As of September 30, 2020,March 31, 2021, our cash, cash equivalents and marketable securities totaled $525.2$435.2 million. Excluding gains from 2 discrete business divestitures, we have incurred significant net losses and negative cash flows from operating activities since inception, resulting in an accumulated deficit of $1.3$1.4 billion as of September 30, 2020.March 31, 2021. We expect to continue to incur significant operating losses and negative cash flows from operations to support the sales and marketing of Fintepla for Dravet syndrome in the U.S. and Europe, potential commercialization of Fintepla for Dravet syndromeLGS, as well as continuing to advance our clinical programs. Additionally, we are obligated to make future milestone payments that are contingent upon the successful achievement of certain development, regulatory and sales-based milestone events related to Fintepla and MT1621. Historically, we have relied primarily on the proceeds from equity and convertible debt offerings to finance our operations. See Note 10 for information related to our recent financing transactions. Until such time, if ever, we can generate a sufficient amount of revenue to finance our cash requirements, we may need to continue to rely on additional financing to achieve our business objectives. However, there is no assurance thatwe may not be able to secure such financingsfinancing in a timely manner or on favorable terms, if at all, and this risk could be consummatedexacerbated by the impact of COVID-19 on acceptable terms or at all.global economic conditions. Failure to raise sufficient capital when needed could require us to significantly delay, scale back or discontinue one or more of our product development programs or commercialization efforts or other aspects of our business plans, and our operating results and financial condition would be adversely affected.

The preparation of our condensed consolidated financial statements requires us to make estimates, judgments and assumptions that may affect the reported amounts of assets, liabilities, equity, revenues and expenses and related disclosure of contingent assets and liabilities. On an ongoing basis we evaluate our estimates, judgments and methodologies. We base our estimates on historical experience and on various other assumptions that we believe are reasonable, the results of which form the basis for making judgments about the carrying values of assets, liabilities and equity and the amount of revenues and expenses. Actual results may differ from those estimates.

ASU 2020-06 will be effective for us as set forth below.of January 1, 2022. When effective, we expect the accounting for our convertible senior notes as a single unit of account will: i) increase the carrying value of our convertible notes to be closer to its outstanding principal balance, ii) decrease our interest expense over the expected life of the financial instrument, and iii) result in the debt instrument’s effective interest rate to be closer to the stated coupon rate. In addition, the use of the more favorable treasury stock method, which allows an entity with a stated policy of settling convertible instruments with a combination of cash and shares to exclude shares issuable upon conversion that it expects to settle with cash when calculating diluted earnings per share, is no longer permitted. Even if we have the intent and ability to settle conversions by paying the conversion value in cash up to the principal amount being converted and any excess in shares, the adoption of ASU 2020-06 will require that we presume such instruments will be settled by issuance of shares (the “if-converted method”). As a result, our diluted earnings per share under ASU 2020-06 may be lower than if we were able to apply the treasury stock method when calculating the dilutive effect of our Notes in earnings per share.

In February 2021, we began to record revenues fromdistribute Fintepla in Europe (currently, in Germany) through a third-party logistics provider (3PL) for distribution to pharmacies throughout Germany. The pharmacies are our customers, who subsequently resell our product directly to patients and health care providers.

For the three months ended March 31 ,2021, total net product sales to our exclusive specialty distributor, our sole Customer,generated from Fintepla was $12.3 million, and consisted of $11.3 million derived in the third quarter of 2020, subsequent to the approval ofUnited States and $1.0 million derived in Germany. Fintepla was approved by the FDA in June 2020. Prior to the third quarter of 2020 our revenues were derived from our collaboration agreement with Nippon Shinyaku Co., Ltd. (Shinyaku).

We record accounts receivable,product revenue at the net sales price (transaction price), which includes estimates of certain fees paidconsideration payable to our Customercustomers and third-party payers for distribution services rendered to uswhich reserves are established and that result from government rebates, chargebacks, co-pay assistance, prompt-payment discounts and other allowances that are not distinct fromoffered under arrangements between us, our customers, and third-party payers related to the sales of product to that Customer, prompt payment discountsFintepla.

The following table summarizes the provisions, and chargebacks based on contractual terms. As of September 30, 2020, we determined an allowancecredits/payments, for credit losses was not recorded based upon our review of contractual payment terms, the short-duration we expect the accounts receivable to be outstanding, the fact each order placed for Fintepla by our Customer is for immediate shipment to their customer, and our assessment of the creditworthiness of our Customer, among other factors. We have standard payment terms that generally require payment within approximately 30 days. Accounts receivable, net excludes receivables from our collaboration agreement with Shinyaku, if any, which are recorded within current assets on our condensed consolidated balance sheets.sales-related deductions.

We generally invoice our customers and recognize revenue once our performance obligations are also subjectsatisfied, at which point payment is unconditional. Accordingly, our arrangements with customers did not give rise to credit risk fromcontract assets or liabilities during the three months ended March 31, 2021.

As is common in the pharmaceutical industry for products treating rare diseases, Fintepla is distributed through exclusive arrangements with a specialty distributor in the U.S. and through a 3PL who distributes to pharmacy providers throughout Germany. As a result, our accounts receivable relatedbalance at March 31, 2021 is highly concentrated with our U.S. customer accounting for over 90% of the balance and over 90% of net product revenue for the three months ended March 31, 2021. Accounts receivable are stated net of an allowance that reflects our current estimate of credit losses expected to our product sales.occur over the life of the receivable. Estimates of our allowance for credit losses consider a number of factors including existing contractual payment terms, individual customer circumstances, historical payment patterns of our customers, a review of the local economic environment and its potential impact on expected future customer payment patterns.

Pursuant to the terms of the agreement, Shinyaku agreed to make aggregate fixed payments of $20.0 million to us in scheduled installments.installments over a two-year period from the date of the agreement. As of

We can earn up to an additional $42.5 million tied to the achievement of certain net sales milestones by Shinyaku through the term of the agreement, which generally expires in 2045.

For the three and nine months ended September 30,March 31, 2021 and 2020, we recognized collaboration revenue ofunder this arrangement was $1.3 million and $3.6$1.2 million, respectively. As of September 30, 2020,March 31, 2021, the deferred revenue balance of $11.2$11.0 million included a $1.5 million installment receivable recorded within other current assets related to the $20.0 million fixed consideration under the arrangement. Wewas classified deferred revenue as either current or net of current portion in the accompanying condensed consolidated balance sheets

In October 2019, we entered into an option agreement with Tevard Biosciences (Tevard), a privately-held company focused on advancing novel gene therapies and other genetic epilepsies. In December 2020, Form 10-Q | 12we exercised the option on Tevard’s Dravet syndrome program and entered into a collaboration, option and license agreement with Tevard (the Tevard Agreement) and will be responsible for funding preclinical studies and clinical development for this program. The financial terms of the Tevard Agreement included an upfront payment of $5.2 million. In connection with the transaction, we also purchased a convertible promissory note issued by Tevard in the amount of $5.0 million. The note matures in December 2022 and carries interest at 3.5% per year. The note will automatically convert into equity securities issued by Tevard in their next equity financing transaction at a conversion price equal to the price paid per share by other investors of the financing transaction.

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. A three-level valuation hierarchy has been established under GAAP for disclosure of fair value measurements. The valuation hierarchy is based on the transparency of inputs to the valuation of an asset or liability as of the measurement date. The three levels are defined as follows:

The following tables summarize assets and liabilities recognized or disclosed at fair value on a recurring basis as of September 30, 2020March 31, 2021 and December 31, 2019 (in thousands):2020: