Revenue Recognition and Collaborative Arrangements

9 Months Ended

Sep. 30, 2019

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 that 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 September 30,				Nine Months Ended September 30,
(In thousands)	2019		2018		2019		2018
Royalties from a related party - RELVAR/BREO	$	46,433	$	51,745	$	136,259	$	155,420
Royalties from a related party - ANORO		11,548		9,769		30,753		29,149
Royalties from a related party - TRELEGY		11,230		3,622		28,401		6,945
Total royalties from a related party		69,211		65,136		195,413		191,514
Less: amortization of capitalized fees paid to a related party		(3,456)		(3,456)		(10,368)		(10,368)
Royalty revenue from GSK	$	65,755	$	61,680	$	185,045	$	181,146