11.        Revenue recognition

The Company views its operations and manages its business in one operating segment: life science. The life science segment is focused on the discovery, development and commercialization of the Company’s clinically differentiated medicines that provide benefits to patients with rare disorders.  The Company derives its revenues through its worldwide net product sales, collaboration and license agreements, and royalty revenues.

Net product sales

During the three and six months ended June 30, 2026 and 2025, net product revenues consisted of the following:

​

​

Disaggregated net product revenues by country for the three and six months ended June 30, 2026 and 2025 are as follows:

​

​

For three and six months ended June 30, 2026, three of the Company’s distributors each accounted for over 10% of the Company’s net product sales. For three and six months ended June 30, 2025, three and two of the Company’s distributors, respectively, each accounted for over 10% of the Company’s net product sales.

As of June 30, 2026 and December 31, 2025, the Company does not have a contract liabilities balance related to net product sales and has not made significant changes to the judgments made in applying ASC Topic 606.

Collaboration and license revenue

In November 2011, the Company and the SMA Foundation entered into a licensing and collaboration agreement with Roche. Under the terms of the SMA License Agreement, Roche acquired an exclusive worldwide license to the Company’s SMA program.

Under the agreement, the Company is eligible to receive additional payments from Roche if specified events are achieved with respect to each licensed product, including up to $135.0 million in research and development event milestones, up to $325.0 million in sales milestones upon achievement of specified sales events, and up to double digit royalties on worldwide annual net sales of a commercial product.

The SMA program currently has one approved product, Evrysdi, which was approved in August 2020 by the FDA for the treatment of SMA in adults and children two months and older. As of June 30, 2026, the Company does not have any remaining research and development event milestones that can be received. The remaining potential sales milestones that can be received is $150.0 million.

For the three and six months ended June 30, 2026 and 2025, the Company did not recognize collaboration revenue related to the SMA License Agreement with Roche.

​

In addition to research and development and sales milestones, the Company is eligible to recognize royalties on worldwide annual net sales of a commercial product under the SMA License Agreement. For the three and six months ended June 30, 2026, the Company has recognized $71.1 million and $117.9 million of royalty revenue related to Evrysdi, respectively. For the three and six months ended June 30, 2025 the Company has recognized $57.6 million and $94.0 million of royalty revenue, respectively, related to Evrysdi.

In November 2024, the Company entered into the Novartis Agreement with Novartis related to the Company’s votoplam HD program. The transaction contemplated by the Novartis Agreement closed in January 2025. Under the Novartis Agreement, and upon the closing of the transaction, the Company received an upfront nonrefundable payment of $1.0 billion on the effective date and can receive up to $1.9 billion in development, regulatory and sales milestones, a 40% share of U.S. profits and losses, and tiered double-digit royalties on ex-U.S. sales.

The Company evaluated the Novartis Agreement in order to determine the proper accounting treatment and concluded that the arrangement was not subject to ASC 730 or ASC 808, as the upfront payment was nonrefundable with no obligation for the Company to repay it and as the Company is not exposed to significant risks. The Company evaluated the arrangement under ASC 606, as a contract with a customer was determined to exist.

Pursuant to the Novartis Agreement, the Company determined that there were three material and distinct performance obligations: the transfer of the licenses and know-how, the completion of the Phase 2A clinical trial, and continuing the ongoing open label extension (“OLE”) clinical trial pursuant to its existing development plan, with the goal of transitioning the ongoing OLE clinical trial to Novartis within 12 months after the effective date of the Novartis Agreement.  All such performance obligations have been completed. Novartis will be responsible for all other development of licensed compounds and licensed products and the manufacture and commercialization of licensed compounds and licensed products worldwide.

The Company determined that the transaction included the fixed consideration of the $1.0 billion and variable consideration in the form of milestones, profit share, and royalties. Management evaluated the variable consideration under ASC 606 and determined that it would be fully constrained until the contingencies were resolved or any applicable sales occurred. Management allocated the transaction price of $1.0 billion to the performance obligations based on the guidance in ASC 606.

During the three and six months ended June 30, 2026, the Company recognized $50.6 million and $50.7 million in collaboration and license revenues, respectively, primarily related to a development milestone pursuant to the Novartis Agreement for Novartis’s initiation of the first Phase 3 clinical trial for a Licensed Product (as defined in the Novartis Agreement), which triggered a $50.0 million milestone payment to the Company. During the three and six months ended June 30, 2025, the Company recognized $2.9 million and $992.7 million, respectively, in collaboration and license revenues related to performance obligations completed pursuant to the Novartis Agreement. Collaboration and license revenue during the six months ended June 30, 2025 was partially offset by $3.5 million related to a refund for a prior collaboration arrangement in relation to votoplam.