REVENUE RECOGNITION AND COLLABORATIVE ARRANGEMENTS

12 Months Ended

Dec. 31, 2020

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 Agreements was as follows:

	Year Ended December 31,
(In thousands)	2020		2019		2018
Royalties from a related party - RELVAR/BREO	$	221,536	$	189,424	$	220,162
Royalties from a related party - ANORO		45,992		42,625		41,286
Royalties from a related party - TRELEGY		73,089		42,790		13,379
Total royalties from a related party		340,617		274,839		274,827
Less: amortization of capitalized fees paid to a related party		(13,823)		(13,823)		(13,823)
Royalty revenue		326,794		261,016		261,004
Strategic alliance  - MABA program		10,000		—		—
Total net revenue from GSK	$	336,794	$	261,016	$	261,004

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%.

2004 Strategic Alliance

During the year ended December 31, 2020, we recognized $10.0 million in revenue from a termination fee paid in connection with the termination of the Bifunctional Muscarinic Antagonist-Beta2 Agonist (“MABA”) program under the Strategic Alliance Agreement with GSK.