NitroMed (NTMD)

Product Returns.  Consistent with industry practice, we offer contractual return rights that allow customers to return product only during the period that is six months prior to, and twelve months after, product expiration. Commercial product shipped during 2005 and the first half of 2006 had a shelf-life of twelve months from date of manufacture with expiration dates ranging from April 2006 to May 2007. During the third quarter of 2006, we began shipping commercial product with an expiration date of 18 months. During the second quarter of 2007, we began shipping commercial product with an expiration date of 24 months. During the fourth quarter of 2008, we began shipping commercial product with an expiration date of 36 months. Factors that are considered in our estimate of future product returns include an analysis of the amount of product in the wholesaler and pharmacy channels, discussions with key wholesalers and other customers regarding inventory levels and shipment trends, review of consumer consumption data, and the remaining time to expiration of our product. As a result of this ongoing evaluation, our product return reserve was $1.4 million and $0.9 million at December 31, 2008 and 2007, respectively. For the years ended December 31, 2008, 2007 and 2006, we recorded a reduction to revenue for product returns of $2.0 million, $1.0 million and $2.6 million, respectively. The return rate and related reserve are evaluated on a quarterly basis, assessing each of the factors described above, and adjusted accordingly. In developing a reasonable estimate for the reserve for product returns, we consider the factors in paragraph 8 of Statement of Financial Accounting Standards No. 48, Revenue Recognition When a Right of Return Exists. The actual amount of product returns could vary significantly from our estimates and could have a material effect on our financial condition and results of operations in any reporting period. Due to an increase in the volume of returns related to commercial product with an expiration date of 24 months, we revised our estimated product return reserve during the fourth quarter of 2008. Prior to the fourth quarter of 2008, we had estimated our provision for returns for commercial product with an expiration date of 24 months using historical return data for commercial product with expiration dates of 12 months and 18 months. Commercial product with an expiration date of 24 months did not begin to expire until the fourth quarter of 2008. This revision to our estimate resulted in an increase to the provision for returns of approximately $1.0 million in the year ended December 31, 2008, as compared to the year ended December 31, 2007.

 

Product Returns.  Consistent with industry practice, we offer
contractual return rights that allow customers to return product only during
the period that is six months prior to, and twelve months after, product
expiration. Commercial product shipped during 2005 and the first half of 2006
had a shelf-life of twelve months from date of manufacture with expiration
dates ranging from April 2006 to May 2007. During the third quarter
of 2006, we began shipping commercial product with an expiration date of
18 months. During the second quarter of 2007, we began shipping commercial
product with an expiration date of 24 months. During the fourth quarter of
2008, we began shipping commercial product with an expiration date of 36
months. Factors that are considered in our estimate of future product returns
include an analysis of the amount of product in the wholesaler and pharmacy
channels, discussions with key wholesalers and other customers regarding
inventory levels and shipment trends, review of consumer consumption data, and
the remaining time to expiration of our product. As a result of this ongoing
evaluation, our product return reserve was $1.4 million and $0.9 million
at December 31, 2008 and 2007, respectively. For the years ended December 31,
2008, 2007 and 2006, we recorded a reduction to revenue for product returns of
$2.0 million, $1.0 million and $2.6 million, respectively. The
return rate and related reserve are evaluated on a quarterly basis, assessing
each of the factors described above, and adjusted accordingly. In developing a
reasonable estimate for the reserve for product returns, we consider the
factors in paragraph 8 of Statement of Financial Accounting Standards No. 48,
Revenue Recognition When a Right of Return
Exists. The actual amount of product returns could vary
significantly from our estimates and could have a material effect on our
financial condition and results of operations in any reporting period. Due to
an increase in the volume of returns related to commercial product with an
expiration date of 24 months, we revised our estimated product return reserve
during the fourth quarter of 2008. Prior to the fourth quarter of 2008, we had
estimated our provision for returns for commercial product with an expiration
date of 24 months using historical return data for commercial product with
expiration dates of 12 months and 18 months. Commercial product with an
expiration date of 24 months did not begin to expire until the fourth quarter
of 2008. This revision to our estimate resulted in an increase to the provision
for returns of approximately $1.0 million in the year ended December 31,
2008, as compared to the year ended December 31, 2007.

 

                Product Returns.  Consistent with industry practice, the Company offers contractual return rights that allow customers to return product only during the period that is six months prior to, and twelve months after, product expiration. Commercial product shipped during 2005 and the first half of 2006 had a shelf-life of twelve months from date of manufacture with expiration dates ranging from April 2006 to May 2007. During the third quarter of 2006, the Company began shipping commercial product with an expiration date of 18 months. During the second quarter of 2007, the Company began shipping commercial product with an expiration date of 24 months. During the fourth quarter of 2008, the Company began shipping commercial product with an expiration date of 36 months. Factors that are considered in the Company’s estimate of future product returns include an analysis of the amount of product in the wholesaler and pharmacy channels, discussions with key wholesalers and other customers regarding inventory levels and shipment trends, review of consumer prescription data, an estimate of the product used by hospitals and the remaining time to expiration of the Company’s product. The Company’s product return reserve was $1.4 million and $0.9 million as of December 31, 2008 and 2007, respectively. For the years ended December 31, 2008, 2007 and 2006, the Company recorded a reduction to revenue for product returns of $2.0 million, $1.0 million and $2.6 million, respectively. The return rate and associated reserve are evaluated on a quarterly basis, assessing each of the factors described above, and adjusted accordingly. In developing a reasonable estimate for the reserve for product returns, the Company considers the factors in paragraph 8 of Statement of Financial Accounting Standards No. 48, Revenue Recognition When a Right of Return Exists. The

 

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                Product Returns.  Consistent with industry practice, the
Company offers contractual return rights that allow customers to return product
only during the period that is six months prior to, and twelve months after, product
expiration. Commercial product shipped during 2005 and the first half of 2006
had a shelf-life of twelve months from date of manufacture with expiration
dates ranging from April 2006 to May 2007. During the third quarter of 2006,
the Company began shipping commercial product with an expiration date of 18 months.
During the second quarter of 2007, the Company began shipping commercial
product with an expiration date of 24 months. During the fourth quarter of
2008, the Company began shipping commercial product with an expiration date of
36 months. Factors that are considered in the Company’s estimate of future
product returns include an analysis of the amount of product in the wholesaler
and pharmacy channels, discussions with key wholesalers and other customers
regarding inventory levels and shipment trends, review of consumer prescription
data, an estimate of the product used by hospitals and the remaining time to
expiration of the Company’s product. The Company’s product return reserve was
$1.4 million and $0.9 million as of December 31, 2008 and 2007, respectively.
For the years ended December 31, 2008, 2007 and 2006, the Company recorded a
reduction to revenue for product returns of $2.0 million, $1.0 million and $2.6
million, respectively. The return rate and associated reserve are evaluated on
a quarterly basis, assessing each of the factors described above, and adjusted
accordingly. In developing a reasonable estimate for the reserve for product
returns, the Company considers the factors in paragraph 8 of Statement of
Financial Accounting Standards No. 48, Revenue
Recognition When a Right of Return Exists. The

 

49

Product Returns. Consistent with industry practice, the Company offers contractual return rights that allow customers to return product only during the period that is six months prior to, and twelve months after, product expiration. During the first quarter of 2008, BiDil’s shelf life for newly produced commercial product was increased to 36 months from the date of manufacture. Factors that are considered in the Company’s estimate of future product returns include an analysis of the amount of product in the wholesaler and pharmacy channels, discussions with key wholesalers and other customers regarding inventory levels and shipment trends, review of consumer consumption data, and the remaining time to expiration of the Company’s product. At September 30, 2008 and December 31, 2007, the Company’s product return reserve was $1.0 million and $0.9 million, respectively. For the three months ended September 30, 2008 and 2007, the Company recorded a reduction to revenue for product returns of $0.2 million and $0.2 million, respectively. For the nine months ended September 30, 2008 and 2007, the Company recorded a reduction to revenue for product returns of $0.9 million and $0.8 million, respectively.  The return rate and associated reserve are evaluated on a quarterly basis, assessing each of the factors described above, and adjusted accordingly. In developing a reasonable estimate for the reserve for product returns, the Company considers the factors in paragraph 8 of Statement of Financial Accounting Standards No. 48, Revenue Recognition When a Right of Return Exists. Based on the factors noted above, the Company believes that its estimate of product returns is reasonable and changes, if any, from this estimate would not have a material impact to the Company’s financial statements.

 

Product Returns. Consistent with industry practice, the Company offers contractual return rights that allow customers to return product only during the period that is six months prior to, and twelve months after product expiration. During the first quarter of 2008, BiDil’s shelf life for newly produced commercial product was increased to 36 months from the date of manufacture. Factors that are considered in the Company’s estimate of future product returns include an analysis of the amount of product in the wholesaler and pharmacy channels, discussions with key wholesalers and other customers regarding inventory levels and shipment trends, review of consumer consumption data, and the remaining time to expiration of the Company’s product. At June 30, 2008 and December 31, 2007, the Company’s product return reserve was $0.9 million and $0.9 million, respectively. For the three months ended June 30, 2008 and 2007, the Company recorded a reduction to revenue for product returns of $0.3 million and $0.3 million, respectively. For the six months ended June 30, 2008 and 2007, the Company recorded a reduction to revenue for product returns of $0.7 million and $0.6 million, respectively.  The return rate and associated reserve are evaluated on a quarterly basis, assessing each of the factors described above, and adjusted accordingly. In developing a reasonable estimate for the reserve for product returns, the Company considers the factors in paragraph 8 of Statement of Financial Accounting Standards No. 48, Revenue Recognition When a Right of Return Exists. Based on the factors noted above, the Company believes its estimate of product returns is reasonable, and changes, if any, from this estimate would not have a material impact to the Company’s financial statements.

 

Product Returns. Consistent with industry practice, the Company offers contractual return rights that allow customers to return product only during the period that is six months prior to, and twelve months after product expiration. During the first quarter of 2008, BiDil’s shelf life for newly produced commercial product was increased to 36 months from the date of manufacture. Factors that are considered in the Company’s estimate of future product returns include an analysis of the amount of product in the wholesaler and pharmacy channels, discussions with key wholesalers and other customers regarding inventory levels and shipment trends, review of consumer consumption data, and the remaining time to expiration of the Company’s product. At March 31, 2008 and December 31, 2007, the Company’s product return reserve was $0.8 million and $0.9 million, respectively. For the three months ended March 31, 2008 and 2007, the Company recorded a reduction to revenue for product returns of $0.5 million and $0.3 million, respectively. The return rate and associated reserve are evaluated on a quarterly basis, assessing each of the factors described above, and adjusted accordingly. In developing a reasonable estimate for the reserve for product returns, the Company considers the factors in paragraph 8 of Statement of Financial Accounting Standards No. 48, Revenue Recognition When a Right of Return Exists. Based on the factors noted above, the Company believes its estimate of product returns is reasonable, and changes, if any, from this estimate would not have a material impact to the Company’s financial statements.

 

Product Returns.   Consistent with industry practice, the Company offers contractual return rights that allow customers to return product only during the period that is six months prior to, and twelve months after, product expiration. Commercial product shipped during 2005 and the first half of 2006 had a shelf-life of twelve months from date of manufacture with expiration dates ranging from April 2006 to April 2007. During the third quarter of 2006, the Company began shipping commercial product with an expiration date of 18 months. During the first quarter of 2007, BiDil’s shelf life for newly produced finished goods was increased to 24 months. The Company began shipping product with an expiration date of 24 months in the second quarter of 2007. Factors that are considered in the Company’s estimate of future product returns include an analysis of the amount of product in the wholesaler and pharmacy channels, discussions with key wholesalers and other customers regarding inventory levels and shipment trends, review of consumer consumption data based on aggregate weekly and monthly prescription data derived from Source Projected Launchtrac provided by Wolters Kluwer Health, and the remaining time to expiration of the Company’s product. At September 30, 2007 and December 31, 2006, the Company’s product return reserve was $1.1 million and $1.3 million, respectively. This reserve is evaluated on a quarterly basis, assessing each of the factors described above, and adjusted accordingly. In developing a reasonable estimate for the reserve for product returns, the Company considers the factors in paragraph 8 of Statement of Financial Accounting Standards No. 48, Revenue Recognition When a Right of Return Exists. The Company believes it has developed a reasonable estimate of returns based on actual return data compared to product shipped. The Company will continue to monitor actual returns as the Company develops more sales experience with BiDil. Based on the factors noted above, among others, the Company believes its estimate of product returns is reasonable, and changes, if any, from this estimate would not have a material impact to the Company’s financial statements.

 

Product Returns.   Consistent with industry practice, the Company offers contractual return rights that allow customers to return product only during the period that is six months prior to, and twelve months after product expiration. Commercial product shipped during 2005 and the first half of 2006 had a shelf-life of twelve months from date of manufacture with expiration dates ranging from April 2006 to April 2007. During the third quarter of 2006, the Company began shipping commercial product with an expiration date of 18 months.  During the first quarter of 2007, BiDil’s shelf life for newly produced finished goods was increased to 24 months. The Company began shipping product with 24 month dating in the second quarter of 2007.  Factors that are considered in the Company’s estimate of future product returns include an analysis of the amount of product in the wholesaler and pharmacy channels, discussions with key wholesalers and other customers regarding inventory levels and shipment trends, review of consumer consumption data based on aggregate weekly and monthly prescription data derived from Source Projected Launchtrac provided by Wolters Kluwer Health, and the remaining time to expiration of the Company’s product. At June 30, 2007 and December 31, 2006, the Company’s product return reserve was $1.1 million and $1.3 million, respectively. This reserve is evaluated on a quarterly basis, assessing each of the factors described above, and adjusted accordingly. In developing a reasonable estimate for the reserve for product returns, the Company considers the factors in paragraph 8 of Statement of Financial Accounting Standards No. 48, Revenue Recognition When a Right of Return Exists. The Company believes it has developed a reasonable estimate of returns based on actual return data compared to product shipped. The Company will continue to monitor actual returns as the Company develops more sales experience with BiDil. Based on the factors noted above, among others, the Company believes its estimate of product returns is reasonable, and changes, if any, from this estimate would not have a material impact to the Company’s financial statements.

Product Returns.   Consistent with industry practice, the Company offers contractual return rights that allow customers to return product only during the period that is six months prior to, and twelve months after product expiration. Commercial product shipped during 2005 and the first half of 2006 had a shelf-life of twelve months from date of manufacture with expiration dates ranging from April 2006 to April 2007. During the third quarter of 2006, the Company began shipping commercial product with an expiration date of 18 months.  During the first quarter of 2007, BiDil’s shelf life for newly produced finished goods was increased to 24 months.  Factors that are considered in the Company’s estimate of future product returns include an analysis of the amount of product in the wholesaler and pharmacy channels, discussions with key wholesalers and other customers regarding inventory levels and shipment trends, review of consumer consumption data based on aggregate weekly prescription data derived from Source Projected Launchtrac provided by Wolters Kluwer Health, and the remaining time to expiration of the Company’s product. At March 31, 2007 and December 31, 2006, the Company’s product return reserve was $1.2 million and $1.3 million, respectively. This reserve is evaluated on a quarterly basis, assessing each of the factors described above, and adjusted accordingly. Based on the factors noted above, among others, the Company believes its estimate of product returns is reasonable, and changes, if any, from this estimate would not have a material impact to the Company’s financial statements.

Product Returns.   Consistent with industry practice, the Company offers contractual return rights that allow customers to return product only during the period that is six months prior to, and twelve months after product expiration. Commercial product shipped during 2005 had a shelf-life of twelve months from date of manufacture with expiration dates ranging from April 2006 to November 2006. During the third quarter of 2006, the Company began shipping commercial product with an expiration date of 18 months. Factors that are considered in the Company’s estimate of future product returns include an analysis of the amount of product in the wholesaler and pharmacy channels, discussions with key wholesalers and other customers regarding inventory levels and shipment trends, review of consumer consumption data as reported by Source Projected Launchtrac provided by Wolters Kluwer Health, and the remaining time to expiration of the Company’s product. As a result of this ongoing evaluation, the Company’s product return reserve was $1.3 million at December 31, 2006 and $0.1 million at December 31, 2005. This reserve is evaluated on a quarterly basis, assessing each of the factors described above, and adjusted accordingly. Based on the factors noted above, the Company believes its estimate of product returns is reasonable, and changes, if any, from this estimate would not have a material impact to the Company’s financial statements. During the first quarter of 2007 BiDil’s shelf life was increased to 24 months.