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Revenue from Contracts with Customers | 9 Months Ended
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Sep. 30, 2023
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, 2023 and 2022, the Company recorded product sales, net, as follows:
|  | Three Months Ended September 30, |  |  | Nine Months Ended September 30, |
(In thousands) |  | 2023 |  |  | 2022 |  |  | 2023 |  |  | 2022 |
VIVITROL |  | $ | 99,305 |  |  | $ | 96,534 |  |  | $ | 298,035 |  |  | $ | 277,493 |
ARISTADA and ARISTADA INITIO |  |  | 81,834 |  |  |  | 75,719 |  |  |  | 244,320 |  |  |  | 222,826 |
LYBALVI |  |  | 50,683 |  |  |  | 27,127 |  |  |  | 135,671 |  |  |  | 61,116 |
Total product sales, net |  | $ | 231,822 |  |  | $ | 199,380 |  |  | $ | 678,026 |  |  | $ | 561,435 |
Manufacturing and Royalty Revenues During the three and nine months ended September 30, 2023 and 2022, the Company recorded manufacturing and royalty revenues from its collaboration arrangements as follows:
|  | Three Months Ended September 30, 2023 |  |  | Nine Months Ended September 30, 2023 |
(In thousands) |  | Manufacturing Revenue |  |  | Royalty Revenue |  |  | Total |  |  | Manufacturing Revenue |  |  | Royalty Revenue |  |  | Total |
Long-acting INVEGA products(1) |  | $ | — |  |  | $ | 76,109 |  |  | $ | 76,109 |  |  | $ | — |  |  | $ | 410,910 |  |  | $ | 410,910 |
VUMERITY |  |  | 9,733 |  |  |  | 24,828 |  |  |  | 34,561 |  |  |  | 32,751 |  |  |  | 62,979 |  |  |  | 95,730 |
RISPERDAL CONSTA |  |  | 14,732 |  |  |  | 151 |  |  |  | 14,883 |  |  |  | 30,049 |  |  |  | 957 |  |  |  | 31,006 |
Other |  |  | 16,157 |  |  |  | 7,403 |  |  |  | 23,560 |  |  |  | 48,160 |  |  |  | 22,082 |  |  |  | 70,242 |
|  | $ | 40,622 |  |  | $ | 108,491 |  |  | $ | 149,113 |  |  | $ | 110,960 |  |  | $ | 496,928 |  |  | $ | 607,888 |
|  | 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 |
(1) “Long-acting INVEGA products”: INVEGA SUSTENNA/XEPLION (paliperidone palmitate), INVEGA TRINZA/TREVICTA (paliperidone palmitate) and INVEGA HAFYERA/BYANNLI (paliperidone palmitate). In October 2022 and November 2022, an arbitration panel found that the Company must return to Acorda Therapeutics, Inc. (“Acorda”) $16.5 million (inclusive of prejudgment interest and administrative fees) and $1.8 million (inclusive of prejudgment interest), respectively, previously paid by Acorda under a license agreement between the Company and Acorda. These amounts represented a portion of the royalty revenue paid to the Company by Acorda since July 2020 related to AMPYRA. The Company paid Acorda the aggregate $18.3 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 the FASB Accounting Standards Codification 606, Revenue from Contracts with Customers. 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 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 consolidated statements of operations and comprehensive loss. As a result of the arbitration ruling, the Company has no contractual obligation to manufacture and supply AMPYRA or contractual right to receive future manufacturing or royalty revenue related to AMPYRA. Refer to Note 16, Commitments and Contingent Liabilities within the “Notes to Condensed Consolidated Financial Statements” in this Form 10-Q for information regarding additional legal proceedings related to the arbitration with Acorda. 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 (“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, which was used to develop the Long-acting INVEGA products. 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. Accordingly, the Company ceased recognizing royalty revenue related to sales of these products in February 2022. In April 2022, the Company commenced binding arbitration proceedings related to, among other things, Janssen Pharmaceutica’s partial termination of this license agreement and Janssen Pharmaceutica’s royalty and other obligations under the agreement. On May 31, 2023, the arbitral tribunal (the “Tribunal”) in the arbitration proceedings issued a final award (the “Final Award”) which concluded the arbitration proceedings. The Final Award provided, among other things, that the Company was due back royalties of $195.4 million, inclusive of $8.1 million in late-payment interest related to 2022 U.S. net sales of the Long-acting INVEGA products, which amount the Company received from Janssen Pharmaceutica in the second quarter of 2023, and is entitled to 2023 and future royalty revenues from Janssen Pharmaceutica related to net sales of INVEGA SUSTENNA through August 20, 2024, INVEGA TRINZA through the second quarter of 2030 (but no later than May 2030 when the license agreement expires) and INVEGA HAFYERA through May 2030 (when the license agreement expires). Following issuance of the Final Award, the Company recognized royalty revenues related to the back royalties noted above and resumed recognizing royalty revenue related to ongoing U.S. sales of the Long-acting INVEGA products. During the nine months ended September 30, 2023, the Company recorded $410.9 million in royalty revenue from sales of the Long-acting INVEGA products, including $195.4 million related to back royalties and associated interest related to net sales of the Long-acting INVEGA products in 2022. Contract Assets Contract assets include unbilled amounts resulting from sales under certain of the Company’s manufacturing contracts where revenue is recognized over time. 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. Total contract assets at September 30, 2023 were as follows:
(In thousands) |  | Contract Assets |
Contract assets at December 31, 2022 |  | $ | 8,929 |
Additions |  |  | 12,881 |
Transferred to receivables, net |  |  | (19,044 | )
Contract assets at September 30, 2023 |  | $ | 2,766 |
Contract Liabilities Contract liabilities consist of contractual obligations related to deferred revenue. At September 30, 2023 and December 31, 2022, $3.3 million and $6.8 million of the contract liabilities, respectively, were classified as “Contract liabilities–short-term” in the accompanying condensed consolidated balance sheets and $1.7 million and $3.9 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, 2023 were as follows:
(In thousands) |  | Contract Liabilities |
Contract liabilities at December 31, 2022 |  | $ | 10,701 |
Additions |  |  | (931 | )
Amounts recognized into revenue |  |  | (4,794 | )
Contract liabilities at September 30, 2023 |  | $ | 4,976 |

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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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