Revenue from Contracts with Customers

6 Months Ended

Jun. 30, 2020

Revenue From Contract With Customer [Abstract]

Revenue from Contracts with Customers

3. REVENUE FROM CONTRACTS WITH CUSTOMERS

Under FASB ASC 606, Revenue from Contracts with Customers (“Topic 606”), the Company recognizes revenues when its customer obtains control of promised goods or services, in an amount that reflects the consideration the Company expects to receive in exchange for those goods or services. The Company recognizes revenues following the five-step model prescribed under Topic 606: (i) identify contract(s) with a customer; (ii) identify the performance obligation(s) in the contract(s); (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligation(s) in the contract(s); and (v) recognize revenues when (or as) the Company satisfies the performance obligation(s).

Product Sales, Net

The Company’s product sales, net consist of sales of VIVITROL and ARISTADA (together with ARISTADA INITIO) in the U.S., primarily to wholesalers, specialty distributors and specialty pharmacies. Product sales, net are recognized when the customer obtains control of the product, which is when the product has been received by the customer.

During the three and six months ended June 30, 2020 and 2019, the Company recorded product sales, net, as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
(In thousands)	2020		2019		2020		2019
VIVITROL	$	71,646	$	88,199	$	150,415	$	157,382
ARISTADA/ARISTADA INITIO		58,769		48,436		109,726		78,734
Total product sales, net	$	130,415	$	136,635	$	260,141	$	236,116

Manufacturing and Royalty Revenues

During the three and six months ended June 30, 2020 and 2019, the Company recorded manufacturing and royalty revenues as follows:

	Three Months Ended June 30, 2020						Six Months Ended June 30, 2020
(In thousands)	Manufacturing Revenue		Royalty Revenue		Total		Manufacturing Revenue		Royalty Revenue		Total
INVEGA SUSTENNA/XEPLION & INVEGA TRINZA/TREVICTA	$	—	$	69,385	$	69,385	$	—	$	124,312	$	124,312
RISPERDAL CONSTA		10,193		3,536		13,729		33,776		7,269		41,045
Other		15,148		18,243		33,391		31,776		35,623		67,399
	$	25,341	$	91,164	$	116,505	$	65,552	$	167,204	$	232,756

	Three Months Ended June 30, 2019						Six Months Ended June 30, 2019
(In thousands)	Manufacturing Revenue		Royalty Revenue		Total		Manufacturing Revenue		Royalty Revenue		Total
INVEGA SUSTENNA/XEPLION & INVEGA TRINZA/TREVICTA	$	—	$	67,289	$	67,289	$	—	$	120,586	$	120,586
RISPERDAL CONSTA		20,506		4,068		24,574		38,428		8,453		46,881
Other		17,873		18,161		36,034		30,898		38,447		69,345
	$	38,379	$	89,518	$	127,897	$	69,326	$	167,486	$	236,812

Research and Development Revenue

The Company recorded R&D revenue of $0.6 million and $0.9 million during the three and six months ended June 30, 2020, respectively, of which $0.1 million and $0.2 million, respectively, related to its license and collaboration agreement with Biogen for VUMERITY. The Company recorded R&D revenue of $14.3 million and $29.0 million during the three and six months ended June 30, 2019, respectively, of which $13.6 million and $27.4 million, respectively, related to its license and collaboration agreement with Biogen for VUMERITY.

The Company expects to earn an additional $0.3 million in R&D revenue under this agreement with Biogen through the end of 2020.

Contract Assets— Contract assets include unbilled amounts under certain of the Company’s contracts with customers where revenue is recognized over time. Total contract assets as of June 30, 2020 include $9.2 million of assets that are classified as “Current assets” in the accompanying condensed consolidated balance sheet, as they related to manufacturing processes that are completed in ten days to eight weeks, and $5.0 million that is classified as “Other assets” in the accompanying condensed consolidated balance sheet, as it consists of consideration from the Company’s collaboration with Biogen related to VUMERITY, which the Company expects to receive in approximately three years.

Total contract assets at June 30, 2020 were as follows:

(In thousands)	Contract Assets
Contract assets at December 31, 2019	$	13,386
Additions		22,199
Transferred to receivables, net		(21,345	)
Contract assets at June 30, 2020	$	14,240

Contract Liabilities—Contract liabilities consist of contractual obligations related to deferred revenue.

Total contract liabilities at June 30, 2020 were as follows:

(In thousands)	Contract Liabilities
Contract liabilities at December 31, 2019	$	28,834
Additions		—
Amounts recognized into revenue		(2,364	)
Contract liabilities at June 30, 2020	$	26,470