XML 57 R36.htm IDEA: XBRL DOCUMENT v3.22.4
Collaboration, Licensing and Other Arrangements (Tables)
 12 Months Ended
Dec. 31, 2022
Schedule of Revenue from Collaboration and Services

Revenue from collaborations and services for the years ended December 31, 2022, 2021 and 2020 are as follows (in thousands):

 

 

 

Year Ended December 31,

 

 

 

2022

 

 

2021

 

 

2020

 

UT CSA Agreement (1)

 

$

24,826

 

 

$

267

 

 

$

—

 

UT License Agreement (2)

 

 

2,426

 

 

 

34,145

 

 

 

32,213

 

Vertice Pharma Co-Promotion Agreement

 

 

325

 

 

 

1,147

 

 

 

—

 

Other

 

 

200

 

 

 

323

 

 

 

—

 

Cipla License and Distribution Agreement

 

 

147

 

 

 

147

 

 

 

147

 

Receptor CLA

 

 

—

 

 

 

245

 

 

 

250

 

UT Research Agreement

 

 

—

 

 

 

—

 

 

 

210

 

Total revenue from collaborations and services

 

$

27,924

 

 

$

36,274

 

 

$

32,820

 

_________________________

(1)

Amount consists of revenue recognized for Manufacturing Services and sales of product to UT for the periods presented.

(2)

Amount consists of revenue recognized for Next-Gen R&D Services and R&D Services and License for the periods presented.
Schedule of Deferred Revenue Related to Revenue Recognized for Collaborations and Services

 

 

The activity related to deferred revenue and the related revenue recognized for collaborations and services is as follows (in thousands):

 

 

 

December 31,

 

 

 

2022

 

 

2021

 

Deferred revenue:

 

 

 

 

 

 

 

 

Beginning balance

 

$

20,370

 

 

$

34,937

 

Additions

 

 

46,971

 

 

 

21,707

 

Revenue — collaborations and services

 

 

(27,924

)

 

 

(36,274

)

Ending balance

 

$

39,417

 

 

$

20,370

 

 
Schedule of Revenue Allocation, Remaining Performance Obligation, Expected Timing of Satisfaction Revenue was allocated as follows:

 

Distinct Performance Obligation

 

Transaction Price

 

 

Allocation of Price

 

 

Recognition Method

 

Progress Measure

 

Recognition Period

 

 

 

(in millions)

 

 

 

 

 

 

 

 

 

 

 

 

R&D Services and License

 

$

105.8

 

 

100%

 

 

Over time

 

Ratably

 

Sep 2018 - Dec 2021

(1)

_________________________

(1)

Recognition period represents the estimated period to satisfy the performance obligation.

Description

 

Transaction Price

 

 

Allocation of Price(1)

 

 

Recognition Method

 

Progress Measure

 

Revenue

Recognition

 

 

 

(in millions)

 

 

 

 

 

 

 

 

Total transaction price

 

$

50.9

 

 

 

 

 

 

 

 

 

 

 

 

Distinct Performance Obligation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

R&D Services and License

 

 

 

 

 

$

18.4

 

 

Over time

 

Ratably

 

May 2021 - Oct 2021

(2)

Pre-Commercial Services

 

 

 

 

 

$

4.6

 

 

Over time

 

Input

 

% of completion of costs

(3)

Next-Gen R&D Services

 

 

 

 

 

$

7.2

 

 

Over time

 

Input

 

% of completion of costs

(3)

Facility Expansion Services(4)

 

 

 

 

 

$

20.7

 

 

Point in time

 

 

 

Transfer of control

(5)

 

_________________________

(1)

Allocation is based on management’s assessment of the stand-alone selling price of each performance obligation.

(2)

Represents the estimated period when the R&D Services performance obligation will be substantially complete.

(3)

Pre-Commercial Services and Next-Gen R&D Services performance obligations will be satisfied over time using the input method based on the costs incurred to date as a percentage of the total estimated costs to fulfill the contract. Incurred cost represents work performed, which corresponds with, and thereby best depicts, the transfer of control to the customer.

(4)

The Company also acts as agent for the procurement of equipment for the manufacturing expansion for the UT Equipment. The Company received $5.0 million from UT for the UT Equipment, which was recognized as deposits from customer on the consolidated balance sheet and will be released as the title is transferred to UT.

(5)

The Facility Expansion Services performance obligation would be recognized as control of manufactured products is transferred to the customer.
Schedule of Revised Anticipated Cash Flows from Transactions Allocated Performance Obligations

 

 

Anticipated

 

 

 

 

 

 

 

 

Description

 

Cash Flow

 

 

Revenue Allocation(1)

 

 

Recognition Method

 

Progress Measure

 

Revenue

Recognition

 

 

 

(in millions)

 

 

 

 

 

 

 

 

Total anticipated cash flow

 

$

221.5

 

 

 

 

 

 

 

 

 

 

 

 

Distinct Performance Obligation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

R&D Services and License(2)

 

 

 

 

 

$

6.0

 

 

Over time

 

Ratably

 

Aug 2021 - Oct 2021

(3)

Next-Gen R&D Services

 

 

 

 

 

$

8.8

 

 

Over time

 

Input

 

% of completion of costs

(4)

Manufacturing Services

 

 

 

 

 

$

206.7

 

 

Point in time

 

 

 

Transfer of control

(5)

_________________________

(1)

Allocation is based on management’s assessment of the stand-alone selling price of each performance obligation.

(2)

The license for the Company’s IP was considered to be interdependent with the development activities to support approval of Tyvaso DPI. A sales-based royalty is promised in exchange for the IP license; therefore, the royalties associated with the license are excluded from the determination of the transaction price and the Company will recognize revenue as the sale of Tyvaso DPI to a patient occurs.

(3)

Represents the estimated period when the R&D Services performance obligation will be substantially complete.

(4)

The Next-Gen R&D Services performance obligation will be satisfied over time using the input method based on the costs incurred to date as a percentage of the total estimated costs to fulfill the contract. Incurred cost represents work performed, which corresponds with, and thereby best depicts, the transfer of control to the customer.

(5)

The Manufacturing Services performance obligation will be recognized as control of manufactured products is transferred to the customer; therefore, no revenue associated with this obligation was recognized during the year ended December 31, 2021. The allocation of transaction price includes a material right related to manufacturing services. The total anticipated cash flow is based on the Company’s estimated production and the ultimate cash flows may vary as manufacturing purchase orders are received.

 

 
Schedule of Effect of Modification on Transaction Price

The Company accounted for the contract modification as if it were part of the existing contract since the amendment modified the scope and price of the CSA by extending the term and increasing the occupancy rate. The effect of the modification on the transaction price and on the measure of progress is recognized as an adjustment to revenue as of the date of the modification. The modification did not result in a change the activities and deliverables under the CSA. The total revised anticipated cash flows of $463.5 million from the transaction was allocated to the three distinct performance obligations as follows.

 

 

 

Anticipated

 

 

 

 

 

 

 

 

Description

 

Cash Flow

 

 

Revenue Allocation(1)

 

 

Recognition Method

 

Progress Measure

 

Revenue

Recognition

 

 

 

(in millions)

 

 

 

 

 

 

 

 

Total anticipated cash flow(2)

 

$

463.5

 

 

 

 

 

 

 

 

 

 

 

 

Distinct Performance Obligation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

R&D Services and License(3)

 

 

 

 

 

$

—

 

 

Over time

 

Ratably

 

Aug 2021 - Oct 2021

(4)

Next-Gen R&D Services(5)

 

 

 

 

 

$

4.8

 

 

Over time

 

Input

 

% of completion of costs

(6)

Manufacturing Services(7)

 

 

 

 

 

$

458.7

 

 

Point in time

 

 

 

Transfer of control

(8)

_________________________

(1)

Allocation is based on management’s assessment of the stand-alone selling price of each performance obligation.

(2)

The total anticipated cash flow includes a transaction price of $64.3 million for the contractual obligations under the CSA for the Manufacturing Services and the Next-Gen R&D Services performance obligations and $399.2 million for future supply of Tyvaso DPI over the remaining term of the CSA.

(3)

The license for the Company’s IP was considered to be interdependent with the development activities to support approval of Tyvaso DPI. A sales-based royalty is promised in exchange for the IP license; therefore, the royalties associated with the license are excluded from the determination of the transaction price and the Company will recognize revenue as the sale of Tyvaso DPI to a patient occurs.

(4)

Represents the period when the revenue for the R&D Services performance obligation was recognized.

(5)

The standalone selling price (“SSP”) for the Next-Gen R&D Services performance obligation was based on industry ratios as well as the Company’s historical R&D projects. The transaction price for the Next-Gen R&D Services was based on fixed consideration which was allocated between performance obligations as discussed in note (2) above.

(6)

The Next-Gen R&D Services performance obligation will be satisfied over time using the input method based on the costs incurred to date as a percentage of the total estimated costs to fulfill the contract. Incurred cost represents work performed, which corresponds with, and thereby best depicts, the transfer of control to the customer.

(7)

Pre-production activities under the CSA, such as facility expansion services and certain other administrative services, were considered bundled services that are part of the Company’s Manufacturing Services performance obligation, given the nature of the Company’s contractual responsibilities and ASC 606 requirements.

(8)

The Manufacturing Services performance obligation will be recognized as control of manufactured products is transferred to the customer. The modification did not result in a cumulative catch-up adjustment as a result of the revenue being deferred for the performance obligations that were affected by the modification. The allocation of the transaction price for the Manufacturing Services includes a material right related to the Company’s estimated production of product in the amount of $144.5 million. The Company will sell product to UT under individual purchase orders, which represent distinct performance obligations. The total anticipated cash flow is based on the Company’s estimated production and the ultimate cash flows may vary as manufacturing purchase orders are received.
United Therapeutics Corporation  
Schedule of Revenue from Collaboration and Services

Revenue from UT for the years ended December 31, 2022, 2021 and 2020 are as follows (in thousands):

 

 

 

Year Ended December 31,

 

 

 

2022

 

 

2021

 

 

2020

 

UT Revenue

 

 

 

 

 

 

 

 

 

 

 

 

UT CSA Agreement

 

$

24,826

 

 

$

267

 

 

$

—

 

UT License Agreement

 

 

2,426

 

 

 

34,145

 

 

 

32,213

 

Royalties — Collaborations (1)

 

 

15,599

 

 

 

—

 

 

 

—

 

Total revenue from UT

 

$

42,851

 

 

$

34,412

 

 

$

32,213

 

_________________________

(1)

Amount consists of royalties associated with the UT License Agreement.

The current portion of contract assets related to the royalties is included in prepaid expense and other current assets in the consolidated balance sheets.