REVENUES

Product Revenues

The Company’s net revenues consisted of the following for the three months ended March 31, 2013 and 2012:



	Three months ended March 31,
	2013		2012
Products:
Acetadote	$	7,251,995	$	7,351,084
Kristalose	2,117,250		2,256,273
Caldolor	410,424		99,079
Other	478,463		549,776
Total net revenues	$	10,258,132	$	10,256,212

As part of the November 12, 2012, Settlement Agreement with Paddock Laboratories, LLC and Perrigo Company ("Perrigo"), the Company supplies Perrigo with an authorized generic version of the Company's Acetadote product. In 2013, Acetadote product revenue includes $3.0 million for the Company's share of revenue from sales of the authorized generic distributed by Perrigo.

Other Revenues

During 2013, the Company entered into three separate agreements with international partners for commercialization of certain of the Company's products into additional international territories. Each of the international partners has expertise in registering and commercializing products in their respective markets. The Company recognized approximately $0.4 million as other revenue in the condensed consolidated statement of income during the first quarter of 2013 upon completion of the agreements and the transfer of certain intellectual property, including product dossiers, to the licensees.

The agreements entered into during 2013 provide that each of the partners are responsible for seeking regulatory approvals for the products, and following approvals, will handle ongoing distribution and sales in the respective international territories. The Company maintains responsibility for the intellectual property, product formulations, development and manufacturing, and will provide finished product for sale. Under the licensing agreements the Company is entitled to receive additional milestone payments upon the achievement of defined regulatory approvals and sales milestones. The Company is also entitled to receive royalties on future sales of the products under the agreements. The Company will recognize revenue for these substantive milestones using the milestone method. The Company uses 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. The agreements provide for up to $0.4 million in milestone payments related to regulatory approvals and up to $3.0 million in milestone payments related to total and annual product sales. As of March 31, 2013, the Company has not recognized any revenues related to milestones associated with the new agreements.

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 condensed consolidated statement of income when the intellectual property was provided to the licensee. The Company recognized approximately $0.5 million as other revenue during the first quarter of 2012.

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. In addition, the Company will 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 March 31, 2013, the Company has not recognized any revenue related to milestones associated with Harbin Gloria.

In addition to the revenue recognized for the up-front payments from our international partners, the Company had product sales of less than $0.1 million to non-U.S. customers for each of the three months ended March 31, 2013 and 2012.