Amgen 2010 Annual Report Download - page 140

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administrative” expense in the Consolidated Statements of Income. In addition, cost recoveries from Pfizer for their
share of the selling and marketing expense were $87 million, $75 million and $77 million for the years ended
December 31, 2010, 2009 and 2008, respectively, and are included in “Selling, general and administrative” expense
in the Consolidated Statements of Income.
Glaxo Group Limited
In July 2009, we entered into a collaboration agreement with Glaxo Group Limited (“Glaxo”) a wholly owned
subsidiary of GlaxoSmithKline plc for the commercialization of denosumab for osteoporosis indications in Europe,
Australia, New Zealand and Mexico (the “Primary Territories”). We retained the rights to commercialize denosumab for
all indications in the United States and Canada and for oncology indications in the Primary Territories.
Under a related agreement, Glaxo will commercialize denosumab for all indications in countries, excluding
Japan, where we do not currently have a commercial presence, including China, Brazil, India, Taiwan and South
Korea (the “Expansion Territories”). In the Expansion Territories, Glaxo will be responsible for all development and
commercialization costs and will purchase denosumab from us to meet demand. We will record product sales to
Glaxo in the Expansion Territories. We have the option of expanding our role in the future in the commercialization
of denosumab in the Primary Territories and certain of the Expansion Territories.
In the Primary Territories, we share equally in the 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. Glaxo will also be responsible for bearing a portion of the cost of certain specified
development activities in the Primary Territories.
The collaboration agreement with Glaxo for the Primary Territories will expire in 2022 and the related
agreement for the Expansion Territories will expire in 2024 unless either agreement is terminated earlier in
accordance with its terms.
We have determined that we are the principal participant in the Primary Territories. Accordingly, we will record
related product sales to third parties net of estimated returns, rebates and other deductions. During the year ended
December 31, 2010, product sales in the Primary Territories for osteoporosis indications were not material.
During the years ended December 31, 2010 and 2009, cost recoveries from Glaxo were $46 million and
$29 million, respectively, and are included in “Selling, general and administrative” expense in the Consolidated
Statements of Income. In addition, during 2010, we received payments aggregating $75 million for the achievement
of certain commercial milestones. The 2010 payments were recognized as revenue upon the achievement of the
related milestones and are included in “Other revenue” in our Consolidated Statement of Income. Under these
agreements, we also received an initial payment of $45 million during the year ended December 31, 2009 which is
being amortized and recognized as revenue over our estimated period of continuing involvement of approximately
13 years in “Other revenue” in our Consolidated Statements of Income.
Takeda Pharmaceutical Company Limited
In February 2008, we entered into a collaboration agreement with Takeda Pharmaceutical Company Limited
(“Takeda”), which provides Takeda the exclusive rights to develop and commercialize for the Japanese market up to
12 clinical stage molecules from our pipeline across a range of therapeutic areas, including oncology and
inflammation, (collectively the “products”). The products include Vectibix»which received regulatory approval
in Japan in 2010 for unresectable, advanced or recurrent colorectal cancer with wild-type KRAS, AMG 386, which
is in a phase 3 trial in the United States for recurrent ovarian cancer, and ganitumab (AMG 479) which is expected to
enter into a phase 3 trial in the United States for first-line metastatic pancreatic cancer in 2011. Under this
agreement, Amgen received an upfront payment of $200 million in 2008 and may receive up to $307 million of
additional amounts upon the achievement of various success-based development and regulatory approval
F-18
AMGEN INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)