Segments and Geographic Information

3 Months Ended

Mar. 31, 2016

Segment Reporting [Abstract]

Segments and Geographic Information

(7) Segments and Geographic Information

The Company and its subsidiaries currently operate in two segments: product and service. The product segment includes supply chain management for CRINONE, the Company’s sole commercialized product. The product segment also includes the royalty stream the Company receives from Allergan for CRINONE sales in the United States as well as the development of new product candidates. The service segment includes pharmaceutical development, clinical trial manufacturing, and advanced analytical and consulting services for the Company’s customers as well as characterizing and developing pharmaceutical product candidates for the Company’s internal programs and managing the preclinical and clinical manufacturing of COL-1077 and the Company’s IVR technology. In September 2013, the Company acquired JPS, a U.K.-based provider of pharmaceutical development, clinical trial manufacturing, and advanced analytical and consulting services to the pharmaceutical industry. The Company has integrated its supply chain management for its sole commercialized product, CRINONE, into those operations and has sought to capture synergies by transferring all operational activities related to its historic business to JPS.

¹  Kimball AB et al. A novel approach to administration of peptides in women: Systemic absorption of a GnRH agonist via transvaginal ring delivery system. J Control Release. 2016 Apr 26, pii: S0168-3659 (16) 30249-8.doi: 10.1016/j.jconrel.2016.04.035.[Epub ahead of print]

The Company’s largest customer, Merck KGaA, acquires CRINONE from the Company through its Switzerland-based subsidiary; it then sells CRINONE throughout the world, excluding the United States. The Company’s primary domestic customer, Allergan, is responsible for the commercialization and sale of CRINONE in the United States. JPS provides services to customers in many jurisdictions; including the European Union, the United States, Australia and Canada. The following tables show selected information by geographic area (in thousands):

Revenues:

	Three Months Ended
	March 31,
	2016		2015
	(As Restated)		(As Restated)
United States	$	1,794	$	1,747
Switzerland		6,341		5,648
United Kingdom		1,351		982
Other countries		991		659
Total	$	10,477		9,036

Total assets:    

	March 31,		December 31,
	2016		2015
	(As Restated)		(As Restated)
United States	$	14,997	$	15,454
United Kingdom		31,734		33,335
Other countries		4,112		1,788
Total	$	50,843	$	50,577

Long-lived assets:

	March 31,		December 31,
	2016		2015
United Kingdom	$	13,343	$	13,817
Other countries		1,026		816
Total	$	14,369	$	14,633

No other individual country represented greater than 10% of total revenues, total assets, or total long-lived assets for any period presented.

For the three months ended March 31, 2016 and 2015, Merck KGaA and Allergan accounted for 88% and 12%, and 85% and 15% of the product segment revenue, respectively. No other customers accounted for 10% or more of total revenues for the three months ended March 31, 2016 and 2015.

At March 31, 2016 Merck KGaA and Allergan made up 74% and 26% of the product segment accounts receivable, respectively. At December 31, 2015 Merck KGaA and Allergan accounted for 58% and 42% of the product segment accounts receivable, respectively. At March 31, 2016 one customer accounted for 11% of total service segment net accounts receivable. No other customers accounted for greater than 10% of the service segment accounts receivable. At December 31, 2015 one customer accounted for 18% of total service segment accounts receivable.

The following summarizes other information by segment for the three months ended March 31, 2016 (in thousands):

	Product		Service		Total
	(As Restated)				(As Restated)
Revenues
Product revenues	$	6,325	$	—	$	6,325
Service revenues		—		3,253		3,253
Royalties		899		—		899
Total revenues		7,224		3,253		10,477

	Product		Service		Total
	(As Restated)				(As Restated)
Cost of product revenues		4,027		—		4,027
Cost of service revenues		—		2,323		2,323
Total cost of revenues		4,027		2,323		6,350
Gross profit	$	3,197	$	930	$	4,127
Total operating expenses						5,865
Total non-operating income						99
Loss before income taxes					$	(1,639	)

The following summarizes other information by segment for the three months ended March 31, 2015 (in thousands):

	Product		Service		Total
	(As Restated)				(As Restated)
Revenues
Product revenues	$	5,585	$	—	$	5,585
Service revenues		—		2,460		2,460
Royalties		991		—		991
Total revenues		6,576		2,460		9,036
Cost of product revenues		3,112		—		3,112
Cost of service revenues		—		1,766		1,766
Total cost of revenues		3,112		1,766		4,878
Gross profit	$	3,464	$	694	$	4,158
Total operating expenses						4,279
Total non-operating income						144
Income before income taxes					$	23