Research and Development Arrangement, Contract to Perform for Others, Costs Incurred, Gross

  
In addition, we jointly develop a portion of our oncology portfolio with BeiGene, which shares in global R&D costs by providing cash and development services of up to $1.25 billion. Upon regulatory approval, BeiGene will assume commercialization rights in China for a specified period, and Amgen and BeiGene will share profits equally until certain of these product rights revert to Amgen. Upon return of the product rights, Amgen will pay royalties to BeiGene on sales in China for a specified period. For product sales outside China, Amgen will also pay royalties to BeiGene.During the years ended December 31, 2021 and 2020, net costs recovered from BeiGene for oncology product candidates were $220 million and $225 million, respectively, and were recorded as an offset to R&D expense in the Consolidated Statements of Income. During the year ended December 31, 2021, product sales from Amgen to BeiGene under the collaboration were $72 million and were recorded in Product sales in the Consolidated Statements of Income. During the year ended December 31, 2021, profit and loss share expenses related to the initial product-specific commercialization period were $64 million and were recorded primarily in SG&A expense in the Consolidated Statements of Income. Product sales from Amgen to BeiGene and profit and loss share expenses were not material during the year ended December 31, 2020. Amounts owed from BeiGene for product sales were $21 million and $22 million as of December 31, 2021 and 2020, respectively, which are included in Trade receivables, net, in the Consolidated Balance Sheets. Net amounts owed from BeiGene for cost recoveries and profit and loss share payments were $61 million and $99 million as of December 31, 2021 and 2020, respectively, which are included in Other current assets in the Consolidated Balance Sheets.Novartis Pharma AGWe are in a collaboration with Novartis to jointly develop and commercialize Aimovig. On January 31, 2022, concurrent with the settlement of the previously disclosed litigation between Amgen and Novartis we modified the terms of the collaboration. See Note 19, Contingencies and commitments.Arrangement through December 31, 2021In the United States, Amgen and Novartis jointly developed and collaborated on the commercialization of Aimovig. Amgen, as the principal, recognized product sales of Aimovig in the United States, shared U.S. commercialization costs with Novartis and paid Novartis a significant royalty on net sales in the United States. Novartis holds global co-development rights and exclusive commercial rights outside the United States and Japan for Aimovig (the ex-U.S. Novartis Rights). Novartis paid Amgen double-digit royalties on net sales of the product in the ex-U.S. Novartis Rights territories and funded a portion of global R&D expenses. In addition, Novartis was required to make a payment to Amgen of up to $100 million if certain commercial and expenditure thresholds were achieved with respect to Aimovig in the United States. Arrangement after January 1, 2022Pursuant to the amendment effective January 1, 2022, Novartis retains the ex-U.S. Novartis Rights and will continue to pay double-digit royalties on net sales in the ex-U.S. Novartis Rights territories. In the United States, Novartis will no longer collaborate with Amgen, share Aimovig commercialization costs or pay milestones and Amgen will no longer pay royalties to Novartis on sales of Aimovig. Amgen and Novartis will continue to share development expenses worldwide. In the United States, Novartis will no longer collaborate with Amgen or share Aimovig commercialization costs and Amgen will no longer pay royalties to Novartis on sales of Aimovig. Amgen and Novartis will continue to share development expenses worldwide.Amgen manufactures and supplies Aimovig worldwide. During the years ended December 31, 2021, 2020 and 2019, net costs recovered from Novartis for migraine products were $160 million, $192 million and $187 million, respectively, and were recorded primarily in SG&A expense in the Consolidated Statements of Income. During the years ended December 31, 2021, 2020 and 2019, royalties due to Novartis for Aimovig were $116 million, $139 million and $115 million, respectively, and were recorded in Cost of sales in the Consolidated Statements of Income. During the years ended December 31, 2021, 2020 and 2019, royalties due from Novartis for Aimovig were not material. Kyowa Kirin Co., Ltd.On July 30, 2021, we closed our collaboration and licensing agreement with KKC to jointly develop and commercialize an anti-OX40 fully human monoclonal antibody (AMG 451) worldwide, except in Japan. AMG 451 is for the treatment of atopic dermatitis, with potential for treatment of other autoimmune diseases.Under the terms of the agreement, we will lead the global development, manufacture and commercialization of AMG 451, except in Japan. KKC will co-promote AMG 451 with Amgen in the United States and have opt-in rights to co-promote AMG 451 in various other markets outside the United States, including in Europe and Asia. F-25
