REVENUE RECOGNITION AND COLLABORATIVE ARRANGEMENTS

12 Months Ended

Dec. 31, 2019

REVENUE RECOGNITION AND COLLABORATIVE ARRANGEMENTS

REVENUE RECOGNITION AND COLLABORATIVE ARRANGEMENTS

3.  REVENUE RECOGNITION AND COLLABORATIVE ARRANGEMENTS

Revenue from Collaborative Arrangements

Net revenue recognized under our GSK Agreement was as follows:

	Year Ended December 31,
(In thousands)	2019		2018		2017
Royalties from a related party — RELVAR/BREO	$	189,424	$	220,162	$	198,726
Royalties from a related party — ANORO		42,625		41,286		29,036
Royalties from a related party — TRELEGY		42,790		13,379		179
Total royalties from a related party		274,839		274,827		227,941
Less: amortization of capitalized fees paid to a related party		(13,823)		(13,823)		(13,823)
Royalty revenue		261,016		261,004		214,118
Strategic alliance  — MABA program license		—		—		3,099
Total net revenue from GSK	$	261,016	$	261,004	$	217,217

3.  REVENUE RECOGNITION AND COLLABORATIVE ARRANGEMENTS (Continued)

LABA Collaboration

As a result of the launch and approval of RELVAR^®/BREO^® ELLIPTA^® and ANORO^® ELLIPTA^® in the U.S., Japan and Europe, we paid milestone fees to GSK totaling $220.0 million during the year ended December 31, 2014. The milestone fees paid to GSK were recognized as capitalized fees paid to a related party, which are being amortized over their estimated useful lives commencing upon the commercial launch of the product. The amortization expense is recorded as a reduction to the royalties from GSK.

We are entitled to receive annual royalties from GSK on sales of RELVAR^®/BREO^® ELLIPTA^® as follows: 15% on the first $3.0 billion of annual global net sales and 5% for all annual global net sales above $3.0 billion. Sales of single-agent LABA medicines and combination medicines would be combined for the purposes of this royalty calculation. For other products combined with a LABA from the LABA Collaboration, such as ANORO^® ELLIPTA^® , royalties are upward tiering and range from 6.5% to 10%.

We are also entitled to 15% of royalty payments made by GSK under its agreements originally entered into with us, and since assigned to TRC in connection with the Spin-Off, including TRELEGY^® ELLIPTA^® , which royalties are upward tiering and range from 6.5% to 10%.