During the three months ended March 31, 2011, the Company recorded sales of Qutenza to its specialty distribution and specialty pharmacy customers totaling $0.6 million. Under the Company's revenue recognition policy, the Company recognized revenue during the three months ended March 31, 2011 totaling $0.6 million.  

Due to the limited history of product returns and cash collections, NeurogesX recognizes revenue at the later of the time the product is shipped by its customers to healthcare professionals and the date of cash collection.  As of March 31, 2011, the Company had $0.6 million of deferred product revenue.  Deferred revenue is reported net of associated cost of goods sold on the Company's balance sheet. Of the deferred revenue total, $0.4 million was sold through to end users (i.e., physicians, clinics and hospitals) and the deferral resulted from cash payments not yet being due under the payment terms, while $0.2 million represented deferral of sales into the Company's distribution channel, recognition of which will be based ultimately upon sales of those units to end users.