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Accrued Expenses
6 Months Ended
Jun. 30, 2020
Payables And Accruals [Abstract]  
Accrued Expenses

Note 9—Accrued Expenses:

Accrued expenses consisted of the following (in thousands):

 

 

 

June 30, 2020

 

 

December 31, 2019

 

Accrued legal verdict expense

 

$

31,536

 

 

$

31,350

 

Accrued royalties

 

 

8,091

 

 

 

8,866

 

Accrued CRO services

 

 

4,273

 

 

 

8,502

 

Accrued variable consideration

 

 

11,096

 

 

 

7,978

 

Accrued bonus

 

 

4,053

 

 

 

1,618

 

Accrued compensation

 

 

5,342

 

 

 

4,138

 

Accrued other clinical development

 

 

1,225

 

 

 

2,546

 

Accrued professional fees

 

 

1,343

 

 

 

1,775

 

Accrued legal fees

 

 

652

 

 

 

266

 

Accrued manufacturing costs

 

 

675

 

 

 

869

 

Other

 

 

354

 

 

 

1,122

 

Totals

 

$

68,640

 

 

$

69,030

 

 

Accrued CRO services, accrued other clinical development expenses, and accrued legal fees represent the Company’s estimates of such costs and are recognized as incurred. Accrued royalties represent royalties incurred in connection with the Company’s license agreement with Pfizer. Accrued compensation includes accrued commissions and accrued vacation, which is accrued at the rate the employee earns vacation and reduced as vacation is used by the employee. Accrued variable consideration represents estimates of adjustments to product revenue, net for which reserves are established. Other accrued expenses consist primarily of accrued contractor/consultant costs, business license fees, taxes, insurance, and marketing fees.

Accrued legal verdict expense represents an estimate of a range between $9.1 million and $18.1 million that may be owed to class action participants as a result of the jury verdict in Hsu v. Puma Biotechnology, Inc., and an estimate of $22.4 million that may be owed to the plaintiff as a result of the jury verdict in Eshelman v. Puma Biotechnology, Inc., et al. The total amount of damages in Hsu and Eshelman is uncertain and will be ascertained only after an extensive claims process in Hsu, and the completion of post-trial proceedings, and the exhaustion of any appeals in both cases. It is also reasonably possible that the total damages will be higher than these estimates.  

 

All accrued expenses are adjusted in the period the actual costs become known.