Collaboration, Licensing and Other Arrangements (Tables)

12 Months Ended

Dec. 31, 2021

Schedule of Revenue from Collaboration and Services

Revenue from collaborations and services for the years ended December 31, 2021 and 2020 are as follows (in thousands):

	Year Ended December 31,
	2021		2020
UT License Agreement	$	34,145	$	32,213
UT CSA Agreement		267		—
Vertice Pharma Co-Promotion Agreement		1,147		—
Receptor CLA		245		250
Cipla License and Distribution Agreement		147		147
Other		323		—
UT Research Agreement		—		210
Total revenue from collaborations and services	$	36,274	$	32,820

Schedule of Deferred Revenue Related to Revenue Recognized for Collaborations and Services

The activity related to deferred revenue and the related revenue recognized for collaborations and services is as follows (in thousands):

	December 31,
	2021			2020
Deferred revenue:
Beginning balance	$	34,937		$	40,847
Additions		21,707			1,910
Upfront and milestone payments		—			25,000
Revenue — collaborations and services		(36,274	)		(32,820	)
Ending balance	$	20,370		$	34,937

Schedule of Revenue Allocation, Remaining Performance Obligation, Expected Timing of Satisfaction

Revenue was allocated as follows:

Distinct Performance Obligation	Transaction Price		Allocation of Price	Recognition Method	Progress Measure	Recognition Period
	(in millions)
R&D Services and License	$	105.8	100%	Over time	Ratably	Sep 2018 - Dec 2021	(1)

(1) Recognition period represents the estimated period to satisfy the performance obligation.

Description	Transaction Price		Allocation of Price(1)		Recognition Method	Progress Measure	Revenue Recognition
	(in millions)
Total transaction price	$	50.9
Distinct Performance Obligation
R&D Services and License			$	18.4	Over time	Ratably	May 2021 - Oct 2021	(2)
Pre-Commercial Services			$	4.6	Over time	Input	% of completion of costs	(3)
Next-Gen R&D Services			$	7.2	Over time	Input	% of completion of costs	(3)
Facility Expansion Services(4)			$	20.7	Point in time		Transfer of control	(5)

(1) Allocation is based on management’s assessment of the stand-alone selling price of each performance obligation.

(2) Represents the estimated period when the R&D Services performance obligation will be substantially complete.

(3) Pre-Commercial Services and Next-Gen R&D Services performance obligations will be satisfied over time using the input method based on the costs incurred to date as a percentage of the total estimated costs to fulfill the contract. Incurred cost represents work performed, which corresponds with, and thereby best depicts, the transfer of control to the customer.

(4) The Company also acts as agent for the procurement of equipment for the manufacturing expansion for the UT Equipment. The Company received $5.0 million from UT for the UT Equipment, which was recognized as deposits from customer on the consolidated balance sheet and will be released as the title is transferred to UT.

(5) The Facility Expansion Services performance obligation would be recognized as control of manufactured products is transferred to the customer.

Schedule of Revised Anticipated Cash Flows from Transactions Allocated Performance Obligations

	Anticipated
Description	Cash Flow		Revenue Allocation(1)		Recognition Method	Progress Measure	Revenue Recognition
	(in millions)
Total anticipated cash flow	$	221.5
Distinct Performance Obligation
R&D Services and License(2)			$	6.0	Over time	Ratably	Aug 2021 - Oct 2021	(3)
Next-Gen R&D Services			$	8.8	Over time	Input	% of completion of costs	(4)
Manufacturing Services			$	206.7	Point in time		Transfer of control	(5)

(1) Allocation is based on management’s assessment of the stand-alone selling price of each performance obligation.

(2) The license for the Company’s IP was considered to be interdependent with the development activities to support approval of Tyvaso DPI. A sales-based royalty is promised in exchange for the IP license; therefore, the royalties associated with the license are excluded from the determination of the transaction price and the Company will recognize revenue as the sale of Tyvaso DPI to a patient occurs.

(3) Represents the estimated period when the R&D Services performance obligation will be substantially complete.

(4) The Next-Gen R&D Services performance obligation will be satisfied over time using the input method based on the costs incurred to date as a percentage of the total estimated costs to fulfill the contract. Incurred cost represents work performed, which corresponds with, and thereby best depicts, the transfer of control to the customer.

(5) The Manufacturing Services performance obligation will be recognized as control of manufactured products is transferred to the customer; therefore, no revenue associated with this obligation was recognized during the year ended December 31, 2021. The allocation of transaction price includes a material right related to manufacturing services. The total anticipated cash flow is based on the Company’s estimated production and the ultimate cash flows may vary as manufacturing purchase orders are received.

Schedule of Effect of Modification on Transaction Price

The Company accounted for the contract modification as if it were part of the existing contract since the amendment modified the scope and price of the CSA by extending the term and increasing the occupancy rate. The effect of the modification on the transaction price and on the measure of progress is recognized as an adjustment to revenue as of the date of the modification. The modification did not result in a change the activities and deliverables under the CSA.

	Anticipated
Description	Cash Flow		Revenue Allocation(1)		Recognition Method	Progress Measure	Revenue Recognition
	(in millions)
Total anticipated cash flow(2)	$	463.5
Distinct Performance Obligation
R&D Services and License(3)			$	—	Over time	Ratably	Aug 2021 - Oct 2021	(4)
Next-Gen R&D Services(5)			$	4.8	Over time	Input	% of completion of costs	(6)
Manufacturing Services(7)			$	458.7	Point in time		Transfer of control	(8)

(1) Allocation is based on management’s assessment of the stand-alone selling price of each performance obligation.

(2) The total anticipated cash flow includes a transaction price of $64.3 million for the contractual obligations under the CSA for the Manufacturing Services and the Next-Gen R&D Services performance obligations and $399.2 million for future supply of Tyvaso DPI over the remaining term of the CSA.

(3) The license for the Company’s IP was considered to be interdependent with the development activities to support approval of Tyvaso DPI. A sales-based royalty is promised in exchange for the IP license; therefore, the royalties associated with the license are excluded from the determination of the transaction price and the Company will recognize revenue as the sale of Tyvaso DPI to a patient occurs.

(4) Represents the period when the revenue for the R&D Services performance obligation was recognized.

(5) The standalone selling price (“SSP”) for the Next-Gen R&D Services performance obligation was based on industry ratios as well as the Company’s historical R&D projects. The transaction price for the Next-Gen R&D Services was based on fixed consideration which was allocated between performance obligations as discussed in note (2) above.

(6) The Next-Gen R&D Services performance obligation will be satisfied over time using the input method based on the costs incurred to date as a percentage of the total estimated costs to fulfill the contract. Incurred cost represents work performed, which corresponds with, and thereby best depicts, the transfer of control to the customer.

(7) Pre-production activities under the CSA, such as facility expansion services and certain other administrative services, were considered bundled services that are part of the Company’s Manufacturing Services performance obligation, given the nature of the Company’s contractual responsibilities and ASC 606 requirements.

(8) The Manufacturing Services performance obligation will be recognized as control of manufactured products is transferred to the customer. The modification did not result in a cumulative catch-up adjustment as a result of the revenue being deferred for the performance obligations that were affected by the modification. The allocation of transaction price includes a material right related to manufacturing services in the amount of $144.5 million. The total anticipated cash flow is based on the Company’s estimated production and the ultimate cash flows may vary as manufacturing purchase orders are received.