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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2020
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___ to ___
Commission File No. 001-36297
Revance Therapeutics, Inc.
(Exact name of registrant as specified in its charter)
Delaware77-0551645
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer Identification No.)

7555 Gateway Boulevard, Newark, California, 94560
(Address, including zip code, of principal executive offices)

(510) 742-3400
(Registrant’s telephone number, including area code)
Securities Registered Pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $0.001 per shareRVNCNasdaq Global Market
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   Yes  ý    No  ¨
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ý    No  ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filerEmerging growth company
Non-accelerated filerSmaller reporting company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial statement accounting standards provide pursuance to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes     No  ý
Number of shares outstanding of the registrant's common stock, par value $0.001 per share, as of October 30, 2020: 66,549,174


Table of Contents
 
  Page
PART I. FINANCIAL INFORMATION
Item 1.
 
 
 
 
 
Item 2.
Item 3.
Item 4.
PART II. OTHER INFORMATION
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.

“Revance Therapeutics,” the Revance logos and other trademarks or service marks of Revance appearing in this quarterly report on Form 10-Q are the property of Revance. This Form 10-Q contains additional trade names, trademarks and service marks of others, which are the property of their respective owners. We do not intend our use or display of other companies’ trade names, trademarks or service marks to imply a relationship with, or endorsement or sponsorship of us by, these other companies.
Unless expressly indicated or the context requires otherwise, the terms “Revance,” “company,” “we,” “us,” and “our,” in this document refer to Revance Therapeutics, Inc., a Delaware corporation, and, where appropriate, its wholly owned subsidiaries.



PART I. FINANCIAL INFORMATION

ITEM 1. Condensed Consolidated Financial Statements (Unaudited)

REVANCE THERAPEUTICS, INC.
Condensed Consolidated Balance Sheets
(In thousands, except share and per share amounts)
(Unaudited)
 September 30,December 31,
 20202019
ASSETS
CURRENT ASSETS
Cash and cash equivalents$339,439 $171,160 
Short-term investments96,392 118,955 
Accounts and other receivable2,585  
Inventories3,976  
Prepaid expenses and other current assets7,713 6,487 
Total current assets450,105 296,602 
Property and equipment, net14,843 14,755 
Goodwill144,505  
Intangible assets, net74,849  
Operating lease right of use assets25,446 26,531 
Restricted cash1,245 730 
Other non-current assets1,154 1,669 
TOTAL ASSETS$712,147 $340,287 
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable$7,860 $8,010 
Accruals and other current liabilities37,659 18,636 
Deferred revenue, current portion10,931 7,911 
Operating lease liabilities, current portion4,040 3,470 
Derivative liability3,163 2,952 
Total current liabilities63,653 40,979 
Convertible senior notes177,377  
Deferred revenue, net of current portion74,811 47,948 
Operating lease liabilities, net of current portion23,453 25,870 
TOTAL LIABILITIES339,294 114,797 
Commitments and Contingencies (Note 14)
STOCKHOLDERS’ EQUITY
Convertible preferred stock, par value $0.001 per share — 5,000,000 shares authorized, and no shares issued and outstanding as of September 30, 2020 and December 31, 2019
  
Common stock, par value $0.001 per share — 95,000,000 shares authorized both as of September 30, 2020 and December 31, 2019; 66,587,713 and 52,374,735 shares issued and outstanding as of September 30, 2020 and December 31, 2019, respectively
67 52 
Additional paid-in capital1,420,770 1,069,639 
Accumulated other comprehensive income 3 
Accumulated deficit(1,047,984)(844,204)
TOTAL STOCKHOLDERS’ EQUITY372,853 225,490 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY$712,147 $340,287 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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REVANCE THERAPEUTICS, INC.
Condensed Consolidated Statements of Operations and Comprehensive Loss
(In thousands, except share and per share amounts)
(Unaudited)
 
 Three Months Ended September 30,Nine Months Ended September 30,
 2020201920202019
Revenue:
Product revenue$2,819 $ $2,868 $ 
Collaboration revenue808 46 1,116 324 
Service revenue208  208  
Total revenue3,835 46 4,192 324 
Operating expenses:
Cost of product revenue (exclusive of amortization)1,081  1,102  
Cost of service revenue (exclusive of amortization)4  4  
Research and development29,130 25,847 96,027 75,368 
Selling, general and administrative48,183 16,739 99,013 43,245 
Amortization2,565  3,239  
Total operating expenses80,963 42,586 199,385 118,613 
Loss from operations(77,128)(42,540)(195,193)(118,289)
Interest income413 1,329 2,868 4,495 
Interest expense(4,334) (10,738) 
Changes in fair value of derivative liability(62)(68)(211)(139)
Other expense, net(146)(130)(406)(170)
Loss before income taxes(81,257)(41,409)(203,680)(114,103)
Income tax provision  (100) 
Net loss(81,257)(41,409)(203,780)(114,103)
Unrealized gain (loss) and adjustment on securities included in net loss(117)(74)(3)50 
Comprehensive loss$(81,374)$(41,483)$(203,783)$(114,053)
Basic and diluted net loss$(81,257)$(41,409)$(203,780)$(114,103)
Basic and diluted net loss per share$(1.34)$(0.96)$(3.62)$(2.67)
Basic and diluted weighted-average number of shares used in computing net loss per share60,526,740 43,314,831 56,233,093 42,730,983 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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REVANCE THERAPEUTICS, INC.
Condensed Consolidated Statements of Stockholders’ Equity
(In thousands, except share and per share amounts)
(Unaudited)

Three Months Ended September 30,Nine Months Ended September 30,
2020201920202019
SharesAmountSharesAmountSharesAmountSharesAmount
Convertible Preferred Stock $  $  $  $ 
Common Stock
Balance — Beginning of period57,313,556 57 44,105,474 44 52,374,735 52 36,975,203 37 
Issuance of common stock in connection with the HintMD Acquisition7,770,613 8 — — 7,770,613 8 — — 
Issuance of restricted stock awards and performance stock awards, net of cancellation1,170,500 1 9,697 — 2,588,353 2 400,720 — 
Issuance of common stock upon exercise of stock options and warrants511,049 1 — — 587,843 1 8,240 — 
Issuance of common stock in connection with the Teoxane Agreement— — — — 2,500,000 3 — — 
Issuance of common stock in connection with offerings— — — — 975,000 1 6,764,705 7 
Issuance of common stock relating to employee stock purchase plan  — — 48,661  35,166 — 
Net settlement of restricted stock awards for employee taxes(178,005) (6,764)— (257,492) (75,627)— 
Balance — End of period66,587,713 67 44,108,407 44 66,587,713 67 44,108,407 44 
Additional Paid-in Capital
Balance — Beginning of period 1,222,271  945,851  1,069,639  830,368 
Issuance of common stock and awards assumed in connection with the HintMD Acquisition— 188,096 — — — 188,096 — — 
Issuance of restricted stock awards and performance stock awards, net of cancellation (1)— —  (2)— — 
Issuance of common stock upon exercise of stock options and warrants 3,805 — —  4,804 — 93 
Issuance of common stock in connection with the Teoxane Agreement — — —  43,397 — — 
Issuance of common stock in connection with offerings, net of issuance costs of $44 and $521 for nine months ended September 30, 2020 and 2019, respectively
 — — —  15,536 — 107,572 
Issuance of common stock relating to employee stock purchase plan  — —  671 — 387 
Equity component of convertible senior notes, net of transaction costs— — — — — 108,510 — — 
Stock-based compensation— 11,092 — 4,303 — 24,989 — 12,882 
Capped call transactions— — — — — (28,865)— — 
Net settlement of restricted stock awards for employee taxes (4,493)— (81) (6,005)— (1,229)
Balance — End of period 1,420,770  950,073  1,420,770  950,073 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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REVANCE THERAPEUTICS, INC.
Condensed Consolidated Statements of Stockholders’ Equity— (Continued)
(In thousands, except share and per share amounts)
(Unaudited)

Three Months Ended September 30,Nine Months Ended September 30,
2020201920202019
SharesAmountSharesAmountSharesAmountSharesAmount
Other Accumulated Comprehensive Gain (Loss)
Balance — Beginning of period 117  116  3  (8)
Unrealized gain (loss) and adjustment on securities included in net loss— (117)— (74)— (3)— 50 
Balance — End of period   42    42 
Accumulated Deficit
Balance — Beginning of period (966,727) (757,469) (844,204) (684,775)
Net loss— (81,257)— (41,409)— (203,780)— (114,103)
Balance — End of period (1,047,984) (798,878) (1,047,984) (798,878)
Total Stockholders’ Equity66,587,713 $372,853 44,108,407 $151,281 66,587,713 $372,853 44,108,407 $151,281 

 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.


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REVANCE THERAPEUTICS, INC.
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
 Nine Months Ended September 30,
 20202019
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss$(203,780)$(114,103)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation24,574 12,882 
Non-cash in-process research and development11,184  
Amortization of debt discount and issuance costs7,576  
Depreciation and amortization5,931 2,152 
Amortization of discount on investments(1,351)(2,215)
Other non-cash operating activities474 411 
Changes in operating assets and liabilities:
Accounts receivable(2,492)22,000 
Inventories(3,976) 
Prepaid expenses and other current assets(1,254)(1,426)
Operating lease right of use assets1,085 (2,414)
Other non-current assets515 999 
Accounts payable147 (1,050)
Accruals and other liabilities17,142 3,532 
Deferred revenue29,883 4,676 
Operating lease liabilities(1,846)1,903 
Net cash used in operating activities(116,188)(72,653)
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from maturities of investments246,500 183,000 
Proceeds from sale of investments16,969  
Purchases of investments(239,821)(228,568)
Purchases of property and equipment(1,890)(2,943)
Cash paid for HintMD Acquisition, net(818) 
Purchase of distribution rights(118) 
Net cash provided by (used in) investing activities20,822 (48,511)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of convertible senior notes287,500  
Proceeds from issuance of common stock in connection with offerings, net of commissions and discount15,581 108,100 
Proceeds from the exercise of stock options, common stock warrants and employee stock purchase plan5,476 480 
Payment of capped call transactions(28,865) 
Payment of convertible senior notes transaction costs(9,190) 
Net settlement of restricted stock awards for employee taxes(6,005)(1,229)
Payment of offering costs(337)(521)
Net cash provided by financing activities264,160 106,830 
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH168,794 (14,334)
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH — Beginning of period171,890 73,986 
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH — End of period$340,684 $59,652 
SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING INFORMATION:
Issuance of common stock and awards assumed in connection with the HintMD Acquisition$188,104 $ 
Issuance of common stock in connection with the Teoxane Agreement$43,400 $ 
Property and equipment purchases in accounts payable and accruals$336 $313 
Internally developed software capitalized from stock-based compensation$415 $ 
 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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REVANCE THERAPEUTICS, INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)

1. The Company and Summary of Significant Accounting Policies
The Company
Revance Therapeutics, Inc. is a biotechnology company focused on innovative aesthetic and therapeutic offerings, including its next-generation neuromodulator product, DaxibotulinumtoxinA for Injection. DaxibotulinumtoxinA for Injection combines a proprietary stabilizing peptide excipient with a highly purified botulinum toxin that does not contain human or animal-based components. We have successfully completed a Phase 3 program for DaxibotulinumtoxinA for Injection in glabellar (frown) lines and are pursuing U.S. regulatory approval in 2020. We are also evaluating DaxibotulinumtoxinA for Injection in the full upper face, including glabellar lines, forehead lines and crow’s feet, as well as in three therapeutic indications: cervical dystonia, adult upper limb spasticity and plantar fasciitis. To accompany DaxibotulinumtoxinA for Injection, we own a unique portfolio of premium products and services for U.S. aesthetics practices, including the exclusive U.S. distribution rights to the RHA® Collection of dermal fillers, the first and only range of FDA-approved fillers for correction of dynamic facial wrinkles and folds, and the HintMD fintech platform, which includes integrated smart payment, subscription and loyalty digital services. We have also partnered with Mylan N.V. to develop a biosimilar to BOTOX®, which would compete in the existing short-acting neuromodulator marketplace. We are dedicated to making a difference by transforming patient experiences.
On July 23, 2020, we completed the acquisition of Hint, Inc. (d/b/a HintMD) by acquiring 100% of the HintMD stock that was issued and outstanding as of the date of acquisition for a total purchase consideration of $189.6 million (see Note 3). Through the HintMD platform, we provide a cloud-based patient engagement and payments platform to medical aesthetic practitioners. The HintMD platform provides patients with the ability to receive personalized aesthetic treatment plans and pay for them using monthly subscription payments, which improves consistency of treatments and affordability. The condensed consolidated financial statements as of and for the period ended September 30, 2020 include the financial results of HintMD from the acquisition completion date.
Since inception, we have devoted substantially all of our efforts to identifying and developing product candidates for the aesthetic and therapeutic pharmaceutical markets, recruiting personnel, raising capital, conducting preclinical and clinical development of, and manufacturing development for DaxibotulinumtoxinA for Injection, DaxibotulinumtoxinA Topical, the biosimilar to BOTOX®, and the commercial launch of Teoxane’s RHA® Collection of dermal fillers. We have incurred losses and negative cash flows from operations. We have not generated substantial product revenue to date, and will continue to incur significant research and development, sales and marketing, and other expenses related to our ongoing operations.
For the three and nine months ended September 30, 2020, we had a net loss of $81.3 million and $203.8 million, respectively. As of September 30, 2020, we had a working capital surplus of $386.5 million and an accumulated deficit of $1.05 billion. In recent years, we have funded our operations primarily through the sale of common stock and convertible senior notes. As of September 30, 2020, we had capital resources of $435.8 million consisting of cash and cash equivalents and short-term investments. We believe that our existing capital resources will fund the operating plan through at least the next 12 months following the issuance of this Form 10-Q, and may need to identify additional capital resources to fund our operations.
Basis of Presentation
The accompanying condensed consolidated financial statements are unaudited, and reflect all adjustments which are, in the opinion of management, of a normal recurring nature and necessary for a fair statement of the results for the interim periods presented.
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REVANCE THERAPEUTICS, INC.
Notes to Condensed Consolidated Financial Statements — (Continued)
(Unaudited)
Our condensed consolidated balance sheets for the year ended December 31, 2019 was derived from audited consolidated financial statements, but does not include all disclosures required by U.S. generally accepted accounting principles (“U.S. GAAP”). The interim results presented herein are not necessarily indicative of the results of operations that may be expected for the full fiscal year ending December 31, 2020, or any other future period. Our condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements contained in our Annual Report on Form 10-K for the year ended December 31, 2019, which was filed with the Securities and Exchange Commission (“SEC”), on February 26, 2020.
Our condensed consolidated financial statements include our accounts and those of our wholly-owned subsidiaries, and have been prepared in conformity with U.S. GAAP.
Principles of Consolidation
Our condensed consolidated financial statements include accounts of Revance Therapeutics, Inc. and its wholly-owned subsidiaries. All intercompany transactions have been eliminated.
Use of Estimates
The preparation of the condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Such estimates include, but are not limited to, the fair value of assets and liabilities assumed in business combinations, incremental borrowing rate used to measure operating lease liabilities, the recoverability of goodwill and long-lived assets, useful lives associated with property and equipment and intangible assets, period of benefit associated with deferred costs, useful lives of customer contracts, revenue recognition (including the timing of satisfaction of performance obligations, estimating variable consideration, estimating stand-alone selling prices of promised goods and services, and allocation of transaction price to performance obligations), deferred revenue classification, accruals including clinical trial costs, valuation and assumptions underlying stock-based compensation and other equity instruments, fair value of derivative liability, fair value of the liability component of the convertible senior notes, allocation of purchase consideration in asset acquisitions, and income taxes.
We base these estimates on historical and anticipated results, trends and various other assumptions that we believe are reasonable under the circumstances. The worldwide continued spread of COVID-19 has caused a global slowdown of economic activity which has decreased demand for a broad variety of goods and services, including from our potential customers, while also disrupting sales channels and marketing activities for an unknown period of time until the disease is contained. We are unable to predict the future effect resulting from the COVID-19 pandemic on, for instance, clinical trials and product launch timing. As of the date of issuance of these condensed consolidated financial statements, we are not aware of any specific event or circumstance that would require us to update our estimates, judgments or revise the carrying value of our assets or liabilities. These estimates may change, as new events occur and additional information is obtained, and are recognized in the condensed consolidated financial statements as soon as they become known. Actual results could differ from those estimates and any such differences may be material to our condensed consolidated financial statements.
Revenue
To determine revenue recognition for arrangements that we determine are within the scope of Accounting Standards Codification (ASC) 606, Revenue from Contracts with Customers, we perform the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) we satisfy a performance obligation. We only apply the five-step model to contracts when it is probable that we will collect the consideration we are entitled to in exchange for the goods or services we transfer to the customer. At contract inception, once the contract is determined to be within the scope of ASC 606, we assess the goods or services promised within the contract and determine those that are performance obligations and assess whether each promised good or service is distinct. We then recognize as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied.
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REVANCE THERAPEUTICS, INC.
Notes to Condensed Consolidated Financial Statements — (Continued)
(Unaudited)
In revenue arrangements involving third parties, we recognize revenue as the principal when we maintain control of the product or service until it is transferred to our customer; under other circumstances, we recognize revenue as an agent in the sales transaction. Determining whether we have control requires judgment over certain considerations, which generally include whether we are primarily responsible for the fulfillment of the underlying products or services, whether we have inventory risk before fulfillment is completed, and if we have discretion to establish prices over the products or services.
Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by us from a customer, are excluded from revenue.
We currently generate product revenue from the sale of RHA® Collection of dermal fillers, service revenue from payment processing and subscriptions to the platform, and collaboration revenue from the biosimilar program with Mylan.
Product Revenue
Our product revenue is generated from the sale of RHA® Collection of dermal fillers to our customers. We sell our products to our customers through our third-party distributor and maintain control throughout the sales transactions as the principal. We recognize revenue from product sales when control of the product transfers, generally upon delivery, to the customers in an amount that reflects the consideration we received or expect to receive in exchange for those goods as specified in the customer contract. We accept product returns under limited circumstances which generally include damages in transit or ineffective product. Service fees paid to the distributor associated with product logistics are accounted for as fulfillment costs and are included in cost of product revenue in the accompanying statements of operations and comprehensive loss.
Service Revenue
We generate service revenue from charging customers subscription-based fees to use the HintMD platform and fees for payments processed through the HintMD platform. Our contracts with customers are generally for a term of one month and renew automatically each month.
Subscription-based fees are charged for the use of our platform and per-patient account basis, for patient accounts that enroll in the monthly subscription payment program. We typically invoice our customers for subscription-based services on a monthly basis for services rendered in the preceding month. Our arrangements for subscription services typically consist of an obligation to provide services to the customers on a when and if needed basis (a stand-ready obligation), and revenue is recognized from the satisfaction of the performance obligations ratably over each month, as we provide the platform services to customers.
We currently work with third-party partners to provide payment processing services in which we are the accounting agent in these arrangements. Payment processing services are charged on a rate per transaction basis (usage-based fees), with no minimum usage commitments. We recognize revenue generated from these transactions on a net basis. We will re-evaluate whether we are the principal or the agent in these service arrangements should there be changes impacting control in transferring related goods or services to end customers.
Costs to Obtain Contracts with Customers
According to ASC 606, certain costs to obtain a contract with a customer should be capitalized, to the extent recoverable from the associated contract margin, and subsequently amortized as the products or services are delivered to the customer inclusive of expected renewals. We expect such costs to generally include sales commissions and related fringe benefits. For similar contracts with which the expected delivery period is one year or less, we apply the practical expedient to expense such costs as incurred in the condensed consolidated statements of operations and comprehensive loss. Otherwise such costs are capitalized on the condensed consolidated balance sheets, and are amortized over the expected period of benefit to the customer. The determined period of benefit for payment processing and subscription services is subject to re-evaluation periodically.
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REVANCE THERAPEUTICS, INC.
Notes to Condensed Consolidated Financial Statements — (Continued)
(Unaudited)
Inventories
Inventories consist of finished goods held for sale to the customer including consigned inventory held by our distributor. Cost is determined using the first-in-first-out (FIFO) method. Inventory valuation reserves are established based on a number of factors including, but not limited to, finished goods not meeting product specifications, product excess and obsolescence, or application of the lower of cost or net realizable value concepts. The determination of events requiring the establishment of inventory valuation reserves, together with the calculation of the amount of such reserves may require judgment. No inventory valuation reserves have been recorded for any periods presented.
Intangible Assets, net
Intangible assets consist of distribution rights acquired from the filler distribution agreement with Teoxane, SA (see Note 5) as well as intangible assets acquired from the HintMD Acquisition (see Note 3). Finite-lived intangible assets are stated at cost, less accumulated amortization on the condensed consolidated balance sheets, and are amortized on a ratable basis over their estimated useful life.
Goodwill
Goodwill represents the excess of the purchase price of the acquired business over the estimated fair value of the identifiable net assets acquired. Goodwill is not amortized but is tested for impairment at least annually at the reporting unit level, the fourth quarter of each calendar year, or more frequently if events or changes in circumstances indicate that the reporting unit might be impaired. Impairment loss, if any, is recognized based on a comparison of the fair value of the reporting unit to its carrying value, without consideration of any recoverability. In assessing goodwill for impairment, we first assess qualitative factors to determine whether it is more likely than not that the fair value is less than its carrying amount. If we conclude it is more likely than not that the fair value of a reporting unit is less than its carrying amount, a quantitative impairment test is performed. If we conclude that goodwill is impaired, an impairment charge is recorded to the extent that the reporting unit’s carrying value exceeds its fair value.
Recently Adopted Accounting Pronouncements
In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which modifies the measurement and recognition of credit losses for most financial assets and certain other instruments. The new standard requires the use of forward-looking expected credit loss models based on historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount, which may result in earlier recognition of credit losses under the new standard. The new guidance also modifies the impairment models for available-for-sale debt securities and for purchased financial assets with credit deterioration since their origination. Subsequently, the FASB issued ASU 2018-19, Codification Improvements to Topic 326, Financial Instruments - Credit Losses, which did not change the core principle of the guidance in ASU 2016-13, instead these amendments are intended to clarify and improve applications of certain topics included within the credit losses standard. The FASB then issued ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments, which did not change the core principle of the guidance in ASU 2016-13 but clarified that expected recoveries of amounts previously written off and expected to be written off should be included in the valuation account and should not exceed amounts previously written off and expected to be written off. Upon adoption of the ASUs above, accounts receivable are stated at amortized cost less allowance for credit losses. The allowance for credit losses reflects the best estimate of future losses over the contractual life of outstanding accounts receivable and is determined on the basis of historical experience, specific allowances known for troubled accounts, other currently available information including customer financial condition, and both current and forecasted economic conditions. We adopted this guidance effective January 1, 2020. The adoption did not have a material impact on our condensed consolidated financial statements.
In January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment. The new guidance eliminates the requirement to calculate the implied fair value of goodwill assuming a hypothetical purchase price allocation (i.e., Step 2 of the goodwill impairment test) to measure a goodwill impairment charge. Instead, entities will record an impairment charge based on the excess of a reporting unit’s carrying amount over its fair value, not to exceed the carrying
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REVANCE THERAPEUTICS, INC.
Notes to Condensed Consolidated Financial Statements — (Continued)
(Unaudited)
amount of goodwill. This standard should be adopted when the entities perform the annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019, with early adoption permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The amendments should be applied on a prospective basis. We adopted this guidance effective January 1, 2020 and will apply the guidance during our annual goodwill impairment test for the year ending December 31, 2020. The adoption of this guidance did not have a material impact on the condensed consolidated financial statements and related disclosures.
In August 2018, the FASB issued ASU 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40) Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. The amendments in ASU 2018-15 align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). Accordingly, the amendments require an entity (customer) in a hosting arrangement that is a service contract to follow the guidance in Subtopic 350-40 to determine which implementation costs to capitalize as an asset related to the service contract and which costs to expense. ASU 2018-15 is effective for fiscal years beginning after December 15, 2019 with early adoption permitted. We adopted ASU 2018-15 on January 1, 2020 on a prospective basis.
Recent Accounting Pronouncements Issued but Not Adopted
In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. The amendments in ASU simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts in an entity’s own equity. Among other changes, ASU 2020-06 simplifies the accounting for convertible debt instruments by removing certain requirements to separately account for conversion options embedded in debt instruments that are not required to be accounted for as derivative instruments. ASU 2020-06 also updates and improves the consistency of earnings per share calculations for convertible instruments. ASU 2020-06 is effective for fiscal years beginning after December 15, 2021, with early adoption permitted for fiscal years beginning after December 15, 2020, and can be adopted on either a fully retrospective or modified retrospective basis. We are evaluating of the impact of ASU 2020-06 on our consolidated financial statements.

2. Revenue    
Our revenue is generated from U.S. customers. Our product and collaboration revenue is generated from the Product Segment, and our service revenue is generated from the Service Segment (Note 15). The following tables present our revenues disaggregated by timing of transfer of goods or services:

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REVANCE THERAPEUTICS, INC.
Notes to Condensed Consolidated Financial Statements — (Continued)
(Unaudited)
Three Months Ended September 30, 2020
(in thousands)Product RevenueCollaboration RevenueService RevenueTotal
Timing of revenue recognition:
Transferred at a point in time$2,819 $ $ $2,819 
Transferred over time 808 208 1,016 
Total$2,819 $808 $208 $3,835 
Nine Months Ended September 30, 2020
(in thousands)Product RevenueCollaboration RevenueService RevenueTotal
Timing of revenue recognition:
Transferred at a point in time$2,868 $ $ $2,868 
Transferred over time 1,116 208 1,324 
Total$2,868 $1,116 $208 $4,192 

Product Revenue
We generate product revenue from the sale of the RHA® Collection of dermal fillers.
Collaboration Revenue
Mylan Collaboration and License Agreement
Agreement Terms
We entered into a collaboration agreement with Mylan Ireland Limited, a wholly-owned indirect subsidiary of Mylan N.V. (“Mylan”) in February 2018 (the “Mylan Collaboration”), pursuant to which we agreed to collaborate with Mylan exclusively, on a world-wide basis (excluding Japan), to develop, manufacture, and commercialize a biosimilar to the branded biologic product (onabotulinumtoxinA) marketed as BOTOX®. In August 2019, the Mylan Collaboration was amended to, among other things, revise the period of time for Mylan to decide whether to continue the development and commercialization of the biosimilar beyond the initial development plan (the “Continuation Decision”) to be on or before the later of (i) April 30, 2020 or (ii) 30 calendar days from the date that we provide Mylan with certain deliverables. Mylan provided us with written notice of its Continuation Decision in May 2020, and paid a $30 million milestone payment in connection with the Continuation Decision in June 2020.
Mylan has paid us an aggregate of $60 million in non-refundable upfront fees as of September 30, 2020, and the agreement provides for additional remaining contingent payments of up to $70 million in the aggregate, upon the achievement of certain clinical and regulatory milestones and of specified, tiered sales milestones of up to $225 million. The payments do not represent a financing component for the transfer of goods or services.
Revenue Recognition
We re-evaluate the transaction price at each reporting period. We estimated the transaction price for the Mylan Collaboration using the most likely amount method. In order to determine the transaction price, we evaluated all of the payments to be received during the duration of the contract, which included milestones and consideration payable by Mylan. Other than the upfront payment, all other milestones and consideration we may earn under the Mylan Collaboration are subject to uncertainties related to development achievements, Mylan’s rights to terminate the agreement, and estimated effort for cost-sharing payments. Components of such estimated effort for cost-sharing payments include both internal and external costs. Consequently, the transaction price does not include any milestones and considerations that, if included, could result in a probable significant reversal of revenue when related uncertainties become resolved. Sales-based milestones and royalties are not included in the transaction price until the sales occur because the underlying value relates to the license and the
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Notes to Condensed Consolidated Financial Statements — (Continued)
(Unaudited)
license is the predominant feature in the Mylan Collaboration. As of September 30, 2020, the transaction price allocated to the unfulfilled performance obligations was $104.3 million.
We recognize revenue and estimate deferred revenue based on the cost of development service incurred over the total estimated cost of development service to be provided for the development period. For revenue recognition purposes, the development period is estimated to continue through 2025. It is possible that this period will change and is assessed at each reporting date.
For the three and nine months ended September 30, 2020, we recognized revenue related to development services of $0.8 million and $1.1 million, respectively. For the three and nine months ended September 30, 2019, we recognized revenue related to development services of less than $0.1 million and $0.3 million, respectively. As of September 30, 2020 and December 31, 2019, we estimated short-term deferred revenue of $10.9 million and $7.9 million, respectively; and long-term deferred revenue of $43.9 million and $18.0 million, respectively.
Fosun License Agreement
Agreement Terms
In December 2018, we entered into a license agreement (the “Fosun License Agreement”) with Shanghai Fosun Pharmaceutical Industrial Development Co., Ltd., a wholly-owned subsidiary of Shanghai Fosun Pharmaceutical (Group) Co., Ltd (“Fosun”), whereby we granted Fosun the exclusive rights to develop and commercialize our proprietary DaxibotulinumtoxinA for Injection in mainland China, Hong Kong and Macau (the “Fosun Territory”) and certain sublicense rights.
Fosun has paid us non-refundable upfront and other payments totaling $31.0 million before foreign withholding taxes. We are also eligible to receive (i) additional remaining contingent payments of up to $229.5 million upon the achievement of certain milestones based on (a) the approval of biologics license applications (“BLAs”) for certain aesthetic and therapeutic indications and (b) first calendar year net sales, and (ii) tiered royalty payments in low double digit to high teen percentages on annual net sales. The royalty percentages are subject to reduction in the event that (i) we do not have any valid and unexpired patent claims that cover the product in the Fosun Territory, (ii) biosimilars of the product are sold in the Fosun Territory or (iii) Fosun needs to pay compensation to third parties to either avoid patent infringement or market the product in the Fosun Territory.
Revenue Recognition
We estimated the transaction price for the Fosun License Agreement using the most likely amount method. We evaluated all of the variable payments to be received during the duration of the contract, which included payments from specified milestones, royalties, and estimated supplies to be delivered. We will re-evaluate the transaction price at each reporting period and upon a change in circumstances. As of September 30, 2020, the transaction price allocated to unfulfilled performance obligation was $31.0 million.
No revenue has been recognized from the Fosun License Agreement for the three and nine months ended September 30, 2020 and 2019. Substantially all payments received to date were included in long-term deferred revenue as of September 30, 2020 and December 31, 2019.
Service Revenue
Following the HintMD Acquisition in July 2020 (Note 3), we began to offer customer payment processing and subscription services through our HintMD fintech platform to aesthetic practices. Revenue related to the payment processing service is recognized at a point in time, whereas revenue related to the subscription service is recognized over time.

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Notes to Condensed Consolidated Financial Statements — (Continued)
(Unaudited)
3. Business Combination    
On July 23, 2020, we completed the acquisition of all of the issued and outstanding shares of Hint, Inc. (d/b/a HintMD) (the “HintMD Acquisition”), pursuant to the Agreement and Plan of Merger, dated as of May 18, 2020, (the “HintMD Merger Agreement”), by and among Revance, Heart Merger Sub, Inc., a Delaware corporation and our direct wholly-owned subsidiary, HintMD, and Fortis Advisors, LLC, a Delaware limited liability company, as the securityholder’s representative. HintMD provides financial technology platform services to improve the aesthetic experience for physicians and patients, which is complementary to our product offerings and strategy. The HintMD Acquisition provides potential economic opportunities in a fragmented financial technology platform market, as well as potential synergies in both our commercial strategies and certain cost savings once we integrate.
Upon completion of the HintMD Acquisition, each share of capital stock of HintMD that was issued and outstanding immediately prior to July 23, 2020 was automatically cancelled and converted into the right to receive approximately 0.3235 shares of our common stock. In addition, outstanding and unexercised options to purchase shares of HintMD common stock immediately prior to July 23, 2020 under the Hint, Inc. 2017 Equity Incentive Plan (the “HintMD Plan”), excluding stock options held by former employees or former service providers of HintMD, whether or not vested, were assumed and subsequently converted based on the conversion ratio defined in the HintMD Merger Agreement into options to purchase shares of our common stock, with the awards retaining the same vesting and other terms and conditions as in effect immediately prior to consummation of the HintMD Acquisition. The total number of shares of our common stock issued as consideration for the HintMD Acquisition was 8,572,213, including (i) 683,200 shares of our common stock which will be held in an escrow fund for purposes of satisfying any post-closing purchase price adjustments or indemnification claims under the HintMD Merger Agreement and (ii) assumed options to purchase an aggregate of 801,600 shares of our common stock.
Mark J. Foley, President, Chief Executive Officer and a director of Revance, is a former director and equity holder of HintMD. The shares of HintMD capital stock beneficially owned by Mr. Foley prior to July 23, 2020 were automatically cancelled and converted into the right to receive shares of our common stock in accordance with the terms of the HintMD Merger Agreement.
Consideration Transferred
The following table summarizes the consideration transferred in the HintMD Acquisition:
(in thousands)July 23, 2020
Fair value of Revance common stock issued to HintMD stockholders (1)
$182,294 
Fair value of Revance assumed stock option awards attributable to pre-combination service (2)
5,810 
Cash consideration (3)
1,483 
Total consideration transferred$189,587 


(1)Represents the fair value of equity consideration issued to HintMD shareholders, consisting of approximately 7,757,356 shares (excluding assumed HintMD stock options to purchase an aggregate of 801,600 shares of our common stock), at $23.50 per share (the closing price of shares of our common stock on July 23, 2020), and adjusted for estimated net debt and working capital amounts.
(2)Represents stock option awards held by HintMD employees prior to the acquisition date that have been assumed and converted into our stock-based awards. The portion of the stock option awards related to services performed by employees prior to the acquisition date is included within the consideration transferred.
(3)Represents certain HintMD pre-acquisition liabilities paid by Revance.
The HintMD Acquisition has been accounted for as a business combination using the acquisition method of accounting. The acquisition method requires that assets acquired and liabilities assumed in a business combination be recognized at their fair values as of the acquisition date. The valuation of assets acquired and liabilities assumed in certain tax-related areas has not yet been finalized as of September 30, 2020. As a result, we recorded preliminary estimates for the
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Notes to Condensed Consolidated Financial Statements — (Continued)
(Unaudited)
fair value of certain tax-related assets and liabilities as of the acquisition date. We retained the use of certified valuation specialists to assist with assigning estimated fair values to certain acquired assets. Finalization of the valuation during the measurement period could result in a change in the amounts recorded for the acquisition date fair value of intangible assets, goodwill, and income taxes among other items. The completion of the valuation will occur on or before July 22, 2021.
The following table summarizes the preliminary fair value of assets acquired and liabilities assumed:
(in thousands)July 23, 2020
Cash and cash equivalents$665 
Accounts and other receivable93 
Prepaid expenses and other current assets206 
Property and equipment77 
Intangible assets46,200 
Total assets acquired47,241 
Accounts payable(53)
Accruals and other current liabilities(2,106)
Total liabilities assumed(2,159)
Total identifiable net assets45,082 
Goodwill (1)
144,505 
Total fair value of assets acquired and liabilities assumed
$189,587 

(1)Goodwill with a provisionally assigned value of $144.5 million represents the excess of the consideration transferred over the estimated fair values of assets acquired and liabilities assumed. The preliminary goodwill recognized is attributable to the assembled workforce of HintMD and the anticipated synergies and cost savings expected to be achieved from the operations of the combined company. None of the goodwill resulting from the acquisition is deductible for tax purposes and all of the goodwill acquired was assigned to the Service reporting unit.

The following table summarizes the intangible assets acquired in the HintMD Acquisition as of July 23, 2020:
Fair ValueUseful Life
(in thousands)(in years)
Developed technology$19,600 6
In-process research and development (1)
16,200 N/A
Customer relationships10,300 4
Tradename100 1
Total intangible assets acquired$46,200 

(1)In-process research and development relates to the research and development of payment facilitator technology to facilitate the processing of customer payments. The in-process research and development was valued utilizing the multi-period excess earnings method and was determined to have no defined life based on the current stage of development of the research projects of HintMD on July 23, 2020. No amortization expense has been recorded since July 23, 2020 as the assets have not yet been completed and placed into service. Upon completion of the associated research and development activities, the asset’s useful life will be determined. Prior to completion of these research and development activities, the intangible assets will be subject to annual impairment tests, or more frequent tests in the event of any impairment indicators occurring. These impairment tests require significant judgment regarding the status of the research activities, the potential for future revenues to be derived from any products that may result from those activities, and other factors.

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Notes to Condensed Consolidated Financial Statements — (Continued)
(Unaudited)
Transaction Costs
For the three and the nine months ended September 30, 2020, transaction costs for the HintMD Acquisition were $0.3 million and $3.9 million, respectively. These costs were associated with legal and professional services and recorded in selling, general and administrative expense in our condensed consolidated statements of operations and comprehensive loss.
Financial Results
Since the acquisition date of July 23, 2020, HintMD contributed $0.2 million of the consolidated net revenue for the three months ended September 30, 2020, which are included in our condensed consolidated statements of operations and comprehensive loss. For the three months ended September 30, 2020, HintMD also contributed loss from operations of $2.8 million, which excluded unallocated corporate and other expenses as defined in Note 15.
Supplemental Pro Forma Information
The following supplemental unaudited pro forma financial information presents the combined results of operations for each of the periods presented, as if the HintMD Acquisition occurred on January 1, 2019. The pro forma financial information is presented for illustrative purposes only, based on currently available information and certain estimates and assumptions we believe are reasonable under the circumstances, and is not necessarily indicative of future results of operations or the results that would have been reported if the HintMD Acquisition had been completed on January 1, 2019. These results were not used as a part of our analysis of the financial results and performance of the business. These results are adjusted and do not include any anticipated synergies or other expected benefits of the acquisition.
The supplemental unaudited pro forma financial information for the periods presented is as follows:
 Three Months Ended September 30,Nine Months Ended September 30,
(in thousands)2020201920202019
Total revenue$3,863 $410 $4,633 $1,336 
Net loss$(81,946)$(47,558)$(215,250)$(135,334)

Significant non-recurring pro forma adjustments include the following:
Transaction costs of $3.9 million were assumed to have been incurred on January 1, 2019 and were recognized as if incurred in the first quarter of 2019.
Share-based compensation expense of $1.3 million was assumed to have been incurred on January 1, 2019 and was recognized as if incurred in the first quarter of 2019. Such share-based compensation was related to stock awards held by HintMD employees prior to July 23, 2020 that have been assumed and converted into our stock awards.

4. Cash Equivalents and Short-term Investments
Our cash equivalents and short-term investments consist of money market funds, U.S. treasury securities, U.S. government agency obligations, commercial paper, and overnight repurchase agreements which are classified as available-for-sale securities.
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Notes to Condensed Consolidated Financial Statements — (Continued)
(Unaudited)
The following table is a summary of amortized cost, unrealized gains and losses, and fair value of our cash equivalents and short-term investments:
September 30, 2020December 31, 2019
Unrealized
in thousandsCostFair ValueCostGainsLossesFair Value
Money market funds$329,047 $329,047 $136,258 $ $ $136,258 
Commercial paper96,392 96,392 77,082   77,082 
U.S. government agency obligations  5,993 2 (5)5,990 
U.S. treasury securities  48,349 6  48,355 
Overnight repurchase agreements  15,001   15,001 
Total cash equivalents and available-for-sale securities$425,439 $425,439 $282,683 $8 $(5)$282,686 
Classified as:
Cash equivalents$329,047 $163,731 
Short-term investments96,392 118,955 
Total cash equivalents and available-for-sale securities$425,439 $282,686 
As of September 30, 2020 and December 31, 2019, we had no other-than-temporary impairments on our available-for-sale securities, and the contractual maturities of the available-for-sale securities are less than one-year.

5. Filler Distribution Agreement
In January 2020, we entered into an exclusive distribution agreement (the “Teoxane Agreement”) with Teoxane SA (“Teoxane”), pursuant to which Teoxane granted us the exclusive right to import, market, promote, sell and distribute Teoxane’s line of Resilient Hyaluronic Acid® (“RHA®”) Collection of dermal fillers in exchange for 2,500,000 shares of our common stock and certain other commitments by us. The Teoxane Agreement includes rights to (i) RHA® 2, RHA® 3 and RHA® 4 which have been approved by the U.S. Food and Drug Administration (the “FDA”) for the correction of moderate to severe dynamic facial wrinkles and folds in the currently approved indications, (ii) RHA® 1, which is currently in the premarket approval (“PMA”) application process for the treatment of perioral rhytids, and (iii) future hyaluronic acid filler advancements and products by Teoxane (collectively the “RHA® Collection of dermal fillers”) in the U.S. and U.S. territories and possessions. The Teoxane Agreement will be effective for a term of ten years upon product launch and may be extended for two years upon the mutual agreement of the parties. We are required to meet certain minimum purchase obligations and certain minimum expenditure requirements, which are discussed in Note 14.
If Teoxane pursues regulatory approval for RHA® Collection of dermal fillers for certain new indications or filler technologies, including innovations with respect to existing products in the U.S., we will be subject to certain specified cost-sharing arrangements for third party expenses incurred in achieving regulatory approval for such products. We will also have a right of first negotiation with respect to any cosmeceutical products that Teoxane wishes to distribute in the U.S, and Teoxane will have a right of first negotiation in connection with the distribution of DaxibotulinumtoxinA for Injection for aesthetic use outside the U.S. and U.S. territories where Teoxane has an affiliate.
The Teoxane Agreement is accounted for as an asset acquisition for the distribution rights of various approved and unapproved products and indications. The aggregate purchase consideration for the distribution rights is $43.5 million, consisting of the fair value of the 2,500,000 shares transferred to Teoxane and transaction costs. The purchase consideration is allocated to the underlying groups of approved and unapproved products based on their relative fair values, of which $11.2 million is allocated to certain unapproved products and future innovations, or in-process research and development assets, and is recognized as research and development expense on the condensed consolidated statements of operations and
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Notes to Condensed Consolidated Financial Statements — (Continued)
(Unaudited)
comprehensive loss. The remaining purchase consideration is allocated to the currently approved products and indications, and is recognized as an intangible asset on the condensed consolidated balance sheets. The distribution rights to approved products and indications are amortized over approximately 4 years commenced upon the first delivery of the RHA® Collection of dermal fillers products from Teoxane in June 2020. Refer to Note 6 for further details.

6. Intangible Assets
The following table sets forth the intangible assets and the remaining useful lives for the intangible assets:
September 30, 2020
(in thousands, except for in years) Remaining Useful Lives
(in years)
Gross Carrying AmountAccumulated AmortizationNet Carrying Amount
Distribution rights3.7$32,334 $(2,695)$29,639 
Developed technology5.819,600 (544)19,056 
In-process research and developmentN/A16,200 N/A16,200 
Customer relationships3.810,300 (429)9,871 
Tradename0.8100 (17)83 
Total intangible assets$78,534 $(3,685)$74,849 

For the three and nine months ended September 30, 2020, the aggregate amortization expense of intangible assets was $3.0 million and $3.7 million, respectively. No amortization expense of the intangible assets was recorded for the three and nine months ended September 30, 2019.
Based on the amount of intangible assets subject to amortization as of September 30, 2020, the estimated amortization expense for each of the next five fiscal years and thereafter was as follows:
Year Ending December 31,(in thousands)
2020 remaining three months$3,506 
202113,983 
202213,925 
202313,925 
20248,137 
2025 and thereafter5,173 
Total$58,649 

7. Inventories
As of September 30, 2020, our inventories of $4.0 million consisted of only finished goods, which are the purchased RHA® Collection of dermal fillers from Teoxane.

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Notes to Condensed Consolidated Financial Statements — (Continued)
(Unaudited)
8. Accruals and Other Current Liabilities
Accruals and other current liabilities consist of the following:
 September 30,December 31,
(in thousands)20202019
Accruals related to:
Compensation$18,470 $7,933 
General and professional services8,399 4,751 
Clinical trials5,046 4,746 
Inventories1,725  
Other current liabilities3,019 206 
Nonrecurring milestone payment1,000 1,000 
Total accruals and other current liabilities$37,659 $18,636 

We reclassified categories of accruals for balances as of December 31, 2019 to make comparable with balances as of September 30, 2020. Therefore, the balances as of December 31, 2019 are different from the balances reflected in Part IV, Item 15. “Exhibits and Financial Statement Schedules—Notes to Consolidated Financial Statements—Note 7. Balance Sheet Components of our Annual Report on Form 10-K for the year ended December 31, 2019.

9. Derivative Liability