8. Collaboration and license agreements

The Company has entered into various product, collaboration and license agreements with pharmaceutical and biotechnology companies. Revenues recognized under these agreements were as follows (in thousands):


	Years ended December 31,
	2011		2010		2009
Millennium	$	27,914	$	16,040	$	1,690
Genentech		5,302		82,819		41,594
Pfizer		4,500		0		0
Agensys		3,957		2,256		4,029
Abbott		3,721		219		0
GSK		3,037		3,013		0
Other		3,106		3,123		4,652

Total	$	51,537	$	107,470	$	51,965

Product collaboration agreements

In December 2009, the Company entered into a collaboration agreement with Millennium, to develop and commercialize ADCETRIS. Under this collaboration, the Company granted research and commercial licenses to certain of its technology to Millennium for its use in its territory. The Company also agreed to conduct certain clinical and development activities and to provide other materials, supplies and services to Millennium during the development term of the collaboration. The Company has retained commercial rights for ADCETRIS in the United States and its territories and in Canada, and Millennium has commercial rights in the rest of the world. In June 2011, Millennium's Marketing Authorization Application, or MAA, seeking regulatory approval to market ADCETRIS for the treatment of relapsed or refractory Hodgkin lymphoma and relapsed or refractory sALCL in the European Union was accepted by the European Medicines Agency, or EMA, which is currently reviewing the application. Under the collaboration, the Company received an upfront payment of $60 million and the Company is entitled to receive progress- and sales-dependent milestone payments based on the achievement by Millennium of specific events. The Company is entitled to receive tiered double-digit royalties beginning in the mid-teens and escalating to the mid-twenties based on net sales of ADCETRIS within Millennium's licensed territories, subject to offsets for payments made by Millennium for third party royalties. In 2011, the Company received a $5 million milestone payment as a result of the acceptance of Millennium's MAA by the EMA. The Company and Millennium will each fund 50% of worldwide joint development costs performed under the collaboration. In Japan, Millennium is solely responsible for development costs. Costs associated with co-development activities performed under this collaboration are included in research and development expense in the accompanying consolidated statements of operations. The upfront fee and other payments received were deferred and are being recognized as revenue over the development term of the collaboration agreement, currently estimated as eight years, using a time-based approach. Either party may terminate the collaboration agreement if the other party materially breaches the agreement and such breach remains uncured. Millennium may terminate the collaboration agreement for any reason upon prior written notice to the Company, and the Company may terminate the collaboration agreement in certain circumstances. The collaboration agreement can also be terminated by mutual written consent of the parties. If neither party terminates the collaboration agreement, then the agreement automatically terminates on the expiration of all payment obligations.

In January 2007, the Company entered into a collaboration agreement with Genentech for the development and commercialization of dacetuzumab. Under this collaboration, the Company granted research and commercial licenses to certain of its technology to Genentech. The Company also agreed to conduct certain clinical and development activities and to provide other materials, supplies and services to Genentech during the performance obligation period of the collaboration. Under the terms of the agreement, the Company received an upfront payment of $60 million, progress-dependent milestone payments totaling $20 million, and reimbursement funding for development activities performed under the collaboration. The Company recognized these payments as revenue over the development period of the collaboration, which initially extended to February 2013. In December 2009, Genentech provided six-months notice to the Company of its election to terminate the collaboration effective June 2010. As a result, the remaining performance obligation period for the Company under the collaboration was shortened to six months. All deferred revenue, representing payments received in advance of the culmination of the earnings process was fully recognized as revenue using a time-based method over the remaining term of the agreement. During the first half of 2010, the Company recorded $70.0 million in collaboration revenue related to this collaboration. All product rights to dacetuzumab were returned to the Company upon completion of the collaboration.

Collaboration and co-development agreement with Agensys

In January 2007, the Company entered into an agreement with Agensys, Inc., an affiliate of Astellas Pharma Inc., or Agensys, to jointly research, develop and commercialize ADCs for cancer. The collaboration encompasses combinations of the Company's ADC technology with antibodies developed by Agensys to proprietary cancer targets. Under the co-development provisions of the collaboration agreement, the companies co-fund development and commercialization costs and share equally in any profits. The agreement was expanded and modified in November 2009 to provide for additional antigen licenses to Agensys. The Company received a $12 million upfront payment and is entitled to future milestone payments, royalties and support fees for research and development services and material provided under the agreement. Under the amended agreement, Agensys can conduct preclinical studies aimed at identifying ADC product candidates for additional targets. The Company has the right to exercise a co-development option for two ADC product candidates upon submission of an IND to the FDA. The Company exercised one of these options in 2011 and began co-developing ASG-22ME. Agensys has the right to develop and commercialize the other ADC product candidates on its own, subject to paying the Company fees, milestones and royalties. Either party may opt out of co-development and profit-sharing in return for receiving milestones and royalties from the continuing party. Amounts received for product candidates being developed solely by Agensys will be recognized as revenue over the seventy-eight month development term of the collaboration agreement using a time-based approach.

The Company and Agensys are currently collaborating on the development of ASG-5ME and ASG-22ME for the treatment of solid tumors. Costs associated with co-development activities performed under this collaboration are included in research and development expense in the accompanying consolidated statements of operations. The Agensys collaboration agreement defines a mechanism for calculating the costs of co-development activities and for reimbursing the other party in order to maintain an equal sharing of development costs. Third-party costs are billed at actual cost and internal labor and support costs are billed at a contractual rate. The following table summarizes research and development expenses incurred by the Company and funding provided to Agensys under the collaboration (in thousands):


	Years ended December 31,
	2011		2010		2009
Research and development expense using contractual rates	$	6,404	$	4,654	$	4,824
Co-development funding due to Agensys		6,844		360		764

Total	$	13,248	$	5,014	$	5,588

ADC collaboration agreements

The Company has entered into collaborations for its ADC technology with a number of biotechnology and pharmaceutical companies, including Abbott Biotechnology Ltd., or Abbott, Bayer Pharmaceuticals Corporation, or Bayer, Celldex Therapeutics, Inc., or Celldex, Daiichi Sankyo Co., Ltd., or Daiichi Sankyo, Genentech, Inc., a member of the Roche Group, or Genentech, GlaxoSmithKline LLC, or GSK, Millennium: The Takeda Oncology Company, or Millennium, Pfizer, Inc., or Pfizer and PSMA Development Company LLC, a subsidiary of Progenics Pharmaceuticals, Inc., or Progenics. Under these collaborations, the Company has granted research and commercial licenses to use its technology in conjunction with the collaborator's technology. The Company also has agreed to conduct limited development activities and to provide other materials, supplies and services to its collaborators during the development term of the collaboration. The Company receives upfront fees, progress- and sales-dependent milestones for the achievement by its collaborators of certain events, annual maintenance fees and support fees for research and development services and material provided under the agreements. The Company is also entitled to receive royalties on net sales of any resulting ADC products. The upfront fee and other payments received are deferred and recognized as revenue over the development term of the related collaboration agreement using a time-based approach. The Company's collaboration partners are solely responsible for research, product development, manufacturing and commercialization of all products under the agreements.