Customer and Supplier Concentration

6 Months Ended

Jun. 30, 2016

7. Customer and Supplier Concentration

Customer Concentrations

Three large wholesale drug distributors, AmerisourceBergen Corporation, or AmerisourceBergen, Cardinal Health, Inc. or Cardinal, and McKesson Corporation, or McKesson, are all distributors of the Company’s products, as well as suppliers of a broad range of health care products. Actavis has exclusive marketing rights of the Company’s enoxaparin product to the U.S. retail pharmacy market (see Note 16). MannKind Corporation began buying RHI API from the Company in December 2014. The Company considers these five customers to be its major customers, as each individually, and these customers collectively, represented a significant percentage of the Company’s net revenue for the three and six months ended June 30, 2016 and 2015, and accounts receivable as of June 30, 2016 and December 31, 2015. The following table provides accounts receivable and net revenues information for these major customers:


	% of Total Accounts				% of Net
	Receivable				Revenue
					Three Months Ended				Six Months Ended
	June 30,		December 31,		June 30,				June 30,
	2016		2015		2016		2015		2016		2015
Actavis, Inc. (1)	8	%	12	%	18	%	21	%	20	%	22	%
AmerisourceBergen	12	%	12	%	20	%	18	%	19	%	17	%
Cardinal Health	19	%	20	%	20	%	17	%	20	%	17	%
MannKind Corporation	17	%	13	%	6	%	5	%	3	%	8	%
McKesson	18	%	21	%	19	%	23	%	20	%	21	%

⁽¹⁾

The distribution agreement with Actavis is in the process of being terminated (see Note 16).

Supplier Concentrations

The Company depends on suppliers for raw materials, active pharmaceutical ingredients, and other components that are subject to stringent U.S. Food and Drug Administration, or FDA, requirements. Some of these materials may only be available from one or a limited number of sources. Establishing additional or replacement suppliers for these materials may take a substantial period of time, as suppliers must be approved by the FDA. Furthermore, a significant portion of raw materials may only be available from foreign sources. If the Company is unable to secure, on a timely basis, sufficient quantities of the materials it depends on to manufacture and market its products, it could have a materially adverse effect on the Company’s business, financial condition, and results of operations.