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Commercial Partnership
12 Months Ended
Dec. 31, 2017
Commercial Partnership [Abstract]  
Commercial Partnership

6. Commercial Partnership

On June 17, 2013, the Company entered into a series of agreements with a commercial partner AbbVie Inc. (“AbbVie”), related to our ribavirin products. Pursuant to an asset purchase agreement, as amended, we sold marketing authorizations and related assets for ribavirin in certain countries outside the United States. The Company received upfront payments totaling $64.0 million, and could receive additional contingent payments totaling $51.0 million based on the achievement of certain milestones. The Company did not earn any such milestones during the years ended December 31, 2017, 2016 and 2015.

Of the $64.0 million upfront payment, $44.0 million was considered allocable to the domestic licensing arrangement and was recorded as deferred revenue to be recognized over the 10 year term of the agreement. The Company will recognize the upfront payment to revenue on a straight‑line basis over the life of the agreement. The Company recognized $4.4 million of the upfront consideration as license revenue during each of the years ended December 31, 2017, 2016 and 2015. At December 31, 2017 and 2016,  $24.0 million and $28.4 million were recorded as deferred revenue, respectively, of which $4.4 million was short‑term.

In October 2014, the Company entered into a series of amendments with AbbVie whereby the parties agreed to eliminate all potential future unearned and unpaid milestones and also agreed to a revised royalty structure for the sale of ribavirin products under the domestic license agreement. The Company received upfront payments of $6.0 million in consideration of future royalties payable resulting from the resale of certain ribavirin products by AbbVie during 2015 and 2016. At the time of receipt the balance was recorded to deferred revenue, $3.0 million of which was recorded as short‑term as it related to prepaid royalties for 2015 and $3.0 million of which was recorded as long‑term as it related to prepaid royalties for 2016. The Company will recognize portions of the deferred revenue to income as ribavirin is sold by AbbVie. The Company is entitled to receive additional compensation from AbbVie for any royalties earned in excess of the annual prepayment. If royalties earned do not exceed the annual prepayment, the Company is required to refund the excess to AbbVie.

Since the royalties earned from the resale of ribavirin products by AbbVie under the domestic license agreement did not exceed the $3.0 million annual prepayment in 2015, the Company refunded approximately $2.1 million of the prepaid royalty to AbbVie as a credit against future purchases during the year ended December 31, 2016. The Company had recorded this amount as an accrued expense at December 31, 2015. Furthermore, the Company was required to refund approximately $2.9 million of the prepaid royalty to AbbVie resulting from the resale of ribavirin products by AbbVie during 2016. The Company settled approximately $2.9 million and $0.7 million of the prepaid royalty refund as of December 31, 2017 and 2016, respectively, and therefore has no refunds of prepaid royalties due to Abbvie at December 31, 2017. The Company had recorded an accrued expense of $2.2 million at December 31, 2016.

The Company has a continuing obligation to supply ribavirin products, maintain the marketing authorizations for certain ribavirin products and maintain the intellectual property for Ribasphere and RibaPak through the term of the agreements ending December 31, 2020.