BMS maintains alliances and collaborations with various third parties for the development and commercialization of certain products. Unless otherwise noted, operating results associated with the alliances and collaborations are generally treated as follows: product revenues from BMS sales are included in revenue; royalties, collaboration fees, profit sharing and distribution fees are included in cost of goods sold; post-approval milestone payments to partners are deferred and amortized over the useful life of the related products in cost of products sold; cost sharing reimbursements offset the intended operating expense; payments to BMS attributed to upfront, pre-approval milestone and other licensing payments are deferred and amortized over the estimated useful life of the related products in other income/expense; income and expenses attributed to a collaboration's non-core activities, such as supply and manufacturing arrangements and compensation for opting-out of commercialization in certain countries, are included in other income/expense; partnerships and joint ventures are either consolidated or accounted for under the equity method of accounting and related cash receipts and distributions are treated as operating cash flow.

See the 2011 Annual Report on Form 10-K for a more complete description of the below agreements, including termination provisions, as well as disclosures of other alliances and collaborations.

BMS has agreements with Sanofi for the codevelopment and cocommercialization of Avapro*/Avalide* and Plavix*. The worldwide alliance operates under the framework of two geographic territories; one in the Americas (principally the U.S., Canada, Puerto Rico and Latin American countries) and Australia and the other in Europe and Asia. Accordingly, two territory partnerships were formed to manage central expenses, such as marketing, research and development and royalties, and to supply finished product to the individual countries. In general, at the country level, agreements either to copromote (whereby a partnership was formed between the parties to sell each brand) or to comarket (whereby the parties operate and sell their brands independently of each other) are in place.

BMS acts as the operating partner and owns a 50.1% majority controlling interest in the territory covering the Americas and Australia and consolidates all country partnership results for this territory with Sanofi's 49.9% share of the results included in net earnings/(loss) attributable to noncontrolling interest. BMS recognizes net sales in this territory and in comarketing countries outside this territory (e.g. Germany, Italy for irbesartan only, Spain and Greece). Sanofi acts as the operating partner and owns a 50.1% majority controlling interest in the territory covering Europe and Asia and BMS has a 49.9% ownership interest in this territory which is included in equity in net income of affiliates.

BMS and Sanofi have a separate partnership governing the copromotion of irbesartan in the U.S. Sanofi paid BMS $350 million for their acquisition of an interest in the irbesartan license for the U.S. upon formation of the alliance.

			Three Months Ended September 30,				Nine Months Ended September 30,
Dollars in Millions			2012			2011	2012			2011
Territory covering the Americas and Australia:
	Net sales		$	95	$	1,936	$	2,690	$	5,959
	Royalty expense			19		430		527		1,229
	Noncontrolling interest – pre-tax			(7)		590		847		1,764
	Distributions to/(from) Sanofi			(290)		523		768		1,824

Territory covering Europe and Asia:
	Equity in net income of affiliates			45		75		163		226
	Profit distributions to BMS			54		97		183		224

Other:
	Net sales in Europe comarketing countries and other			64		68		227		213
	Amortization (income)/expense – irbesartan license fee			(8)		(7)		(24)		(23)
	Supply activities and development and opt-out royalty
		(income)/expense		(53)		6		(98)		21

							September 30,		December 31,
Dollars in Millions							2012		2011
Investment in affiliates – territory covering Europe and Asia							$	17	$	37
Deferred income – irbesartan license fee								5		29

The following is summarized financial information for interests in the partnerships with Sanofi for the territory covering Europe and Asia, which are not consolidated but are accounted for using the equity method:

	Three Months Ended September 30,				Nine Months Ended September 30,
Dollars in Millions	2012		2011		2012		2011
Net sales	$	248	$	364	$	886	$	1,125
Gross profit		132		161		402		501
Net income		116		131		358		413

In September 2012, BMS and Sanofi restructured the terms of the codevelopment and cocommercialization agreements discussed above. Effective as of January 1, 2013, subject in certain countries to the receipt of regulatory approvals, Sanofi will assume the worldwide operations of the alliance with the exception of Plavix* for the U.S. and Puerto Rico. The alliance for Plavix* in these two markets will continue unchanged through December 2019 under the same terms as in the original alliance arrangements. In exchange for the rights being assumed by Sanofi, BMS will receive quarterly royalties from January 1, 2013 until December 31, 2018 and a terminal payment from Sanofi of $200 million at the end of 2018. All ongoing disputes between the companies have been resolved, including a one-time payment of $80 million by BMS to Sanofi related to the Avalide* supply disruption in the U.S. in 2011 (accrued for in 2011).

BMS has a worldwide commercialization agreement with Otsuka Pharmaceutical Co., Ltd. (Otsuka), to codevelop and copromote Abilify*, for the treatment of schizophrenia, bipolar mania disorder and major depressive disorder, excluding certain Asia Pacific countries. The U.S. portion of the amended commercialization and manufacturing agreement expires upon the expected loss of product exclusivity in April 2015. Beginning on January 1, 2012, the contractual share of revenue recognized by BMS in the U.S. was reduced from 53.5% in 2011 to 51.5% and will be further reduced in 2013.

In the UK, Germany, France and Spain, BMS receives 65% of third-party net sales. In these countries and the U.S., third-party customers are invoiced by BMS on behalf of Otsuka and alliance revenue is recognized when Abilify* is shipped and all risks and rewards of ownership have been transferred to third-party customers. In certain countries where BMS is presently the exclusive distributor for the product or has an exclusive right to sell Abilify*, BMS recognizes all of the net sales.

BMS purchases the product from Otsuka and performs finish manufacturing for sale to third-party customers by BMS or Otsuka. Under the terms of the amended agreement, BMS paid Otsuka $400 million, which is amortized as a reduction of net sales through the expected loss of U.S. exclusivity in April 2015. The unamortized balance is included in other assets. Otsuka receives a royalty based on 1.5% of total U.S. net sales. Otsuka is responsible for 30% of the U.S. expenses related to the commercialization of Abilify* from 2010 through 2012. BMS also reimburses Otsuka for its contractual share of the annual pharmaceutical company fee related to Abilify*.

BMS and Otsuka also have an oncology collaboration for Sprycel and Ixempra (ixabepilone) (the “Oncology Products”) in the U.S., Japan and the EU. The Company pays a collaboration fee to Otsuka equal to 30% of the first $400 million annual net sales of the Oncology Products in the Oncology Territory (U.S., Japan and Europe), 5% of annual net sales between $400 million and $600 million, and 3% of annual net sales between $600 million and $800 million with additional trailing percentages of annual net sales over $800 million. Annually, Otsuka contributes 20% of the first $175 million of certain commercial operational expenses relating to the Oncology Products in the Oncology Territory and 1% of such costs in excess of $175 million. In addition, Otsuka has the right to co-promote Sprycel in the U.S., Japan, and the top five markets in the EU.

		Three Months Ended September 30,				Nine Months Ended September 30,
Dollars in Millions		2012		2011		2012		2011
Abilify*	net sales, including amortization of extension payment	$	676	$	691	$	2,008	$	2,021
Oncology Products collaboration fee expense			36		30		103		100
Royalty expense			18		18		55		52
Commercialization expense reimbursement to/(from) Otsuka			(2)		(15)		(34)		(37)
Amortization (income)/expense – extension payment			16		16		49		49
Amortization (income)/expense – upfront, milestone and other
licensing payments			1		1		5		5

						September 30,		December 31,
Dollars in Millions						2012		2011
Other assets - extension payment						$	170	$	219
Other intangible assets - upfront, milestone and other licensing payments							-		5

BMS has an Epidermal Growth Factor Receptor (EGFR) commercialization agreement with Lilly through Lilly's November 2008 acquisition of ImClone Systems Incorporated (ImClone) for the codevelopment and promotion of Erbitux* and necitumumab (IMC-11F8) in the U.S. which expires as to Erbitux* in September 2018. BMS also has codevelopment and copromotion rights to both products in Canada and Japan. Erbitux* is indicated for use in the treatment of patients with metastatic colorectal cancer and for use in the treatment of squamous cell carcinoma of the head and neck. Under the EGFR agreement, with respect to Erbitux* sales in North America, Lilly receives a distribution fee based on a flat rate of 39% of net sales in North America plus reimbursement of certain royalties paid by Lilly.

In Japan, BMS shares rights to Erbitux* under an agreement with Lilly and Merck KGaA and receives 50% of the pre-tax profit from Merck KGaA's net sales of Erbitux* in Japan which is further shared equally with Lilly.

With respect to necitumumab, the companies will share in the cost of developing and potentially commercializing necitumumab in the U.S., Canada and Japan. Lilly maintains exclusive rights to necitumumab in all other markets. BMS will fund 55% of development costs for studies that will be used only in the U.S., 50% for Japan studies and 27.5% for global studies.

BMS is amortizing $500 million of license acquisition costs associated with the EGFR commercialization agreement through 2018.

		Three Months Ended September 30,				Nine Months Ended September 30,
Dollars in Millions		2012		2011		2012		2011
Net sales		$	173	$	172	$	531	$	510
Distribution fees and royalty expense			71		72		220		212
Research and development expense reimbursement to Lilly – necitumumab			5		4		13		10
Amortization (income)/expense – upfront, milestone and other
	licensing payments		9		9		28		28
Commercialization expense reimbursements to/(from) Lilly			(4)		(9)		(14)		(12)
Japan commercialization profit sharing (income)/expense			(9)		(9)		(28)		(24)

						September 30,		December 31,
Dollars in Millions						2012		2011
Other intangible assets – upfront, milestone and other licensing payments						$	221	$	249

BMS acquired Amylin Pharmaceuticals, Inc. (Amylin) on August 8, 2012 (see “—Note 4. Acquisitions” for further information). Amylin had previously entered into a settlement and termination agreement with Lilly regarding their collaboration for the global development and commercialization of Byetta* and Bydureon* (exenatide products) under which the parties agreed to transition full responsibility of these products to Amylin. Although the transition of the U.S. operations was completed, Lilly had not yet transitioned the non-U.S. operations to Amylin. In September 2012, BMS provided notification to Lilly that BMS will assume essentially all non-U.S. operations of the exenatide products during the first half of 2013 and therefore terminate Lilly's exclusive right to non-U.S. commercialization of the exenatide products, subject to certain regulatory and other conditions. BMS is responsible for any non-U.S. losses incurred by Lilly during 2012 and 2013 up to a maximum of $60 million and is entitled to tiered royalties until the transition is complete.

BMS and Gilead Sciences, Inc. (Gilead) have a joint venture to develop and commercialize Atripla* (efavirenz 600 mg/ emtricitabine 200 mg/ tenofovir disoproxil fumarate 300 mg), a once-daily single tablet three-drug regimen for the treatment of human immunodeficiency virus (HIV) infection, combining Sustiva, a product of BMS, and Truvada* (emtricitabine and tenofovir disoproxil fumarate), a product of Gilead, in the U.S., Canada and Europe.

Net sales of the bulk efavirenz component of Atripla* are deferred until the combined product is sold to third-party customers. Net sales for the efavirenz component are based on the relative ratio of the average respective net selling prices of Truvada* and Sustiva.

	Three Months Ended September 30,				Nine Months Ended September 30,
Dollars in Millions	2012		2011		2012		2011
Net sales	$	305	$	289	$	950	$	858
Equity in net loss of affiliates		(6)		(3)		(14)		(11)

BMS and AstraZeneca Pharmaceuticals LP, a wholly-owned subsidiary of AstraZeneca, entered into a collaboration regarding the worldwide development and commercialization of Amylin's portfolio of products. The arrangement is based on the framework of the existing diabetes alliance agreements discussed further below, including the equal sharing of profits and losses arising from the collaboration. AstraZeneca has indicated its intent to establish equal governance rights over certain key strategic and financial decisions regarding the collaboration pending required anti-trust approvals in certain international markets.

BMS received preliminary proceeds of $3.8 billion from AstraZeneca as consideration for entering into the collaboration during the current period, including $190 million which is included in accrued expenses and expected to be reimbursed back to AstraZeneca. The remaining $3.6 billion was accounted for as deferred income and is amortized as a reduction to cost of products sold on a pro-rata basis over the estimated useful lives of the related long-lived assets assigned in the purchase price allocation (primarily intangible assets with a weighted-average estimated useful life of 12 years and property, plant and equipment with a weighted-average estimated useful life of 15 years). The net proceeds that BMS will receive from AstraZeneca as consideration for entering into the collaboration are subject to certain other adjustments including the right to receive an additional $135 million when AstraZeneca exercises its option for equal governance rights.

BMS and AstraZeneca agreed to share in certain tax attributes related to the Amylin collaboration. The preliminary proceeds of $3.8 billion that BMS received from AstraZeneca included $207 million related to sharing of certain tax attributes.

In addition, BMS continues to maintain two worldwide codevelopment and cocommercialization agreements with AstraZeneca for Onglyza, Kombiglyze XR (saxagliptin and metformin hydrochloride extended-release), Komboglyze (saxagliptin and metformin immediate-release marketed in the EU) and Forxiga (dapagliflozin). The agreements for saxagliptin exclude Japan which is not covered by the alliance. Onglyza, Kombiglyze and Komboglyze are indicated for use in the treatment of diabetes. In this document unless specifically noted, we refer to both Kombiglyze and Komboglyze as Kombiglyze. Forxiga is currently being studied for the treatment of diabetes. Onglyza and Forxiga were discovered by BMS. Kombiglyze was codeveloped with AstraZeneca. Both companies jointly develop the clinical and marketing strategy and share commercialization expenses and profits and losses equally on a global basis and also share in development costs, with the exception of Forxiga development costs in Japan, which are borne by AstraZeneca. BMS manufactures both products. BMS has opted to decline involvement in cocommercialization for both products in certain countries not in the BMS global commercialization network and instead receives compensation based on net sales recorded by AstraZeneca in these countries. Opt-out compensation recorded by BMS was not material in the three and nine months ended September 30, 2012.

BMS received $300 million in upfront, milestone and other licensing payments related to saxagliptin as of September 30, 2012 and $170 million in upfront, milestone and other licensing payments related to dapagliflozin as of September 30, 2012.

		Three Months Ended September 30,				Nine Months Ended September 30,
Dollars in Millions		2012		2011		2012		2011
Net sales		$	266	$	127	$	599	$	320
Profit sharing expense			118		58		268		148
Commercialization expense reimbursements to/(from) AstraZeneca			(43)		(11)		(62)		(30)
Research and development expense reimbursements to/(from) AstraZeneca			(17)		4		(7)		33
Amortization (income)/expense – upfront, milestone and other licensing
	payments recognized in:
	Cost of products sold		(50)		-		(50)		-
	Other (income)/expense		(9)		(10)		(30)		(28)

Upfront, milestone and other licensing payments received:
	Amylin-related products		3,570		-		3,570		-
	Dapagliflozin		-		-		-		120

						September 30,		December 31,
Dollars in Millions						2012		2011
Deferred income – upfront, milestone and other licensing payments:
	Amylin-related products					$	3,520	$	-
	Saxagliptin						213		230
	Dapagliflozin						129		142

BMS and Pfizer Inc. (Pfizer) maintain a worldwide codevelopment and cocommercialization agreement for Eliquis, an anticoagulant discovered by BMS for the prevention and treatment of atrial fibrillation and other arterial thrombotic conditions. Pfizer funds 60% of all development costs under the initial development plan effective January 1, 2007. The companies jointly develop the clinical and marketing strategy and share commercialization expenses and profits equally on a global basis. In certain countries not in the BMS global commercialization network, Pfizer will commercialize Eliquis alone and will pay compensation to BMS based on a percentage of net sales. BMS manufactures the product globally.

BMS has received $559 million in upfront, milestone and other licensing payments for Eliquis as of September 30, 2012.

		Three Months Ended September 30,				Nine Months Ended September 30,
Dollars in Millions		2012		2011		2012		2011
Net sales		$	-	$	-	$	1	$	-
Commercialization expense reimbursement to/(from) Pfizer			(6)		(2)		(14)		(5)
Research and development reimbursements to/(from) Pfizer			(1)		(16)		10		(74)
Amortization (income)/expense – upfront, milestone and other
	licensing payments		(10)		(8)		(29)		(24)

						September 30,		December 31,
Dollars in Millions						2012		2011
Deferred income – upfront, milestone and other licensing payments						$	405	$	434