Disaggregated Revenues

3 Months Ended

Mar. 31, 2020

Disaggregation of Revenue [Abstract]

Disaggregated Revenues

Disaggregated Revenues

The following table summarizes the disaggregation of revenues by nature, (dollars in thousands):

	Three Months ended March 31,
	2020		2019
	(unaudited)
Net product sales
Trokendi XR	$	68,551	$	63,693
Oxtellar XR	23,939		19,406
Total net product sales	$	92,490	$	83,099
Royalty revenues	2,486		2,375
Total revenues	$	94,976	$	85,474

Trokendi XR accounted for 74% and 77% of the Company’s total net product sales for the three months ended March 31, 2020 and 2019, respectively.

The Company recognized noncash royalty revenue of $1.6 million for the three months ended March 31, 2020 and 2019, respectively, consequent to the Company's agreement with HC Royalty (see Note 2).

The Company ceased production and distribution of all blister pack configurations for Trokendi XR in 2017. Subsequent to ceasing blister pack production and distribution in 2017, the observed rate of product return for all blister pack configurations of Trokendi XR steadily declined over time. This return rate trend was firmly established over a multi-year period. However, in the first quarter of 2020, the return rate for the final blister pack lots of Trokendi XR produced in 2017 exhibited a return rate significantly higher than had been experienced with all previous lots. The lots for which a higher return rate was observed are the last lots which were produced and distributed.

As a result, the Company changed its estimate of the provision for product returns, based on the most recent experience. This change in estimate resulted in an increase to the provision for product returns of $8.0 million, decreased net product sales of $8.0 million and decreased net earnings of $5.9 million, or $0.11 per basic and per diluted share, for the three months ended March 31, 2020.