Revenue from Contracts with Customers

3 Months Ended

Mar. 31, 2022

Revenue From Contract With Customer [Abstract]

Revenue from Contracts with Customers

3. REVENUE FROM CONTRACTS WITH CUSTOMERS

Product Sales, Net

The Company’s product sales, net consist of sales in the U.S. of VIVITROL, ARISTADA and ARISTADA INITIO and, following its commercial launch in October 2021, LYBALVI, primarily to wholesalers, specialty distributors and pharmacies. During the three months ended March 31, 2022 and 2021, the Company recorded product sales, net, as follows:

	Three Months Ended March 31,
(In thousands)	2022		2021
VIVITROL	$	84,854	$	74,534
ARISTADA and ARISTADA INITIO		72,485		55,429
LYBALVI		13,929		—
Total product sales, net	$	171,268	$	129,963

Manufacturing and Royalty Revenues

During the three months ended March 31, 2022 and 2021, the Company recorded manufacturing and royalty revenues as follows:

	Three Months Ended March 31, 2022
(In thousands)	Manufacturing Revenue		Royalty Revenue		Total
Long-acting INVEGA products(1)	$	—	$	37,054	$	37,054
VUMERITY		11,395		19,200		30,595
RISPERDAL CONSTA		15,578		1,848		17,426
Other		11,854		8,241		20,095
	$	38,827	$	66,343	$	105,170

	Three Months Ended March 31, 2021
(In thousands)	Manufacturing Revenue		Royalty Revenue		Total
Long-acting INVEGA products(1)	$	—	$	61,570	$	61,570
VUMERITY		2,448		10,992		13,440
RISPERDAL CONSTA		10,683		3,479		14,162
Other		11,954		18,721		30,675
	$	25,085	$	94,762	$	119,847

(1) “Long-acting INVEGA products”: INVEGA SUSTENNA/XEPLION (paliperidone palmitate), INVEGA TRINZA/TREVICTA (paliperidone palmitate) and INVEGA HAFYERA/BYANNLI (paliperidone palmitate)  

In November 2021, the Company received notice of partial termination in the U.S. of its license agreement with Janssen Pharmaceutica N.V., a subsidiary of Johnson & Johnson Corporation (“Janssen Pharmaceutica”) in respect of INVEGA SUSTENNA, INVEGA TRINZA and INVEGA HAFYERA, pursuant to which Janssen Pharmaceutica received access and rights to Alkermes’ small particle pharmaceutical compound technology, known as NanoCrystal Technology. When the partial termination became effective in February 2022, Janssen Pharmaceutica ceased paying royalties related to sales of INVEGA SUSTENNA, INVEGA TRINZA and INVEGA HAFYERA in the U.S. and the Company stopped recognizing royalty revenue related to net sales of these products. In April 2022, the Company commenced binding arbitration proceedings related to, among other things, Janssen Pharmaceutica’s partial termination

of the license agreement in the U.S. and Janssen Pharmaceutica’s royalty and other obligations under the agreement. Refer to Note 15, Commitments and Contingencies within the “Notes to Condensed Consolidated Financial Statements” in this Form 10-Q for additional information regarding the arbitration proceedings with Janssen Pharmaceutica.

Contract Assets

Contract assets include unbilled amounts resulting from sales under certain of the Company’s manufacturing contracts where revenue is recognized over time, except for $5.0 million of expected consideration from the Company’s collaboration with Biogen related to VUMERITY. The amounts included in the contract assets table below are classified as “Current assets” in the accompanying condensed consolidated balance sheets, as they relate to manufacturing processes that are completed in ten days to eight weeks and, in the case of the $5.0 million of consideration, an amount that is expected to be received in 2022.

Total contract assets at March 31, 2022 were as follows:

(In thousands)	Contract Assets
Contract assets at December 31, 2021	$	13,363
Additions		11,451
Transferred to receivables, net		(4,602	)
Contract assets at March 31, 2022	$	20,212

Contract Liabilities

Contract liabilities consist of contractual obligations related to deferred revenue.

Total contract liabilities at March 31, 2022 were as follows:

(In thousands)	Contract Liabilities
Contract liabilities at December 31, 2021	$	17,830
Additions		83
Amounts recognized into revenue		(3,063	)
Contract liabilities at March 31, 2022	$	14,850