Related Party Transactions

3 Months Ended

Mar. 31, 2012

RELATED PARTY TRANSACTIONS

The table below presents the transactions between the Company and Watson.



	Three Months Ended March 31,
	2012		2011
REVENUES
Net product revenues	$	240,401	$	426,780
Royalties	600,000		540,000
Amortization of deferred revenue	—		8,393,926
Total net revenues	$	840,401	$	9,360,706

COST OF PRODUCT REVENUES
Cost of product revenues	218,546		388,133
Gross profit	$	621,855	$	8,972,573


Accounts receivable	$	1,256,203	$	555,441

The Company has exceeded the cap of $7.0 million by $3.6 million for R&D spending on the PREGNANT study and related Preterm Birth NDA pursuant to the Watson Transactions and has recorded this amount as a reduction of R&D expenses. Watson has paid the Company for $3.2 million of these excess amounts and has been invoiced for the remaining $0.4 million equal to the R&D expense reimbursement recognized in the first quarter of 2012.

- Definition

The entire disclosure for related party transactions, including the nature of the relationship(s), a description of the transactions, the amount of the transactions, the effects of any change in the method of establishing the terms of the transaction from the previous period, stated interest rate, expiration date, terms and manner of settlement per the agreement with the related party, and amounts due to or from related parties. If the entity and one or more other entities are under common ownership or management control and this control affects the operating results or financial position, disclosure includes the nature of the control relationship even if there are no transactions between the entities. Disclosure may also include the aggregate amount of current and deferred tax expense for each statement of earnings presented where the entity is a member of a group that files a consolidated tax return, the amount of any tax related balances due to or from affiliates as of the date of each statement of financial position presented, the principal provisions of the method by which the consolidated amount of current and deferred tax expense is allocated to the members of the group and the nature and effect of any changes in that method. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

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Reference 3: http://www.xbrl.org/2003/role/presentationRef

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+ Details