Eli Lilly 2012 Annual Report Download - page 66

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products of $388.0 million and $50.0 million for the years ended December 31, 2011, and 2010, respectively,
was written off by a charge to income immediately upon acquisition because the products had no alternative
future use.
In connection with the arrangements described below, our partners may be entitled to future milestones and
royalties based on sales should these products be approved for commercialization.
Acquisition of Businesses
ChemGen
On February 17, 2012, we acquired all of the outstanding stock of ChemGen Corporation, a privately-held
bioscience company specializing in the development and commercialization of innovative feed-enzyme
products that improve the efficiency of poultry, egg, and meat production, for total purchase consideration of
$206.9 million in cash. In connection with this acquisition, we preliminarily recorded $151.5 million of
marketed product assets, with $55.4 million of other net assets. The final determination may result in asset
and liability fair values that differ from the preliminary estimates, but it is not expected that these differences
will be material to our consolidated financial statements.
Janssen
On July 7, 2011, we acquired the animal health business of Janssen, a Johnson & Johnson company, for total
purchase consideration of $307.8 million in cash. We obtained a portfolio of more than 50 marketed animal
health products. In connection with this acquisition, we recorded $234.4 million of marketed product assets
and $29.6 million of acquired IPR&D assets, with $43.8 million of other net assets.
Avid
On December 20, 2010, we acquired all of the outstanding stock of Avid, a company focusing on developing
molecular radiopharmaceutical tracers in positron emission tomography (PET) scan imaging, for total
purchase consideration of $346.1 million, which included an upfront payment of $286.3 million and up to
$550 million in additional payments contingent upon potential future regulatory and commercial milestones.
The fair value of the contingent consideration at the acquisition date was $59.8 million. In connection with this
acquisition, we recorded $334.0 million of acquired IPR&D assets, $119.6 million of goodwill, and
$116.9 million of deferred tax liability, with $9.4 million of other net assets. Avid’s lead product, Amyvid, is a
PET agent indicated for imaging amyloid plaque pathology in the brain to aid the evaluation of patients with
signs or symptoms of cognitive impairment. During the year ended December 31, 2011, we recorded
impairment charges for the IPR&D asset related to Amyvid, as discussed further in Note 7. Amyvid received
regulatory approval in the U.S. in 2012 and European Union in 2013, and is available to a limited number of
imaging centers.
Alnara
On July 20, 2010, we acquired all of the outstanding stock of Alnara, a privately-held company developing
protein therapeutics for the treatment of metabolic diseases, for total purchase consideration of
$291.7 million, which included an upfront payment of $188.7 million and up to $200 million in additional
payments contingent upon potential future regulatory and commercial milestones. The fair value of the
contingent consideration at the acquisition date was $103.0 million. In connection with this acquisition, we
recorded $264.0 million of acquired IPR&D assets, $100.5 million of goodwill, and $92.4 million of deferred
tax liability, with $19.6 million of other net assets. Alnara's lead product in development is liprotamase, a non-
porcine pancreatic enzyme replacement therapy. The New Drug Application (NDA) was submitted to the U.S.
Food and Drug Administration (FDA) in the first quarter of 2010. In April 2011, we received a complete
response letter that communicated the need for us to conduct an additional clinical trial prior to a
resubmission. During the years ended December 31, 2012 and 2011, we recorded impairment charges for the
IPR&D asset related to liprotamase, as discussed further in Note 7.
Animal Health Product Lines
On May 28, 2010, we acquired the European marketing rights to several animal health product lines divested
by Pfizer Inc., for total purchase consideration of $148.4 million paid in cash. These products, including
vaccines, parasiticides, and feed additives, serve both the production animal and companion animal markets.