(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. Up until November 2016, the Company’s primary domestic customer, Allergan, Plc (“Allergan”), was 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 June 30,				Six Months Ended June 30,
	2017		2016		2017		2016
United States	$	2,387	$	2,421	$	4,015	$	4,215
Switzerland		9,759		7,350		17,516		13,691
United Kingdom		1,088		1,142		2,037		2,493
Other countries		722		697		1,635		1,688
Total	$	13,956	$	11,610	$	25,203	$	22,087

Total assets:

	June 30, 2017		December 31, 2016
United States	$	21,494	$	21,423
Switzerland		33,566		4,673
United Kingdom		4,838		31,288
Other countries		130		187
Total	$	60,028	$	57,571

Long-lived assets:

	June 30, 2017		December 31, 2016
United States	$	667	$	663
Switzerland		460		369
United Kingdom		14,718		13,468
Other countries		2		2
Total	$	15,847	$	14,502

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

For the three and six months ended June 30, 2017, Merck KGaA accounted for 100% of the product segment revenue. For the three and six months ended June 30, 2016, Merck KGaA accounted for 89% and 88% of the product segment revenue, respectively. For the three and six months ended June 30, 2016, Allergan accounted for 11% and 12% of the product segment revenue, respectively. At June 30, 2017 and December 31, 2016, Merck KGaA made up 100% of the product segment accounts receivable.

For the three and six months ended June 30, 2017 the same customer accounted for 28% and 23% of the service segment total revenue, respectively. No customers accounted for 10% or more of the service segment total revenue for the three and six months ended June 30, 2016. At June 30, 2017, two customers accounted for 24% and 10% of total service segment accounts receivable, respectively. No other customers accounted for greater than 10% of the service segment accounts receivable. At December 31, 2016, two customers accounted for 18% and 13% of total service segment net accounts receivable..

The following summarizes other information by segment for the three months ended June 30, 2017 (in thousands):

	Product		Service		Total
Revenues
Product revenues	$	9,569	$	—	$	9,569
Service revenues		—		4,387		4,387
Total revenues	$	9,569	$	4,387	$	13,956
Cost of product revenues	$	5,303	$	—	$	5,303
Cost of service revenues		—		2,347		2,347
Total cost of revenues	$	5,303	$	2,347	$	7,650
Gross profit	$	4,266	$	2,040	$	6,306
Total operating expenses						6,662
Total non-operating expense						(20	)
Loss before income taxes					$	(376	)

The following summarizes other information by segment for the three months ended June 30, 2016 (in thousands):

	Product		Service		Total
Revenues
Product revenues	$	7,334	$	—	$	7,334
Service revenues		—		3,374		3,374
Royalties		902		—		902
Total revenues	$	8,236	$	3,374	$	11,610
Cost of product revenues	$	4,182	$	—	$	4,182
Cost of service revenues		—		2,285		2,285
Total cost of revenues	$	4,182	$	2,285	$	6,467
Gross profit	$	4,054	$	1,089	$	5,143
Total operating expenses						7,420
Total non-operating income						57
Loss before income taxes					$	(2,220	)

The following summarizes other information by segment for the six months ended June 30, 2017 (in thousands):

	Product		Service		Total
Revenues
Product revenues	$	17,295	$	—	$	17,295
Service revenues		—		7,908		7,908
Total revenues	$	17,295	$	7,908	$	25,203
Cost of product revenues	$	9,617	$	—	$	9,617
Cost of service revenues		—		4,590		4,590
Total cost of revenues	$	9,617	$	4,590	$	14,207
Gross profit	$	7,678	$	3,318	$	10,996
Total operating expenses						12,807
Total non-operating expense						(6	)
Loss before income taxes					$	(1,817	)

The following summarizes other information by segment for the six months ended June 30, 2016 (in thousands):

	Product		Service		Total
Revenues
Product revenues	$	13,659	$	—	$	13,659
Service revenues		—		6,627		6,627
Royalties		1,801		—		1,801
Total revenues	$	15,460	$	6,627	$	22,087
Cost of product revenues	$	8,209	$	—	$	8,209
Cost of service revenues		—		4,608		4,608
Total cost of revenues	$	8,209	$	4,608	$	12,817
Gross profit	$	7,251	$	2,019	$	9,270
Total operating expenses						13,285
Total non-operating income						156
Loss before income taxes					$	(3,859	)