Annual report pursuant to Section 13 and 15(d)

Revenue

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Revenue
12 Months Ended
Dec. 31, 2019
Revenue  
Revenue

10. Revenue

The Company accounts for revenue under ASC 606, under which revenue is recognized when, or as, performance obligations under the terms of a contract are satisfied, which occurs when control of the promised products or services is transferred to customers.

License Revenue recorded under ASC 606

License revenue for the years ended December 31, 2019 and 2018 represents revenue from contracts with customers in licensing arrangements accounted for in accordance with ASC 606, which the Company adopted in the first quarter of 2018, as more fully described in Note 2 and Note 9.  License revenue was immaterial in 2019. For the year ended December 31, 2018, the Company recognized $3.0 million related to its agreement with Pharmbio and $2.7 million related to its agreement with Nhwa.

Revenue related to the Pharmbio agreement was recognized in the third quarter of 2018, when the Company satisfied its performance obligation in July 2018. Revenue related to the upfront payments received from Nhwa was recognized in the second quarter of 2018, once the related performance obligation was satisfied in June 2018. Both of these performance obligations were satisfied once the Company had transferred the license and know-how and each party could begin to benefit from the transfer. The Company determined that participation in the Joint Development Committees and Joint Manufacturing and Commercialization Committees were deemed immaterial in the context of the contract. The income tax expense resulting from these transactions represents foreign withholding taxes as a result of license revenue from the contracts. As the Company has incurred losses in recent years, no material U.S. federal, state, or foreign income taxes have been accrued.