REVENUES

Product Revenues

The Company’s net revenues consisted of the following for the three and six months ended June 30, 2013 and 2012:



	Three months ended June 30,				Six months ended June 30,
	2013		2012		2013		2012
Products:
Acetadote	$	4,146,974	$	9,770,168	$	11,398,968	$	17,121,252
Kristalose	2,041,043		2,140,783		4,158,293		4,397,056
Caldolor	615,547		210,323		1,025,971		309,403
Other	277,524		245,666		755,988		795,441
Total net revenues	$	7,081,088	$	12,366,940	$	17,339,220	$	22,623,152

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. Acetadote product revenue includes the Company's share of revenue from sales of the authorized generic distributed by Perrigo, with those revenues totaling $2.1 million and $5.0 million for the three and six months ended June 30, 2013.

Other Revenues

During the second quarter of 2013, the Company entered into two new agreements for the registration and commercialization of Caldolor outside the United States and amended its agreement with Harbin Gloria Pharmaceuticals Co., Ltd to extend its territory.

Earlier in 2013, the Company entered into three separate agreements with international partners for commercialization of certain of the Company's products into additional international territories. As a result of the new and amended agreements, the Company recognized approximately $0.2 million and $0.6 million of non-refundable up-front payments, respectively, as other revenue in the condensed consolidated statement of income during the during the three and six months ended June 30, 2013.

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 and product formulations. Under the licensing agreements, the Company is entitled to receive additional milestone payments upon the partners 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 $0.5 million in milestone payments related to regulatory approvals and up to $3.7 million in milestone payments related to total and annual product sales. As of June 30, 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. 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 $0.7 million as other revenue during the first six months 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 June 30, 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 and six months ended June 30, 2013 and 2012.