Segments and Geographic Information | (6) Segments and Geographic Information The Company and its subsidiaries currently operate in two segments: product and service. The product segment oversees the supply chain and manufacturing of CRINONE, the Company’s sole commercialized product. The product segment included the royalty stream the Company received from Allergan for CRINONE sales in the United States, which ceased with the November 2016 agreement with Allergan, as well as the development of new product candidates. The service segment includes product development, clinical trial manufacturing, and advanced analytical and consulting services for the Company’s customers, as well as the characterizing and developing of pharmaceutical product candidates for the Company’s internal programs and managing certain preclinical activities including manufacturing of the Company’s pipeline products. In September 2013, the Company acquired JPS, a U.K.-based provider of pharmaceutical development, clinical trial manufacturing, and advanced analytical and consulting services to the pharmaceutical industry. The Company has integrated its supply chain management for its sole commercialized product, CRINONE, into those operations and have therefore sought to capture synergies by transferring all operational activities related to its historic business. The Company owns certain plant and equipment physically located at third party contractor facilities in the United Kingdom and Switzerland. The Company conducts its advanced formulation, analytical and consulting services through its subsidiary, JPS. The Company’s largest customer, Merck KGaA, utilizes a Switzerland-based subsidiary to acquire product from the Company, which it then sells throughout the world excluding the United States. Up until November 2016, the Company’s primary domestic customer, Allergan, Plc (“Allergan”), was responsible for the commercialization and sale of CRINONE in the United States. In November 2016, the Company entered into an agreement with Allergan to monetize future royalty payments. Under the agreement, the Company received a one-time payment of $11.0 million representing all future royalty amounts payable. The following tables show selected information by geographic area (in thousands): Revenues: Three Months Ended June 30, Six Months Ended June 30, 2017 2016 2017 2016 United States $ 2,387 $ 2,421 $ 4,015 $ 4,215 Switzerland 9,759 7,350 17,516 13,691 United Kingdom 1,088 1,142 2,037 2,493 Other countries 722 697 1,635 1,688 Total $ 13,956 $ 11,610 $ 25,203 $ 22,087 Total assets: June 30, 2017 December 31, 2016 United States $ 21,494 $ 21,423 Switzerland 33,566 4,673 United Kingdom 4,838 31,288 Other countries 130 187 Total $ 60,028 $ 57,571 Long-lived assets: June 30, 2017 December 31, 2016 United States $ 667 $ 663 Switzerland 460 369 United Kingdom 14,718 13,468 Other countries 2 2 Total $ 15,847 $ 14,502 No other individual country represented greater than 10% of total revenues, total assets, or long-lived assets for any period presented. For the three and six months ended June 30, 2017, Merck KGaA accounted for 100% of the product segment revenue. For the three and six months ended June 30, 2016, Merck KGaA accounted for 89% and 88% of the product segment revenue, respectively. For the three and six months ended June 30, 2016, Allergan accounted for 11% and 12% of the product segment revenue, respectively. At June 30, 2017 and December 31, 2016, Merck KGaA made up 100% of the product segment accounts receivable. For the three and six months ended June 30, 2017 the same customer accounted for 28% and 23% of the service segment total revenue, respectively. No customers accounted for 10% or more of the service segment total revenue for the three and six months ended June 30, 2016. At June 30, 2017, two customers accounted for 24% and 10% of total service segment accounts receivable, respectively. No other customers accounted for greater than 10% of the service segment accounts receivable. At December 31, 2016, two customers accounted for 18% and 13% of total service segment net accounts receivable.. The following summarizes other information by segment for the three months ended June 30, 2017 (in thousands): Product Service Total Revenues Product revenues $ 9,569 $ — $ 9,569 Service revenues — 4,387 4,387 Total revenues $ 9,569 $ 4,387 $ 13,956 Cost of product revenues $ 5,303 $ — $ 5,303 Cost of service revenues — 2,347 2,347 Total cost of revenues $ 5,303 $ 2,347 $ 7,650 Gross profit $ 4,266 $ 2,040 $ 6,306 Total operating expenses 6,662 Total non-operating expense (20 ) Loss before income taxes $ (376 ) The following summarizes other information by segment for the three months ended June 30, 2016 (in thousands): Product Service Total Revenues Product revenues $ 7,334 $ — $ 7,334 Service revenues — 3,374 3,374 Royalties 902 — 902 Total revenues $ 8,236 $ 3,374 $ 11,610 Cost of product revenues $ 4,182 $ — $ 4,182 Cost of service revenues — 2,285 2,285 Total cost of revenues $ 4,182 $ 2,285 $ 6,467 Gross profit $ 4,054 $ 1,089 $ 5,143 Total operating expenses 7,420 Total non-operating income 57 Loss before income taxes $ (2,220 ) The following summarizes other information by segment for the six months ended June 30, 2017 (in thousands): Product Service Total Revenues Product revenues $ 17,295 $ — $ 17,295 Service revenues — 7,908 7,908 Total revenues $ 17,295 $ 7,908 $ 25,203 Cost of product revenues $ 9,617 $ — $ 9,617 Cost of service revenues — 4,590 4,590 Total cost of revenues $ 9,617 $ 4,590 $ 14,207 Gross profit $ 7,678 $ 3,318 $ 10,996 Total operating expenses 12,807 Total non-operating expense (6 ) Loss before income taxes $ (1,817 ) The following summarizes other information by segment for the six months ended June 30, 2016 (in thousands): Product Service Total Revenues Product revenues $ 13,659 $ — $ 13,659 Service revenues — 6,627 6,627 Royalties 1,801 — 1,801 Total revenues $ 15,460 $ 6,627 $ 22,087 Cost of product revenues $ 8,209 $ — $ 8,209 Cost of service revenues — 4,608 4,608 Total cost of revenues $ 8,209 $ 4,608 $ 12,817 Gross profit $ 7,251 $ 2,019 $ 9,270 Total operating expenses 13,285 Total non-operating income 156 Loss before income taxes $ (3,859 ) |