15. Other Revenue Sharing Arrangements	12 Months Ended
Dec. 31, 2017
Notes to Financial Statements
15. Other Revenue Sharing Arrangements	Note 15. Other Revenue Sharing Arrangements The Company enters into collaborative arrangements to develop and commercialize drug candidates. Collaborative activities might include research and development, marketing and selling (including promotional activities and physician detailing), manufacturing, and distribution. These collaborations often require royalty or profit share payments, contingent upon the occurrence of certain future events linked to the success of the product. Revenues related to products sold by the Company pursuant to these arrangements are included in product sales, while other sources of revenue such as royalties and profit share receipts are included in collaboration, royalty and other revenue as further discussed below. Operating expenses for costs incurred pursuant to these arrangements are reported in their respective expense line item. Co-promotion Agreements The Company may enter into co-promotion agreements whereby it obtains rights to market other parties' products in return for certain commissions or percentages of revenue on the sales Pernix generates. Alternatively, Pernix may enter into co-promotion agreements with respect to its products whereby it grants another party certain rights to market or otherwise promote one or more of its products. Co-promotion revenue is included in net revenues. Expense from co-promotion agreements is included in cost of products sold. For the years ended December 31, 2017 and 2016, the Company recognized approximately $22.2 million and $18.2 million, respectively, in expense included in cost of goods sold from payments pursuant to co-promotion and other revenue sharing arrangements. Co-promotion, royalty and other revenues were $321,000 and $466,000 for the years ended December 31, 2017 and 2016, respectively. In connection with the acquisition of Treximet, the Company is responsible for the payment of royalties to Aralez of 18% of net sales or lower under certain circumstances, with quarterly minimum royalty amounts of $4.0 million for the calendar quarters commencing on January 1, 2015 and ending on March 31, 2018. In connection with the acquisition of Zohydro, the Company is responsible for the payment of royalties to Recro of 6% of net sales.

15. Other Revenue Sharing Arrangements

12 Months Ended

Dec. 31, 2017

Note 15. Other Revenue Sharing Arrangements

The Company enters into collaborative arrangements to develop and commercialize drug candidates. Collaborative activities might include research and development, marketing and selling (including promotional activities and physician detailing), manufacturing, and distribution. These collaborations often require royalty or profit share payments, contingent upon the occurrence of certain future events linked to the success of the product. Revenues related to products sold by the Company pursuant to these arrangements are included in product sales, while other sources of revenue such as royalties and profit share receipts are included in collaboration, royalty and other revenue as further discussed below. Operating expenses for costs incurred pursuant to these arrangements are reported in their respective expense line item.

Co-promotion Agreements

The Company may enter into co-promotion agreements whereby it obtains rights to market other parties' products in return for certain commissions or percentages of revenue on the sales Pernix generates. Alternatively, Pernix may enter into co-promotion agreements with respect to its products whereby it grants another party certain rights to market or otherwise promote one or more of its products. Co-promotion revenue is included in net revenues. Expense from co-promotion agreements is included in cost of products sold. For the years ended December 31, 2017 and 2016, the Company recognized approximately $22.2 million and $18.2 million, respectively, in expense included in cost of goods sold from payments pursuant to co-promotion and other revenue sharing arrangements. Co-promotion, royalty and other revenues were $321,000 and $466,000 for the years ended December 31, 2017 and 2016, respectively.

In connection with the acquisition of Treximet, the Company is responsible for the payment of royalties to Aralez of 18% of net sales or lower under certain circumstances, with quarterly minimum royalty amounts of $4.0 million for the calendar quarters commencing on January 1, 2015 and ending on March 31, 2018.

In connection with the acquisition of Zohydro, the Company is responsible for the payment of royalties to Recro of 6% of net sales.