ACQUISITIONS

9 Months Ended

Sep. 30, 2012

Business Combinations [Abstract]

Acquisition [Text Block]

Note 4. ACQUISITIONS

AmylinPharmaceuticals, Inc.Acquisition

On August 8, 2012, BMS completed its acquisition of the outstanding shares of Amylin, a biopharmaceutical company focused on the discovery, development and commercialization of innovative medicines to treat diabetes and other metabolic diseases. Acquisition costs of $29million were included in other expenses.

BMS obtained full U.S. commercialization rights to Amylin's two primary commercialized assets, Bydureon*, a once-weekly diabetes treatment and Byetta*, a daily diabetes treatment, both of which are glucagon-like peptide-1 (GLP-1) receptor agonists approved in certain countries to improve glycemic control in adults with type 2 diabetes. BMS also obtained full commercialization rights to Symlin* (pramlintide acetate), an amylinomimetic approved in the U.S. for adjunctive therapy to mealtime insulin to treat diabetes. Goodwill generated from this acquisition was primarily attributed to the expansion of our diabetes franchise.

The fair value of acquired intangible assets, including in-process research and development (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). All acquired intangible assetswere valued utilizing a global view that considered all potential jurisdictions and indications.Actual cash flows are likely to be different than those assumed.

IPRD was attributed to metreleptin, an analog of the human hormone leptine being studied and developed for the treatment of diabetes and/or hypertriglyceridemia in pediatric and adult patients with inherited or acquired lipodystrophy.The estimated useful life and the cash flows utilized to value metreleptin assumed initial positive cash flows to commence shortly after the expected receipt of regulatory approvals, subject to trial results.

The results of Amylin's operations are included in the consolidated financial statements from August 9, 2012.

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 fair value of 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 PTRS and a global view that considered all potential jurisdictions and indications.

IPRD was primarily attributed to INX-189. INX-189 was expected to be most effective when used in combination therapy and it was 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 included such synergies and also assumed initial positive cash flows to commence shortly after the expected receipt of regulatory approvals, subject to trial results.

In August 2012, the Company discontinued development of INX-189 in the interest of patient safety. As a result, the Company recognized a non-cash, pre-tax impairment charge of $1.8 billion related to the IPRD intangible asset in the third quarter of 2012. For further information discussion ofthe impairment charge, see “¾Note 12. Goodwill and Other Intangible Assets.”

The results of Inhibitex's operations are included in the consolidated financial statements from February 13, 2012.

Significant estimates utilized at the time of the valuations to support the fair values of the commercial assets and compounds within the acquisitions include:

				Estimated	Phase of	PTRS	Year of first
			Discount	useful life	Development as	Rate	projected positive
Dollars in Millions		Fair value	rate utilized	(in years)	of acquisition date	utilized	cash flow
Commercialized products:
Bydureon*	$	5,240	11.1%	13	N/A	N/A	N/A
Byetta*		750	10.0%	7	N/A	N/A	N/A
Symlin*		300	10.0%	9	N/A	N/A	N/A
IPRD:
BMS-986094 (formerly INX-189)		1,830	12.0%	11	Phase II	38%	2017
Metreleptin		370	12.0%	12	Phase III	75%	2014

The components of the cash paid to acquire Amylin and Inhibitex were as follows:

Dollars in Millions	Amylin		Inhibitex
Total consideration transferred	$	5,218	$	2,539
Stock-based compensation expense		94		-
Total cash paid	$	5,312	$	2,539

The preliminary purchase price allocation for Amylin (pending final valuation of intangible assets and deferred income taxes) and the final purchase price allocation for Inhibitex were as follows:

Dollars in Millions
Identifiable net assets:	Amylin		Inhibitex
Cash	$	179	$	46
Marketable securities		108		17
Inventory		178		-
Property, plant and equipment		773		-
Developed technology rights		6,290		-
IPRD		370		1,875
Other assets		136		-
Debt obligations		(2,020)		(23)
Other liabilities		(339)		(10)
Deferred income taxes		(1,156)		(579)
Total identifiable net assets		4,519		1,326
Goodwill	$	699	$	1,213

Cash paid for the acquisition of Amylinincluded payments of $5,093 million to its outstanding common stockholders and $219 million to holders of its stock options and restricted stock units (including $94 million attributed to accelerated vesting that was accounted for as stock compensation expense in the third quarter of 2012).

Pro forma supplemental financial information is not provided as the impacts of the acquisitions were not material to operating results in the year of acquisition. Goodwill, IPRD and all intangible assets valued in these acquisitions are non-deductible for tax purposes.