11.	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 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 U.S. 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,
	2017		2016		2015
United States	$	10,464	$	19,955	$	7,677
Switzerland		33,264		27,302		23,139
United Kingdom		3,559		4,632		4,422
Other countries		2,692		2,684		3,049
Subtotal international		39,515		34,618		30,610
Total	$	49,979	$	54,573	$	38,287

Total assets:

	December 31,
	2017		2016
United States	$	21,683	$	21,423
Switzerland		1,366		4,673
United Kingdom		38,129		31,288
Other countries		42		187
Total	$	61,220	$	57,571

Long-lived assets:

	December 31,
	2017		2016
United States	$	523	$	663
Switzerland		535		369
United Kingdom		15,064		13,468
Other countries		2		2
Total	$	16,124	$	14,502

The following summarizes other information by segment for the year ended December 31, 2017 (in thousands):

	Product		Service		Total
Revenues
Product revenues	$	32,688	$	—	$	32,688
Service revenues		—		17,291		17,291
Total revenues		32,688		17,291		49,979
Cost of product revenues		19,013		—		19,013
Cost of service revenues		—		9,948		9,948
Total cost of revenues		19,013		9,948		28,961
Gross profit	$	13,675	$	7,343	$	21,018
Total operating expenses						24,881
Total non-operating income						1,617
Income before income taxes					$	(2,246	)

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
Loss 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
Income before income taxes					$	(1,491	)

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,
	2017			2016			2015
Merck KGaA		100	%		66	%		86	%
Allergan		-			34			14
Total		100	%		100	%		100	%

At December 31, 2017 and 2016, Merck KGaA accounted for 100% of the product segment accounts receivable.

Service

One of our customers in our service segment represented 33% of total service revenue for the year ended December 31, 2017. No other customers accounted for 10% or more of total service revenue for the year ended December 31, 2017. No customers accounted for 10% or more of total service revenue for the years ended December 31, 2016 and 2015.

At December 31, 2017, one customer accounted for 53% of total service segment net accounts receivable. 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 65% 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 Inc. (“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 increased the price for its progesterone. The second supplier has been approved in several countries and is in the regulatory approval process in numerous other countries. The Company expects to receive regulatory approval for this second supplier in the countries where it sells Crinone within the next two years.