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Revenue from Contracts with Customers
 9 Months Ended
Sep. 30, 2025
Revenue from Contract with Customer [Abstract]  
Revenue from Contracts with Customers

4. REVENUE FROM CONTRACTS WITH CUSTOMERS

The Company recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration which it expects to receive in exchange for those goods or services. The Company recognizes revenue following the five-step model prescribed in accordance with FASB ASC 606, Revenue from Contracts with Customers, or Topic 606: (i) identify contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the Company satisfies the performance obligations.

Product Sales, Net

The Company’s product sales, net consist of sales in the U.S. of VIVITROL, ARISTADA and ARISTADA INITIO, and LYBALVI, primarily to wholesalers, specialty distributors and pharmacies. Product sales, net are recognized when the customer obtains control of the product, which is when the product has been received by the customer.

During the three and nine months ended September 30, 2025 and 2024, the Company recorded product sales, net, as follows:

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

(In thousands)

 

2025

 

 

2024

 

 

2025

 

 

2024

 

VIVITROL

 

$

121,125

 

 

$

113,650

 

 

$

343,781

 

 

$

323,182

 

ARISTADA and ARISTADA INITIO

 

 

98,050

 

 

 

84,652

 

 

 

272,820

 

 

 

249,571

 

LYBALVI

 

 

98,248

 

 

 

74,697

 

 

 

252,550

 

 

 

203,055

 

Total product sales, net

 

$

317,423

 

 

$

272,999

 

 

$

869,151

 

 

$

775,808

 

 

Revenues from product sales are recorded net of reserves established for applicable discounts and allowances that are offered within contracts with the Company’s customers, healthcare providers or payers. The Company’s process for estimating reserves established for these variable consideration components does not differ materially from historical practices. The transaction price, which includes variable consideration reflecting the impact of discounts and allowances, may be subject to constraint and is included in the net sales price only to the extent that it is probable that a significant reversal of the amount of the cumulative revenues recognized will not occur in a future period. Actual amounts may ultimately differ from the Company’s estimates. If actual results vary, the Company adjusts these estimates, which could have an effect on earnings in the period of adjustment. See the “Revenue from Contracts with Customers” section in Note 2, Summary of Significant Accounting Policies in the “Notes to Consolidated Financial Statements” in the Annual Report for information with respect to the Company’s significant categories of sales discounts and allowances.

Actual Medicaid rebates related to VIVITROL and ARISTADA/ARISTADA INITIO during the nine months ended September 30, 2025 were lower than original estimates, and as a result the Company reduced its rebate reserve for each product by approximately $25.3 million and $12.1 million, respectively, during the period.

A rollforward of the Company’s provisions for sales discounts and allowances is as follows:

 

 

 

Nine Months Ended September 30, 2025

 

(In thousands)

 

Contractual Adjustments(1)

 

 

Discounts(2)

 

 

Product Returns

 

 

Other

 

 

Total

 

Beginning balance — December 31, 2024

 

$

228,978

 

 

$

43,645

 

 

$

50,507

 

 

$

13,297

 

 

$

336,427

 

Current provisions relating to sales in current year

 

 

404,353

 

 

 

312,419

 

 

 

19,841

 

 

 

67,803

 

 

 

804,416

 

Adjustments relating to prior years

 

 

(34,939

)

 

 

156

 

 

 

(7,302

)

 

 

(373

)

 

 

(42,458

)

Payments relating to sales in current year

 

 

(260,213

)

 

 

(293,195

)

 

 

—

 

 

 

(55,560

)

 

 

(608,968

)

Payments relating to sales in prior years

 

 

(127,928

)

 

 

(23,940

)

 

 

(9,569

)

 

 

(12,512

)

 

 

(173,949

)

Ending balance — September 30, 2025

 

$

210,251

 

 

$

39,085

 

 

$

53,477

 

 

$

12,655

 

 

$

315,468

 

 

1.
“Contractual Adjustments” include “Medicaid Rebates” and “Medicare Part D” accruals.
2.
“Discounts” include “Chargebacks” and “Product Discounts.”

Total revenue-related reserves as of September 30, 2025 and December 31, 2024 included in the accompanying consolidated balance sheets are summarized as follows:

 

 

 

September 30,

 

 

December 31,

 

(In thousands)

 

2025

 

 

2024

 

Reduction of accounts receivable

 

$

19,249

 

 

$

22,031

 

Components of accrued sales discounts, allowances and reserves

 

 

252,743

 

 

 

272,452

 

Components of other long-term liabilities

 

 

43,476

 

 

 

41,944

 

Total revenue-related reserves

 

$

315,468

 

 

$

336,427

 

 

Manufacturing and Royalty Revenues

During the three and nine months ended September 30, 2025 and 2024, the Company recorded manufacturing and royalty revenues from its collaboration arrangements as follows:

 

 

 

Three Months Ended September 30, 2025

 

 

Nine Months Ended September 30, 2025

 

(In thousands)

 

Manufacturing
Revenue

 

 

Royalty
Revenue

 

 

Total

 

 

Manufacturing
Revenue

 

 

Royalty
Revenue

 

 

Total

 

Long-acting INVEGA products(1)

 

$

—

 

 

$

30,180

 

 

$

30,180

 

 

$

—

 

 

$

78,240

 

 

$

78,240

 

VUMERITY

 

 

3,494

 

 

 

32,122

 

 

 

35,616

 

 

 

16,852

 

 

 

85,996

 

 

 

102,848

 

RISPERDAL CONSTA

 

 

3,732

 

 

 

19

 

 

 

3,751

 

 

 

16,659

 

 

 

41

 

 

 

16,700

 

Other

 

 

1,562

 

 

 

5,653

 

 

 

7,215

 

 

 

9,171

 

 

 

15,242

 

 

 

24,413

 

 

$

8,788

 

 

$

67,974

 

 

$

76,762

 

 

$

42,682

 

 

$

179,519

 

 

$

222,201

 

 

 

 

 

Three Months Ended September 30, 2024

 

 

Nine Months Ended September 30, 2024

 

(In thousands)

 

Manufacturing
Revenue

 

 

Royalty
Revenue

 

 

Total

 

 

Manufacturing
Revenue

 

 

Royalty
Revenue

 

 

Total

 

Long-acting INVEGA products(1)

 

$

—

 

 

$

58,448

 

 

$

58,448

 

 

$

—

 

 

$

199,860

 

 

$

199,860

 

VUMERITY

 

 

8,753

 

 

 

23,821

 

 

 

32,574

 

 

 

30,740

 

 

 

68,322

 

 

 

99,062

 

RISPERDAL CONSTA

 

 

2,417

 

 

 

11

 

 

 

2,428

 

 

 

8,440

 

 

 

264

 

 

 

8,704

 

Other

 

 

4,777

 

 

 

6,917

 

 

 

11,694

 

 

 

27,077

 

 

 

17,132

 

 

 

44,209

 

 

$

15,947

 

 

$

89,197

 

 

$

105,144

 

 

$

66,257

 

 

$

285,578

 

 

$

351,835

 

 

(1)
“long-acting INVEGA products”: INVEGA SUSTENNA/XEPLION (paliperidone palmitate), INVEGA TRINZA/TREVICTA (paliperidone palmitate) and INVEGA HAFYERA/BYANNLI (paliperidone palmitate).

 

In August 2024, the Company’s royalty on U.S. net sales of INVEGA SUSTENNA expired. Accordingly, royalty revenues from net sales of the long-acting INVEGA products have been, and the Company expects will continue to be, lower in 2025, as the royalty revenues related to U.S. net sales of INVEGA SUSTENNA comprised a significant portion of the overall royalty revenues from the long-acting INVEGA products.

 

Contract Assets

Contract assets include unbilled amounts related to the manufacture of a product that, once complete, will be sold under certain of the Company’s manufacturing contracts. 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, 2025 were as follows:

 

(In thousands)

 

Contract Assets

 

Contract assets at December 31, 2024

 

$

4,990

 

Additions

 

 

4,483

 

Transferred to receivables, net

 

 

(8,756

)

Contract assets at September 30, 2025

 

$

717

 

 

Contract Liabilities

 

Contract liabilities consist of contractual obligations related to deferred revenue. At September 30, 2025 and December 31, 2024, none and $1.2 million of the contract liabilities, respectively, were classified as “Contract liabilities–short-term” in the accompanying condensed consolidated balance sheets and none of the contract liabilities in either period were classified as “Other long-term liabilities” in the accompanying condensed consolidated balance sheets.

Total contract liabilities at September 30, 2025 were as follows:

 

(In thousands)

 

Contract Liabilities

 

Contract liabilities at December 31, 2024

 

$

1,249

 

Additions

 

 

1,313

 

Amounts recognized into revenue

 

 

(2,562

)

Contract liabilities at September 30, 2025

 

$

—