Revenues

Product Revenues

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



	2013		2012		2011

Acetadote	$	18,846,753	$	37,522,180	$	42,454,055
Omeclamox-Pak	1,045,815		—		—
Kristalose	9,118,475		9,429,741		8,517,873
Caldolor	2,089,655		992,110		(78,134		)
Total net product revenues	$	31,100,698	$	47,944,031	$	50,893,794

As part of the October 28, 2013 agreement further discussed in Note 6, the Company entered into an agreement with Pernix Therapeutics to promote Omeclamox-Pak. Under the terms of the agreement, effective October 1, 2013, the Company began to share in the revenue of this product including $1.0 million during 2013. Effective January 2014 the Company began promoting Omeclamox-Pak to gastroenterologists across the United States through its field sales force.

As part of the November 12, 2012, Settlement Agreement with Paddock and Perrigo, the Company supplies Perrigo with an Authorized Generic version of the Company's Acetadote product. Acetadote product revenue in 2013 includes $9.2 million in the Company's share of the Authorized Generic distributed by Perrigo, and 2012 includes $0.3 million.

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 $2.9 million, $1.3 million and $0.3 million for the years ended December 31, 2013, 2012 and 2011, 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.

The allowances in accounts receivable for chargebacks, cash discounts and damaged goods were $0.6 million at December 31, 2013 and $0.2 million at 2012, and the accruals for rebates, product returns and certain administrative and service fees included in other current liabilities were $2.4 million and $3.4 million, respectively, at December 31, 2013 and 2012.

Other Revenues

During 2013, the Company entered into six new agreements with international partners for commercialization of certain of the Company's products into additional international territories and amended its agreement with Harbin Gloria Pharmaceuticals Co., Ltd ("Harbin Gloria"), a Chinese pharmaceutical company, to extend its territory. As a result of the new and amended agreements, the Company recognized approximately $0.6 million of non-refundable up-front payments as other revenue in the consolidated statement of operations during 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 will recognize revenue for these substantive milestones using the milestone method. The agreements provide for up to $0.6 million in milestone payments related to regulatory approvals and up to $4.0 million in milestone payments related to total and annual product sales. As of December 31, 2013, the Company has not recognized any revenues related to milestones associated with the new agreements. The Company is also entitled to receive royalties on future sales of the products under the agreements.

In 2012, the Company entered into an exclusive licensing agreement for Acetadote and Caldolor with Harbin Gloria. 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. During 2012, the Company received nonrefundable, up-front payments totaling approximately $0.7 million in exchange for the transfer of certain intellectual property, including its product dossiers, and recognized these payments as other revenue in the consolidated statement of operations 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, 2013, no revenue has been recognized related to milestones associated with Harbin Gloria.

Other revenues during 2013, 2012 and 2011 also includes revenue generated by CET through grant funding from federal Small Business 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, 2013, 2012 and 2011.