Product Revenue
We generate product revenue from sales of PYRUKYND® in the United States to a limited number of specialty distributors and specialty pharmacy providers, and to Avanzanite and NewBridge outside of the United States, or collectively, the Customers. These Customers subsequently resell PYRUKYND® to pharmacies or dispense PYRUKYND® directly to patients. In addition to distribution agreements with Customers, we enter into arrangements with healthcare providers and payors that provide for government-mandated and/or privately-negotiated rebates, chargebacks and discounts with respect to the purchase of PYRUKYND®.
The performance obligation related to the sale of PYRUKYND® is satisfied and revenue is recognized when the Customer obtains control of the product, which occurs at a point in time, typically upon delivery to the Customer.
Product revenue, net, was as follows for the years ended December 31:
| | | | | | | | | | | | | | | | | |
| (In thousands) | 2025 | | 2024 | | 2023 |
| Product revenue, net | | | | | |
| United States | $ | 49,170 | | | $ | 36,395 | | | $ | 26,823 | |
| Rest of world | 4,858 | | | 103 | | | — | |
| Total product revenue, net | $ | 54,028 | | | $ | 36,498 | | | $ | 26,823 | |
One Customer accounted for 89%, 95% and 96% of our consolidated revenues for the years ended December 31, 2025, 2024 and 2023, respectively, and 55% and 92% of accounts receivable from product sales for the years ended December 31, 2025 and 2024, respectively.
Reserves for Variable Consideration
Revenues from product sales are recorded at the net sales price, or transaction price, which includes estimates of variable consideration for which reserves are established and result from contractual adjustments, government rebates, returns and other allowances that are offered within the contracts with our Customers, healthcare providers, payors and other indirect customers relating to the sale of our products.
The following tables summarize balances and activity in each of the product revenue allowance and reserve categories for the years ended December 31, 2025 and December 31, 2024:
| | | | | | | | | | | | | | | | | | | | | | | |
| (In thousands) | Contractual Adjustments | | Government Rebates | | Returns | | Total |
| Balance at December 31, 2024 | $ | 253 | | | $ | 1,354 | | | $ | 489 | | | $ | 2,096 | |
| Current provisions relating to sales in the current year | 1,422 | | | 2,917 | | | 557 | | | 4,896 | |
| Adjustments relating to prior years | (51) | | | (892) | | | — | | | (943) | |
| Payments/returns relating to sales in the current year | (1,240) | | | (1,643) | | | — | | | (2,883) | |
| Payments/returns relating to sales in the prior years | (202) | | | (462) | | | (6) | | | (670) | |
| Balance at December 31, 2025 | $ | 182 | | | $ | 1,274 | | | $ | 1,040 | | | $ | 2,496 | |
| | | | | | | | | | | | | | | | | | | | | | | |
| (In thousands) | Contractual Adjustments | | Government Rebates | | Returns | | Total |
| Balance at December 31, 2023 | $ | 156 | | | $ | 1,084 | | | $ | 232 | | | $ | 1,472 | |
| Current provisions relating to sales in the current year | 1,300 | | | 2,593 | | | 399 | | | 4,292 | |
| Adjustments relating to prior years | (39) | | | (711) | | | (45) | | | (795) | |
| Payments/returns relating to sales in the current year | (1,079) | | | (1,239) | | | — | | | (2,318) | |
| Payments/returns relating to sales in the prior years | (85) | | | (373) | | | (97) | | | (555) | |
| Balance at December 31, 2024 | $ | 253 | | | $ | 1,354 | | | $ | 489 | | | $ | 2,096 | |
Total revenue-related reserves above, included in our consolidated balance sheets, are summarized as follows:
| | | | | | | | | | | |
| (In thousands) | December 31, 2025 | | December 31, 2024 |
| Reduction of accounts receivable | $ | 174 | | | $ | 124 | |
| Component of accrued expenses | 2,322 | | | 1,972 | |
| Total revenue-related reserves | $ | 2,496 | | | $ | 2,096 | |
The following table presents changes in our contract assets, which consisted of accounts receivable, net:
| | | | | | | | | | | |
| (In thousands) | December 31, 2025 | | December 31, 2024 |
| Beginning balance | $ | 4,109 | | | $ | 2,810 | |
Additions (1) | 58,011 | | | 39,973 | |
Deductions (1) | (51,543) | | | (38,674) | |
| Ending balance | $ | 10,577 | | | $ | 4,109 | |
(1) Additions to contract assets relate to amounts billed to Customers for product sales, and deductions to contract assets primarily relate to collection of receivables during the reporting period.