Revenue

6 Months Ended

Jun. 30, 2021

Revenue

Revenue

7.           Revenue

	Three Months Ended				Six Months Ended
	June 30,				June 30,
(in thousands)	2020		2021		2020		2021
Product revenue, net	$	(48)	$	6,940	$	108	$	7,070
Collaboration revenues		7		813		152		2,815
Research premium		301		490		591		792
Government grants		227		—		425		95
Total	$	487	$	8,243	$	1,276	$	10,772

Collaboration revenues for the six months ended June 30, 2021 include $1.6 million related to the restructured China Region License Agreement, a portion of which is recognized over the estimated period the manufacturing collaboration and regulatory support will be provided to Sumitomo Pharmaceuticals (Suzhou), as well as $1.2 million of the Company’s share of revenues associated with the SIVEXTRO distribution agreement with Merck & Co., Inc. through April 11, 2021 (see Note 11).

The Company sells its products to pharmaceutical wholesalers/distributors (i.e., the Company’s customers). The Company’s wholesalers/distributors in turn sell the Company’s products directly to clinics, hospitals, and private practices. Revenue from the Company’s product sales is recognized as physical delivery of product occurs (when the Company’s customer obtains control of the product), in return for agreed-upon consideration.

For the six months ended June 30, 2020 and 2021 XENLETA product revenues, gross were $398 thousand and $310 thousand, respectively, including revenues from the Company´s Named Patient Program of $17 thousand for the six months ended June 30, 2021. SIVEXTRO product revenues, gross were $10.3 million since the Company began exclusive distribution of SIVEXTRO under its own National Drug Code, or NDC, on April 12, 2021. The Company´s product revenues, gross (i.e., delivered units multiplied by the contractual price per unit) are reduced by the corresponding gross-to-net, or GTN, estimates, resulting in the Company´s reported “product revenues, net” in the accompanying consolidated statements of operations. These GTN estimates are based upon information received from external sources (such as written or oral information obtained from the Company´s customers with respect to their period-end inventory levels and sales to end-users during the period), in combination with management’s informed judgments. Due to the inherent uncertainty of these estimates, the actual amount incurred may be materially above or below the amount initially estimated when product revenues are originally recorded, then requiring prospective adjustments to the Company’s reported product revenues, net.

The following tables summarizes gross-to-net (“GTN”) adjustments for the periods presented:

	Three months ended June 30,				Six months ended June 30,
(in thousands)	2020		2021		2020		2021
Product revenue, gross
SIVEXTRO	$	—	$	10,287	$	—	$	10,287
XENLETA		149		120		398		310
Total product revenue, gross		149		10,407		398		10,597
GTN accruals
Chargebacks and cash discounts		(5)		(222)		(13)		(228)
Medicaid and Medicare rebates		(18)		(1,003)		(46)		(1,018)
Other returns, rebates, discounts and adjustments		(35)		(2,196)		(92)		(2,235)
Total GTN accruals		(58)		(3,421)		(151)		(3,481)
Product revenue		91		6,986		247		7,116
Adjustments to prior period accruals
Returns reserve (1)		(349)		(132)		(349)		(132)
GTN accrual adjustments		210		86		210		86
Product revenue, net	$	(48)	$	6,940	$	108	$	7,070

(1) For the three and six months ended June 30, 2020, the Company recorded a returns reserve adjustment for slow-moving inventory, representing 50% of XENLETA IV inventory held at its Specialty Distributors, as well as an adjustment for returns from a single mail order specialty pharmacy. For the three and six months ended June 30, 2021, the Company recorded a returns reserve adjustment for shelf life expiration of certain XENLETA products.