On May 15, 2020, QINLOCK was approved by the FDA for the treatment of adult patients with advanced GIST who have received prior treatment with three or more kinase inhibitors, including imatinib.

As of June 30, 2020, the Company's only source of product revenues were from the U.S. sales of QINLOCK, with total net product revenues of $4.8 million for the three and six months ended June 30, 2020.

The Company primarily sells QINLOCK through specialty distributors and specialty pharmacies. The Company recognized revenues from two customers accounting for 50% and 33% of gross product revenues for the three and six months ended June 30, 2020. As of June 30, 2020, two customers individually accounted for approximately 51% and 32% of accounts receivable associated with the Company's product sales.


(in thousands)	Trade discounts and allowances		Chargebacks and administrative fees		Government rebates and other incentives		Returns		Total
Balance at December 31, 2019	$	—	$	—	$	—	$	—	$	—
Provision related to sales in the current year	165		142		221		119		647
Adjustments related to prior period sales	—		—		—		—		—
Credits and payments made	(58)		(52)		(28)		—		(138)
Balance at June 30, 2020	$	107	$	90	$	193	$	119	$	509


(in thousands)	As of June 30, 2020
Reduction of accounts receivable, net	$	305
Component of accrued expenses and other current liabilities	204
Total revenue-related reserves	$	509

As of June 30, 2020, net receivables related to the Company's net product revenue were $5.1 million, which were included in accounts receivable, net within the consolidated balance sheet.

In June 2019, the Company entered into a License Agreement (the Zai License Agreement) with Zai Lab (Shanghai) Co., Ltd. (Zai), pursuant to which the Company granted Zai exclusive rights to develop and commercialize QINLOCK, including certain follow-on compounds (the Licensed Products), in Greater China (the Territory). The Company retains exclusive rights to, among other things, develop, manufacture, and commercialize the Licensed Products outside the Territory.

Pursuant to the terms of the Zai License Agreement, the Company received an upfront cash payment of $20.0 million and became eligible to receive up to $185.0 million in potential development and commercial milestone payments, consisting of up to $50.0 million of development milestones and up to $135.0 million of commercial milestones. In addition, during the term of the Zai License Agreement, Zai will be obligated to pay the Company tiered percentage royalties ranging from low to high teens on potential annual net sales of the Licensed Products in the Territory, subject to adjustments in specified circumstances.

Under the Zai License Agreement, the Company recognized revenue of $25.0 million during the second quarter of 2019, which consisted of the $20.0 million upfront payment and a $5.0 million INTRIGUE study-related development milestone payment, which the Company believed to be probable of achievement in the second quarter of 2019 and was achieved in July 2019.

Under the Zai License Agreement, during the three and six months ended June 30, 2020, the Company recognized revenues of $2.1 million, which consisted of the achievement of a $2.0 million development milestone in the second quarter of 2020 and $0.1 million in reimbursable costs.

Subject to the terms and conditions of the Zai License Agreement, Zai will be responsible for conducting the development and commercialization activities in the Territory related to the Licensed Products. Please read Note 3, License Agreement, to the consolidated financial statements in the Company's Form 10-K for the year ended December 31, 2019 for further details on the Zai License Agreement.

In February 2020, the Company entered into a Supply Agreement (the Zai Supply Agreement) with Zai, as required by terms in the Zai License Agreement, pursuant to which the Company will supply the Licensed Products to Zai for use in the Territory for clinical trials as well as commercial inventory, if QINLOCK obtains regulatory approval in the Territory. Subject to the Zai Supply Agreement, costs incurred by the Company for external manufacturing services are reimbursed by Zai.

Under the Zai Supply Agreement, the Company recognized revenues of $0.1 million and $0.2 million associated with the reimbursement of costs incurred for external manufacturing services provided during the three and six months ended June 30, 2020, respectively.

The Company's receivables related to its agreements with Zai included in accounts receivable, net within the consolidated balance sheets were $2.3 million as of June 30, 2020. There were no receivables related to the Company's agreements with Zai as of December 31, 2019.