Our net revenues recorded on sales of the OraQuick
®
In-Home
HIV test represent total gross revenues, less an allowance for expected returns, and customer allowances for cooperative advertising, discounts,
rebates, and chargebacks. The allowance for expected returns is an estimate established by management, based upon currently available information, and is adjusted to reflect known changes in the factors that impact this estimate. Other customer
allowances are at contractual rates and are recorded as a reduction of gross revenue when recognized in our consolidated statements of income.
We record
shipping and handling charges billed to our customers as product revenue and the related expense as cost of products sold. Taxes assessed by governmental authorities, such as sales or value-added taxes, are excluded from product revenues.
On June 10, 2014, we entered into a Master Program Services and
Co-Promotion
Agreement with AbbVie to
co-promote
our OraQuick
®
HCV test in the United States. On June 30, 2016, we mutually agreed to terminate our agreement effective December 31, 2016.
Accordingly, we did not record any revenue from this
co-promotion
agreement during 2017. During 2016 and 2015, $18,951 and $13,479, respectively, in exclusivity revenues were recognized and recorded as other
revenue in our consolidated statements of income.
On June 12, 2015, we were awarded a grant for up to $10,400 in total funding from the U.S.
Department of Health and Human Services (HHS) Office of the Assistant Secretary for Preparedness and Responses Biomedical Advanced Research and Development Authority (BARDA) related to our OraQuick
®
Ebola rapid antigen test. The three-year, multi-phased grant included an initial commitment of $1,800 and options for up to an additional $8,600 to fund certain clinical and regulatory
activities. In September 2015 and July 2017, BARDA exercised options to provide $7,200 and $1,330, respectively, in additional funding for our OraQuick
®
Ebola test. Amounts related to this
grant are recorded as other revenue in our consolidated statements of income as the activities are being performed and the related costs are incurred. During 2017, 2016 and 2015, $1,999, $1,707 and $1,783, respectively, were recognized in connection
with this grant.
In August 2016, we were awarded a contract for up to $16,600 in total funding from BARDA related to our rapid Zika test. The
six-year,
multi-phased contract includes an initial commitment of $7,000 and options for up to an additional $9,600 to fund the evaluation of additional product enhancements, and clinical and regulatory activities.
In May 2017, BARDA exercised an option to provide $2,600 in additional funding for our rapid Zika test. Funding received under this contract is recorded as other revenue in our consolidated statements of income as the activities are being performed
and the related costs are incurred. During 2017 and 2016, $2,388 and $616, respectively, were recognized in connection with this grant.
In June 2017, we
entered into a four-year Charitable Support Agreement with the Bill & Melinda Gates Foundation (Gates Foundation) that will enable us to offer our OraQuick
®
HIV self-test
at an affordable price in 50 developing countries with funding from the Gates Foundation. The funding will consist of support payments tied to volume of product sold by us and reimbursement of certain related costs. The funding from the Gates
Foundation will be in an aggregate amount not to exceed $20,000 over the four-year term or $6,000 each year of the agreement. Funding received under this agreement in the form of support payments for product purchases is recorded as a component of
product revenue. During 2017, $1,047 of support payments were recognized in product revenue in connection with this agreement. Funding received in the form of reimbursement of certain related costs is recorded as other revenue in our consolidated
statements of income. During 2017, $689 was recognized in other revenue in connection with this agreement.
Customer Sales Returns and
Allowances
We do not grant return rights to our customers for any product, except for our
OraQuick
®
In-Home
HIV test. Accordingly, we have recorded an estimate of expected returns as a reduction of gross OraQuick
®
In-Home
HIV product revenues in our consolidated statements of income. This estimate reflects our historical sales experience to retailers and consumers,
as well as other retail factors, and is reviewed regularly to ensure that it reflects
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