ALLIANCES

BMS enters into collaboration arrangements with third parties for the development and commercialization of certain products. Although each of these arrangements is unique in nature, both parties are active participants in the operating activities of the collaboration and are exposed to significant risks and rewards depending on the commercial success of the activities. BMS may either in-license intellectual property owned by the other party or out-license its intellectual property to the other party. These arrangements also typically include research, development, manufacturing and/or commercial activities and can cover a single investigational compound or commercial product or multiple compounds and/or products in various life cycle stages. The rights and obligations of the parties can be global or limited to geographic regions. We refer to these collaborations as alliances and our partners as alliance partners. Products sold through alliance arrangements in certain markets include Opdivo, Eliquis, Orencia, Sprycel, Yervoy, Empliciti, Sustiva (Atripla*) and certain other brands.

Selected financial information pertaining to our alliances was as follows, including net product sales when BMS is the principal in the third-party customer sale for products subject to the alliance. Expenses summarized below do not include all amounts attributed to the activities for the products in the alliance, but only the payments between the alliance partners or the related amortization if the payments were deferred or capitalized.



	Three Months Ended September 30,						Nine Months Ended September 30,
Dollars in Millions	2017			2016			2017			2016
Revenues from alliances:
Net product sales	$	1,764		$	1,465		$	5,045		$	4,031
Alliance revenues	334			402			957			1,229
Total Revenues	$	2,098		$	1,867		$	6,002		$	5,260

Payments to/(from) alliance partners:
Cost of products sold	$	678		$	572		$	1,969		$	1,543
Marketing, selling and administrative	(16		)	(3		)	(39		)	(10		)
Research and development	(12		)	(7		)	(6		)	23
Other (income)/expense	(151		)	(160		)	(545		)	(864		)

Noncontrolling interest, pretax	4			3			9			13



Selected Alliance Balance Sheet information:
Dollars in Millions	September 30, 2017		December 31, 2016
Receivables - from alliance partners	$	878	$	903
Accounts payable - to alliance partners	634		555
Deferred income from alliances^(a)	1,060		1,194


(a)	Includes unamortized upfront, milestone and other licensing proceeds, revenue deferrals attributed to Atripla* and undelivered elements of diabetes business divestiture proceeds. Amortization of deferred income (primarily related to alliances) was $59 million and $193 million for the nine months ended September 30, 2017 and 2016, respectively.

Specific information pertaining to each of our significant alliances is discussed in our 2016 Form 10-K, including their nature and purpose, the significant rights and obligations of the parties and specific accounting policy elections. Significant developments and updates related to alliances during the nine months ended September 30, 2017 are set forth below.

AstraZeneca

BMS received $100 million from AstraZeneca as additional contingent consideration for the diabetes business divestiture upon achievement of a regulatory approval milestone in the first quarter of 2017 (included in other income).

F-Star Alpha

In the first quarter of 2017, BMS discontinued development of FS102 (an anti-HER2 antibody fragment) which was in Phase I development for the treatment of breast and gastric cancer. BMS will not exercise its option to purchase F-Star Alpha which was previously consolidated by BMS as a variable interest entity. As a result, an IPRD charge of $75 million was included in R&D expense and attributed to noncontrolling interest in the first quarter of 2017.