Revenue |
6 Months Ended |
|---|---|
Jun. 30, 2026 | |
| Revenue [Abstract] | |
| Revenue | 8. Revenue
Pursuant to the Mayne License Agreement, we granted Mayne Pharma, on the Closing Date, (i) an exclusive, sublicensable, perpetual, irrevocable license to research, develop, register, manufacture, have manufactured, market, sell, use, and commercialize the Licensed Products in the United States and its possessions and territories and (ii) an exclusive, sublicensable, perpetual, irrevocable license to manufacture, have manufactured, import and have imported the Licensed Products outside the United States for commercialization in the United States and its possessions and territories.
Pursuant to the Mayne License Agreement, Mayne Pharma will make one-time, milestone payments to us of each of (i) $5.0 million if aggregate net sales of all Products in the United States during a calendar year reach $100.0 million, (ii) $10.0 million if aggregate net sales of all Products in the United States during a calendar year reach $200.0 million and (iii) $15.0 million if aggregate net sales of all Products in the United States during a calendar year reach $300.0 million. Further, Mayne Pharma will pay to us royalties on net sales of all Products in the United States at a royalty rate of 8.0% on the first $80 million in annual net sales and 7.5% on annual net sales above $80.0 million, subject to certain adjustments, for a period of 20 years following the Closing Date. The royalty rate will decrease to 2.0% on a Product-by-Product basis upon the earlier to occur of (i) the expiration or revocation of the last patent covering a Product and (ii) a generic version of a Product launching in the United States. Mayne Pharma will pay to us minimum annual royalties of $3.0 million per year for 12 years, adjusted for inflation at an annual rate of 3%, subject to certain further adjustments. Upon the expiry of the 20-year royalty term, the licenses granted to Mayne Pharma under the Mayne License Agreement will become a fully paid-up and royalty free license for the Licensed Products.
The Theramex and Knight License Agreements provide for variable consideration in the form of milestone payments upon the achievement of specified product net sales thresholds. In accordance with ASC 606 and the Company’s accounting policy, the Company recognizes milestone revenue in the period in which it receives confirmation from the applicable licensee that the relevant sales threshold has been achieved, at which time the related constraint on variable consideration is resolved. In July 2026, Knight notified the Company that the net sales milestone related to IMVEXXY sales for the year ended December 31, 2025 had been achieved. Accordingly, the Company became entitled to receive a milestone payment of CAD 500.0 thousand, equivalent to $364.8 thousand, and recognized the related license revenue during the three months ended September 30, 2026. |