Amgen 2010 Annual Report Download - page 142

Other
We have various other collaborations in addition to those discussed above including our collaborations with
Array BioPharma Inc. (“Array”), Kyowa Hakko Kirin Co. Ltd. (‘‘KHK”) and Cytokinetics, Inc. (“Cytokinetics”),
discussed below.
We entered into our collaboration agreement with Array in December 2009, which granted us exclusive
worldwide rights to Array’s small-molecule glucokinase activator program, including ARRY-403 (AMG 151),
which at the time of the agreement was and currently is being tested in a phase 1 clinical trial in patients with Type 2
diabetes. In connection with entering the agreement, we paid Array $60 million which we expensed when paid and
included in “Research and development” expense in the Consolidated Statement of Income.
We entered into our collaboration agreement with KHK in March 2008, which granted us an exclusive license
to develop and commercialize KHK’s humanized monoclonal antibody KW-0761 (AMG 761) worldwide, except in
Japan, Korea, China and Taiwan. KW-0761 (AMG 761) is being studied in inflammation and oncology settings and
at the time the agreement was entered into was and currently is in a phase 1 clinical trial for both settings. In
connection with entering the agreement, we paid KHK $100 million. In 2010, KHK paid us $20 million to reacquire
our rights for KW-0761 (AMG 761) in the oncology setting. Both amounts were recognized when paid and included
in “Research and development” expense in the Consolidated Statement of Income.
We entered into a collaboration agreement with Cytokinetics in December 2006, to discover, develop and
commercialize novel small-molecule therapeutics that activate cardiac muscle contractility for potential applications in
the treatment of heart failure. In addition, Amgen obtained an option to participate in future development and
commercialization of Cytokinetics’ lead drug candidate arising from this program, Omecamtiv mecarbil (AMG 423),
which at the time the agreement was entered into was in a phase 1 clinical trial and currently is in a phase 2 clinical trial.
The collaboration is worldwide, excluding Japan. In connection with entering into the agreement, we paid Cytokinetics
$42 million. In 2009, we exercised our option under the agreement and paid Cytokinetics an additional $50 million, to
assume responsibility for development and commercialization of the lead drug candidate and related compounds, subject
to certain participation rights of Cytokinetics. Both payments were expensed when paid and included in “Research and
development” expense in the Consolidated Statements of Income.
Pursuant to the terms of these agreements, we may also be required to pay additional amounts upon the
achievement of various development, regulatory and commercial milestones which in the aggregate are significant.
In addition, if any products related to these collaborations are approved for sale, we would be required to pay
royalties on future sales. The payment of these amounts, however, is contingent upon the occurrence of various
future events, which have a high degree of uncertainty of occurring.
7. Related party transactions
We own a 50% interest in KA, a corporation formed in 1984 with Kirin Holdings Company, Limited (“Kirin”)
for the development and commercialization of certain products based on advanced biotechnology. We account for
our interest in KA under the equity method and include our share of KA’s profits or losses in “Selling, general and
administrative” expense in the Consolidated Statements of Income. For the years ended December 31, 2010, 2009
and 2008, our share of KA’s profits was $71 million, $72 million and $72 million, respectively. At December 31,
2010 and 2009, the carrying value of our equity method investment in KA, net of dividends received, was
$377 million and $306 million, respectively, and is included in non-current “Other assets” in the Consolidated
Balance Sheets. The amount of dividends received was $110 million and $8 million for the years ended
December 31, 2009 and 2008, respectively. We did not receive any dividend payments in 2010. KA’s revenues
consist of royalty income related to its licensed technology rights. All of our rights to manufacture and market
certain products including darbepoetin alfa, recombinant human erythropoietin, pegfilgrastim, granulocyte colony-
stimulating factor, and romiplostim are pursuant to exclusive licenses from KA, which we currently market under
F-20
AMGEN INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)