Product Revenue

6 Months Ended

Jun. 30, 2012

Product Revenue [Abstract]

Product Revenue

2.   Product Revenue

In November 2011, the Company received marketing approval from the U.S. Food and Drug Administration (“FDA”) for EYLEAÒ (aflibercept) Injection for the treatment of neovascular wet age-related macular degeneration (“wet AMD”).  EYLEA net product sales totaled $194.0 million and $317.5 million for the three and six months ended June 30, 2012, respectively.

In February 2008, the Company received marketing approval from the FDA for ARCALYST® Injection for Subcutaneous Use for the treatment of Cryopyrin-Associated Periodic Syndromes (“CAPS”).  ARCALYST net product sales totaled $5.5 million and $5.0 million for the three months ended June 30, 2012 and 2011, respectively, and $9.9 million and $9.5 million for the six months ended June 30, 2012 and 2011, respectively.

The Company sells EYLEA in the United States to three distributors and several specialty pharmacies.  The Company sells ARCALYST in the United States to two specialty pharmacies.  Under these distribution models, the distributors and specialty pharmacies (collectively, the Company’s “customers”) generally take physical delivery of product.  For EYLEA, the distributors and specialty pharmacies generally sell the product directly to healthcare providers; whereas for ARCALYST, the specialty pharmacies sell the product directly to patients.  The Company records revenue from product sales upon delivery to its customers.  For both the three and six months ended June 30, 2012, the Company recorded 79% of its gross product revenue from sales to Besse Medical, a subsidiary of AmerisourceBergen Corporation.

Revenue from product sales are recorded net of applicable provisions for prompt pay discounts, rebates and chargebacks under governmental programs (including Medicaid), product returns, distribution-related fees, and other sales-related deductions.  The following table summarizes the provisions, and credits/payments, for government rebates and chargebacks, distribution-related fees, and other sales-related deductions; such amounts were not material as of and for the six months ended June 30, 2011.

	Rebates &	Distribution- Related	Other Sales-Related
	Chargebacks	Fees	Deductions	Total
Balance as of December 31, 2011	$585	$1,451	$182	$2,218
Provision related to current period sales	6,152	17,917	2,407	26,476
Credits/payments	(1,957)	(8,314)	(1,093)	(11,364)
Balance as of June 30, 2012	$4,780	$11,054	$1,496	$17,330