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Revenues
 6 Months Ended
Jun. 30, 2012
Revenues [Abstract]  
REVENUES

(4) REVENUES

We operate in one segment, specialty pharmaceutical products. Management has chosen to organize the Company based on the type of products sold. Substantially all of our assets are located in the United States. We had sales of less than $0.1 million to non-U.S. customers for the three and six months ended June 30, 2012, and sales of $0.1 million to non-U.S. customers for the three and six months ended June 30, 2011.

The Company’s net revenues consisted of the following for the three and six months ended June 30, 2012 and 2011:

 

                                 
    Three Months Ended June 30,     Six Months Ended June 30,  
    2012     2011     2012     2011  

Products:

                                

Acetadote

   $ 9,770,168     $ 12,167,302     $ 17,121,252     $ 20,711,895  

Kristalose

     2,140,783       2,101,971       4,397,056       4,172,352  

Caldolor

     210,323       86,027       309,403       97,981  

Other

     245,666       34,441       795,441       74,440  
   

 

 

    

 

 

    

 

 

    

 

 

  

Total net revenues

   $ 12,366,940     $ 14,389,741     $ 22,623,152     $ 25,056,668  
   

 

 

    

 

 

    

 

 

    

 

 

  

In the first quarter of 2012, we entered into an exclusive licensing agreement for Acetadote and Caldolor with Harbin Gloria Pharmaceuticals Co., Ltd., a Chinese pharmaceutical company that has expertise in developing, registering, manufacturing and commercializing products in the China market. In connection with the agreement, we received a nonrefundable, up-front payment of $0.7 million in exchange for the transfer of certain intellectual property, including our product dossiers. We also have certain protective rights, including the right to review and approve all documents submitted to the Chinese State Drug Administration. We determined the agreement contains two units of accounting—the transfer of certain rights, including the product dossier, for Acetadote and Caldolor, separately. As of March 31, 2012, we had delivered these items for Caldolor to the licensee, and recognized revenue of approximately $0.5 million as other revenue. The remaining up-front payment of $0.2 million related to Acetadote was recognized during the second quarter of 2012, when the intellectual property, including the dossier, was provided to the licensee.

The licensing agreement provides for us to receive milestone payments of $0.7 million when the licensee receives notice from the regulatory authority granting approval to conduct clinical trials, or stating that no clinical trials are necessary. In addition, we will receive milestone payments of $1.1 million upon receiving regulatory approval for both Acetadote and Caldolor in China. We will recognize revenue for these substantive milestones using the milestone method. We use the milestone method of recognizing revenue for substantive milestones if (1) it is commensurate with either the performance to achieve the milestone or the enhancement of the value of the delivered item, (2) it relates solely to past performance and (3) it is reasonable relative to the other milestones. As of June 30, 2012 and 2011, we have not recognized any revenue related to milestones associated with Harbin Gloria.