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This excerpt taken from the LLY 10-K filed Feb 22, 2010. Erbitux
Prior to our acquisition in November 2008, ImClone entered into
several collaborations with respect to Erbitux, a product
approved to fight cancer, while still in its development phase.
The most significant collaborations operate in these geographic
territories: the U.S., Japan, and Canada (Bristol-Myers Squibb
Company); and worldwide except the U.S. and Canada (Merck
KGaA). The agreements are expected to expire in 2018, upon which
all of the rights with respect to Erbitux in the U.S. and
Canada return to us. The following table summarizes the revenue
recognized with respect to Erbitux:
Bristol-Myers
Squibb Company
Pursuant to a commercial agreement with Bristol-Myers Squibb
Company and E.R. Squibb (collectively, BMS), relating to
Erbitux, ImClone is co-developing and co-promoting Erbitux in
the U.S. and Canada with BMS, exclusively, and in Japan
with BMS and Merck KGaA. The companies have jointly agreed to
expand the investment in the ongoing clinical development plan
for Erbitux to further explore its use in additional tumor
types. Under this arrangement, Erbitux research and development
and other costs, up to threshold amounts, are the sole
responsibility of BMS, with costs in excess of the thresholds
shared by both companies according to a predetermined ratio.
Responsibilities associated with clinical and other ongoing
studies are apportioned between the parties as determined
pursuant to the agreement. Collaborative reimbursements received
by ImClone for supply of clinical trial materials; for research
and development; and for a portion of marketing, selling, and
administrative expenses are recorded as a reduction to the
respective expense line items on the consolidated statement of
operations. We receive a distribution fee in the form of a
royalty from BMS, based on a percentage of net sales in the
U.S. and Canada, which is recorded in collaboration and
other revenue. Royalty expense paid to third parties, net of any
reimbursements received, is recorded as a reduction of
collaboration and other revenue.
We are responsible for the manufacture and supply of all
requirements of Erbitux in bulk-form active pharmaceutical
ingredient (API) for clinical and commercial use in the
territory, and BMS will purchase all of its requirements of API
for commercial use from us, subject to certain stipulations per
the agreement. Sales of Erbitux to BMS for commercial use are
reported in net product sales.
Merck
KGaA
A development and license agreement between ImClone and Merck
KGaA (Merck) with respect to Erbitux granted Merck exclusive
rights to market Erbitux outside of the U.S. and Canada,
and co-exclusive rights with BMS and ImClone in Japan. Merck
also has rights to manufacture Erbitux for supply in its
territory. We manufacture and provide a portion of Merck’s
requirements for API, which is included in net product sales. We
also receive a royalty on the sales of Erbitux outside of the
U.S. and Canada, which is included in collaboration and
other revenue as earned. Collaborative reimbursements received
for supply of product; for research and development; and
marketing, selling, and administrative expenses are recorded as
a reduction to the respective expense line items on the
consolidated statement of operations. Royalty
52
expense paid to third parties, net of any royalty reimbursements
received, is recorded as a reduction of collaboration and other
revenue.
These excerpts taken from the LLY 10-K filed Feb 27, 2009. Erbitux
Prior to our acquisition, ImClone entered into several
collaborations with respect to Erbitux, a product approved to
fight cancer, while still in its development phase. The most
significant collaborations operate in these geographic
territories: the U.S., Japan, and Canada (Bristol-Myers Squibb);
and worldwide except the U.S. and Canada (Merck KGaA). The
agreements are expected to expire in 2018, upon which all of the
rights with respect to Erbitux in the U.S. and Canada
return to us.
Bristol-Myers
Squibb Company
Pursuant to a commercial agreement with Bristol-Myers Squibb
Company and E.R. Squibb (collectively, BMS), relating to
Erbitux, ImClone is co-developing and co-promoting Erbitux in
North America with BMS, and is co-developing and co-promoting
Erbitux in Japan with BMS. The companies had jointly agreed to
expand the investment in the ongoing clinical development plan
for Erbitux to further explore its use in additional tumor
types. Under this arrangement, Erbitux research and development
and other costs, up to threshold amounts, are the sole
responsibility of BMS, with costs in excess of the thresholds
shared by both companies according to a predetermined ratio.
Responsibilities associated with clinical and other ongoing
studies are apportioned between the parties as determined
pursuant to the agreement. Collaborative reimbursements received
by ImClone for supply of product for research and development,
for a portion of royalty expenses, and for a portion of
marketing, selling, and administrative expenses, are recorded as
a reduction to the respective expense line items on the
consolidated statement of operations. Royalty expense paid to
third parties is included in costs of sales. We receive a
distribution fee in the form of a royalty from BMS, based on a
percentage of net sales in the U.S. and Canada, which is
recorded in net sales.
We are responsible for the manufacture and supply of all
requirements of Erbitux in bulk-form active pharmaceutical
ingredient (API) for clinical and commercial use in the
territory, and BMS will purchase all of its requirements of API
for commercial use from us, subject to certain stipulations per
the agreement. Sales of Erbitux to BMS for commercial use are
reported in net sales.
Merck
KGaA
A development and license agreement between ImClone and Merck
KGaA (Merck) with respect to Erbitux granted Merck exclusive
rights to market Erbitux outside of North America and
co-exclusive rights with BMS in Japan. Merck also has rights to
manufacture Erbitux for supply in its territory. We manufacture
and provide a portion of Merck’s requirements for API; we
also receive a royalty on the sales of Erbitux outside of the
U.S. and Canada, both of which are included in net sales as
earned. Collaborative reimbursements received for supply of
product for research and development, reimbursement of a portion
of royalty expense, and marketing, selling, and administrative
expenses are recorded as a reduction to the respective expense
line items on the consolidated statement of operations. Royalty
expense paid to third parties is included in cost of sales.
Erbitux Prior to our acquisition, ImClone entered into several collaborations with respect to Erbitux, a product approved to fight cancer, while still in its development phase. The most significant collaborations operate in these geographic territories: the U.S., Japan, and Canada (Bristol-Myers Squibb); and worldwide except the U.S. and Canada (Merck KGaA). The agreements are expected to expire in 2018, upon which all of the rights with respect to Erbitux in the U.S. and Canada return to us. Bristol-Myers Squibb Company Pursuant to a commercial agreement with Bristol-Myers Squibb Company and E.R. Squibb (collectively, BMS), relating to Erbitux, ImClone is co-developing and co-promoting Erbitux in North America with BMS, and is co-developing and co-promoting Erbitux in Japan with BMS. The companies had jointly agreed to expand the investment in the ongoing clinical development plan for Erbitux to further explore its use in additional tumor types. Under this arrangement, Erbitux research and development and other costs, up to threshold amounts, are the sole responsibility of BMS, with costs in excess of the thresholds shared by both companies according to a predetermined ratio. Responsibilities associated with clinical and other ongoing studies are apportioned between the parties as determined pursuant to the agreement. Collaborative reimbursements received by ImClone for supply of product for research and development, for a portion of royalty expenses, and for a portion of marketing, selling, and administrative expenses, are recorded as a reduction to the respective expense line items on the consolidated statement of operations. Royalty expense paid to third parties is included in costs of sales. We receive a distribution fee in the form of a royalty from BMS, based on a percentage of net sales in the U.S. and Canada, which is recorded in net sales. We are responsible for the manufacture and supply of all requirements of Erbitux in bulk-form active pharmaceutical ingredient (API) for clinical and commercial use in the territory, and BMS will purchase all of its requirements of API for commercial use from us, subject to certain stipulations per the agreement. Sales of Erbitux to BMS for commercial use are reported in net sales. Merck KGaA A development and license agreement between ImClone and Merck KGaA (Merck) with respect to Erbitux granted Merck exclusive rights to market Erbitux outside of North America and co-exclusive rights with BMS in Japan. Merck also has rights to manufacture Erbitux for supply in its territory. We manufacture and provide a portion of Merck’s requirements for API; we also receive a royalty on the sales of Erbitux outside of the U.S. and Canada, both of which are included in net sales as earned. Collaborative reimbursements received for supply of product for research and development, reimbursement of a portion of royalty expense, and marketing, selling, and administrative expenses are recorded as a reduction to the respective expense line items on the consolidated statement of operations. Royalty expense paid to third parties is included in cost of sales.
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