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Collaborative and Other Relationships | 9 Months Ended
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Sep. 30, 2014
Organization, Consolidation and Presentation of Financial Statements [Abstract] |
Collaborative and Other Relationships | Collaborative and Other Relationships Eisai Co., Ltd. On March 4, 2014 we entered into a collaboration with Eisai Co., Ltd. (Eisai) to jointly develop and commercialize two Eisai product candidates for the treatment of Alzheimer’s disease. The agreement also provides Eisai with an option to jointly develop and commercialize two of our candidates for Alzheimer’s disease, the anti-amyloid beta antibody BIIB037 and an anti-tau monoclonal antibody upon the exchange of clinical data on the current stage of development. For additional information related to our candidates for Alzheimer’s disease, please read about our relationship with Neurimmune in Note 16, Investments in Variable Interest Entities to these condensed consolidated financial statements. The collaboration initially will be centered on the co-development and co-commercialization of Eisai’s two clinical candidates: E2609, a BACE inhibitor, and BAN2401, an anti-amyloid beta antibody. Eisai will serve as the operational and regulatory lead in the co-development of E2609 and BAN2401 and will pursue marketing authorizations for both compounds worldwide. In major markets, such as the U.S. and the E.U., we and Eisai will co-promote the products following marketing approval. Both companies will share overall cost, including research and development expenses and profits will be split between the companies. The agreement excluded commercialization of these candidates in Japan, but included an option for Eisai to receive an additional one-time payment from us in exchange for expanding joint development and commercialization activities to include Japan. We paid $100.0 million upon closing and recorded $17.7 million reflecting the fair value of the options granted under the agreement, both of which were classified as research and development expense within our condensed consolidated statements of income. During the second quarter of 2014, Eisai exercised its option to expand the joint development and commercialization activities to include Japan and we paid Eisai an additional $35.0 million. We recorded $21.6 million in the second quarter of 2014 as research and development expense within our condensed consolidated statements of income, which represented the difference between the payment made upon exercise of the option and the fair value of that option recorded as research and development expense upon closing of the agreement in the first quarter of 2014. We could pay up to an additional $1.0 billion based on the future achievement of certain development, regulatory and commercial milestones. Sangamo BioSciences, Inc. On February 22, 2014, we completed an exclusive worldwide research, development and commercialization collaboration and license agreement with Sangamo BioSciences, Inc. (Sangamo) under which both companies will develop and commercialize product candidates for the treatment of two inherited blood disorders, sickle cell disease and beta-thalassemia. The collaboration is currently in the research stage of development. Under the terms of the agreement, we paid Sangamo an upfront payment of $20.0 million in cash, with additional payments of up to $300.0 million based on the achievement of certain development, regulatory and commercial milestones, plus royalties based on sales. We recorded the $20.0 million upfront payment as research and development expenses. Under this arrangement, Sangamo will be responsible for identifying a product candidate for the treatment of beta-thalassemia and advancing that candidate through a completed Phase 1 human clinical trial, at which point we will assume responsibility for development. We will jointly develop a sickle cell disease candidate through the potential filing of an investigative new drug application, after which we will assume clinical responsibilities. We will lead the global development and commercialization efforts and Sangamo will have the option to assume co-promotion responsibilities in the U.S. Isis Pharmaceuticals, Inc. In January 2012, we entered into an exclusive, worldwide option and collaboration agreement with Isis Pharmaceuticals, Inc. (Isis) under which both companies will develop and commercialize Isis’ product candidate for the treatment of spinal muscular atrophy (SMA). Under the agreement, we agreed to pay up to $45.0 million related to the clinical development of ISIS-SMN Rx. For additional information related to our agreements with Isis, please read Note 20, Collaborative and Other Relationships to our consolidated financial statements included within our 2013 Form 10-K. In January 2014, we amended the agreement and agreed to pay additional clinical trial costs up to approximately $45.0 million related to the development of ISIS-SMN Rx through studies which Isis will be responsible for performing. In October 2014, we amended the development plan of ISIS-SMN Rx and agreed to pay up to an additional $23.0 million in clinical trial costs related to the development of ISIS-SMN Rx. Consistent with the initial agreement, Isis remains responsible for conducting the pivotal/Phase 3 trials. We will recognize these payments as research and development expenses as the trial costs are incurred. We are providing input on the clinical trial design and regulatory strategy for the development of ISIS-SMN Rx. We have an option to license ISIS-SMN Rx following completion and data review of the first successful Phase 2/3 trial or completion of both Phase 2/3 trials. Samsung Bioepis In February 2012, we entered into a joint venture agreement with Samsung BioLogics Co. Ltd. (Samsung Biologics), establishing an entity, Samsung Bioepis, to develop, manufacture and market biosimilar pharmaceuticals. Under the terms of the joint venture agreement, Samsung Biologics agreed to contribute 280.5 billion South Korean won (approximately $250.0 million) for an 85% stake in Samsung Bioepis and we agreed to contribute approximately 49.5 billion South Korean won (approximately $45.0 million) for a 15% ownership interest. Our investment is limited to this contribution as we have no obligation to provide any additional funding. As of September 30, 2014, our ownership interest has decreased to approximately 12% as Samsung Bioepis secured additional equity financing from Samsung Biologics and we did not participate in such financing. We maintain an option to purchase additional stock in Samsung Bioepis that would allow us to increase our ownership percentage up to 49.9%. The exercise of this option is within our control and is based on paying for 49.9% of the total investment made to Samsung Bioepis in excess of what we have already contributed, plus interest. On December 17, 2013, pursuant to our rights under the joint venture agreement with Samsung Biologics, we entered into an agreement with Samsung Bioepis to commercialize anti-TNF biosimilar product candidates in Europe. Under the terms of this agreement, we paid $36.0 million, which was recorded as a research and development expense within our condensed consolidated statements of income as the programs they relate to had not achieved regulatory approval. Samsung Bioepis is eligible to receive an additional $85.0 million in additional milestones related to clinical development and regulatory approval of the product candidates. Upon commercialization, there will be a 50% profit share with Samsung Bioepis. As of September 30, 2014 and December 31, 2013, the carrying value of our investment in Samsung Bioepis totaled 11.1 billion and 25.2 billion South Korean won (approximately $11.0 million and $23.9 million), respectively, which is classified as a component of investments and other assets within our condensed consolidated balance sheets. Based on our level of influence over Samsung Bioepis, we account for this investment under the equity method of accounting and we recognize our share of the results of operations related to our investment in Samsung Bioepis one quarter in arrears when the results of the entity become available, which is reflected as equity in loss of investee, net of tax within our condensed consolidated statements of income. During the three and nine months ended September 30, 2014, we recognized a loss on our investment of $5.4 million and $14.9 million, respectively, as compared to $6.2 million and $12.3 million, respectively, in the prior year comparative periods. Simultaneous with the formation of Samsung Bioepis, we also entered into a license agreement, a technical development services agreement and a manufacturing agreement with Samsung Bioepis. For the three and nine months ended September 30, 2014, we recognized $21.3 million and $57.8 million, respectively, in other revenues in relation to these services, as compared to $4.3 million and $18.5 million, respectively, in the prior year comparative periods, which is reflected as a component of other revenues within our condensed consolidated statement of income. For additional information related to our other significant collaboration arrangements, please read Note 20, Collaborative and Other Relationships to our consolidated financial statements included within our 2013 Form 10-K.

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- Definition The entire disclosure for collaborative arrangements in which the entity is a participant, including a) information about the nature and purpose of such arrangements; b) its rights and obligations thereunder; c) the accounting policy for collaborative arrangements; and d) the income statement classification and amounts attributable to transactions arising from the collaborative arrangement between participants. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 808 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6931272&loc=SL5834143-161434 + Details
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