Company: WHWK
Filing Date: 2025-03-28
Form Type: 10-K
Source: 0001628280-25-015269
Chunk: 251

Company: Whitehawk Therapeutics, Inc.
Filing Date: 2025-03-28
Form: 10-K
Item: Item 1
Chunk 251
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 specified period around the product expiration date as set forth in the applicable individual distribution agreement. The Company does not allow product returns for product that has been dispensed to a patient. As the Company receives inventory reports from the SDs and SP and has the ability to control the amount of product that is sold to the SDs and SP the Company’s estimate of future potential product returns is based on the on-hand channel inventory data and sell-through data obtained from the SDs and SP. In arriving at its estimate, the Company also considers historical product returns, the underlying product demand, and industry data specific to the specialty pharmaceutical distribution industry.The total amount deducted from gross product sales for the allowances described above for the years ended December 31, 2024 and 2023 was $6.5 million and $4.6 million, respectively. The following table sets forth the changes in the accrued revenue allowances (in thousands):

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As of December 31,20242023Balance at beginning of period$1,065 $1,434 Provision for current period sales6,473 4,648 Payments(6,127)(5,017)Balance at end of period$1,411 $1,065 Cost of Goods SoldCost of goods sold consist primarily of royalties paid to BMS, costs incurred on sales of FYARRO and costs to manufacture and prepare the product for sales subsequent to the FDA approval in November 2021. Costs incurred prior to the FDA approval were expensed when incurred.Research and DevelopmentResearch and development expenses consist of costs incurred in performing research and development activities, including salaries and benefits, materials and supplies, preclinical expenses, share-based compensation expense, contract services, and other external development expenses. The Company records research and development activities conducted by third-party service providers, which include work related to preclinical studies, clinical trials, and contract manufacturing activities, to research and development expense as incurred. The Company is required to estimate the amount of services provided but not yet invoiced and include these expenses in accrued expenses on the consolidated balance sheets and within research and development expenses in the consolidated statements of operations and comprehensive loss. These expenses are a significant component of the Company’s research and development expenses and require significant estimates and judgments. The Company accrues for these expenses based on factors such as estimates of the work completed and in accordance with agreements established with its third-party service providers. As actual expenses become known, the Company adjusts its accrued expenses. In-Process Research and Development (IPR&D