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2.2.0.25falsefalse10401 - Disclosure - Collaborationstruefalsefalse1falsefalseUSDfalsefalse1/1/2010 - 12/31/2010 USD ($) USD ($) / shares $Duration_1_1_2010_To_12_31_2010http://www.sec.gov/CIK0000059478duration2010-01-01T00:00:002010-12-31T00:00:00Unit12Standardhttp://www.xbrl.org/2003/iso4217USDiso42170Unit15Dividehttp://www.xbrl.org/2003/iso4217USDiso4217http://www.xbrl.org/2003/instancesharesxbrli0Unit1Standardhttp://www.xbrl.org/2003/instancesharesxbrli0Unit14Standardhttp://www.xbrl.org/2003/instancepurexbrli0USDUSD$2true0lly_CollaborationsAbstractllyfalsenadurationCollaborations [Abstract]falsefalsefalsefalsefalsefalsefalsefalsefalsefalse1falsefalsefalse00falsefalsefalsefalsefalseOtherxbrli:stringItemTypestringCollaborations [Abstract]falsefalseCollaborations [Abstract]3false0us-gaap_CollaborativeArrangementDisclosureTextBlockus-gaaptruenadurationNo definition available.falsefalsefalsefalsefalsefalsefalsefalsefalsefalse1falsefalsefalse00<div> <div> Note 4: Collaborations   We often enter into collaborative arrangements to develop and commercialize drug candidates.  Collaborative activities might include research and development, marketing and selling (including promotional activities and physician detailing), manufacturing, and distribution. These collaborations often require milestone and royalty or profit share payments, contingent upon the occurrence of certain future events linked to the success of the asset in development, as well as expense reimbursements or payments to the third party.  Revenues related to products sold by us pursuant to these arrangements are included in net product sales, while other sources of revenue (e.g., royalties and profit share payments) are included in collaboration and other revenue.  Operating expenses for costs incurred pursuant to these arrangements are reported in their respective expense line item, net of any payments made to or reimbursements received from our collaboration partners.  Each collaboration is unique in nature, and our more significant arrangements are discussed below.    <div> Erbitux   We have several collaborations with respect to Erbitux, a product approved to fight cancer. 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:    <table class="MsoNormalTable" style="font-size: 11pt; margin-left: 5.4pt; font-family: 'Calibri','sans-serif'; border-collapse: collapse;" cellspacing="0" cellpadding="0" width="522" border="0"> <tr><td style="padding-right: 5.4pt; padding-left: 5.4pt; padding-bottom: 0in; width: 229.5pt; padding-top: 0in;" valign="top" width="306">  </td> <td style="padding-right: 5.4pt; padding-left: 5.4pt; padding-bottom: 0in; width: 0.75in; padding-top: 0in; border-bottom: windowtext 1pt solid;" valign="top" width="72"> 2010</td> <td style="padding-right: 5.4pt; padding-left: 5.4pt; padding-bottom: 0in; width: 0.75in; padding-top: 0in; border-bottom: windowtext 1pt solid;" valign="top" width="72"> 2009</td> <td style="padding-right: 5.4pt; padding-left: 5.4pt; padding-bottom: 0in; width: 0.75in; padding-top: 0in; border-bottom: windowtext 1pt solid;" valign="top" width="72"> 2008</td></tr> <tr><td style="padding-right: 5.4pt; padding-left: 5.4pt; padding-bottom: 0in; width: 229.5pt; padding-top: 0in;" valign="top" width="306">  </td> <td style="padding-right: 5.4pt; padding-left: 5.4pt; padding-bottom: 0in; width: 0.75in; padding-top: 0in;" valign="top" width="72">  </td> <td style="padding-right: 5.4pt; padding-left: 5.4pt; padding-bottom: 0in; width: 0.75in; padding-top: 0in;" valign="top" width="72">  </td> <td style="padding-right: 0in; padding-left: 0in; padding-bottom: 0in; padding-top: 0in;" width="72">  </td></tr> <tr><td style="padding-right: 5.4pt; padding-left: 5.4pt; padding-bottom: 0in; width: 229.5pt; padding-top: 0in;" valign="top" width="306"> Net product sales </td> <td style="padding-right: 5.4pt; padding-left: 5.4pt; padding-bottom: 0in; width: 0.75in; padding-top: 0in;" valign="top" width="72">   $  71.9</td> <td style="padding-right: 5.4pt; padding-left: 5.4pt; padding-bottom: 0in; width: 0.75in; padding-top: 0in;" valign="top" width="72"> $  92.5</td> <td style="padding-right: 5.4pt; padding-left: 5.4pt; padding-bottom: 0in; width: 0.75in; padding-top: 0in;" valign="top" width="72"> $  2.7</td></tr> <tr><td style="padding-right: 5.4pt; padding-left: 5.4pt; padding-bottom: 0in; width: 229.5pt; padding-top: 0in;" valign="top" width="306"> Collaboration and other revenue </td> <td style="padding-right: 5.4pt; padding-left: 5.4pt; padding-bottom: 0in; width: 0.75in; padding-top: 0in; border-bottom: windowtext 1pt solid;" valign="top" width="72">     314.2</td> <td style="padding-right: 5.4pt; padding-left: 5.4pt; padding-bottom: 0in; width: 0.75in; padding-top: 0in; border-bottom: windowtext 1pt solid;" valign="top" width="72">    298.3</td> <td style="padding-right: 5.4pt; padding-left: 5.4pt; padding-bottom: 0in; width: 0.75in; padding-top: 0in; border-bottom: windowtext 1pt solid;" valign="top" width="72">    26.7</td></tr> <tr><td style="padding-right: 5.4pt; padding-left: 5.4pt; padding-bottom: 0in; width: 229.5pt; padding-top: 0in;" valign="top" width="306"> Total revenue </td> <td style="padding-right: 5.4pt; padding-left: 5.4pt; padding-bottom: 0in; width: 0.75in; padding-top: 0in; border-bottom: windowtext 1.5pt solid;" valign="top" width="72">   $386.1</td> <td style="padding-right: 5.4pt; padding-left: 5.4pt; padding-bottom: 0in; width: 0.75in; padding-top: 0in; border-bottom: windowtext 1.5pt solid;" valign="top" width="72"> $390.8</td> <td style="padding-right: 5.4pt; padding-left: 5.4pt; padding-bottom: 0in; width: 0.75in; padding-top: 0in; border-bottom: windowtext 1.5pt solid;" valign="top" width="72"> $ 29.4</td></tr></table> </div>   <div> Bristol-Myers Squibb Company   Pursuant to a commercial agreement with Bristol-Myers Squibb Company and E.R. Squibb (collectively, BMS), relating to Erbitux, we are 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 are shared by both companies according to a predetermined ratio.   Responsibilities associated with clinical and other on-going studies are apportioned between the parties under the agreement. Collaborative reimbursements received by us 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.   <div> Merck KGaA   A development and license agreement with 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 us in Japan. Merck also has rights to manufacture Erbitux for supply in its territory. In 2009, we manufactured and provided a portion of Merck's requirements for API, which was 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 expense paid to third parties, net of any royalty reimbursements received, is recorded as a reduction of collaboration and other revenue.</div></div>   <div> Necitumumab   In January 2010, we restructured the commercial agreement with BMS described above to allow for the co-development and co-commercialization of necitumumab, which is currently in Phase III clinical testing for non-small cell lung cancer. Within this restructured arrangement, we and BMS have agreed to share in the cost of developing and potentially commercializing necitumumab in the U.S., Canada, and Japan. We maintain exclusive rights to necitumumab in all other markets. We will fund 45 percent of the development costs for studies that will be used only in the U.S., and 72.5 percent for global studies. We will be responsible for the manufacturing of API, and BMS will be responsible for manufacturing the finished product. We could receive a payment of $250.0 million upon approval in the U.S. In the U.S. and Canada, BMS will record sales and we will receive 45 percent of the profits for necitumumab, while we will provide 50 percent of the selling effort. In Japan, we and BMS will share costs and profits evenly.   <div> Exenatide   We are in a collaborative arrangement with Amylin Pharmaceuticals (Amylin) for the joint development, marketing, and selling of Byetta (exenatide injection) and other forms of exenatide such as exenatide once weekly (proposed tradename Bydureon). Byetta is presently approved as an adjunctive therapy to improve glycemic control in patients with type 2 diabetes who have not achieved adequate glycemic control using metformin, a sulfonylurea, or a combination of metformin and sulfonylurea; and in the U.S. only, as an adjunctive therapy in patients using a thiazolidinedione (with or without metformin) and as a monotherapy. Lilly and Amylin are co-promoting Byetta in the U.S. Amylin is responsible for manufacturing and primarily utilizes third-party contract manufacturers to supply Byetta. However, we are manufacturing Byetta pen delivery devices for Amylin. We are responsible for development and commercialization costs outside the U.S.   Under the terms of our arrangement, we report as collaboration and other revenue our 50 percent share of gross margin on Amylin's net product sales in the U.S. We report as net product sales 100 percent of sales outside the U.S. and our sales of Byetta pen delivery devices to Amylin. The following table summarizes the revenue recognized with respect to Byetta:   <table class="MsoTableGrid" style="border-right: medium none; border-top: medium none; font-size: 10pt; border-left: medium none; width: 437.4pt; border-bottom: medium none; font-family: 'Times New Roman','serif'; border-collapse: collapse; text-align: justify;" cellspacing="0" cellpadding="0" width="583" border="0"> <tr><td style="padding-right: 5.4pt; padding-left: 5.4pt; padding-bottom: 0in; width: 225.9pt; padding-top: 0in;" valign="top" width="301">  </td> <td style="border-right: medium none; padding-right: 5.4pt; border-top: medium none; padding-left: 5.4pt; padding-bottom: 0in; border-left: medium none; width: 1in; padding-top: 0in; border-bottom: windowtext 1pt solid;" valign="top" width="96"> 2010</td> <td style="border-right: medium none; padding-right: 5.4pt; border-top: medium none; padding-left: 5.4pt; padding-bottom: 0in; border-left: medium none; width: 1in; padding-top: 0in; border-bottom: windowtext 1pt solid;" valign="top" width="96"> 2009</td> <td style="border-right: medium none; padding-right: 5.4pt; border-top: medium none; padding-left: 5.4pt; padding-bottom: 0in; border-left: medium none; width: 67.5pt; padding-top: 0in; border-bottom: windowtext 1pt solid;" valign="top" width="90"> 2008</td></tr> <tr><td style="padding-right: 5.4pt; padding-left: 5.4pt; padding-bottom: 0in; width: 225.9pt; padding-top: 0in;" valign="top" width="301">  </td> <td style="border-right: medium none; padding-right: 5.4pt; border-top: medium none; padding-left: 5.4pt; padding-bottom: 0in; border-left: medium none; width: 211.5pt; padding-top: 0in; border-bottom: medium none;" valign="top" width="282" colspan="3">  </td></tr> <tr><td style="padding-right: 5.4pt; padding-left: 5.4pt; padding-bottom: 0in; width: 225.9pt; padding-top: 0in;" valign="top" width="301"> Net product sales </td> <td style="padding-right: 5.4pt; padding-left: 5.4pt; padding-bottom: 0in; width: 1in; padding-top: 0in;" valign="top" width="96">   $168.1</td> <td style="padding-right: 5.4pt; padding-left: 5.4pt; padding-bottom: 0in; width: 1in; padding-top: 0in;" valign="top" width="96"> $147.7</td> <td style="padding-right: 5.4pt; padding-left: 5.4pt; padding-bottom: 0in; width: 67.5pt; padding-top: 0in;" valign="top" width="90"> $  96.7</td></tr> <tr><td style="padding-right: 5.4pt; padding-left: 5.4pt; padding-bottom: 0in; width: 225.9pt; padding-top: 0in;" valign="top" width="301"> Collaboration and other revenue </td> <td style="border-right: medium none; padding-right: 5.4pt; border-top: medium none; padding-left: 5.4pt; padding-bottom: 0in; border-left: medium none; width: 1in; padding-top: 0in; border-bottom: windowtext 1pt solid;" valign="top" width="96">     262.5</td> <td style="border-right: medium none; padding-right: 5.4pt; border-top: medium none; padding-left: 5.4pt; padding-bottom: 0in; border-left: medium none; width: 1in; padding-top: 0in; border-bottom: windowtext 1pt solid;" valign="top" width="96">   300.8</td> <td style="border-right: medium none; padding-right: 5.4pt; border-top: medium none; padding-left: 5.4pt; padding-bottom: 0in; border-left: medium none; width: 67.5pt; padding-top: 0in; border-bottom: windowtext 1pt solid;" valign="top" width="90">   299.4</td></tr> <tr><td style="padding-right: 5.4pt; padding-left: 5.4pt; padding-bottom: 0in; width: 225.9pt; padding-top: 0in;" valign="top" width="301"> Total revenue </td> <td style="border-right: medium none; padding-right: 5.4pt; border-top: medium none; padding-left: 5.4pt; padding-bottom: 0in; border-left: medium none; width: 1in; padding-top: 0in; border-bottom: windowtext 1.5pt solid;" valign="top" width="96">   $430.6</td> <td style="border-right: medium none; padding-right: 5.4pt; border-top: medium none; padding-left: 5.4pt; padding-bottom: 0in; border-left: medium none; width: 1in; padding-top: 0in; border-bottom: windowtext 1.5pt solid;" valign="top" width="96"> $448.5</td> <td style="border-right: medium none; padding-right: 5.4pt; border-top: medium none; padding-left: 5.4pt; padding-bottom: 0in; border-left: medium none; width: 67.5pt; padding-top: 0in; border-bottom: windowtext 1.5pt solid;" valign="top" width="90"> $396.1</td></tr></table>   We pay Amylin a percentage of the gross margin of exenatide sales outside of the U.S., and these costs are recorded in cost of sales. Under the 50/50 profit-sharing arrangement for the U.S., in addition to recording as revenue our 50 percent share of exenatide's gross margin, we also record 50 percent of U.S. research and development costs and marketing and selling costs in the respective line items on the consolidated statements of operations.   A NDA has been submitted to the FDA for Bydureon. In October 2010, we received a complete response letter from the FDA that requested a safety study to measure the potential for heart rhythm disturbances when exenatide is used at higher than average doses. Our goal is to submit a reply to the complete response letter in the second half of 2011. Based on the requirements for additional data, this will likely be considered a Class 2 resubmission requiring a six-month review. We have also submitted Bydureon for review by the European Medicines Agency and we anticipate action in the first half of 2011.   Amylin is constructing and will operate a manufacturing facility for Bydureon, and we have entered into a supply agreement in which Amylin will supply Bydureon product to us for sales outside the U.S. The estimated total cost of the facility is approximately $550 million. In 2008, we paid $125.0 million to Amylin, which we will amortize to cost of sales over the estimated life of the supply agreement beginning with product launch. We would be required to reimburse Amylin for a portion of any future impairment of this facility, recognized in accordance with GAAP. A portion of the $125.0 million payment we made to Amylin would be creditable against any amount we would owe as a result of impairment. We have also agreed to loan up to $165.0 million to Amylin at an indexed rate. No amounts have been loaned pursuant to this arrangement. Draws must be made by June 30, 2011,and any borrowings must be repaid by June 30, 2014. We have also agreed to cooperate with Amylin in the development, manufacturing, and marketing of Bydureon in a dual-chamber cartridge pen configuration. We will contribute 60 percent of the total initial capital costs of the project, our portion of which will be approximately $130 million. As of December 31, 2010, we have contributed approximately $90 million.</div></div>   <div> Cymbalta   Boehringer Ingelheim   Beginning in 2002,we were in a collaborative arrangement with Boehringer Ingelheim (BI) to jointly develop, market and promote Cymbalta (duloxetine), a product for the treatment of major depressive disorder, diabetic peripheral neuropathic pain, generalized anxiety disorder, and fibromyalgia, outside the U.S. and Japan. Pursuant to the terms of the agreement, we generally shared equally in development, marketing, and selling expenses, and paid BI a commission on sales in the co-promotion territories. We manufacture the product for all territories. Reimbursements or payments for the cost sharing of marketing, selling, and administrative expenses were recorded in the respective expense line items in the consolidated statements of operations. The commission paid to BI was recorded in marketing, selling, and administrative expenses. In March 2010, the parties agreed to terminate this agreement, and we re-acquired the exclusive rights to develop and market duloxetine for all indications in countries outside the U.S. and Japan. In connection with the arrangement, we paid BI approximately $400 million and will also pay to BI a percentage of our sales of duloxetine in these countries through 2012 as consideration for the rights acquired.  We record these costs as intangible assets and will amortize to marketing, selling and administrative expenses using the straight-line method over the life of the original agreement, which is through 2015.   Quintiles   We were in a collaborative arrangement with Quintiles Transnational Corp. (Quintiles) to jointly market and promote Cymbalta in the U.S. since Cymbalta's launch in 2004. Pursuant to the terms of the agreement, Quintiles shared in the costs to co-promote Cymbalta with us and receives a commission based upon net product sales. According to that agreement, Quintiles' obligation to promote Cymbalta expired during 2009, and we pay a lower commission for three years after completion of the promotion efforts specified in that agreement. The commissions paid to Quintiles are recorded in marketing, selling, and administrative expenses.   Effient   We are in a collaborative arrangement with Daiichi Sankyo Company, Limited (D-S) to develop, market, and promote Effient, an antiplatelet agent for the treatment of patients with acute coronary syndrome who are being managed with an artery-opening procedure known as percutaneous coronary intervention. The product was approved for marketing by the European Commission under the trade name Efient® in February 2009, and the initial sales were recorded in the first quarter of 2009. The product was also approved for marketing by the FDA under the tradename Effient in July 2009, and the initial sales in the U.S. were recorded in the third quarter of 2009. Within this arrangement, we and D-S have agreed to co-promote under the same trademark in certain territories (including the U.S. and five major European markets), while we have exclusive marketing rights in certain other territories. D-S has exclusive marketing rights in Japan. Under the agreement, we paid D-S an upfront license fee and milestones related to successful development and product launch. The parties share approximately 50/50 in the profits, as well as in the costs of development and marketing in the co-promotion territories. A third party manufactures bulk product, and we produce the finished product for our exclusive and co-promotion territories. We record product sales in our exclusive and co-promotion territories. In our exclusive territories, we pay D-S a royalty specific to these territories. Profit share payments made to D-S are recorded as marketing, selling, and administrative expenses. All royalties paid to D-S and the third-party manufacturer are recorded in cost of sales. Worldwide Effient sales were $115.0 million and $27.0 million in 2010 and 2009, respectively.   Diabetes Collaboration   In January 2011, we and BI entered into a global agreement to jointly develop and commercialize a portfolio of diabetes compounds currently in mid- and late-stage development. Included are BI's two oral diabetes agents, linagliptin, for which an NDA has been submitted to the FDA, and BI10773, which is currently in Phase III clinical testing; our two basal insulin analogues, LY2605541 and LY2963016, both expected to begin Phase III clinical testing in 2011; and the option to co-develop and co-commercialize our anti-TGF-beta monoclonal antibody, which is currently in Phase II clinical testing. Under the terms of the agreement, we made an initial one-time payment to BI of €300.0 million for acquired IPR&D related to this arrangement, which will be included as expense in the first quarter of 2011 and is deductible for tax purposes.  BI will be eligible to receive up to a total of €625.0 million in success-based regulatory milestones for linagliptin and BI10773. We will be eligible to receive up to a total of $650.0 million in success-based regulatory milestones on our two basal analogue insulins. Should BI elect to opt-in to the Phase III development and potential commercialization of the anti-TGF-beta monoclonal antibody, we would be eligible for up to $525.0 million in opt-in and success-based regulatory milestone payments. The companies will share ongoing development costs equally. Upon successful regulatory approval of any product resulting from the collaboration, the companies will equally share in the product's commercialization costs and gross margin. Each company will also be entitled to potential performance payments on sales of the molecules they contribute to the collaboration.   <div> TPG-Axon Capital   In 2008, we entered into an agreement with an affiliate of TPG-Axon Capital (TPG) whereby both we and TPG were obligated to fund the Phase III development of semagacestat and solanezumab, our two lead molecules for the treatment of mild to moderate Alzheimer's disease. In the third quarter of 2010, we halted the development of semagacestat based on preliminary results of Phase III clinical trials which resulted in a charge to research and development of approximately $80 million. In February 2011, we amended this agreement. Under the amended agreement, TPG's remaining obligation to fund solanezumab costs incurred subsequent to 2010 will not be material and will not extend beyond the first half of 2011. In exchange for their funding, TPG may receive success-based sales milestones totaling approximately $70.0 million and mid-single digit royalties that are contingent upon the successful development of solanezumab. The royalties relating to solanezumab would be paid for approximately eight years after launch of a product. Reimbursements received from TPG for its portion of research and development costs incurred related to the Alzheimer's treatments are recorded as a reduction to the research and development expense line item on the consolidated statements of operations. The reimbursement from TPG has not been and is not expected to be material in any period.   Summary of Collaboration-Related Commission and Profit Share Payments   The aggregate amount of commissions and profit share payments included in marketing, selling, and administrative expense pursuant to the collaborations described above was $174.5 million, $319.2 million, and $307.6 million in 2010, 2009, and 2008, respectively.</div></div>  </div> </div>Note 4: Collaborations   We often enter into collaborative arrangements to develop and commercialize drug candidates.  Collaborative activitiesfalsefalsefalsefalsefalseOtherus-types:textBlockItemTypestringDescription of 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 under 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.Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Emerging Issues Task Force (EITF) -Number 07-1 -Paragraph 21 falsefalseCollaborations [Text Block]12CollaborationsUnKnownUnKnownUnKnownUnKnownfalsetrue