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Co-Promotion Revenue
9 Months Ended
Sep. 30, 2013
Co-Promotion Revenue

Note 12—Co-Promotion Revenue

In the first quarter of 2013 the Company entered into an agreement with Swedish Orphan Biovitrum AB, or Sobi, an international specialty healthcare company dedicated to rare diseases, for the co-promotion of Kineret®l, a treatment for rheumatoid arthritis, in the U.S. Under the terms of the agreement, Sobi has granted to the Company the exclusive right to co-promote the sale of Kineret with Sobi in the U.S. The Company began marketing and promoting Kineret on April 1, 2013. The Company earns a co-promotion fee based on incremental gross profit earned from Kineret in a year as compared to a baseline year. The Company is obligated to perform an agreed upon sales call plan utilizing its current sales representatives. Pursuant to the terms of the agreement, the fee is subject to adjustment by Sobi if the Company fails to meet certain prescribed minimum Kineret product presentation requirements in a given sales quarter. These performance-related adjustments may reflect changes in estimates or data reconciliations that pertain to the co-promotion fee. Accordingly, during the third quarter of 2013 the Company reversed $382,000 of revenue recorded in the second quarter of 2013 as a result of an adjustment to the baseline year by Sobi to incorporate certain pre–agreement price increases.