Revenue Recognition and Collaborative Arrangements

6 Months Ended

Jun. 30, 2018

Revenue Recognition and Collaborative Arrangements

Revenue Recognition and Collaborative Arrangements

3. Revenue Recognition and Collaborative Arrangements

Revenue is recognized when our customer obtains control of promised goods or services, in an amount that reflects the consideration which we expect to receive in exchange for those goods or services. Revenue is recognized through a five-step process: (i) identify the contract with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price for the contract; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) a performance obligation is satisfied. We recognize the royalty revenue on licensee net sales of products with respect to which we have contractual royalty rights in the period in which the royalties are earned and reported to us. Royalties are recognized net of amortization of capitalized fees associated with any approval and launch milestone payments made to GSK.

Net Revenue from Collaborative Arrangements

Net revenue recognized under our GSK Agreements was as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
(In thousands)	2018		2017		2018		2017
Royalties from a related party - RELVAR/BREO	$	57,515	$	54,645	$	103,675	$	93,334
Royalties from a related party - ANORO		10,656		7,152		19,380		12,190
Royalties from a related party - TRELEGY		2,371		—		3,323		—
Total royalties from a related party		70,542		61,797		126,378		105,524
Less: amortization of capitalized fees paid to a related party		(3,456)		(3,456)		(6,912)		(6,912)
Royalty revenue		67,086		58,341		119,466		98,612
Strategic alliance - MABA program license		—		221		—		442
Total net revenue from GSK	$	67,086	$	58,562	$	119,466	$	99,054