Amgen 2009 Annual Report Download - page 87

$60 million expense associated with the Array BioPharma Inc. agreement and the $50 million expense resulting
from the payment to Cytokinetics, partially offset by the $100 million expense in 2008 resulting from the upfront
payment associated with the Kyowa Hakko Kirin Co. Ltd. (“Kyowa Hakko”) collaboration.
R&D expenses decreased 7% for the year ended December 31, 2008 compared to 2007, which was princi-
pally due to $102 million of lower staff-related costs and discretionary expenses; $133 million of lower clinical
trial costs; $100 million of cost recoveries derived from our licensing agreements, primarily with Daiichi Sankyo
and Takeda and a $16 million decline in restructuring-related costs, as discussed below, partially offset by a $100
million expense in the year ended December 31, 2008 for the upfront payment under our licensing agreement
with Kyowa Hakko. Our clinical trial costs were lower for the year ended December 31, 2008 primarily due to
the completion of enrollment of our large denosumab clinical trials and the related significant costs associated
with site initiation and patient enrollment no longer being incurred, partially offset by increased clinical costs for
our emerging pipeline.
R&D expenses for the years ended December 31, 2009, 2008 and 2007 included $6 million, $3 million and
$19 million, respectively, of restructuring and related charges. The restructuring charges incurred in the year
ended December 31, 2007 primarily related to $38 million in charges related to asset impairments offset by a $19
million benefit associated with the reversal of previously accrued expenses for bonuses and stock-based compen-
sation awards, which were forfeited as a result of the employees’ termination. See Note 9, “Restructuring” to the
Consolidated Financial Statements for further discussion.
Selling, general and administrative
Selling, general and administrative (“SG&A”) expenses are primarily comprised of salaries, benefits and oth-
er staff-related costs associated with sales and marketing, finance, legal and other administrative personnel;
facilities and overhead costs; outside marketing, advertising and legal expenses and other general and admin-
istrative costs. SG&A expenses include costs and cost recoveries associated with certain collaborative
arrangements. Net payment or reimbursement of SG&A costs for collaborations is recognized when the obliga-
tions are incurred or as we become entitled to the cost recovery. In connection with a co-promotion agreement,
we and Pfizer market and sell ENBREL in the United States and Canada and Pfizer is paid a share of the related
profits, as defined. The share of ENBREL’s profits owed to Pfizer is included in SG&A expenses.
SG&A expenses increased 1% for the year ended December 31, 2009 compared to 2008, primarily due to
higher product promotional expenses of $207 million, including increased spending for activities in anticipation
of the launch of Prolia™. This increase was substantially offset by lower litigation expenses of $38 million, lower
expenses associated with the Pfizer profit share of $32 million, expense recoveries associated with our GSK col-
laboration agreement for Prolia™in PMO in Europe, Australia, New Zealand and Mexico of $29 million, lower
staff-related costs of $28 million, lower global enterprise resource planning (“ERP”) system related expenses of
$28 million and lower restructuring and related costs of $8 million. For the years ended December 31, 2009 and
2008, the expense associated with the Pfizer profit share was $1,163 million and $1,195 million, respectively.
SG&A expense increased 13% for the year ended December 31, 2008 compared to 2007, in part due to the
impact of our restructuring plan which contributed $161 million to the increase in expenses, as discussed below.
The increase was also due to higher expense associated with the Pfizer profit share of $211 million, product
promotional spending of $39 million and staff-related costs of $94 million, partially offset by lower litigation ex-
pense of $50 million and lower severance costs of $21 million related to our acquisition of the remaining 51%
ownership interest in Dompé. For the year ended December 31, 2007, the expense associated with the Pfizer
profit share, excluding recoveries recorded as part of our restructuring, as discussed below, was $984 million.
For the year ended December 31, 2009, we recorded $29 million for certain cost saving initiatives. For the
year ended December 31, 2008, we recorded $37 million for certain restructuring charges, which primarily in-
cluded $17 million in asset impairments, $12 million in loss accruals for leases principally related to certain
facilities that will not be used in our business and $9 million in implementation costs associated with certain re-
structuring initiatives. For the year ended December 31, 2007, we recorded $114 million in cost recoveries for
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