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ACQUISITIONS, DIVESTITURES, LICENSING AND OTHER ARRANGEMENTS | 9 Months Ended
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Sep. 30, 2023
Acquisitions, Divestitures and Other Arrangements [Abstract] |
ACQUISITIONS, DIVESTITURES, LICENSING AND OTHER ARRANGEMENTS | ACQUISITIONS, DIVESTITURES, LICENSING AND OTHER ARRANGEMENTS Acquisitions Mirati In October 2023, BMS entered into a definitive merger agreement to acquire Mirati, a commercial stage targeted oncology company with a pipeline of clinical and commercial oncology medicines. The acquisition will provide BMS with rights to Krazati* (adagrasib) and MRTX1719, among other assets. Krazati* is a best-in-class inhibitor of KRAS G12C mutation, which was approved by the FDA as a second-line treatment for patients with NSCLC and is in clinical development in combination with a PD-1 inhibitor as a first-line therapy for patients with NSCLC, as well as in other indications. MRTX1719, is a potential first-in-class MTA-cooperative PRMT5 inhibitor in Phase 1 development. BMS also will gain access to several other promising clinical and pre-clinical stage assets, including additional KRAS inhibitors and enabling programs. BMS will acquire all of the issued and outstanding shares of Mirati's common stock for $58.00 per share in an all-cash transaction for a total consideration of $4.8 billion, including cash settlements of equity stock awards. Mirati shareholders will also receive one non-tradeable contingent value right for each share of Mirati common stock held, potentially worth $12.00 per share in cash for a total value of approximately $1.0 billion. The payout of the contingent value right is subject to the FDA acceptance of an NDA for MRTX1719 for the treatment of specific indications within seven years of the closing of the transaction. The transaction is expected to be accounted for as a business combination and is anticipated to close by the first half of 2024, subject to fulfillment of customary closing conditions, including approval of Mirati's shareholders and receipt of required regulatory approvals. The acquisition will be funded through a combination of cash-on-hand and debt proceeds. Turning Point In the third quarter of 2022, BMS acquired Turning Point for $4.1 billion of cash (or $3.3 billion net of cash acquired). Turning Point was a clinical-stage precision oncology company with a pipeline of investigational medicines designed to target the common mutations and alterations that drive cancer growth. The acquisition provided BMS rights to Turning Point's lead asset, repotrectinib, and other clinical and pre-clinical stage assets. Divestitures The following table summarizes the financial impact of divestitures including royalties, which are included in Other (income)/expense, net. Revenue and pretax earnings related to all divestitures were not material in all periods presented (excluding divestiture gains or losses).
| Three Months Ended September 30,
| Net Proceeds |  | Divestiture (Gains)/Losses |  | Royalty Income
Dollars in millions | 2023 |  | 2022 |  | 2023 |  | 2022 |  | 2023 |  | 2022
Diabetes business - royalties | $ | 220 |  |  | $ | 205 |  |  | $ | — |  |  | $ | — |  |  | $ | (217) |  |  | $ | (205) |
Mature products and other | 3 |  |  | 1 |  |  | — |  |  | — |  |  | — |  |  | — |
Total | $ | 223 |  |  | $ | 206 |  |  | — |  |  | $ | — |  |  | $ | (217) |  |  | (205) |
| Nine Months Ended September 30,
| Net Proceeds |  | Divestiture (Gains)/Losses |  | Royalty Income
Dollars in Millions | 2023 |  | 2022 |  | 2023 |  | 2022 |  | 2023 |  | 2022
Diabetes business - royalties | $ | 621 |  |  | $ | 562 |  |  | $ | — |  |  | $ | — |  |  | $ | (623) |  |  | $ | (595) |
Mature products and other (a) | 10 |  |  | 229 |  |  | — |  |  | (211) |  |  | — |  |  | (2) |
Total | $ | 631 |  |  | $ | 791 |  |  | $ | — |  |  | $ | (211) |  |  | $ | (623) |  |  | $ | (597) |
(a) Includes cash proceeds of $221 million and a divestiture gain of $211 million related to the sale of several mature products to Cheplapharm in the first quarter of 2022. Mature Products and Other Manufacturing Operations During the second quarter of 2022, BMS agreed to sell its manufacturing facility in Syracuse, New York to LOTTE Corporation and accounted for the business as held-for-sale resulting in a $43 million impairment charge recorded to Cost of products sold. Assets and liabilities reclassified to held-for-sale were included within Other current assets and Other current liabilities and were $172 million and $20 million, respectively, as of December 31, 2022. In January 2023, BMS completed the sale resulting in cash proceeds of $159 million, which was received in December 2022. Licensing and Other Arrangements The following table summarizes the financial impact of Keytruda* royalties, Tecentriq* royalties, upfront licensing fees and milestones for products that have not obtained commercial approval, which are included in Other (income)/expense, net.
| Three Months Ended September 30, |  | Nine Months Ended September 30,
Dollars in millions | 2023 |  | 2022 |  | 2023 |  | 2022
Keytruda* royalties | $ | (315) |  |  | $ | (268) |  |  | $ | (878) |  |  | $ | (732) |
Tecentriq* royalties | (24) |  |  | (24) |  |  | (78) |  |  | (68) |
Contingent milestone income | — |  |  | — |  |  | (36) |  |  | (46) |
Amortization of deferred income | (12) |  |  | (18) |  |  | (39) |  |  | (41) |
Biohaven sublicense income | — |  |  | (55) |  |  | — |  |  | (55) |
Other royalties and licensing income | (14) |  |  | (9) |  |  | (37) |  |  | (25) |
Total | $ | (365) |  |  | $ | (374) |  |  | $ | (1,068) |  |  | $ | (967) |
LianBio During October 2023, BMS reacquired the rights for mavacamten in China and certain other Asian territories from LianBio for $350 million in cash. The cost for the reacquired rights will be reflected in Acquired IPRD during the fourth quarter of 2023 as mavacamten is currently in development and not approved for commercial use in China. Keytruda* Patent License Agreement In 2017, BMS and Ono entered a global patent license agreement with Merck related to Merck's PD-1 antibody Keytruda*. In accordance with the agreement, Merck is obligated to pay ongoing royalties on global sales of Keytruda* of 6.5% from January 1, 2017 through December 31, 2023, and 2.5% from January 1, 2024 through December 31, 2026. The companies also granted certain rights to each other under their respective patent portfolios pertaining to PD-1. Payments and royalties are shared between BMS and Ono on a 75/25 percent allocation, respectively after adjusting for each party's legal fees. Immatics During the first quarter of 2022, BMS obtained a global exclusive license to Immatics' TCR bispecific IMA401 program, which is being studied in oncology. BMS and Immatics collaborate on the development and BMS will be responsible for the commercialization of IMA401 worldwide, including strategic decisions, regulatory responsibilities, funding and manufacturing. Immatics has the option to co-fund U.S. development in exchange for enhanced U.S. royalty payments and/or to co-promote IMA401 in the U.S. The transaction included an upfront payment of $150 million which was expensed to Acquired IPRD in the first quarter of 2022. Immatics is eligible to receive contingent development, regulatory and sales-based milestones of up to $770 million as well as royalties on global net sales. Dragonfly During the first quarter of 2022, a Phase I development milestone for interleukin-12 ("IL-12") was achieved resulting in a $175 million payment to Dragonfly and an Acquired IPRD charge. During the first quarter of 2023, BMS notified Dragonfly of its termination of the global exclusive license related to Dragonfly’s IL-12. All rights to IL-12 were reverted back to Dragonfly effective April 2023. Other Nimbus Change of Control Income During the first quarter of 2022, BMS and Nimbus Therapeutics ("Nimbus") entered into a settlement resolving all legal claims and business interests pertaining to Nimbus' TYK2 inhibitor resulting in $40 million of income included in Other (income)/expense. The settlement also provides for BMS to receive additional amounts for contingent development, regulatory approval and sales-based milestones and 10% of any change in control proceeds received by Nimbus related to its TYK2 inhibitor. In February 2023, Takeda acquired 100% ownership of Nimbus' TYK2 inhibitor for approximately $4.0 billion in upfront proceeds plus contingent sales-based milestones aggregating up to $2.0 billion. As a result, $400 million of income related to the change of control provision was included in Other (income)/expense during the first quarter of 2023. Royalty Extinguishment During the second quarter of 2022, BMS amended the terms of a license arrangement and paid a third party $295 million, which was expensed to Acquired IPRD, to extinguish a future royalty obligation related to mavacamten prior to its FDA approval in April 2022.

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- Definition The entire disclosure for business combinations, including leverage buyout transactions (as applicable), and divestitures. This may include a description of a business combination or divestiture (or series of individually immaterial business combinations or divestitures) completed during the period, including background, timing, and assets and liabilities recognized and reclassified or sold. This element does not include fixed asset sales and plant closings. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 805 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//805/tableOfContent Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 205 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//205-20/tableOfContent + Details
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