content_image/183805.jpg content_image/183799.jpg content_image/183801.jpg
The U.S. commercialization agreement was amended in October 2012 requiring Otsuka to assume full responsibility for providing and funding all sales force efforts effective January 2013. In consideration, BMS paid Otsuka $27 million in January 2013, and will be responsible for funding certain operating expenses up to $82 million in 2013, $56 million in 2014 and $8 million in 2015. In the EU, Otsuka will reimburse BMS for its sales force effort provided through March 31, 2013. Beginning April 1, 2013 Otsuka will assume responsibility for providing and funding sales force effort. 

$^{ }$BMS and Otsuka also entered into an oncology collaboration for Sprycel  and Ixempra  (ixabepilone) for the U.S., Japan and European Union (EU) markets (the Oncology Territory). A collaboration fee, classified in cost of products sold, is paid to Otsuka based on the following percentages of annual net sales of Sprycel  and Ixempra  in the Oncology Territory: 

<img src='content_image/183805.jpg'>

$^{ }$During these periods, Otsuka contributes (i) 20% of the first $175 million of certain commercial operational expenses relating to the oncology products, and (ii) 1% of such commercial operational expenses relating to the products in the territory in excess of $175 million. Beginning in 2011, Otsuka copromotes Sprycel  in the U.S. and Japan, and has exercised the right to copromote in the top five EU markets beginning in January 2012. 

$^{ }$The U.S. extension and the oncology collaboration include a change-of-control provision in the case of an acquisition of BMS. If the acquiring company does not have a competing product to Abilify , then the new company will assume the Abilify  agreement (as amended) and the oncology collaboration as it exists today. If the acquiring company has a product that competes with Abilify , Otsuka can elect to request the acquiring company to choose whether to divest Abilify  or the competing product. In the scenario where Abilify is divested, Otsuka would be obligated to acquire the rights of BMS under the Abilify  agreement (as amended). The agreements also provide that in the event of a generic competitor to Abilify  after January 1, 2010, BMS has the option of terminating the Abilify  April 2009 amendment (with the agreement as previously amended remaining in force). If BMS were to exercise such option then either (i) BMS would receive a payment from Otsuka according to a pre-determined schedule and the oncology collaboration would terminate at the same time or (ii) the oncology collaboration would continue for a truncated period according to a pre-determined schedule. 

$^{ }$The EU agreement remained unchanged and will expire in June 2014. In other countries where BMS has the exclusive right to sell Abilify , the agreement expires on the later of April 2015 or expiration of the applicable patent or data exclusivity in such country. 

$^{ }$In addition to the $400 million extension payment, total milestones paid to Otsuka were $217 million, of which $157 million was expensed as IPRD in 1999. The remaining $60 million was capitalized in other intangible assets and was amortized to cost of products sold over the remaining life of the original agreement in the U.S. 

$^{ }$Summarized financial information related to this alliance is as follows: 

<img src='content_image/183799.jpg'>

<img src='content_image/183801.jpg'>

## $^{ }$Lilly 

$^{ }$BMS has an Epidermal Growth Factor Receptor (EGFR) commercialization agreement with Eli Lilly and Company (Lilly) through Lilly’s 2008 acquisition of ImClone Systems Incorporated (ImClone) for the codevelopment and promotion of Erbitux  and necitumumab (IMC-11F8) in the U.S., which expires as to Erbitux  in September 2018. BMS also has codevelopment and copromotion rights to both products in Canada and Japan.  is indicated for use in the treatment of patients with metastatic colorectal cancer and for use in the treatment of squamous cell carcinoma of the head and neck. Under the EGFR agreement, with respect to Erbitux  sales in North America, Lilly receives a distribution fee based on a flat rate of 39% of net sales in North America plus reimbursement of certain royalties paid by Lilly. 

