Product Revenues, Accounts Receivable, and Reserves for Product Sales

9 Months Ended

Sep. 30, 2024

Product Revenues Accounts Receivable And Reserves For Product Sales [Abstract]

Product Revenues, Accounts Receivable, and Reserves for Product Sales

3. Product Revenues, Accounts Receivable, and Reserves for Product Sales

The Company received FDA approval for the sale of EMPAVELI in the United States in May 2021 and approval for the sale of SYFOVRE in the United States in February 2023. The Company’s product revenues consist of sales of EMPAVELI and SYFOVRE to specialty pharmacies and specialty distributors.

The table reflects product revenue by major source for the following periods (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Products:
EMPAVELI	$	24,611	$	23,901	$	74,733	$	66,643
SYFOVRE		151,960		75,281		444,049		160,983
Total Product revenue, net	$	176,571	$	99,182	$	518,782	$	227,626

The Company’s accounts receivable balance of $279.0 million as of September 30, 2024 and $206.4 million as of December 31, 2023, consisted of EMPAVELI and SYFOVRE product sales receivable and licensing and other revenue receivables from our collaboration with Swedish Orphan Biovitrum AB (“Sobi”). The Company does not have a reserve related to expected credit losses against its receivable balance and expects to collect its accounts receivable in the ordinary course of business.

The Company’s product revenue allowance and reserves totaled $32.9 million and $16.6 million as of September 30, 2024 and December 31, 2023, respectively. These amounts are included in accrued expenses on the Company’s unaudited condensed consolidated balance sheets.

The following table summarizes activity in each of the product revenue allowance and reserve categories for the three and nine months ended September 30, 2024 (in thousands):


	Chargebacks, Discounts, and Fees			Government and Other Rebates			Returns			Total
Ending balance at December 31, 2023	$	5,674		$	8,898		$	2,053		$	16,625
Provision related to sales in the current year		9,575			13,125			1,355			24,055
Adjustments related to prior period sales		146			(19	)		(96	)		31
Credits and payments made		(9,724	)		(9,906	)		(1,859	)		(21,489	)
Ending balance at March 31, 2024	$	5,671		$	12,098		$	1,453		$	19,222
Provision related to sales in the current year		10,025			17,777			1,039			28,841
Adjustments related to prior period sales		(131	)		354			(983	)		(760	)
Credits and payments made		(9,635	)		(14,640	)		(326	)		(24,601	)
Ending balance at June 30, 2024	$	5,930		$	15,589		$	1,183		$	22,702
Provision related to sales in the current year		11,455			25,364			1,380			38,199
Adjustments related to prior period sales		2,332			420			—			2,752
Credits and payments made		(12,078	)		(17,695	)		(979	)		(30,752	)
Ending balance at September 30, 2024	$	7,639		$	23,678		$	1,584		$	32,901

The following table summarizes activity in each of the product revenue allowance and reserve categories for the three and nine months ended September 30, 2023 (in thousands):


	Chargebacks, Discounts, and Fees			Government and other rebates			Returns			Total
Ending balance at December 31, 2022	$	164		$	1,936		$	251		$	2,351
Provision related to sales in the current year		1,466			2,566		651				4,683
Adjustments related to prior period sales		—			(2	)		(249	)		(251	)
Credits and payments made		(184	)		(1,639	)		—			(1,823	)
Ending balance at March 31, 2023	$	1,446		$	2,861		$	653		$	4,960
Provision related to sales in the current year		3,944			5,114			1,588			10,646
Adjustments related to prior period sales		(84	)		30			(416	)		(470	)
Credits and payments made		(1,668	)		(2,946	)		(141	)		(4,755	)
Ending balance at June 30, 2023	$	3,638		$	5,059		$	1,684		$	10,381
Provision related to sales in the current year		4,698			7,169			1,384			13,251
Adjustments related to prior period sales		39			(964	)		(1,685	)		(2,610	)
Credits and payments made		(4,960	)		(5,778	)		—			(10,738	)
Ending balance at September 30, 2023	$	3,415		$	5,486		$	1,383		$	10,284

Significant customers - EMPAVELI and SYFOVRE are sold principally through arrangements with specialty pharmacies and specialty distributors, who are the Company’s customers. Gross product revenues and product sales receivable from the Company's customers who individually accounted for 10% or more of total gross product revenues and/or 10% or more of total product sales accounts receivable consisted of the following:


	Percent of Total Gross Product Revenues
	Three Months Ended September 30,		Nine Months Ended September 30,
	2024	2023	2024	2023
Customer A	12%	24%	13%	29%
Customer C	17%	16%	18%	14%
Customer D	61%	56%	59%	52%


	Percent of Product Sales Receivable
	As of September 30,
	2024	2023
Customer A	3%	7%
Customer C	24%	19%
Customer D	61%	68%

Factoring of accounts receivable and associated fees as of September 30, 2024 and December 31, 2023 were as follows (in thousands):


	September 30,			December 31,
	2024			2023
Accounts receivable sold	$	56,590		$	—
Less: factoring fees		(672	)		—
Net cash proceeds	$	55,918		$	—