Amgen 2011 Annual Report Download - page 146

AMGEN INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Takeda Pharmaceutical Company Limited
We are in a collaboration with Takeda Pharmaceutical Company Limited (Takeda), which provides Takeda
the exclusive rights to develop and commercialize for the Japanese market up to 12 molecules from our portfolio
across a range of therapeutic areas, including oncology and inflammation (collectively the “Japanese market
products”) and for the worldwide development and commercialization of our product candidate, motesanib, in
the oncology area. The Japanese market products include: (i) Vectibix®, which received regulatory approval in
Japan, in 2010, for unresectable, advanced or recurrent colorectal cancer with wild-type KRAS, (ii) AMG 386,
which is in a phase 3 trial for recurrent ovarian cancer, and (iii) ganitumab (AMG 479), which is in a phase 3 trial
for first-line metastatic pancreatic cancer. Through collaboration committees, the parties jointly coordinate and
oversee Takeda’s development and commercialization of the Japanese market products in Japan. The parties
share responsibility for the development of motesanib outside Japan and Takeda is responsible for development
in Japan. Additionally, 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
participate in the commercialization of motesanib in the other party’s territory. In addition, under the
collaboration Amgen will manufacture and supply Takeda motesanib and the Japanese market products for both
clinical and commercial purposes. In 2011, we announced that the motesanib pivotal phase 3 trial (MONET1) did
not meet its primary objective of demonstrating an improvement in overall survival.
For the Japanese market products Takeda is obligated to pay Amgen up to an additional $60 million of
future worldwide development costs for these products in 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
will pay Amgen royalties on future sales in Japan. Amgen has the right to participate in the promotion of these
products in Japan. With respect to motesanib, Takeda is obligated to pay 60% of future worldwide development
costs (excluding Japan, for which Takeda shall bear all 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.
The collaboration agreements will continue in effect unless terminated earlier in accordance with their
terms.
In connection with the collaboration, Amgen received upfront payments of $300 million in 2008 which were
deferred and are being recognized as Other revenue in our Consolidated Statements of Income, over our
estimated period of continuing involvement of approximately 20 years. Additionally, during 2010, we received
payments aggregating $55 million for the achievement of certain regulatory milestones which were recognized as
Other revenue in our Consolidated Statement of Income upon the achievement of the related milestone
events. We may also receive numerous individually immaterial milestones aggregating $472 million upon the
achievement of various substantive success-based development and regulatory approval milestones. The receipt
of these amounts, however, is contingent upon the occurrence of various future events which have a high degree
of uncertainty of occurring.
During the years ended December 31, 2011, 2010 and 2009, cost recoveries from Takeda were $83 million,
$91 million and $112 million, respectively, and are included in Research and development expense in the
Consolidated Statements of Income. In addition, for the years December 31, 2011 and 2010, we recognized
royalties on sales of Vectibix®in Japan of $20 million and $7 million, respectively.
Daiichi Sankyo Company, Limited
We are in a collaboration with Daiichi Sankyo Company, Limited (Daiichi Sankyo), which provides Daiichi
Sankyo the exclusive rights to develop and commercialize denosumab in Japan for osteoporosis, oncology and
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