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Collaboration, Licensing and Other Arrangements | 3 Months Ended
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Mar. 31, 2023
Organization Consolidation And Presentation Of Financial Statements [Abstract] |
Collaboration, Licensing and Other Arrangements | 10. Collaboration, Licensing and Other Arrangements Revenue from collaborations and services were as follows (in thousands):
|  | Three Months Ended March 31, |
|  | 2023 |  |  | 2022 |
UT CSA Agreement (1) |  | $ | 11,164 |  |  | $ | 694 |
UT License Agreement (2) |  |  | 185 |  |  |  | 1,348 |
Cipla License and Distribution Agreement |  |  | 37 |  |  |  | 37 |
Other |  |  | — |  |  |  | 87 |
Total revenue from collaborations and services |  | $ | 11,386 |  |  | $ | 2,166 |
_________________________ (1) Amount consists of revenue recognized for Manufacturing Services and sales of product to UT for the periods presented. (2) Amounts consist of revenue recognized for Next-Gen R&D Services and R&D Services and License for the periods presented. United Therapeutics License Agreement — In September 2018, the Company and UT entered into an exclusive global license and collaboration agreement (the “UT License Agreement”), pursuant to which UT is responsible for global development, regulatory and commercial activities with respect to Tyvaso DPI. The Company is responsible for manufacturing Tyvaso DPI. Total revenue from UT was as follows (in thousands):
|  | Three Months Ended March 31, |
|  | 2023 |  |  | 2022 |
UT Revenue |  |  |  |  |  |
UT CSA Agreement |  | $ | 11,164 |  |  | $ | 694 |
UT License Agreement |  |  | 185 |  |  |  | 1,348 |
Royalties — Collaborations (1) |  |  | 11,678 |  |  |  | — |
Total revenue from UT |  | $ | 23,027 |  |  | $ | 2,042 |
_________________________ (1) Amount consists of royalties associated with the UT License Agreement. The contract assets related to the royalties is included in prepaid expense and other current assets in the condensed consolidated balance sheets. In October 2018, the Company and UT entered into the UT License Agreement for the collaboration and development of Tyvaso DPI. Pursuant to this agreement, the Company also receives low double-digit royalties on net sales of Tyvaso DPI as well as a manufacturing margin on commercial supplies of the product. In August 2021, the Company and UT entered into a commercial supply agreement (the “CSA”), pursuant to which the Company is responsible for manufacturing and supplying to UT, and UT is responsible for purchasing from the Company on a cost-plus basis. There have been various amendments to the UT License Agreement and the CSA since inception. The terms of the amendments and related accounting treatment are disclosed in the Company's Form 10-K for the fiscal year ended December 31, 2022, filed with the SEC on February 23, 2023. In December 2022, the Company and UT agreed to fund an additional $39.5 million to support capital and continuous improvement activities and $2.3 million in the development of alternative manufacturing processes. The Company determined that the capital and continuous improvements should be combined with the manufacturing services performance obligation and the alternative manufacturing processes should be combined with the Next-Gen R&D Services. The total revised anticipated cash flows of $722.3 million from the transaction was allocated to the three distinct performance obligations as follows (dollars in millions):
|  | Anticipated |  |  |  |  |  |  |  |
|  | Cash Flow |  |  | Revenue Allocation |  |  | Recognition Method |  | Progress Measure |  | Revenue Recognition |
Total anticipated cash flow(1) |  | $ | 722.3 |  |  |  |  |  |  |  |  |  |  |
Distinct Performance Obligation |  |  |  |  |  |  |  |  |  |  |  |  |
R&D Services and License |  |  |  |  | $ | — |  |  | Over time |  | Ratably |  | Aug 2021 - Oct 2021 |
Next-Gen R&D Services |  |  |  |  | $ | 10.0 |  |  | Over time |  | Input |  | % of completion of costs |
Manufacturing Services and Product Sales(2) |  |  |  |  | $ | 712.3 |  |  | Point in time |  |  |  | Transfer of control |
__________________________ (1) The total anticipated cash flow includes a transaction price of $120.0 million for the contractual obligations under the CSA for the Manufacturing Services and the Next-Gen R&D Services performance obligations and $602.3 million for future supply of Tyvaso DPI over the remaining term of the CSA. (2) The Manufacturing Services performance obligation will be recognized as control of manufactured products is transferred to UT. 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 $220.8 million. The Company will sell product to UT under individual purchase orders, which represent distinct performance obligations. The ultimate cash flows may vary as manufacturing purchase orders are received. As of March 31, 2023, deferred revenue consisted of $46.5 million, of which $2.2 million was classified as current and $44.3 million was classified as long-term on the condensed consolidated balance sheet. As of December 31, 2022, deferred revenue consisted of $37.9 million, of which $1.6 million was classified as current and $36.3 million was classified as long-term on the condensed consolidated balance sheet. Thirona Collaboration Agreement — In June 2021, the Company and Thirona entered into a collaboration agreement to evaluate the therapeutic potential of Thirona’s compound for the treatment of pulmonary fibrosis. If initial studies are promising, the Company can exercise certain rights to seek a full license to the compound for clinical development and commercialization. The parties will perform their respective obligations and provide reasonable support for research, clinical development and regulatory strategy. The collaboration agreement was accounted for under ASC 808, Collaborative Agreements; however, no consideration was exchanged between the parties. The costs incurred by the Company were expensed as research and development in the condensed consolidated statements of operations. On February 28, 2023, the collaboration agreement was amended to extend the term through June 2024. In accordance with the amendment, the Company will fund a minimum of $1.1 million to be expended on a revised development plan prepared by Thirona. Biomm Supply and Distribution Agreement — In May 2017, the Company and Biomm S.A. ("Biomm") entered into a supply and distribution agreement for the commercialization of Afrezza in Brazil. Under this agreement, Biomm was responsible for pursuing regulatory approvals of Afrezza in Brazil, including from the Agência Nacional de Vigilância Sanitária (“ANVISA”) and, with respect to pricing matters, from the Camara de Regulação de Mercado de Medicamentos (“CMED”), both of which were received. Biomm commenced product sales in January 2020. There were no shipments of product to Biomm in 2022 or the first quarter of 2023. Cipla License and Distribution Agreement — In May 2018, the Company and Cipla Ltd. (“Cipla”) entered into an exclusive agreement for the marketing and distribution of Afrezza in India and the Company received a $2.2 million nonrefundable license fee. Under the terms of the agreement, Cipla is responsible for obtaining regulatory approvals to distribute Afrezza in India and for all marketing and sales activities of Afrezza in India. The Company is responsible for supplying Afrezza to Cipla. The Company has the potential to receive an additional regulatory milestone payment, minimum purchase commitment revenue and royalties on Afrezza sales in India once cumulative gross sales have reached a specified threshold. The nonrefundable licensing fee was recorded in deferred revenue and is being recognized in net revenue – collaborations over 15 years, representing the estimated period to satisfy the performance obligation. The additional milestone payments represent variable consideration for which the Company has not recognized any revenue because of the uncertainty of obtaining marketing approval. As of March 31, 2023, the deferred revenue balance was $1.5 million, of which $0.2 million is classified as current and $1.3 million is classified as long term in the condensed consolidated balance sheets.

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- Definition The entire disclosure for collaborative arrangements in which the entity is a participant, including a) information about the nature and purpose of such arrangements; b) its rights and obligations thereunder; c) the accounting policy for collaborative arrangements; and d) the income statement classification and amounts attributable to transactions arising from the collaborative arrangement between participants. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 808 -SubTopic 10 -Section 50 -Paragraph 1 -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=6931272&loc=SL5834143-161434 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 808 -SubTopic 10 -Section 50 -Paragraph 1 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=6931272&loc=SL5834143-161434 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 808 -URI https://asc.fasb.org/topic&trid=5833765 + Details
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