Revenue and Accounts Receivable (Policies)

3 Months Ended

Mar. 31, 2026

The preparation of these unaudited condensed consolidated financial statements and accompanying notes are in conformity with U.S. generally accepted accounting principles (“GAAP”) which requires the use of management estimates. In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments, consisting of normal recurring adjustments, considered necessary to fairly state the interim results. Interim operating results are not necessarily indicative of results that may be expected for the full year ending December 31, 2026, or for any subsequent period. These unaudited condensed consolidated financial statements should be read in conjunction with the audited financial statements and notes thereto of the Company which are included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission, or SEC, on March 5, 2026. The accompanying condensed consolidated balance sheet as of December 31, 2025 has been derived from the audited financial statements included in such Annual Report on Form 10-K.

Reclassifications

Certain reclassifications were made to the prior year’s amounts to conform to the 2026 presentation.

Concentrations

The following table summarizes net revenue from each of the Company’s customers, who individually represent at least 10% of total revenue.


	Three Months Ended March 31,
	2026		2025
Customer A	24	%	78	%
Customer B	23	%	14	%
Customer C	30	%	0	%

The following table summarizes accounts receivable concentrations for each of the Company’s customers, who individually represent at least 10% of gross total accounts receivable.


	March 31, 2026		December 31, 2025
Customer A	18	%	20	%
Customer B	31	%	23	%
Customer C	37	%	41	%

For DefenCath, the Company currently has one FDA-approved source (contract manufacturing organization, or “CMO”) for each of its two key active pharmaceutical ingredients (“APIs”), taurolidine and heparin sodium, respectively. With regards to taurolidine, the Company has a drug master file (“DMF”) filed with the FDA. There is a master commercial supply agreement between a third-party manufacturer that has been in place since August 2018. With respect to heparin sodium API, the Company has identified an alternate third-party supplier and may qualify such supplier under the DefenCath NDA over the next twelve months.

The Company received FDA approval of DefenCath with finished dosage production from its European based CMO, Rovi Pharma Industrial Services. The Company believes this CMO has adequate capacity to produce the volumes needed to meet near-term projected demand for DefenCath. In addition, the Company also qualified Siegfried Hameln as an alternate finished dosage manufacturing site and is in the process of scaling up production at the facility.

Each of the products in the Melinta Portfolio has one FDA-approved CMO, primarily in Europe or in the United States. The Company has ongoing technology transfers intended to reduce costs of goods sold as well as to onshore the manufacture of several of its products, which it expects to complete over the next two to three years.

Accounts Receivable and Allowances

Accounts Receivable and Sales Allowances

Allowances recorded for credit losses as of March 31, 2026 and December 31, 2025 were approximately $0.6 million with no write-offs or recoveries during the three months ended March 31, 2026.

Variable consideration associated with net product sales, or "Sales Allowances," totaled $189.0 million and $19.3 million for the three months ended March 31, 2026, and March 31, 2025, respectively. As of March 31, 2026 and December 31, 2025, total accrued reserves and allowances to accounts receivable on the balance sheet were $98.2 million and $132.4 million, respectively.

A roll forward of the significant categories of Sales Allowances and the related accrual balances on the Condensed Consolidated Balance Sheet for the three months ended March 31, 2026 is as follows:


	Volume Incentive Rebates	Medicaid	Distribution Service Fees	Accrued Shelf- stock Liability	Accrued Returns Allowance	Chargebacks
Balance at December 31, 2025	86,001	12,418	5,780	2,255	18,291	4,304
Provisions related to sales recorded in the period	45,778	2,348	17,878	4,983	1,699	26,535
Credits/payments issued during the period	(86,193)	(735)	(15,549)	(2,175)	(924)	(19,389)
Effect of change in estimate	-	(3,187)	-	-	(5,796)	-
Balance at March 31, 2026	45,586	10,844	8,109	5,063	13,270	11,450