Revenue |
9 Months Ended |
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Sep. 30, 2020 | |
| Revenue from Contract with Customer [Abstract] | |
| Revenue | Revenue The Company generates substantially all of its revenue from sales of prescription drugs to its customers. Revenue from sales of prescription drugs was $1.1 million and $2.1 million for the three months ended September 30, 2020 and 2019, respectively. Revenue from sales of prescription drugs was $5.2 million and $6.1 million for the nine months ended September 30, 2020 and 2019, respectively.
As is typical in the pharmaceutical industry, the Company sells its prescription drugs in the United States primarily through wholesale distributors and a specialty contracted pharmacy. Wholesale distributors account for substantially all of the Company’s net product revenues and trade receivables. In addition, the Company earns revenue from sales of its prescription drugs directly to retail pharmacies. For the three months ended September 30, 2020, the Company’s three largest customers accounted for approximately 40%, 24%, and 34% of the Company's total net product revenues from sale of prescription drugs from continuing operations. For the nine months ended September 30, 2020, the Company’s three largest customers accounted for approximately 43%, 28%, and 27%of the Company's total net product revenues from sale of prescription drugs from continuing operations.
The Company has a License and Supply Agreement for Millipred with Watson Laboratories, Inc., which is now part of Teva Pharmaceutical Industries Ltd. ("Teva"). Pursuant to the License and Supply Agreement, the Company is required to make license payments of $75,000 in February and August of each year through April 2021, and purchase inventory on an ad-hoc basis. Dr. Sol Barer is the Chairman of Cerecor's Board of Directors and he also serves as the Chairman of Teva's Board of Directors.
During the third quarter of 2020, the Company received notice from Teva of its termination of the License and Supply Agreement, effective April 1, 2021. Cerecor will continue to have the right under the agreement to sell the existing inventory on hand at April 1, 2021 for a period of six months after such date. The Company is currently in negotiations with Teva to extend the term of the License and Supply Agreement, however there can be no guarantee that any such extension will be granted. Finally, the Company continues to explore strategic alternatives for this product.
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