ACQUISITIONS

6 Months Ended

Jun. 30, 2012

Business Combinations [Abstract]

Acquisition [Text Block]

Note 4. ACQUISITIONS

Amylin Pharmaceuticals, Inc.Acquisition

On June 29, 2012, BMS entered into an agreement to acquire Amylin Pharmaceuticals, Inc. (Amylin) for $31.00 per share in cash, pursuant to a cash tender offer and second step merger, or an aggregate purchase price of approximately $5.3 billion. BMS will also be assuming Amylin's net debt and a contractual payment obligation to Eli Lilly & Company, together totaling approximately $1.7 billion.The closing of the transaction is expected to occur during the third quarter of 2012 subject to, among other items, at least a majorityof the outstanding shares of Amylin being tendered and customary regulatory approvals.See “—Note 3. Alliances and Collaborations” for further information regarding the agreement to acquire Amylin.

Amylin is a biopharmaceutical company dedicated to the discovery, development and commercialization of innovative medicines for patients with diabetes and other metabolic diseases. Amylin's primary focus is on the research, development and commercialization of a franchise of GLP-1 agonists for the treatment of type 2 diabetes.

Inhibitex, Inc. Acquisition

On February 13, 2012, BMS completed its acquisition of the outstanding shares of Inhibitex, Inc. (Inhibitex), a clinical-stage biopharmaceutical company focused on developing products to prevent and treat serious infectious diseases. Acquisition costs of $12 million were included in other expense. BMS obtained Inhibitex's lead asset, INX-189, an oral nucleotide polymerase (NS5B) inhibitor in Phase II development for the treatment of chronic hepatitis C infections. Goodwill generated from this acquisition was primarily attributed to the potential to offer a full portfolio of therapy choices for hepatitis infections as well as to provide additional levels of sustainability to BMS's virology pipeline.

The purchase price allocation was as follows:

Purchase price:		Dollars in Millions
Cash	$	2,539
Identifiable net assets:
Cash		46
Marketable securities		17
In-process research and development (IPRD)		1,875
Accounts payable		(23)
Accrued expenses		(10)
Deferred income taxes		(579)
Total identifiable net assets		1,326
Goodwill	$	1,213

The fair value of the IPRD was estimated utilizing the income method which risk adjusted the expected future net cash flows estimated to be generated from the compounds based upon estimated probabilities of technical and regulatory success (PTRS). The unit of account for IPRD was a global view that considered all potential jurisdictions and indications. The cash flows were adjusted to present value utilizing a 12.0% discount rate reflecting the risk factors associated with the cash flow streams.

IPRD includes $1.8 billion attributed to INX-189. INX-189 is expected to be most effective when used in combination therapy and it is assumed all market participants would inherently maintain franchise synergies attributed to maximizing the cash flows of their existing virology pipeline assets. The cash flows utilized to value INX-189 include such synergies and also assume initial positive cash flows to commence in 2017, shortly after the expected receipt of regulatory approvals, subject to trial results. The weighted-average PTRS utilized in the INX-189 valuation was 38%. Actual cash flows attributed to IPRD are likely to be different than those assumed.

The results of Inhibitex's operations are included in the consolidated financial statements from February 13, 2012. Pro forma supplemental financial information is not provided as the impact of the acquisition is not material to operating results. Goodwill, IPRD and all intangible assets valued in this acquisition are non-deductible for tax purposes.