3. COLLABORATION AGREEMENTS

(a) Collaboration Agreement with Astellas

The Company entered into a collaboration agreement with Astellas in October 2009. Under the Astellas Collaboration Agreement, the Company and Astellas agreed to collaborate on the development of MDV3100 for the United States market, including associated regulatory filings with the U.S. Food and Drug Administration, or the FDA. Based on the positive results from the AFFIRM trial, the Company elected to exercise its right under the Astellas Collaboration Agreement to co-promote MDV3100 in the U.S. market. Should MDV3100 receive marketing approval by the FDA, following such approval and the launch of MDV3100 in the United States, the Company and Astellas will co-promote MDV3100 in the United States and each will provide 50% of the sales and medical affairs field forces supporting MDV3100 in the U.S. market. Astellas is responsible for development of, seeking regulatory approval for and commercialization of MDV3100 outside the United States. Astellas will be responsible for commercial manufacture of MDV3100 on a global basis. Both Medivation and Astellas have agreed not to commercialize certain other products having a similar mechanism of action as MDV3100 for the treatment of specified indications for a specified time period, subject to certain exceptions.

The Company and Astellas share equally the costs and expenses of developing and commercializing MDV3100 for the United States market, except that (a) development costs for studies useful in both the United States market and either Europe or Japan are shared two-thirds by Astellas and one-third by the Company, and (b) both the Company and Astellas will be responsible for all commercialization costs incurred in fielding and supporting its respective MDV3100 sales forces, and each of Astellas and the Company will be entitled to receive a fee for each detail made by its respective sales forces. The Company and Astellas will share profits (or losses) resulting from the commercialization of MDV3100 in the United States equally. Outside the United States, Astellas will bear all development and commercialization costs and will pay the Company tiered, double-digit royalties on the aggregate net sales of MDV3100.

The agreement establishes several joint committees consisting of an equal number of representatives from both parties that operate by consensus to oversee the collaboration. In the event that a joint committee is unable to reach consensus on a particular issue, then, depending on the issue, a dispute may be decided at the joint committee level by the party with the final decision on the issue or escalated to senior management of the parties. If a dispute is escalated to senior management and no consensus is reached, then the dispute may be decided by the party to whom the contract grants final decision on such issue. Other issues can only be decided by consensus of the parties, and unless and until the parties' representatives reach agreement on such issue, no decision on such issue will be made, and the status quo will be maintained.

Under the Astellas Collaboration Agreement, Astellas paid the Company a non-refundable, up-front cash payment of $110.0 million in the fourth quarter of 2009. The Company is also eligible to receive up to $335.0 million in development milestone payments, plus up to an additional $320.0 million in commercial milestone payments. As of December 31, 2011, the Company had received an aggregate of $13.0 million in development milestone payments under the Astellas Collaboration Agreement. Should the FDA or European Medicines Agency accept for filing a new drug application or marketing authorization application, respectively, seeking approval of MDV3100 in post-chemotherapy advanced prostate cancer patients based on the positive results from the AFFIRM trial, the Company would be entitled to a $10.0 million and a $5.0 million milestone payment, respectively, under the Astellas Collaboration Agreement. In addition, should the new drug application be approved by the FDA or the marketing authorization application be approved by the European regulators, the Company would be entitled to a $30.0 million and a $15.0 million milestone payment, respectively, under the Astellas Collaboration Agreement. The Company is required to share 10% of the up-front and development milestone payments received under the Astellas Collaboration Agreement with The Regents of the University of California, or UCLA, pursuant to the terms of its MDV3100 license agreement. The Company and Astellas each are permitted to terminate the Astellas Collaboration Agreement for an uncured material breach by, or the insolvency of, the other party. Astellas has a right to terminate the Astellas Collaboration Agreement unilaterally by advance written notice to the Company, but except in certain specific circumstances, generally cannot exercise that termination right until the first anniversary of MDV3100's first commercial sale. Following any termination of the Astellas Collaboration Agreement in its entirety, all rights to develop and commercialize MDV3100 will revert to the Company, and Astellas will grant a license to the Company to enable the Company to continue such development and commercialization. In addition, except in the case of a termination by Astellas for an uncured material breach, Astellas will supply MDV3100 to the Company during a specified transition period.

(b) Former Collaboration Agreement with Pfizer

The Company entered into a collaboration agreement with Pfizer in October 2008. Under the agreement, the Company and Pfizer agreed to collaborate on the development of dimebon for Alzheimer's disease and Huntington disease for the United States market, including associated regulatory filings with the FDA. Pfizer paid the Company a non-refundable up-front cash payment of $225.0 million in the fourth quarter of 2008 pursuant to the terms of the agreement. Under the terms of the former collaboration agreement with Pfizer, the Company and Pfizer shared the costs and expenses of developing and commercializing dimebon for the United States market on a 60%/40% basis, with Pfizer assuming the larger share.

Based on the negative results in the Phase 3 CONNECTION, HORIZON and CONCERT trials, the Company and Pfizer have discontinued development of dimebon for all indications in 2012. In January 2012, Pfizer exercised its right to terminate the collaboration agreement as discussed in Note 14, "Subsequent Events."

(c) Deferred Revenue and Collaboration Revenue

Through December 31, 2011, the Company has received an aggregate of $123.0 million of up-front and development milestone payments under the Astellas Collaboration Agreement and $225.0 million of up-front payments under its former collaboration agreement with Pfizer.

Deferred revenue related to the Astellas Collaboration Agreement and the former collaboration agreement with Pfizer consisted of the following:


	December 31,
	2011		2010
Current portion:
Deferred revenue from Astellas	$	23,747	$	23,138
Deferred revenue from Pfizer		36,015		36,015

Total	$	59,762	$	59,153

Long-term portion:
Deferred revenue from Astellas	$	47,494	$	69,477
Deferred revenue from Pfizer		36,015		72,030

Total	$	83,509	$	141,507

Collaboration revenue recognized with respect to the Astellas Collaboration Agreement and the former collaboration agreement with Pfizer consisted of the following:


	Years Ended December 31,
	2011		2010		2009
Collaboration revenue from Astellas	$	24,374	$	23,492	$	3,893
Collaboration revenue from Pfizer		36,015		39,016		65,361

Total	$	60,389	$	62,508	$	69,254

(d) Cost-Sharing Payments

The Company recorded development cost-sharing payments from Astellas and Pfizer, and corresponding reductions in research and development expense as follows:


	Years Ended December 31,
	2011		2010		2009
Development cost-sharing payments from Astellas	$	44,285	$	34,125	$	2,784
Development cost-sharing payments from Pfizer		12,365		29,139		20,435

Total	$	56,650	$	63,264	$	23,219

The Company recorded commercialization cost-sharing payments (to) from Astellas and Pfizer, and corresponding (increases) reductions in selling, general and administrative expenses as follows:


	Years Ended December 31,
	2011			2010			2009
Commercialization cost-sharing payments (to) from Astellas	$	(472	)	$	520		$	74
Commercialization cost-sharing payments from (to) Pfizer		32			(1,084	)		(720	)

Total	$	(440	)	$	(564	)	$	(646	)

At December 31, 2011 and 2010, development and commercialization cost-sharing payments receivable from Astellas were $10.6 million and $11.6 million, respectively, and at December 31, 2011 and 2010, development and commercialization cost-sharing payments receivable from Pfizer were $2.0 million and $9.6 million, respectively. The amounts receivable at December 31, 2011 from Astellas and Pfizer were received in the first quarter of 2012.