) income, net |  |  | (6,384 | )
Contract liabilities at September 30, 2022 |  | $ | 8,639 |

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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 https://asc.fasb.org/topic&trid=49130388 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 10 -URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130551-203045 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 13 -Subparagraph (b)(2) -URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130556-203045 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 12 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130554-203045 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 9 -URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130550-203045 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 12 -Subparagraph (e) -URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130554-203045 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 12 -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130554-203045 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 12 -Subparagraph (d) -URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130554-203045 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 15 -URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130558-203045 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 12 -Subparagraph (c) -URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130554-203045 + Details
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