AbbVie 2014 Annual Report Download - page 78

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respectively. It is not possible to predict with reasonable certainty whether these milestones will be
achieved or the timing for achievement.
Significant arrangements impacting 2014, 2013 and 2012, some of which require contingent milestone
payments, include the following:
Calico Life Sciences LLC
In September 2014, AbbVie and Calico Life Sciences LLC (Calico) entered into a novel R&D collaboration
agreement to discover, develop and commercialize new therapies for patients with age-related diseases,
including neurodegeneration and cancer. In 2014, AbbVie recorded $750 million in other expense in the
consolidated statement of operations related to its commitments under the agreement of which
$250 million was paid in 2014 and $500 million was paid in early 2015. Calico will be responsible for
research and early development during the first five years and continue to advance collaboration projects
through Phase 2a for a ten year period. AbbVie will have the option to exclusively license collaboration
compounds after completion of Phase 2a. AbbVie will support Calico in its early R&D efforts and, upon
option exercise, would be responsible for all late-stage development and commercial activities. Collaboration
costs and profits will be shared equally by both companies post option exercise.
Infinity Pharmaceuticals, Inc.
In September 2014, AbbVie entered into a global collaboration agreement with Infinity
Pharmaceuticals, Inc. (Infinity) to develop and commercialize duvelisib (IPI-145) for the treatment of
patients with cancer. As part of the agreement, AbbVie made an initial upfront payment of $275 million,
which was expensed to IPR&D in the third quarter of 2014. Upon the achievement of certain development,
regulatory and commercial milestones, AbbVie could make additional payments of up to $530 million. In
the United States, the companies will jointly commercialize duvelisib and will share equally in any potential
profits. Outside the United States, AbbVie will be responsible for the commercialization of duvelisib, and
Infinity is eligible to receive tiered double-digit royalties on net product sales.
Ablynx NV
In September 2013, AbbVie entered into a global collaboration agreement with Ablynx NV to develop
and commercialize the anti-IL-6R Nanobody, ALX-0061, for the treatment of inflammatory diseases including
rheumatoid arthritis and systemic lupus erythematosus, resulting in a charge to IPR&D of $175 million.
Upon the achievement of certain development, regulatory and commercial milestones, AbbVie could make
additional payments of up to $665 million, as well as royalties on net sales.
Galapagos NV
In September 2013, AbbVie recorded a charge to IPR&D of $45 million as a result of entering into a
global collaboration with Galapagos NV (Galapagos) to discover, develop and commercialize cystic fibrosis
therapies. Upon the achievement of certain development, regulatory and commercial milestones, AbbVie
could make additional payments of up to $360 million, as well as royalties on net sales.
In February 2012, AbbVie recorded a charge to IPR&D of $150 million as a result of entering into a
global collaboration with Galapagos to develop and commercialize a next-generation, oral Janus Kinase 1
(JAK1) inhibitor in Phase 2 development with the potential to treat multiple autoimmune diseases.
Additional payments of approximately $1.3 billion could be required for the achievement of certain
development, regulatory and commercial milestones under this agreement.
72 2014 Form 10-K