Source Advanced Race Guide
Chewing a potion sponge and swallowing its liquid contents is a full-round action. A creature of at least Large size can swallow the sponge in its entirely; other creatures must spit out the sponge once it’s depleted (a free action).
Unlike a potion that is drunk from a vial, a potion sponge can be used underwater. A potion can be poured from a vial into a sponge potion (or squeezed from a sponge into a vial) as a full-round action. The potion sponge is immune to attacks that specifically target crystal, glass, ceramic, or porcelain, such as shatter. It otherwise works like a potion vial.