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Note 3 - Revenue
 9 Months Ended
Sep. 30, 2020
Notes to Financial Statements  
Revenue from Contract with Customer [Text Block]

3.     Revenue

 

We received payment of $4.5 million for the third quarter of 2020 from Janssen in September 2020 based on billing schedules established in the contract on December 30, 2019 for manufacturing. Due to the coronavirus pandemic, the Company did not fully complete the manufacture of drugs specified for the June purchase order until the third quarter. As of September 30, 2020, the Company had completed the manufacture of drugs specified for the September purchase order. In addition, due to the pandemic, Janssen requested that we delay shipment of June volumes for which we had completed manufacturing. We recognized revenue for those volumes held at Janssen’s request, as they are segregated for future delivery. Consequently, as of September 30, 2020, we recorded $6.0 million revenue for the third quarter of 2020.

 

On December 30, 2019, the Company entered into a Transition Services Agreement with Janssen. Pursuant to the Transition Services Agreement, the Company has agreed to continue operational management, on a fee-for-service basis, of two ongoing clinical trials related to bermekimab. In consideration for all of the services to be provided, for each calendar quarter during the term of such agreement, Janssen shall pay the Company a fee for such quarter equal to all pass-through costs incurred by the Company during such calendar quarter, exclusive of the allocation of certain internal costs that are not considered pass-through pursuant to the agreement, plus a markup of 30%. For the three months and nine months ended  September 30, 2020, the Company has recorded $4.5 million and $25.2 million of gross revenue, respectively, under this arrangement, with the corresponding expense to clinical services cost of goods sold.