Deferred License Revenue

9 Months Ended

Sep. 30, 2023

Revenue from Contract with Customer [Abstract]

Deferred License Revenue

Deferred License Revenue

In October 2014, the Company entered into an exclusive distribution agreement with Baxter, which had a term of 10 years and received an upfront fee of $20 million. The upfront fee was recorded as deferred license revenue and was being recognized based on the proportion of product shipments to Baxter in each period, compared with total expected sales volume over the term of the distribution agreement. On November 9, 2022, Rockwell reacquired its distribution rights to its hemodialysis concentrates products from Baxter and terminated the distribution agreement. Exclusivity and other provisions associated with the distribution agreement terminated November 9, 2022 and the remaining operational elements of the agreement terminated December 31, 2022. Rockwell agreed to provide certain services to a group of Baxter's customers until March 31, 2023. Under the distribution agreement, Baxter distributed and commercialized Rockwell’s hemodialysis concentrates products and provided customer service and order delivery to nearly all United States customers. Following the reacquisition of these rights, Rockwell is now unrestricted in its ability to sell its hemodialysis concentrates products to dialysis clinics throughout the United States and around the world. The Company recognized the remaining revenue of $1.5 million during the three months ended March 31, 2023.

In 2016, the Company entered into a distribution agreement with Wanbang (the "Wanbang Agreement") and received an upfront fee of $4.0 million. The upfront fee was recorded as deferred license revenue and is being recognized as revenue based on the agreement term. On August 7, 2023, Rockwell was informed by Wanbang that the main efficacy results of Wanbang’s clinical trial for Triferic (dialysate) compared with placebo were not obtained and Wanbang will not bring the product forward to registration. As a result, the Company recognized all remaining revenue under the Wangbang Agreement of approximately $2.2 million during the third quarter of 2023. Additionally, in connection with these events, the Company

established a reserve for related Triferic long-term inventory of $1.1 million, resulting in a net increase in gross profit of $1.1 million.

In January 2020, the Company entered into license and supply agreements with Sun Pharma (the "Sun Pharma Agreements"), for the rights to commercialize Triferic (dialysate) in India. In consideration for the license, the Company received an upfront fee of $0.1 million. The upfront fee was recorded as deferred license revenue and is being recognized as revenue based on the agreement term. The Company recognized revenue of approximately $2,500 and $7,500 for the three and nine months ended September 30, 2023 and 2022, respectively. Deferred license revenue related to the Sun Pharma Agreement totaled $62,500 and $70,000 as of September 30, 2023 and December 31, 2022, respectively.

In September 2020, the Company entered into a license and supply agreements with Jeil Pharmaceutical (the "Jeil Agreements"), for the rights to commercialize Triferic (dialysate) in South Korea. In consideration for the license, the Company received an upfront fee of $0.2 million. In May 2022, Jeil Pharmaceutical obtained regulatory approval in South Korea and paid the Company $0.2 million in consideration of reaching the milestone. The upfront fee and milestone payments were recorded as deferred license revenue and are being recognized as revenue based on the agreement term. The Company recognized revenue of $5,200 and $15,600 for the three and nine months ended September 30, 2023 and 2022, respectively. Deferred license revenue related to the Jeil Agreement totaled approximately $0.4 million as of both September 30, 2023 and December 31, 2022.

In June 2021, the Company entered into license and supply agreements with Drogsan Pharmaceuticals (the "Drogsan Agreements"), for the rights to commercialize Triferic (dialysate) and Triferic AVNU in Turkey. In consideration for the license, the Company received an upfront fee of $0.15 million. The upfront fee was recorded as deferred license revenue and will be recognized as revenue based on the agreement term. The Company recognized revenue of $3,750 and $11,250 for the three and nine months ended September 30, 2023 and 2022, respectively. Deferred license revenue related to the Drogsan Agreements totaled approximately $0.1 million as of each of September 30, 2023 and December 31, 2022. In April 2023, Drogsan submitted a Marketing Authorization application and GMP application for Triferic AVNU to the Turkish Medicines and Medical Devices Agency, for which Drogsan received priority status and high priority status, respectively. Drogsan is responsible for all regulatory approval and commercialization activities.