Collaboration with Janssen Biotech, Inc.	9 Months Ended
Sep. 30, 2015
Collaboration with Janssen Biotech, Inc.
Collaboration with Janssen Biotech, Inc.	Note 5Collaboration with Janssen Biotech, Inc. In December 2011, Pharmacyclics entered into a worldwide collaboration and license agreement with Janssen for the joint development and commercialization of IMBRUVICA, a novel, orally active, selective covalent inhibitor of BTK, and certain compounds structurally related to IMBRUVICA, for oncology and other indications, excluding all immune and inflammatory mediated diseases or conditions and all psychiatric or psychological diseases or conditions, in the United States and outside the United States. The collaboration provides Janssen with an exclusive license to commercialize IMBRUVICA outside of the United States and co-exclusively with AbbVie in the United States. Both parties are responsible for the development, manufacturing and marketing of any products generated as a result of the collaboration. The collaboration has no set duration or specific expiration date and provides for potential future development, regulatory and approval milestone payments of up to $200 million to AbbVie. The collaboration includes a cost sharing arrangement for associated collaboration activities. Except in certain cases, in general, Janssen is responsible for approximately 60% of collaboration development costs and AbbVie is responsible for the remaining 40% of collaboration development costs. AbbVie and Janssen share pre-tax profits and losses equally from the commercialization of products. Janssen is responsible for and has exclusive rights to commercialize IMBRUVICA outside the United States. While both parties have co-exclusive rights to commercialize the products in the United States, AbbVie is the principal in the end-customer product sales. Operating expenses for costs incurred under the collaboration are reported in their respective expense line items, net of any payments due or reimbursements due from Janssen. Revenues and profit share costs related to sales of IMBRUVICA in the United States are included in net revenues and cost of products sold, respectively. Amounts payable to AbbVie by Janssen for IMBRUVICA sales outside the United States are included in collaboration revenues. Janssen’s share of the pre-tax U.S. profits under the collaboration was $124 million and $169 million for the three and nine months ended September 30, 2015, respectively, and was recorded within cost of products sold in the condensed consolidated statements of earnings. AbbVie’s share of pre-tax profits outside the United States under the collaboration were $37 million and $47 million for the three and nine months ended September 30, 2015, respectively. AbbVie’s share of the cost sharing expenses under the collaboration was $65 million and $87 million for the three and nine months ended September 30, 2015, respectively. At September 30, 2015, AbbVie’s receivable from Janssen was $39 million and AbbVie’s payable to Janssen was $111 million, which were classified in accounts and other receivables, net and accounts payable and accrued liabilities, respectively, in AbbVie’s condensed consolidated balance sheet.

Note 5Collaboration with Janssen Biotech, Inc.

In December 2011, Pharmacyclics entered into a worldwide collaboration and license agreement with Janssen for the joint development and commercialization of IMBRUVICA, a novel, orally active, selective covalent inhibitor of BTK, and certain compounds structurally related to IMBRUVICA, for oncology and other indications, excluding all immune and inflammatory mediated diseases or conditions and all psychiatric or psychological diseases or conditions, in the United States and outside the United States.

The collaboration provides Janssen with an exclusive license to commercialize IMBRUVICA outside of the United States and co-exclusively with AbbVie in the United States. Both parties are responsible for the development, manufacturing and marketing of any products generated as a result of the collaboration. The collaboration has no set duration or specific expiration date and provides for potential future development, regulatory and approval milestone payments of up to $200 million to AbbVie.

The collaboration includes a cost sharing arrangement for associated collaboration activities. Except in certain cases, in general, Janssen is responsible for approximately 60% of collaboration development costs and AbbVie is responsible for the remaining 40% of collaboration development costs. AbbVie and Janssen share pre-tax profits and losses equally from the commercialization of products. Janssen is responsible for and has exclusive rights to commercialize IMBRUVICA outside the United States. While both parties have co-exclusive rights to commercialize the products in the United States, AbbVie is the principal in the end-customer product sales. Operating expenses for costs incurred under the collaboration are reported in their respective expense line items, net of any payments due or reimbursements due from Janssen. Revenues and profit share costs related to sales of IMBRUVICA in the United States are included in net revenues and cost of products sold, respectively. Amounts payable to AbbVie by Janssen for IMBRUVICA sales outside the United States are included in collaboration revenues.

Janssen’s share of the pre-tax U.S. profits under the collaboration was $124 million and $169 million for the three and nine months ended September 30, 2015, respectively, and was recorded within cost of products sold in the condensed consolidated statements of earnings. AbbVie’s share of pre-tax profits outside the United States under the collaboration were $37 million and $47 million for the three and nine months ended September 30, 2015, respectively. AbbVie’s share of the cost sharing expenses under the collaboration was $65 million and $87 million for the three and nine months ended September 30, 2015, respectively.

At September 30, 2015, AbbVie’s receivable from Janssen was $39 million and AbbVie’s payable to Janssen was $111 million, which were classified in accounts and other receivables, net and accounts payable and accrued liabilities, respectively, in AbbVie’s condensed consolidated balance sheet.