Amgen 2009 Annual Report Download - page 143

AMGEN INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
development and commercialization costs and will purchase denosumab from us to meet demand. We will record
product sales to GSK for their purchase of denosumab in the Expansion Territories. We have the option of ex-
panding our role in the commercialization of denosumab in the Primary Territories and certain of the Expansion
Territories in the future.
In the Primary Territories, we will share equally in commercialization profits and losses related to the
collaboration after accounting for expenses, including an amount payable to us in recognition of our discovery
and development of denosumab that will decline as certain sales thresholds are met. GSK will also be responsible
for bearing a portion of the cost of certain specified development activities. During the year ended December 31,
2009, we had no product sales of denosumab. During the year ended December 31, 2009, cost recoveries from
GSK were $29 million and are included in “Selling, general and administrative” expense in the Consolidated
Statement of Income. Under this agreement, we also received an initial payment of $45 million and may receive
additional amounts upon the achievement of certain commercial milestones. The initial payment of $45 million is
being amortized over our estimated period of continuing involvement of approximately 13 years and is recog-
nized as revenue in “Other revenue” in our Consolidated Statement of Income. As of December 31, 2009, no
amounts have been recognized with respect to the commercial milestones.
Takeda Pharmaceutical Company Limited
In February 2008, we entered into a collaboration agreement with Takeda Pharmaceutical Company Limited
(“Takeda”), which provides them the exclusive rights to develop and commercialize for the Japanese market up
to 12 clinical stage molecules, including Vectibix®(collectively the “products”), from our pipeline across a range
of therapeutic areas, including oncology and inflammation. Under this agreement, Amgen received an upfront
payment of $200 million and may receive additional amounts upon the achievement of various success-based
development and regulatory approval milestones. In addition, Takeda is obligated to pay Amgen up to an addi-
tional $190 million of future worldwide development costs for the products through 2012 and a reduced amount
of such costs, thereafter. Takeda will be solely responsible for all development and commercialization costs of
these products in Japan and we will receive royalties on future sales of these products in Japan. Amgen has the
right to participate in the promotion of the products in Japan.
In February 2008, we also entered into a collaboration agreement with Takeda for the worldwide develop-
ment and commercialization of our product candidate, motesanib, in the oncology area. Under this agreement, the
parties will share responsibility for the development of motesanib outside Japan and Takeda shall be responsible
for development in Japan. Amgen shall be responsible for commercialization of motesanib in North America and
Takeda shall be responsible for commercialization outside of North America. Each party has the right to partic-
ipate in the commercialization of motesanib in the other party’s territory. Under this agreement, Amgen received
an upfront payment of $100 million and may receive additional amounts upon the achievement of various
success-based regulatory approval and sales milestones. In addition, Takeda is obligated to pay 60% of future
worldwide development costs (excluding Japan, for which Takeda shall bear 100% of such costs), and the parties
will share equally all other costs and profits resulting from the commercialization of motesanib outside Japan. If
approved for sale, Amgen will receive royalties on future sales of motesanib in Japan.
During the years ended December 31, 2009 and 2008, cost recoveries from Takeda were $112 million and
$120 million, respectively, and are included in “Research and development” expense in the Consolidated State-
ments of Income. The upfront payments, aggregating $300 million, are being amortized over our estimated
period of continuing involvement of approximately 20 years and are recognized as revenue in “Other revenues”
in our Consolidated Statements of Income, of which $15 million and $14 million were recognized for the years
ended December 31, 2009 and 2008, respectively.
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