Unbilled Receivable

6 Months Ended

Jun. 30, 2022

Revenue from Contract with Customer [Abstract]

Unbilled Receivable

Unbilled Receivable    As of June 30, 2022, the Company had an unbilled receivable of $1.6 million, which relates to an unbilled amount to BARDA. This amount represents the payment to the FDA during the period ended June 30, 2022 which will be reimbursed from BARDA per the contract award dated August 2, 2022.Revenue

NARCAN® Royalties

The Company's primary source of revenue is from royalty payments received from NARCAN® net sales by EBS. During the three and six months ended June 30, 2022 the Company recorded revenue of $2.3 million and $4.5 million, respectively, related to its agreement with EBS.

On August 10, 2022, the Company, delivered a notice (the "Default Notice") to EBS under section 10.3 of the License Agreement between Adapt Pharma Operations Limited and the Company, dated December 15, 2014 (the “Adapt Agreement”). The Default Notice put EBS on notice that EBS had materially breached one or more of its obligations under the Adapt Agreement. Specifically, the Company stated cause for breach based upon the royalty report EBS provided for the quarter ended June 30, 2022 (the “Royalty Report”), which incorrectly stated the royalty payable to the Company for U.S. net NARCAN® sales during the current quarter. EBS applied an erroneous 2% rate to the U.S. net NARCAN® sales for the quarter, resulting in a royalty payable of approximately $2.3 million. According to the Royalty Report, the $2.3 million includes royalties at the tiered rates for net NARCAN® sales in Canada for the quarter. The Company believes that it is due a royalty of approximately $9.1 million using the tiered royalty rate structure under section 5.4.1 of the Adapt Agreement, for all net NARCAN® sales in the quarter.

The Company intends to pursue all available legal remedies under the Adapt Agreement, including terminating the Adapt Agreement and reclaiming the assets subject thereto, if the material breach is not cured within the timeframe provided in the Adapt Agreement.

BARDA Contract

    On September 19, 2018, the Company entered into a contract with the Biomedical Advanced Research and Development Authority (“BARDA”), which is part of the U.S. Health and Human Services Office of the Assistant Secretary for Preparedness and Response, to accelerate the Company’s development of OPTN003, its lead product candidate. OPTN003, nasal nalmefene, is a potent, long-acting opioid antagonist currently in development for the treatment of opioid overdose. The contract provides funding up to approximately $10.8 million and covers activities related to the New Drug Application for OPTN003 with the Food and Drug Administration. BARDA has awarded approximately $8.7 million of the contract as of June 30, 2022. The remaining balance of $2.1 million was awarded on August 2022 - see Footnote 5. During the three and six months ended June 30, 2022 the Company recognized revenue of $1.6 million and $3.8 million, respectively related to this contract.

Deferred revenue

    On April 17, 2018, the Company was awarded a grant of approximately $7.4 million from the National Institutes of Health’s National Institute on Drug Abuse, ("NIDA"). The grant provided the Company with additional resources for the development of OPNT003.

Government grants are agreements that generally provide cost reimbursement for certain types of expenditures in return for research and development activities over a contractually defined period. The Company recognized revenues from grants in the period during which the related costs were incurred, provided that the conditions under which the grants were provided had been met and only perfunctory obligations were outstanding.

The Company was awarded the entire $7.4 million, and all the work related to the grant was complete as of March 31, 2022. During the three and six months ended June 30, 2022, the Company recognized revenue of $0 and $17 thousand, respectively related to this grant.

The following is a summary of the Company’s deferred revenue activity as of June 30, 2022:

(in thousands)	NIDA Grant		Total
Balance as of December 31, 2021	$	17	$	17
Additions to deferred revenue	—		—
Recognized as revenue	(17)		(17)
Balance as of June 30, 2022			$	—