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NOTE 13 SIGNIFICANT AGREEMENTS
12 Months Ended
Dec. 31, 2012
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
NOTE 13 SIGNIFICANT AGREEMENTS

NOTE 13 SIGNIFICANT AGREEMENTS

Merial Limited

In September 2009, we entered into a world-wide license and development agreement with Merial Limited (Merial), a world leading animal health company, for a long acting pain management product for companion animals. Under the terms of the agreement, we received a nonrefundable upfront license fee and would receive development funding and potential future milestone payments and royalties following commercialization.

Under the license and development agreement, we were obligated to perform reimbursable development services and provide any improvements related to the licensed technology during the six-year development period. We recognized the upfront license fee ratably over the development period, and recognized revenue from the development services when the services were rendered.

In May 2011, we received notice of termination from Merial due to their concerns about the commercial potential of the product under development in the animal health market. We recognized $0.0 million, $0.6 million and $1.3 million in revenue related to development services to Merial for the years ended 2012, 2011 and 2010, respectively. The remaining balance of deferred revenue related to the upfront license fee of $0.1 million was recognized as revenue in the quarter ended June 30, 2011, upon termination of the licensing agreement by Merial.

Paul Royalty Fund

On January 18, 2006, we sold our rights to royalties on sales of Retin-A Micro® and Carac®, effective October 1, 2005, to an affiliate of the Paul Royalty Fund for $30.0 million. Proceeds of $25.0 million were received upon the closing of the transaction and used primarily to fund the Phase 3 pivotal trial of APF530. Subsequent $2.5 million payments were received in both 2007 and January 2010 upon the achievement of certain milestones.