17. Segment Information

The Company has two reportable segments, therapeutics and contract research. The therapeutics segment is focused on identifying and developing innovative therapies to address significant unmet needs for immuno-inflammatory diseases. The Company marketed and sold RHOFADE during the nine months ended September 30, 2019. In October 2019, the Company sold the worldwide rights to RHOFADE (see Note 19). RHOFADE is a topical treatment for persistent facial erythema, or redness, associated with rosacea in adults. The Company marketed and sold ESKATA in the United States during the nine months ended September 30, 2019 and 2018 and discontinued sales and marketing of ESKATA in August 2019. ESKATA is a proprietary formulation of high-concentration hydrogen peroxide topical solution that the Company was marketing as an office-based prescription treatment for raised SKs. The Company is currently seeking a strategic partner to commercialize ESKATA worldwide.

The contract research segment earns revenue from the provision of laboratory services to clients through Confluence, the Company’s wholly-owned subsidiary. Contract research revenue is generally evidenced by contracts with clients which are on an agreed upon fixed-price, fee-for-service basis. Corporate and other includes general and administrative expenses as well as eliminations of intercompany transactions. The Company does not report balance sheet information by segment since it is not reviewed by the chief operating decision maker, and all of the Company’s tangible assets are held in the United States.

The Company’s results of operations by segment for the three and nine months ended September 30, 2019 and 2018 are summarized in the tables below:


			Contract		Corporate		Total
Three Months Ended September 30, 2019	Therapeutics		Research		and Other		Company
Revenue, net	$	—	$	2,943	$	(1,960)	$	983
Cost of revenue (excludes amortization)		—		2,724		(1,898)		826
Research and development		16,245		—		(62)		16,183
Sales and marketing		96		16		—		112
General and administrative		—		956		5,770		6,726
Amortization of definite-lived intangible		—		—		—		—
Loss from operations	$	(16,341)	$	(753)	$	(5,770)	$	(22,864)
Loss from discontinued operations	$	(30,915)	$	—	$	(960)	$	(31,875)


			Contract		Corporate		Total
Three Months Ended September 30, 2018	Therapeutics		Research		and Other		Company
Revenue, net	$	—	$	3,225	$	(2,107)	$	1,118
Cost of revenue		—		2,823		(1,756)		1,067
Research and development		15,189		—		—		15,189
Sales and marketing		49		14		—		63
General and administrative		—		566		5,575		6,141
Loss from operations	$	(15,238)	$	(178)	$	(5,926)	$	(21,342)
Loss from discontinued operations	$	(11,675)	$	—	$	(433)	$	(12,108)

			Contract		Corporate		Total
Nine Months Ended September 30, 2019	Therapeutics		Research		and Other		Company
Revenue, net	$	—	$	11,940	$	(8,808)	$	3,132
Cost of revenue (excludes amortization)		—		11,584		(8,556)		3,028
Research and development		53,585		—		(251)		53,334
Sales and marketing		581		48		—		629
General and administrative		—		2,069		19,073		21,142
Goodwill impairment		18,504		—		—		18,504
Amortization of definite-lived intangible		—		—		—		—
Loss from operations	$	(72,670)	$	(1,761)	$	(19,074)	$	(93,505)
Loss from discontinued operations	$	(45,636)	$	—	$	(2,724)	$	(48,360)



			Contract		Corporate		Total
Nine Months Ended September 30, 2018	Therapeutics		Research		and Other		Company
Revenue, net	$	1,000	$	8,779	$	(5,400)	$	4,379
Cost of revenue		—		7,564		(4,501)		3,063
Research and development		41,482		—		—		41,482
Sales and marketing		55		34		—		89
General and administrative		—		1,557		18,924		20,481
Loss from operations	$	(40,537)	$	(376)	$	(19,823)	$	(60,736)
Loss from discontinued operations	$	(35,166)	$	—	$	(474)	$	(35,640)

Intersegment Revenue

Revenue for the contract research segment included $1,960 and $2,107 for services performed on behalf of the therapeutics segment for the three months ended September 30, 2019 and 2018, respectively, and $8,807 and $5,400 for the nine months ended September 30, 2019 and 2018, respectively. All intersegment revenue has been eliminated in the Company’s condensed consolidated statement of operations.