Segments and Geographic Information

12 Months Ended

Dec. 31, 2016

Segment Reporting [Abstract]

Segments and Geographic Information

12. Segments and Geographic Information

The Company and its subsidiaries currently operate in two segments: product and service. The product segment oversees the supply chain and manufacturing of CRINONE, the Company’s sole commercialized product. The product segment also includes the royalty stream the Company received from Allergan for CRINONE sales in the United States until the November 2016 monetization agreement as well as the development of new product candidates. The service segment includes product 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 certain preclinical activities including manufacturing of the Company’s pipeline products. In September 2013, the Company acquired Juniper Pharma Services, 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 have therefore sought to capture synergies by transferring all operational activities related to its historic business.  The Company owns certain plant and equipment physically located at third party contractor facilities in the United Kingdom and Switzerland. The Company conducts its advanced formulation, analytical and consulting services through its subsidiary, Juniper Pharma Services.

The Company’s largest customer, Merck KGaA, utilizes a Switzerland-based subsidiary to acquire product from the Company, which it then sells throughout the world excluding the U.S. The Company’s primary domestic customer, Allergan, is responsible for the commercialization and sale of progesterone products in the United States. In November 2016, the Company entered into an agreement with Allergan to monetize future royalty payments.  Under the agreement, the Company received a one-time payment of $11.0 million representing all future royalty amounts payable.  This amount was included in revenue in the year ended December 31, 2016.  The following tables show selected information by geographic area (in thousands):

Revenues:

	Year Ended December 31,
	2016		2015		2014
United States	$	19,955	$	7,677	$	10,374
Switzerland		27,302		23,139		18,789
United Kingdom		4,632		4,422		2,180
Other countries		2,684		3,049		2,050
Subtotal international		34,618		30,610		23,019
Total	$	54,573	$	38,287	$	33,393

Total assets:

	December 31,
	2016		2015
United States	$	21,423	$	15,454
Switzerland		4,673		1,570
United Kingdom		31,288		33,335
Other countries		187		218
Total	$	57,571	$	50,577

Long-lived assets:

	December 31,
	2016		2015
United States	$	663	$	765
Switzerland		369		49
United Kingdom		13,468		13,817
Other countries		2		2
Total	$	14,502	$	14,633

The following summarizes other information by segment for the year ended December 31, 2016 (in thousands):

	Product		Service		Total
Revenues
Product revenues	$	27,211	$	—	$	27,211
Service revenues		—		13,065		13,065
Royalties		14,297		—		14,297
Total revenues		41,508		13,065		54,573
Cost of product revenues		15,595		—		15,595
Cost of service revenues		—		8,698		8,698
Total cost of revenues		15,595		8,698		24,293
Gross profit	$	25,913	$	4,367	$	30,280
Total operating expenses						25,001
Total non-operating income						763
Income before income taxes					$	6,042

The following summarizes other information by segment for the year ended December 31, 2015 (in thousands):

	Product		Service		Total
Revenues
Product revenues	$	22,891	$	—	$	22,891
Service revenues		—		11,651		11,651
Royalties		3,745		—		3,745
Total revenues		26,636		11,651		38,287
Cost of product revenues		13,053		—		13,053
Cost of service revenues		—		8,361		8,361
Total cost of revenues		13,053		8,361		21,414
Gross profit	$	13,583	$	3,290	$	16,873
Total operating expenses						18,746
Total non-operating income						382
Loss before income taxes					$	(1,491	)

The following summarizes other information by segment for the year ended December 31, 2014 (in thousands):

	Product		Service		Total
Revenues
Product revenues	$	18,310	$	—	$	18,310
Service revenues		—		8,770		8,770
Royalties		6,313		—		6,313
Total revenues		24,623		8,770		33,393
Cost of product revenues		10,470		—		10,470
Cost of service revenues		—		7,219		7,219
Total cost of revenues		10,470		7,219		17,689
Gross profit	$	14,153	$	1,551	$	15,704
Total operating expenses						10,960
Total non-operating income						563
Income before income taxes					$	5,307

Our chief operating decision maker evaluates the performance of our product and service segments based on revenue and gross profit. Our chief operating decision maker does not review our assets, operating expenses or non-operating income and expenses by business segment at this time. Therefore, such allocations by segment are not provided.

Customer Concentration

The following table presents information about Juniper’s revenues by customer, including product sales, royalty and license revenue and service revenues for each customer accounting for 10% or more of consolidated revenues in any of the three years ended December 31 by segment:

Product

	Year Ended December 31,
	2016			2015			2014
Merck KGaA		66	%		86	%		74	%
Allergan		34			14			16
Lil’ Drug Store		—			—			10
Total		100	%		100	%		100	%

Service

Two of our customers in our service segment represented 11% and 10%, respectively, of total service revenue for the year ended December 31, 2014.   No other customers accounted for 10% or more of total service revenue for the year ended December 31, 2014. No customers accounted for 10% or more of total service revenue for the years ended December 31, 2016 and 2015.

At December 31, 2016 Merck KGaA accounted for 100% of the product segment accounts receivable. At December 31, 2015 Merck KGaA and Allergan accounted for 58% and 42% of the product segment accounts receivable, respectively. At December 31, 2016 two customers accounted for 18% and 13% of total service segment net accounts receivable. At December 31, 2015 one customer accounted for 18%  of total service segment accounts receivable.  

Patent Expiration

Juniper is a pharmaceutical company focused on developing novel intra-vaginal therapeutics that address unmet medical needs in women’s health. All of the Company’s product sales are outside the United States. The patent for CRINONE has expired in all countries other than Argentina. This product accounts for approximately 50% of the Company’s revenues and a higher percentage of gross profit.

Sources of Supply

The major raw materials the Company uses in its products and product candidates are polycarbophil and progesterone. Medical grade, cross-linked polycarbophil, the polymer used in the BDS-based product is currently available from only one supplier, Lubrizol. The Company believes that Lubrizol will supply as much of the material as it requires because the product ranks among the highest value-added uses of the polymer. In the event that Lubrizol cannot or will not supply enough polycarbophil to satisfy the Company’s needs, however, Juniper will be required to seek alternative sources of supply.

Only one supplier of progesterone for CRINONE is approved by regulatory authorities outside the United States. Juniper has not experienced production delays due to shortages of progesterone. Beginning in 2017 this supplier has increased the price for its progesterone. It is unclear what impact, if any, an increase in the cost of progesterone will have on the demand for CRINONE. The Company has identified a potential second supplier for progesterone and expects to establish a second source in 2017.