Product Revenue Reserves and Allowances

6 Months Ended

Jun. 30, 2023

Disclosure Text Block

Product Revenue Reserves and Allowances

6. Product Revenue Reserves and Allowances

In January 2020, the U.S. Food and Drug Administration (FDA) approved AYVAKIT for the treatment of adults with unresectable or metastatic gastrointestinal stromal tumor (GIST) harboring a PDGFRA exon 18 mutation, including PDGFRA D842V mutations. In September 2020, the European Commission granted conditional marketing authorization to AYVAKYT as a monotherapy for the treatment of adult patients with unresectable or metastatic GIST harboring the PDGFRA D842V mutation. In June 2021, the FDA granted a subsequent approval for AYVAKIT, expanding the labeled indications to include adult patients with advanced SM, including aggressive SM (ASM), SM with an associated hematological neoplasm (SM-AHN) and mast cell leukemia (MCL). In March 2022, the European Commission expanded the marketing authorization for AYVAKYT to include the treatment of adult patients with ASM, SM-AHN, or MCL, after at least one systemic therapy. In May 2023, the FDA approved AYVAKIT for the treatment of adult patients with indolent SM.

The following table summarizes revenue recognized from product sales for the three and six months ended June 30, 2023 and 2022 (in thousands):

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2023		2022		2023		2022
United States	$	34,307	$	24,682	$	69,234	$	45,834
Rest of World		5,569		3,772		9,711		6,461
Total product revenue	$	39,876	$	28,454	$	78,945	$	52,295

The Company primarily sells AYVAKIT/AYVAKYT through specialty distributors and specialty pharmacies. The following table summarizes the customers that represent 10% or greater of gross product revenue for the three and six months ended June 30, 2023, and 2022 (in thousands):

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2023		2022		2023		2022
Customer 1	41	%	44	%	42	%	46	%
Customer 2	11	%	11	%	11	%	11	%

The following table summarizes the customers with amounts due that represent 10% or greater of the accounts receivable associated with the Company’s product sales as of June 30, 2023 and December 31, 2022 (in thousands):

	June 30,		December 31,
	2023		2022
Customer 1	34	%	33	%
Customer 2	11	%	15	%
Customer 3	*		12	%
Customer 4	10	%	*

* Indicates the customer’s share is under 10%.

The following table summarizes activity in each of the product revenue allowance and reserve categories for the six months ended June 30, 2023 and 2022 (in thousands):

	Six Months Ended June 30,
	2023		2022
Beginning balance at January 1	$	9,788	$	4,345
Provision related to sales in the current period		16,108		9,408
Adjustment related to prior periods sales		(531)		(570)
Credits and payments made		(10,553)		(6,120)
Ending balance at June 30	$	14,812	$	7,063

The total reserves that are included in the Company’s unaudited condensed consolidated balance sheets as of June 30, 2023 and December 31, 2022, are summarized as follows (in thousands):

	June 30,		December 31,
	2023		2022
Reduction of accounts receivable, net	$	1,257	$	742
Component of accrued expenses		13,555		9,046
Total revenue-related reserves	$	14,812	$	9,788