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REVENUE
 6 Months Ended
Jun. 30, 2020
Revenue from Contract with Customer [Abstract]  
REVENUE REVENUE
 
Disaggregated Revenue
 
The following table reflects summary revenue, net for the three and six months ended June 30, 2020 and 2019 (in thousands):
 
Three Months Ended June 30,Six Months Ended June 30,
2020201920202019
Product sales, net:
CAMBIA$7,780  $6,758  $14,054  $15,566  
Zipsor3,535  1,524  5,866  5,755  
INDOCIN products(1)
5,434  —  5,434  —  
SPRIX Nasal Spray(1)
1,602  —  1,602  —  
SOLUMATRIX products(1)
836  —  836  —  
OXAYDO(1)
517  —  517  —  
Gralise(116) 17,800  431  31,078  
NUCYNTA and Lazanda product sales adjustments577  (145) 677  (12) 
Total product sales, net20,165  25,937  29,417  52,387  
Commercialization agreement, net—  31,003  11,258  61,859  
Royalties and milestone revenue452  263  859  886  
Total revenues$20,617  $57,203  $41,534  $115,132  
(1)Products acquired in connection with Zyla Merger represent product sales, net for the period of May 20, 2020 through June 30, 2020.

Product Sales

For the three and six months ended June 30, 2020, product sales primarily consisted of sales from CAMBIA, Zipsor, INDOCIN products, SPRIX Nasal Spray, SOLUMATRIX products, and OXAYDO. The Company began shipping and recognizing product sales for INDOCIN products, SPRIX Nasal Spray, SOLUMATRIX products, and OXAYDO in May 2020 upon the completion of the Zyla Merger.

The Company completed the sale of Gralise to Alvogen on January 10, 2020, and therefore ceased recognizing product sales related to Gralise effective on the transaction close date. Product sales related to Gralise during the three and six months ended June 30, 2020 primarily relate to sales reserve estimate adjustments related to sales recognized in prior periods.   

The Company ceased recognizing product sales related to NUCYNTA in January 2018 and the NUCYNTA Commercialization Agreement in February 2020 (see Commercialization Agreement below). The Company divested and ceased recognizing product sales related to Lazanda in November 2017. Product sales related to NUCYNTA and Lazanda during the three and six months ended June 30, 2020 and 2019 relate to sales reserve estimate adjustments related to sales recognized in prior periods. 

 
Commercialization Agreement
 
In December 2017, the Company and Collegium entered into the Commercialization Agreement (Commercialization Agreement), pursuant to which the Company granted Collegium the right to commercialize the NUCYNTA franchise of pain products in the U.S.  Pursuant to the Commercialization Agreement, Collegium assumed all commercialization responsibilities for the NUCYNTA franchise effective January 9, 2018, including sales and marketing. In November 2018 the Company entered into an amendment to the Commercialization Agreement (Commercialization Amendment). Prior to the November 2018 amendment, the consideration related to the license and facilitation services was fixed and recognized ratably over the contract term. Following the November 2018 amendment, the royalty payments represented variable consideration that are subject to the sales-based royalty exception for licenses of intellectual property and are recognized at the later of (i) when the
subsequent product sales occur or (ii) the performance obligation, to which some or all of the sales-based royalty has been allocated, has been satisfied.

In addition, the Company was responsible for royalty payments to a third party related to sales of NUCYNTA. Prior to the November 2018 amendment, Collegium became primarily responsible for these royalties in connection with the Commercialization Agreement; however, a portion of these payments remained the responsibility of the Company. Following the November 2018 amendment, effective January 1, 2019, Collegium became responsible for the third-party royalty payments entirely. As the Company was not actively commercializing NUCYNTA, such royalties were recorded by the Company on a systematic basis in proportion to the underlying net product sales, subject to the sales-based royalty exemption for license of intellectual property, and were included as gross-to-net adjustments in the related revenue line in the Company’s Condensed Consolidated Statements of Comprehensive Income. Such amounts, over the course of the calendar year, had no net impact.

Effective February 13, 2020, the Company divested its rights, title and interest in and to its NUCYNTA franchise of products in the U.S. to Collegium. In connection with the sale, the Commercialization Agreement terminated at closing with certain specified provisions of the Commercialization Agreement surviving in accordance with the terms of the purchase agreement. During the first quarter of 2020, the Company recognized net revenue from the Commercialization Agreement of $11.3 million. This included variable royalty revenue of $13.1 million offset by the amortization of the $1.8 million net contract asset in connection with the termination of the Commercialization Agreement as a result of the divestiture of NUCYNTA to Collegium.

For the three and six months ended June 30, 2019, the Company recognized $1.0 million and $2.1 million, respectively, of net expense related to the third-party royalties which were paid by Collegium on behalf of Assertio. Collegium paid the full royalty owed to the third-party in 2019 and such amounts, over the course of the calendar year, had no net impact to the Company’s Condensed Consolidated Statement of Comprehensive Income.

Contract Assets
 
The following table reflects changes in the Company’s contract assets as of June 30, 2020 (in thousands):
 Balance as of  Balance as of
 December 31, 2019AdditionsDeductionsJune 30,
2020
Contract asset - Collegium, net1,896  —  (1,896) —  

The Collegium contract asset, net represented the conditional right to consideration for completed performance under the Commercialization Agreement arising from the transfer of inventory to Collegium on the date of closing of the agreement in January 2018 net of the contract liability of $10.0 million resulting from the upfront payment received and the $8.8 million of warrants received in connection with the Commercialization Amendment. In connection with the divestiture of NUCYNTA to Collegium the Company amortized the remaining balance of the contract asset in the first quarter of 2020.

Royalties and Milestone Revenue

In November 2010, the Company entered into a license agreement with Tribute Pharmaceuticals Canada Ltd. (now known as Nuvo Pharmaceuticals, Inc.) granting them the rights to commercially market CAMBIA in Canada. Nuvo independently contracts with manufacturers to produce a specific CAMBIA formulation in Canada. The Company receives royalties on net sales on a quarterly basis as well as certain one-time contingent milestone payments upon the occurrence of certain events. The Company recognized revenue related to CAMBIA in Canada, $0.5 million and $0.9 million for the three and six months ended June 30, 2020, respectively, and $0.3 million and $0.9 million for the three and six months ended June 30, 2019, respectively.