Amgen 2009 Annual Report Download - page 144

AMGEN INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Daiichi Sankyo Company, Limited
In July 2007, we entered into a collaboration and license agreement with Daiichi Sankyo Company, Limited
(“Daiichi Sankyo”), which provides them the exclusive rights to develop and commercialize our late-stage prod-
uct candidate, denosumab, in Japan in postmenopausal osteoporosis, oncology and certain other indications. As
part of the agreement, Amgen received exclusive worldwide rights to certain Daiichi Sankyo intellectual property
to the extent applicable to denosumab. Under the terms of the agreement, Daiichi Sankyo assumed all related de-
velopment and commercialization costs in Japan and agreed to reimburse Amgen for certain worldwide
development costs related to denosumab. As of December 31, 2009, Daiichi Sankyo has substantially satisfied its
obligations to reimburse Amgen for these costs. If approved for sale, Amgen will receive royalties on future sales
of denosumab in Japan. Pursuant to the terms of the agreement, Daiichi Sankyo may receive milestone payments
from Amgen aggregating $60 million dependent on various regulatory approvals of denosumab. During the years
ended December 31, 2009, 2008 and 2007, cost recoveries from Daiichi Sankyo were $64 million, $60 million
and $40 million, respectively, and are included in “Research and development” expense in the Consolidated
Statements of Income.
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 (“Kyowa Hakko”) 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, currently be-
ing 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.
We entered into our collaboration agreement with Kyowa Hakko in March 2008, which granted us an ex-
clusive license to develop and commercialize Kyowa Hakko’s humanized monoclonal antibody KW-0761
worldwide, except in Japan, Korea, China and Taiwan. KW-0761 is being studied in inflammation and oncology
settings and at the time the agreement was entered into was in a phase 1 clinical trial. In connection with entering
the agreement, we paid Kyowa Hakko $100 million which we expensed when paid.
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 applica-
tions 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, CK-1827452, which at
the time the agreement was entered into was in phase 1 clinical trials. The collaboration is worldwide, excluding
Japan. In connection with entering into the agreement, we paid Cytokinetics $42 million. In 2009, we exercised
an 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 partic-
ipation rights of Cytokinetics. Both payments were expensed when paid.
Pursuant to the terms of these agreements, we may also be required to pay additional amounts upon the ach-
ievement of various success-based 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 re-
quired to pay royalties on future sales. The payment of these amounts, however, is contingent upon the
occurrence of various future events. Given their nature, these payments are not considered probable as the occur-
rence of the related events has a high degree of uncertainty and many of the events may never occur. Further, the
timing of any future payments is not reasonably estimable. Individually, future payment of any amounts under
these arrangements is not expected to be material in any one reporting period.
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