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Note 10 - Collaboration and License Agreements
 9 Months Ended
Sep. 30, 2013
Collaborative And License Arrangement Disclosure [Abstract]  
Collaborative And License Arrangement Disclosure [Text Block]
10.      Collaboration and License Agreements

Abbott Agreement

In February 2009, the Company entered into the Abbott Agreement to develop and commercialize lubiprostone for the treatment of CIC in Japan. Additionally, the Abbott Agreement grants Abbott the right of exclusive negotiation to any additional indications for which lubiprostone is developed in Japan under all relevant patents, know-how and trademarks. Under the terms of the Abbott Agreement, payments to the Company include a non-refundable upfront payment and non-refundable development and commercial milestone payments based on achieving specified development, regulatory and sales goals.

As of September 30, 2013, the Company has received a total of $37.5 million in up-front and development milestone payments under the Abbott Agreement, consisting of a $15.0 million development milestone payment received in December 2012 for the first commercial sale of AMITIZA, as well as $10.0 million and $12.5 million in up-front and development milestone payments, respectively, received in 2009. Under the Abbott Agreement, the Company could receive additional milestone payments based on achieving other specified development and commercialization goals although there can be no assurance that the Company will receive any such payments.

The following table summarizes the cash streams and related revenue recognized or deferred under the Abbott Agreement for the nine months ended September 30, 2013:

(In thousands)
 
Amount
Deferred at
December 31,
2012
   
Cash Received
for the Nine
Months Ended 
September 30,
2013
   
Revenue
Recognized for
the Nine
Months Ended
September 30,
2013
   
Change in
Accounts
Receivable for
the Nine Months
Ended
September 30,
2013
   
Foreign
Currency Effects
for the Nine
Months Ended
September 30,
2013
   
Amount
Deferred at
September 30,
2013
 
Collaboration revenue:
                                   
Up-front payment associated with the Company's
  obligation to participate in joint committees
  $ 725     $ -     $ 18     $ -     $ (101 )   $ 606  
                                                 
Product sales revenue:
  $ -     $ 9,437     $ 10,680     $ 1,124     $ 119     $ -  
                                                 

Takeda commercialization and license agreement

The Company has received a total of $160.0 million in upfront and development milestone payments through September 30, 2013 under the Takeda Agreement, including a $10.0 million development milestone received in the second quarter of 2013 for the first commercial sale of AMITIZA for OIC. Subject to development and acceptance of future indications, the Company is potentially entitled to receive additional development milestone and commercial milestone payments under the Takeda Agreement, although there can be no assurance that the Company will receive any such payments.

The following table summarizes the cash streams and related revenue recognized or deferred under the Takeda Agreement for the nine months ended September 30, 2013:

(In thousands)
 
Amount
Deferred at
December 31,
2012
   
Cash Received
for the Nine
Months Ended 
September 30,
2013
   
Revenue
Recognized for
the Nine
Months Ended
September 30,
2013
     
Change in
Accounts
Receivable for
the Nine Months
Ended
September 30,
2013*
     
Amount
Deferred at
September 30,
2013
 
Collaboration revenue:
                                 
Up-front payment associated with the Company's
   obligation to participate in joint committees
  $ 1,176     $ -     $ 110     $ -     $ 1,066  
                                         
Research and development revenue:
                                       
Up-front payment - remainder
  $ -     $ -     $ -     $ -     $ -  
Development milestones
    -       10,000       10,000       -       -  
Reimbursement of research and development expenses
    249       8,010       6,288       (1,657 )     314  
Total
  $ 249     $ 18,010     $ 16,288     $ (1,657 )   $ 314  
                                         
Product royalty revenue
  $ -     $ 37,852     $ 37,271     $ (581 )     -  
                                         
Co-promotion revenue
  $ -     $ 839     $ 61     $ (778 )     -  
                                         

*      Includes billed and unbilled accounts receivable.

Numab AG

In September 2011, the Company entered into a Loan Guarantee and Development Agreement, or the Numab Agreement, with Numab. Numab is considered a related party as a result of an ownership interest by one of the Company’s former executive officers. Under the terms of the Numab Agreement, the Company would provide Numab with up to CHF 5.0 million as collateral and would serve as guarantor for a loan to Numab from a third party, Zurcher Kantonalbank. Following the payment of the first success fee during the first quarter of 2013, this amount was reduced to CHF 2.2 million, or approximately $2.4 million as of September 30, 2013.

As of September 30, 2013, the collateral of CHF 2.2 million has been deposited by the Company and Numab has utilized CHF 2.0 million of its loan facility. During 2012, the Company considered it probable that the success criteria for the first target would be met and made full provision for the success fee. This fee was paid during the first quarter of 2013. In the first quarter of 2013, the Company decided to no longer pursue the further development of the target.  In October 2013, Numab and the Company entered into a termination arrangement which will result in continued development by Numab. After successful development by Numab and an agreement with a third party investor, Numab and the Company will enter into a license agreement on commercially reasonable terms. In reviewing the amount outstanding under the loan, and in light of Numab being a start-up company, the Company recorded an additional liability of $153,000 during the third quarter of 2013 in collateral callable to meet a potential loan default by Numab. As of September 30, 2013 the Company has a recorded liability of $512,000 in collateral callable to meet a potential loan default by Numab.