Revenue |
3 Months Ended |
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Mar. 31, 2021 | |
| Revenue from Contract with Customer [Abstract] | |
| Revenue | Revenue
The Company generates substantially all of its revenue from sales of Millipred®, an oral prednisolone indicated across a wide variety of inflammatory conditions, which is considered a prescription drug. The Company sells its prescription drug in the United States primarily through wholesale distributors and specialty contracted pharmacies. Wholesale distributors account for substantially all of the Company’s net product revenues and trade receivables. The Company also earns revenue from sales of its prescription drug directly to retail pharmacies. For the three months ended March 31, 2021, the Company’s three largest customers accounted for approximately 67%, 18%, and 15% 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 the Millipred® product with a wholly owned subsidiary of Teva Pharmaceutical Industries Ltd. (“Teva”), which expires on September 30, 2023. As part of a prior amendment to extend the contract to its current term, Cerecor agreed to pay Teva fifty percent of the net profit of the Millipred® product following each calendar quarter, subject to a $0.5 million quarterly minimum payment, which was set to begin on April 1, 2021. In May 2021, the Company and Teva entered into an amendment in which the net profit split will be delayed until July 1, 2021. Dr. Sol Barer is the Chairman of Cerecor’s board of directors and also serves as the Chairman of Teva’s board of directors.
Revenue from sales of prescription drugs was $0.5 million and $2.8 million for the three months ended March 31, 2021 and 2020, respectively. During the first quarter of 2021, the Company’s inventory on hand became short-dated (which the Company considers inventory within six months of expiration) due to manufacturing delays. The Company recorded a full allowance of $2.9 million for returns on the sale of short-dated inventory given the high likelihood of return. The Company received the delayed inventory lot in April 2021.
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