ACQUISITIONS AND DIVESTITURES

Acquisitions

Acquisitions are evaluated to determine whether it is a business, an asset or a group of assets. The following transactions were accounted for as asset acquisitions since they were determined not to be a business as that term is defined in ASC 805 - Business Combinations primarily because no significant processes were acquired. As a result, the amounts allocated to the lead investigational compounds were expensed and not capitalized. The consideration of each transaction was allocated as follows:



Dollars in Millions	Year	Upfront Payment		R&D Expense		Deferred Tax Assets^(a)		Contingent Consideration
Cormorant	2016	$	35	$	35	$	—	$	485
Padlock	2016	150		139		11		453
		$	185	$	174	$	11	$	938

Cardioxyl	2015	$	200	$	167	$	33	$	1,875
Flexus^(b)	2015	814		800		14		450
		$	1,014	$	967	$	47	$	2,325

iPierian	2014	$	175	$	148	$	27	$	554


(a)	Relates to net operating loss and tax credit carryforwards


(b)	Includes $14 million of acquisition costs.

Cormorant

In July 2016, BMS acquired all of the outstanding shares of Cormorant, a private pharmaceutical company focused on the development of therapies for cancer and rare diseases. The acquisition provides BMS with full rights to Cormorant's lead candidate HuMax-IL8, a Phase I/II monoclonal antibody that represents a potentially complementary immuno-oncology mechanism of action to T-cell directed antibodies and co-stimulatory molecules. Contingent consideration includes development and regulatory milestone payments.

Padlock

In April 2016, BMS acquired all of the outstanding shares of Padlock, a private biotechnology company dedicated to creating new medicines to treat destructive autoimmune diseases. The acquisition provides BMS with full rights to Padlock’s PAD inhibitor discovery program focused on the development of potentially transformational treatment approaches for patients with rheumatoid arthritis. Padlock’s PAD discovery program may have additional utility in treating systemic lupus erythematosus and other autoimmune diseases. Contingent consideration includes development and regulatory milestone payments.

Cardioxyl

In December 2015, BMS acquired all of the outstanding shares of Cardioxyl, a private biotechnology company focused on the discovery and development of novel therapeutic agents for cardiovascular disease. The acquisition provided BMS with full rights to CXL-1427, a nitroxyl prodrug in Phase II development for acute decompensated heart failure. Contingent consideration includes development, regulatory and sales-based milestone payments.

Flexus

In April 2015, BMS acquired all of the outstanding shares of Flexus, a private biotechnology company focused on the discovery and development of novel anti-cancer therapeutics. The acquisition provided BMS with full rights to F001287, a preclinical small molecule IDO1-inhibitor targeted immunotherapy. In addition, BMS acquired Flexus's IDO/TDO discovery program which includes its IDO-selective, IDO/TDO dual and TDO-selective compounds. Contingent consideration includes development and regulatory milestone payments. A $100 million milestone was achieved and paid to former shareowners of Flexus in 2016 for the commencement of a Phase I clinical trial and included in R&D expense.

iPierian

In April 2014, BMS acquired all of the outstanding shares of iPierian, a private biotechnology company focused on new treatments for tauopathies, a class of neurodegenerative diseases. The acquisition provided BMS with full rights to IPN007, a preclinical monoclonal antibody to treat progressive supranuclear palsy and other tauopathies. Contingent consideration includes development and regulatory milestone payments and future royalties on net sales if any of the acquired preclinical assets are approved and commercialized.

Divestitures



	Proceeds^(a)						Divestiture (Gains) / Losses									Royalties
Dollars in Millions	2016		2015		2014		2016			2015			2014			2016			2015			2014
Investigational HIV medicines	$	387	$	—	$	—	$	(272	)	$	—		$	—		$	—		$	—		$	—
OTC products (Reckitt)	317		—		—		(277		)	—			—			—			—			—
Diabetes	333		374		3,495		—			(82		)	(536		)	(361		)	(215		)	(192		)
Erbitux*	252		9		—		—			171			—			(246		)	(70		)	—
Recothrom*	—		132		—		—			(59		)	—			—			—			—
Mature brand products (Valeant)	—		61		—		—			(88		)	—			—			—			—
Ixempra*	13		113		—		—			(88		)	—			(11		)	(8		)	—
Other	15		8		70		(15		)	(48		)	(28		)	—			—			—
	$	1,317	$	697	$	3,565	$	(564	)	$	(194	)	$	(564	)	$	(618	)	$	(293	)	$	(192	)


(a)	Includes royalties received subsequent to the related sale of the asset or business.

ViiV Healthcare

In February 2016, BMS sold its investigational HIV medicines business to ViiV Healthcare which includes a number of programs at different stages of discovery, preclinical and clinical development. The transaction excluded BMS's HIV marketed medicines. BMS earned transitional fees of $105 million for certain R&D and other services in 2016. In February 2016, BMS received an upfront payment of $350 million. BMS will also receive from ViiV Healthcare contingent development and regulatory milestone payments of up to $1.1 billion, sales-based milestone payments of up to $4.3 billion and future tiered royalties if the products are approved and commercialized.

Other Divestitures

Refer to "—Note 3. Alliances" for a discussion on the divestiture transactions with Reckitt, Lilly, The Medicines Company, Valeant and AstraZeneca. Revenues and pretax earnings related to these businesses were not material in 2016, 2015 and 2014 (excluding the divestiture gains).

Assets Held-For-Sale

Assets held-for-sale were $134 million at December 31, 2015 and included in prepaid expenses and other. The amount consisted primarily of goodwill related to the investigational HIV medicines business and the business comprising an alliance with Reckitt. The allocation of goodwill was determined using the relative fair value of the applicable business to the Company's reporting unit. Revenues and pretax earnings related to these businesses were not material in 2016, 2015 and 2014 (excluding the divestiture gains).