Revenues

Product Revenues

The Company’s net product revenues (loss) consisted of the following for the years ended December 31:



	2012		2011			2010

Acetadote	$	37,522,180	$	42,454,055		$	35,092,796
Kristalose	9,429,741		8,517,873			9,510,275
Caldolor	992,110		(78,134		)	101,499
Total net product revenues	$	47,944,031	$	50,893,794		$	44,704,570

In December 2011, the Company discontinued sales of the 400mg Caldolor offering domestically and focused on the 800mg Caldolor offering. Gross product revenue for Caldolor was approximately $1.3 million, $0.3 million and $0.1 million for the years ended December 31, 2012, 2011 and 2010, respectively. The Company recognized approximately $0.4 million of sales allowances in the fourth quarter of 2011 primarily for estimated return of the discontinued product.

As part of the November 12, 2012, Settlement Agreement with Paddock and Perrigo, the Company will supply Perrigo with an Authorized Generic version of the Company's Acetadote product, as discussed in Note 19, Commitments and Contingencies. Acetadote product revenue in 2012 includes $0.3 million in our share of the Authorized Generic distributed by Perrigo.

The allowances in accounts receivable for chargebacks, cash discounts and damaged goods were $0.2 million at December 31, 2012 and 2011, and the accruals for rebates, product returns and certain administrative and service fees included in other current liabilities were $3.4 million and $3.2 million, respectively, at December 31, 2012 and 2011.

Other Revenues

Other revenues during 2012, 2011 and 2010 are comprised of revenue generated by CET through grant funding from federal Small Business (SBIR/STTR) grant programs, and lease income generated by CET’s Life Sciences Center and contract services. The Life Sciences Center is a research center that provides scientists with access to flexible lab space and other resources to develop biomedical products. Grant revenue from SBIR/STTR programs totaled approximately $0.1 million for each of the years ended December 31, 2012, 2011 and 2010, respectively. Other revenues in 2010 also included approximately $0.9 million of federal grants associated with the Therapeutic Discovery Project Credit, a component of the U.S. health care reform act enacted in March 2010. The Therapeutic Discovery Project Credit allowed entities to apply for funding based on qualified research activities. Funds were then granted to entities based on their qualified research expenses. Revenue was recognized after the application was approved and as qualified research expenses were incurred.

In 2012, the Company 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, the Company has certain protective rights, including the right to review and approve all documents submitted to the Chinese State Drug Administration. The Company determined the agreement contains two units of accounting being the transfer of certain rights, including the product dossier, for Acetadote and Caldolor, separately. During 2012, the Company received nonrefundable, up-front payments totaling $0.7 million in exchange for the transfer of certain intellectual property, including its product dossiers, and recognized the payments as other revenue in the consolidated statement of income when the intellectual property was provided to the licensee.

The licensing agreement provides for the Company to receive additional 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. The Company is also entitled to receive milestone payments of $1.1 million upon receiving regulatory approval for each of Acetadote and Caldolor in China. The Company will recognize revenue for these substantive milestones using the milestone method. As of December 31, 2012, no revenue has been recognized related to milestones associated with Harbin Gloria.