Segments and Geographic Information

3 Months Ended

Mar. 31, 2017

Segment Reporting [Abstract]

Segments and Geographic Information

(6) 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 included the royalty stream the Company received from Allergan for CRINONE sales in the United States, which ceased with the November 2016 agreement with Allergan, 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 the characterizing and developing of 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 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 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, JPS.

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 United States.  The Company’s primary domestic customer, Allergan, Plc (“Allergan”), is responsible for the commercialization and sale of CRINONE 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. The following tables show selected information by geographic area (in thousands):

Revenues:

	Three Months Ended March 31,
	2017		2016
United States	$	1,628	$	1,794
Switzerland		7,757		6,341
United Kingdom		949		1,351
Other countries		913		991
Total	$	11,247	$	10,477

Total assets:

	March 31, 2017		December 31, 2016
United States	$	21,589	$	21,423
Switzerland		2,319		4,673
United Kingdom		32,730		31,288
Other countries		171		187
Total	$	56,809	$	57,571

Long-lived assets:

	March 31, 2017		December 31, 2016
United States	$	698	$	663
Switzerland		225		369
United Kingdom		13,983		13,468
Other countries		3		2
Total	$	14,909	$	14,502

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, 2017, Merck KGaA accounted for 100% of the product segment revenue. For the three months ended March 31, 2016, Merck KGaA and Allergan accounted for 88% and 12% of the product segment revenue, respectively. For the three months ended March 31, 2017 one customer accounted for 17% of the service segment total revenue. No additional customers accounted for 10% or more of the service segment total revenue for the three months ended March 31, 2017. No customers accounted for 10% or more of the service segment total revenue for the three months ended March 31, 2016.  For the three months ended March 31, 2017, two customers accounted for 14% and 11% of total service segment accounts receivable, respectively. No other customers accounted for greater than 10% of the service segment accounts receivable. At March 31, 2016, one customer accounted for 11% of total service segment net accounts receivable.

The following summarizes other information by segment for the three months ended March 31, 2017 (in thousands):

	Product		Service		Total
Revenues
Product revenues	$	7,726	$	—	$	7,726
Service revenues		—		3,521		3,521
Total revenues	$	7,726	$	3,521	$	11,247
Cost of product revenues	$	4,313	$	—	$	4,313
Cost of service revenues		—		2,243		2,243
Total cost of revenues	$	4,313	$	2,243	$	6,556
Gross profit	$	3,413	$	1,278	$	4,691
Total operating expenses						6,146
Total non-operating income						14
Loss before income taxes					$	(1,441	)

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

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