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Revenues and Trade Receivables, Net | 6 Months Ended
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Jun. 30, 2021
Revenues and Trade Receivables, Net [Abstract] |
Revenues and Trade Receivables, Net | Revenues and Trade Receivables, Net The Company’s revenues include (i) sales of manufactured products pursuant to contracts with commercialization licensees, (ii) sales of its proprietary clobazam-based Sympazan oral film product, (iii) license and royalty revenues and (iv) co-development and research fees generally in the form of milestone payments. The Company recognizes revenue to reflect the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. To achieve this core principle, a five-step model is applied that includes (1) identifying the contract with a customer, (2) identifying the performance obligation in the contract, (3) determining the transaction price, (4) allocating the transaction price to the performance obligations, and (5) recognizing when, or as, an entity satisfies a performance obligation. Performance Obligations A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account in the current revenue recognition standard. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. At contract inception, the Company assesses the goods promised in its contracts with customers and identify a performance obligation for each promise to transfer to the customer a distinct good. When identifying performance obligations, the Company considers all goods or services promised in a contract regardless of whether explicitly stated in the contract or implied by customary business practice. The Company's performance obligations consist mainly of transferring of goods and services identified in the contracts, purchase orders or invoices. Manufacture and supply revenue – this revenue is derived from products manufactured exclusively for specific customers according to their strictly-defined specifications, subject only to specified quality control inspections. Accordingly, at the point in time when quality control requirements are satisfied, revenue net of related discounts is recorded. Proprietary product sales, net - this net revenue is recognized when product is shipped and title passes to the customer, typically at time of delivery. At the time of sale, estimates for various revenue allowances are recorded based on historical trends and judgmental estimates. For sales of Sympazan, returns allowances and prompt pay discounts are estimated based on contract terms and historical return rates, if available, and these estimates are recorded as a reduction of receivables. Similarly determined estimates are recorded relating to wholesaler service fees, co-pay support redemptions, Medicare, Medicaid and other rebates, and these estimates are reflected as a component of accrued liabilities. Once all related variable considerations are resolved and uncertainties as to collectable amounts are eliminated, estimates are adjusted to actual allowance amounts. Provisions for these estimated amounts are reviewed and adjusted on no less than a quarterly basis. License and Royalty Revenu e – license revenues are determined based on an assessment of whether the license is distinct from any other performance obligations that may be included in the underlying licensing arrangement. If the customer is able to benefit from the license without provision of any other performance obligations by the Company and the license is thereby viewed as a distinct or functional license, the Company then determines whether the customer has acquired a right to use the license or a right to access the license. For functional licenses that do not require further development or other ongoing activities by the Company, the customer is viewed as acquiring the right to use the license as, and when, transferred and revenues are generally recorded at a point in time, subject to contingencies or constraints. For symbolic licenses providing substantial value only in conjunction with other performance obligations to be provided by the Company, revenues are generally recorded over the term of the license agreement. Such other obligations provided by the Company generally include manufactured products, additional development services or other deliverables that are contracted to be provided during the license term. Payments received in excess of amounts ratably or otherwise earned are deferred and recognized over the term of the license or as contingencies or other performance obligations are met. Royalty revenue is estimated and recognized when sales under supply agreements with commercial licensees are recorded, absent any contractual constraints or collectability uncertainties. Co-development and Research Fees – co-development and research fees are earned through performance of specific tasks, activities or completion of stages of development defined within a contractual development or feasibility study agreement with a customer. The nature of these performance obligations, broadly referred to as milestones or deliverables, are usually dependent on the scope and structure of the project as contracted, as well as the complexity of the product and the specific regulatory approval path necessary for that product. Accordingly, the duration of the Company’s research and development projects may range from several months to approximately three years. Although each contractual arrangement is unique, common milestones included in these arrangements include those for the performance of efficacy and other tests, reports of findings, formulation of initial prototypes, production of stability clinical and/or scale-up batches, and stability testing of those batches. Additional milestones may be established and linked to clinical results of the product submission and/or approval of the product by the FDA and the commercial launch of the product. Revenue recognition arising from milestone payments is dependent upon the facts and circumstances surrounding the milestone payments. Milestone payments based on a non-sales metric such as a development-based milestone (e.g., an NDA filing or obtaining regulatory approval) represent variable consideration and are included in the transaction price subject to any constraints. If the milestone payments relate to future development, the timing of recognition depends upon historical experience and the significance a third party has on the outcome. For milestone payments to be received upon the achievement of a sales threshold, the revenue from the milestone payments is recognized at the later of when the actual sales are incurred or the performance obligation to which the sales relate to has been satisfied. Contract Assets - in certain situations, customer contractual payment terms provide for invoicing in arrears. Accordingly, some, or all performance obligations may be completely satisfied before the customer may be invoiced under such agreements. In these situations, billing occurs after revenue recognition, which results in a contract asset supported by the estimated value of the completed portion of the performance obligation. These contract assets are reflected as a component of other receivables within Trade and other receivables within the Condensed Consolidated Balance Sheet. As of June 30, 2021, and December 31, 2020, such contract assets were $3,177 and $3,081, respectively, consisting primarily of products and services provided under specific contracts to customers for which earnings processes have been met prior to shipment of goods or full delivery of completed services. Contract Liabilities - in certain situations, customer contractual payment terms are structured to permit invoicing in advance of delivery of a good or service. In such instances, the customer’s cash payment may be received before satisfaction of some, or any, performance obligations that are specified. In these situations, billing occurs in advance of revenue recognition, which results in contract liabilities. These contract liabilities are reflected as deferred revenue within the Condensed Consolidated Balance Sheet. As remaining performance obligations are satisfied, an appropriate portion of the deferred revenue balance is credited to earnings. As of June 30, 2021, and December 31, 2020, such contract liabilities were $6,993 and $4,326, respectively. The Company’s revenues were comprised of the following:
| Three Months Ended June 30, |  | Six Months Ended June 30,
| 2021 |  | 2020 |  | 2021 |  | 2020
Manufacture and supply revenue | $ | 10,665 |  |  | $ | 7,259 |  |  | $ | 17,176 |  |  | $ | 14,175 |
License and royalty revenue | 2,311 |  |  | 12,928 |  |  | 4,672 |  |  | 13,354 |
Co-development and research fees | 456 |  |  | 266 |  |  | 894 |  |  | 529 |
Proprietary product sales, net | 1,913 |  |  | 1,222 |  |  | 3,725 |  |  | 2,382 |
Total revenues | $ | 15,345 |  |  | $ | 21,675 |  |  | $ | 26,467 |  |  | $ | 30,440 |
Disaggregation of Revenue The following table provides disaggregated net revenue by geographic area:
| Three Months Ended June 30, |  | Six Months Ended June 30,
| 2021 |  | 2020 |  | 2021 |  | 2020
United States | $ | 13,107 |  |  | $ | 21,423 |  |  | $ | 22,957 |  |  | $ | 28,929 |
Ex-United States | 2,238 |  |  | 252 |  |  | 3,510 |  |  | 1,511 |
Total revenues | $ | 15,345 |  |  | $ | 21,675 |  |  | $ | 26,467 |  |  | $ | 30,440 |
Ex-United States revenues are derived primarily from Indivior for product manufactured for markets outside of the United States. Trade and other receivables, net consist of the following:
| June 30, 2021 |  | December 31, 2020
Trade receivables | $ | 9,626 |  |  | $ | 4,330 |
Contract and other receivables | 3,177 |  |  | 3,081 |
Less: allowance for doubtful accounts | (40) |  |  | (40) |
Less: sales-related allowances | (636) |  |  | (416) |
Trade and other receivables, net | $ | 12,127 |  |  | $ | 6,955 |
The following table presents the changes in the allowance for doubtful accounts:
| June 30, 2021 |  | December 31, 2020
Allowance for doubtful accounts at beginning of the period | $ | 40 |  |  | $ | 124 |
Additions charged to expense | — |  |  | 198 |
Write-downs charged against the allowance | — |  |  | (282) |
Allowance for doubtful accounts at end of the period | $ | 40 |  |  | $ | 40 |
Sales Related Allowances and Accruals Revenues from sales of products are recorded net of prompt payment discounts, wholesaler service fees, returns allowances, rebates and co-pay support redemptions. These reserves are based on estimates of the amounts earned or to be claimed on the related sales. These amounts are treated as variable consideration, estimated and recognized as a reduction of the transaction price at the time of the sale. The Company includes these estimated amounts in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized for such transaction will not occur, or when the uncertainty associated with the variable consideration is resolved. The calculation of some of these items requires management to make estimates based on sales data, historical return data, contracts and other related information that may become known in the future. The adequacy of these provisions is reviewed on a quarterly basis. The following table provides a summary of activity with respect to sales related allowances and accruals for the six months ended June 30, 2021:
| Total Sales Related Allowances
Balance at December 31, 2020 | $ | 2,138 |
Provision | 4,422 |
Payments / credits | (3,771) |
Balance at June 30, 2021 | $ | 2,789 |
Total reductions of gross product sales from sales-related allowances and accruals were $4,422 for the six months ended June 30, 2021. Accruals for returns allowances and prompt pay discounts are reflected as a direct reduction of trade receivables and accruals for wholesaler service fees, co-pay support redemptions and rebates as current liabilities. The accrued balances relative to these provisions included in Trade and other receivables, net and Accounts payable and accrued expenses were $636 and $2,153, respectively, as of June 30, 2021 and $416 and $1,722 , respectively, as of December 31, 2020. Concentration of Major Customers Customers are considered major customers when net revenue exceeds 10% of total revenue for the period or outstanding receivable balances exceed 10% of total receivables. For the six months ended June 30, 2021, Indivior Inc. ("Indivor") exceeded the 10% threshold for revenue and represented approximately 68% of total revenue. As of June 30, 2021, Indivior and AmerisourceBergen Corporation ("AmerisourceBergen") exceeded the 10% threshold for outstanding receivables and represented 68% and 10%, respectively, of outstanding receivables. For the six months ended June 30, 2020, Indivior and Sunovion Pharmaceuticals, Inc. (“Sunovion”) represented approximately 48% and 39%, respectively of total revenue. As of December 31, 2020, Indivior, AmerisourceBergen, Sunovion, and Cardinal Health Inc. represented 53%, 14%, 13%, and 10%, respectively of outstanding receivables.

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