SecProbe.io

CORRESP
1
filename1.htm

May 25, 2023

VIA EDGAR

Securities and Exchange Commission

Division of Corporation Finance

Office of Life Sciences

100 F. Street, N.E.

Washington, D.C. 20549

Attention: Mary Mast

Angela Connell

Re: RVL Pharmaceuticals plc

Form 10-K for Year Ended December 31, 2022

  Filed on March 20, 2023

  Form 8-K dated March 20, 2023

  File No. 001-38709

Ladies and Gentlemen:

RVL Pharmaceuticals plc (the
 “Company”) is submitting this letter to the Securities and Exchange Commission (the “SEC”) via EDGAR
in response to the comment letter from the staff of the SEC (the “Staff”), dated April 20, 2023 (the “Comment
Letter”), pertaining to the Company’s above-referenced Annual Report on Form 10-K for the fiscal year ended December 31,
2022, filed with the SEC on March 20, 2023 (the “Annual Report”) and Current Report on Form 8-K.

The Staff’s comments,
as reflected in the Comment Letter, are reproduced in italics below, and the corresponding responses of the Company are shown below each
comment.

Form 10-K for the Year Ended December 31,
2022

Management’s Discussion and Analysis

Results of Operations

Comparison of Years Ended December 31,
2022 and 2021, page 66

 1. You disclose a gross profit and gross profit percentage in your table of revenues and expenses from
continuing operations which includes both Net product sales and Royalty and licensing revenue. Please confirm you will revise in future
filings to separately calculate gross profit and gross profit percentage based on net product sales and revise the narrative on page 67
accordingly. In this regard, please confirm that the cost of sales relates solely to Net product sales.

Response to Comment 1:

In response to the Staff's comment,
the Company confirms that its cost of goods sold relates solely to costs directly associated with net product sales, as illustrated in
the narrative and tabular disclosures provided in the Management’s Discussion and Analysis (“MD&A”).

Further, the Company confirms that
in future filings it will disclose and analyze a supplemental measurement of gross profit and gross profit percentage in both the MD&A
table of revenues and expenses and the narrative disclosure that follows thereafter, with each such measure being based on net product
sales, exclusive of any royalty and licensing revenue.

The Company refers the Staff to Exhibit A
for an illustration of the marked changes to the MD&A contained in the Annual Report as an example of how the Company would revise
the disclosure in future filings to address the Staff’s comments.

Revenues,
page 66

 2. You state on pages 9 and 22 that Upneeq exclusivity from the FDA expires on July 8, 2023. You state on page 26 that
after the regulatory exclusivity period expires in July 2023, manufacturers may gain approval of generic versions of Upneeq. If you
may be subject to generic competition after July 2023, provide proposed additional disclosure to be included in future filings to
enhance Management's Discussion and Analysis and throughout the filing, as necessary, relating to the effect loss of exclusivity may have
on your results of operations.

Response to Comment 2:

In response to the Staff’s comment,
the Company advises the Staff that it discloses on page 9 of the Annual Report, that Upneeq received three years of regulatory exclusivity
from the U.S. Food and Drug Administration (the “FDA”) that expires on July 8, 2023. As pointed out by the Staff,
the Company further discloses, on page 26 of the Annual Report, that, after the regulatory exclusivity period expires on July 8,
2023, a manufacturer may gain approval of a generic version of Upneeq through the submission of an Abbreviated New Drug Application (“ANDA”).
This does not mean, however, that a generic version of Upneeq will be approved when the period of regulatory exclusivity expires. On page 9
of the Annual Report, the Company discloses that, in addition to the three years of regulatory exclusivity, Upneeq is also protected by
method of use patents that expire in 2031 and formulation patents that expire in 2039.

As disclosed by the Company on page 34
of the Annual Report, a manufacturer that files an ANDA for a generic version of Upneeq may file a Paragraph IV certification, triggering
lengthy litigation under the Drug Price Competition and Patent Term Restoration Act of 1984. A Paragraph IV certification would need to
be served on the Company within 20 days of the FDA accepting an ANDA for review. To date, the Company has not received any Paragraph IV
certifications and is not aware of any third party that has filed, or is contemplating filing, an ANDA. Since an ANDA filer attempting
to obtain approval of a generic version that would be substitutable for Upneeq must show that the Company’s patents covering Upneeq
are invalid, unenforceable or not infringed by the proposed generic version, this process could take a number of years, and we believe
any such filer would currently be unsuccessful due to the Company’s patent position. As such, the Company would not expect any generic
version product approval at the time Upneeq’s regulatory exclusivity expires on July 8, 2023 or in the near term after the
loss of regulatory exclusivity. Any generic competition would occur after the Company and an ANDA filer engage in litigation related to
the validity, enforceability and/or infringement of relevant patents, which may take several years.

Finally, even if a third party receives
FDA approval of a generic version equivalent of Upneeq, since Upneeq is not distributed through the customary wholesaler and pharmacy
channels, there would not be an automatic substitution of existing Upneeq prescriptions with a generic version, as seen with many generic
launches. Accordingly, the Company does not currently believe that the impending loss of regulatory exclusivity is material to an understanding
of our results of operations or liquidity and capital resources and, as a result, does not believe that disclosure on the loss of regulatory
exclusivity in the MD&A would be appropriate at this time.

Notes to the Consolidated Financial Statements

Note 5. Revenue, page 91

 3. You state in your Form 8-K dated March 20, 2023 that since inception of your Direct Dispense
model, you recognized sales upon shipment from the third-party logistics company. You state that you will now record Direct Dispense revenues
upon delivery to the end customer, starting with the fourth quarter of 2022. As a result, $2.3 million of net product sales that were
included in your preliminary estimates of the fourth quarter and full year 2022 UPNEEQ net product sales will now be recognized in the
first quarter of 2023. Please address the following:

 • Clarify whether this change represents a change in accounting principle or change in accounting estimate.
If the former, tell us if you have received a preferability letter from your auditors. Refer to ASC 250.

 • Tell us where this fourth quarter change is disclosed in your 10-K.

 • Tell us the effect the change was to each previously reported period.

 • Provide us an analysis under ASC 606 of your accounting treatment before and after the change. In this
regard, clarify your use of any third-party logistical partners and explain your determination of whether they are acting as principal
or agent in their capacity as distributor and the resulting impact on the timing of your revenue recognition.

Response to Comment 3:

In response to the Staff’s comment,
please see below a discussion of the accounting treatment of the Company’s Direct Dispense model.

Direct Dispense - Background

In September 2021, the Company
initiated its Direct Dispense program to eye care practices. In early 2022, the Company expanded the offering to medical aesthetics professionals
and in the second half of 2022, it further expanded the offering to select telemedicine partners (telemedicine partners, eye care practices
and medical aesthetics professionals, together, the “practitioners”). Pursuant to the Direct Dispense model, practitioners
can purchase case quantities of Upneeq directly from the Company and then resell and dispense Upneeq directly from the practitioner’s
office to patients who are diagnosed with acquired blepharoptosis and prescribed Upneeq by the practitioner.

From inception, the Direct Dispense
model has relied upon a third-party logistical partner, Eversana Life Science Services located in Memphis Tennessee (“Eversana”),
to satisfy certain regulatory requirements and fulfill the product shipment to the practitioner. Prior to the fourth quarter of 2022,
the Company erroneously concluded that a sale to Eversana had been completed at the time that Eversana shipped the product to the practitioner,
as title to the product transferred to Eversana upon shipment, rather than at the time the practitioner took possession of the product,
which is when title to the product transferred to the practitioner. As a result, the Company prematurely recognized revenues with respect
to Direct Dispense shipments that crossed a period end (i.e. shipped by Eversana prior to a period end but delivered to the practitioner
after a period end).

Direct Dispense - Recent Developments

As sales volumes under the Direct Dispense
model have grown, and material Direct Dispense shipments first crossed the period end in the fourth quarter of 2022, the Company re-examined
its Direct Dispense model under Financial Accounting Standards Board, Accounting Standards Codification 606, Revenue from contracts
with customers (“ASC 606”).

The Company concluded that the end
customer practitioner, and not Eversana, meets the definition of a customer under ASC 606-10-15-3: “a party that has contracted
with an entity to obtain goods or services that are an output of the entity’s ordinary activities in exchange for consideration.”
This conclusion was based on the fact that the end customer practitioner enters into a contract with the Company to purchase the product
and is the ultimate beneficiary of the product. Further, the Company concluded that it is the principal in the arrangement with the end
customer practitioner and that Eversana acts in the capacity as an agent for the Company. This conclusion is based on the fact that the
Company retains control over the product prior to the transfer to the end customer practitioner. Additionally, the Company determines
the price at which to sell the product, obtains the order from the end customer practitioner and directs Eversana to provide the fulfillment
services on its behalf. While Eversana assumes legal title to the product while the product is in transit to the end customer practitioner,
Eversana does not have the ability to control or direct the use of the product as they are directed by the Company to ship specified quantities
to specified customers. Further, the Company maintains control over product pricing and the end customer practitioner pays the Company
directly for the purchase of the product. Eversana is ultimately compensated by the Company for the fulfillment services and the amount
of compensation is not related to the pricing established for the product sold to the end customer practitioner. Lastly, the Company’s
shipping terms with the end customer practitioner are based on FOB destination. As a result, until such time as Eversana delivers the
product to the end customer practitioner and thereby transfers control of the product on behalf of the Company, the Company's performance
obligation to the end customer practitioner remains unfulfilled and therefore will not result in the Company's recognition of revenue
under ASC 606.

Accordingly, starting with the fourth
quarter of 2022, the Company refined its revenue recognition methodologies to correct for this error and began recognizing Direct Dispense
revenues only upon proof of delivery to the end customer practitioner (the “Direct Dispense Change”). As discussed in the
Press Release furnished as an exhibit to the Company’s Current Report on Form 8-K dated March 20, 2023, $2.3 million of
net product sales processed under the Direct Dispense model (representing ~19% and ~6% of unadjusted net product sales in the fourth quarter
and full year 2022, respectively) were shipped by Eversana but not delivered to various end customer practitioners at December 31,
2022 and were, therefore, appropriately not recognized as revenues in the year ended December 31, 2022 nor reported as such in the
Annual Report.

Direct Dispense – Prior Period Impacts

The Direct Dispense Change constituted
a correction of an error and does not represent either a change in accounting principle or change in accounting estimate. In addition,
the Direct Dispense Change did not have a material impact to any previously reported period and therefore did not result in any restatement.
After completing an analysis of every sale transaction and shipment made under the Direct Dispense model since inception, the Company
determined that the Direct Dispense Change, had it been applied to all prior periods, would have been clearly immaterial. To illustrate
this immateriality, the Company provides the following summary of the periodic net impact of the Direct Dispense Change to net product
sales for each fiscal period since the initiation of the Direct Dispense program:

 Fiscal Period

 Net Over/(Under)

Stated Net

Product Sales

  As
Reported Net

 Product Sales

Net Impact As % of

As Reported
Net

Product Sales

2021-Q3 QTD

$
31,950

$
2,196,000

1.45
%

2021-Q4 QTD

$
7,920

$
3,060,000

0.26
%

2021-FY YTD

$
39,870

$
7,511,000

0.53
%

2022-Q1 QTD

$
115,980

$
5,944,000

1.95
%

2022-Q2 QTD

$
139,470

$
8,448,000

1.65
%

2022-Q3 QTD

$
(106,308
)

$
10,022,000

1.06
%

2022-Q4 QTD

$
(189,012
)

$
9,807,000

1.93
%

2022-FY YTD

$
(39,870
)

$
34,221,000

0.12
%

In addition, the Company also considered whether any qualitative factors, including those listed in ASC 250-10-S99, could render the otherwise
quantitatively immaterial amount material and concluded they would not.

Further, the Company advises the Staff
that, because the impact of the Direct Dispense Change in prior periods was immaterial and the Company’s preliminary estimates of
fourth quarter and full year 2022 Upneeq net product sales had not been included in the Company’s financial statements, or otherwise
filed with the Commission, the Direct Dispense Change was not specifically discussed in the Annual Report. However, in the Annual Report,
the Company did revise its previously disclosed revenue recognition accounting policies and practices consistent with the Direct Dispense
Change. Specifically, in MD&A on page 65 and in the consolidated financial statements on page 91, the Company disclosed
that revenue is recognized and the Company’s performance obligations are satisfied when control of the product has transferred to
the customer, which is typically upon delivery to the customer. See the Company’s response to comment 4 below for additional
information on the Company’s plans to improve relevant disclosures in future filings.

 4. You state on page 22 that you made the decision to dispense Upneeq exclusively through a wholly-owned mail order pharmacy,
RVL Pharmacy LLC, which appears to conflict with your discussion on pages 63 and 64 that patients may purchase Upneeq either from
eye care or medical aesthetic professionals, or exclusivity through RVL Pharmacy, LLC, your wholly-owned pharmacy. Please revise to clarify
in future filings. In addition, you discuss on page 23 your Direct Dispense and Virtual Inventory programs, which you state were
introduced in September 2021 and January 2022, respectively. Please tell us the accounting treatment for each distribution model
for all periods presented. Provide us the basis for your accounting treatment and proposed disclosure to be included in future filings.

Response to Comment 4:

Means of Distribution

In response to the Staff’s com