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Collaborations
6 Months Ended
Jun. 30, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Collaborations
Collaborations
A collaborative arrangement is a contractual arrangement that involves a joint operating activity. Such arrangements involve two or more parties that are both (i) active participants in the activity and (ii) exposed to significant risks and rewards dependent on the commercial success of the activity.
From time to time, we enter into collaborative arrangements for the R&D, manufacture and/or commercialization of products and/or product candidates. These collaborations generally provide for nonrefundable up-front license fees, development and commercial-performance milestone payments, cost sharing, royalty payments and/or profit sharing. Our collaboration arrangements are performed with no guarantee of either technological or commercial success, and each is unique in nature. The following describes a significant arrangement that had a material change since the filing of our Annual Report on Form 10-K for the year ended December 31, 2017.
Novartis AG
In April 2017, we expanded our existing migraine collaboration with Novartis AG (Novartis). In the United States, Amgen and Novartis jointly develop and collaborate on the commercialization of AimovigTM (erenumab -aooe). Amgen, as the principal, recognizes product sales of AimovigTM in the United States, shares U.S. commercialization costs with Novartis and pays Novartis a significant royalty on net sales in the United States. Novartis holds global co-development rights and exclusive commercial rights outside the United States and Japan for AimovigTM and other specified migraine programs. Novartis pays Amgen double-digit royalties on net sales of the products in the Novartis exclusive territories and funds a portion of global R&D expenses. As a result of certain regulatory and commercial events, during the three months ended June 30, 2018, we received a milestone payment of $148 million from Novartis, which was recorded in Other revenues in the Condensed Consolidated Statement of Income. In addition, Novartis will make payments to Amgen that could collectively amount to approximately $250 million if certain commercial thresholds are achieved with respect to AimovigTM in the United States. Amgen manufactures and supplies AimovigTM worldwide.
The migraine collaboration will continue for the commercial lives of the products unless terminated in accordance with its terms.