BioPharma: our Strategy in a ction
`
`2008 annual report
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`5asd
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`AstraZeneca Exhibit 2110
`Mylan v. AstraZeneca
`IPR2015-01340
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`Page 1 of 108
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`on left: Zhen Jin, a research scientist at KAI Pharmaceuticals in
`South San Francisco, compares tissue samples as part of a cardio-
`vascular disease collaboration with Bristol-Myers Squibb. The lead
`compound from this collaboration is a novel investigational medica-
`tion for the emergency room treatment of acute heart attack. This
`compound is in Phase IIb clinical development and has been granted
`Fast Track status by the U.S. Food and Drug Administration because
`of its potential to treat life-threatening disease and to address an
`unmet medical need.
`
`As a next-generation BioPharma leader, Bristol-Myers Squibb is
`committed to helping patients prevail against serious disease. To
`do so, we are complementing and enhancing our internal capabilities
`with a suite of innovative alliances, partnerships and acquisitions.
`
`We call this our String of Pearls strategy. The collaboration with
`KAI is part of that strategy, which includes seven major transactions
`completed to date since August 2007.
`
`on the front cover: A Bristol-Myers Squibb scientist in
`Wallingford, Connecticut, examines a 1,536-well plate for screening
`drug candidates against disease targets. Each well contains about
`one-millionth of a liter of a particular compound. That’s barely
`enough to see. Yet it’s plenty for advanced high-speed robotic technol-
`ogy to use this plate and 800 others to screen more than a million
`compounds at a time. In one of the tiny wells on this plate, perhaps,
`is the next breakthrough medication for cancer, HIV/AIDS, cardiovas-
`cular disease, Alzheimer’s or other serious illness.
`
`It’s just part of what being BioPharma is all about.
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`BioPharma: our Strategy in action
`
`to our StockholderS: Bristol-Myers Squibb has emerged in 2008 as a stronger,
`leaner and more effective enterprise. We are much better positioned to continue delivering
`the innovative medicines that help patients prevail in their fight against serious disease.
`
`In a year when global economic upheaval and
`continuing industry challenges threw many companies
`off track, we kept our sights trained on the vision we
`laid out in December 2007.
`And as a next-generation BioPharma leader, we have
`executed transformative changes to maximize our near-
`term growth while improving the company’s earnings
`base in 2012 and beyond.
`From a financial perspective alone, 2008 was
`punctuated by wins, led by 13 percent sales growth, to
`$20.6 billion for the year. This solid growth was broad-
`based, both geographically and across all products, and
`driven by Plavix, Abilify, our Virology franchise, as well
`as our newer products, such as Orencia and Sprycel.
`Total net sales from continuing operations in
`2008 were $20.6 billion, compared with $18.2 billion
`in 2007. Net fully diluted earnings per share from
`continuing operations were $1.59 in 2008, up from
`88 cents in 2007.
`We continue to be on track to project one of the
`best near-term growth rates in the industry — with a
`15 percent compound annual growth rate for non-GAAP
`earnings per share from continuing operations, from
`the 2007 base through 2010. This is without rebasing
`2007 for the ConvaTec wound care business we sold
`in August 2008.
`
`Better reSource management
`Closely tied to our sales and earnings growth are
`improved gross margins, which reflect a new approach
`to expenses.
`
`Our Productivity Transformation Initiative — which was
`announced in December 2007, and expanded in July 2008
`— represents an ongoing, long-term, companywide effort to
`reset our cost base while fundamentally changing the way
`we work to be quicker, more agile and more profitable.
`We are on track to achieve a total of $2.5 billion in
`annual productivity cost savings and avoidance by 2012.
`The first wave of initiatives, announced in December 2007,
`targets $1.5 billion in cost savings and avoidance by 2010.
`The second wave, announced in July 2008, targeted an
`additional $1.0 billion by 2012.
`These productivity efforts set in motion a cascade of
`actions that are building momentum to make us faster
`and more competitive — touching all areas of our business,
`culture and strategy. Teams in divisions worldwide have
`embraced and advanced these self-sustaining improve-
`ments, ensuring greater shareholder value in the coming
`years and over the long term.
`We’ve recast our global operating model to better
`suit our vision of a more focused BioPharma company.
`Resources are being reallocated to prioritize the most
`valuable opportunities, and partnerships and third-party
`manufacturers are helping us maximize our assets. We’re
`continuing to rationalize our mature brands portfolio,
`consolidate the global supply network, simplify the
`geographic footprint and implement a more efficient
`go-to-market model.
`With our general and administrative functions, we’re
`also simplifying, standardizing and, in some cases, out-
`sourcing processes and services. We’re improving our global
`sourcing practices, and the way we manage cash flow.
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`ShiFting our BuSineSS PortFolio
`At the heart of our BioPharma
`strategy are the medicines that give
`meaningful hope to patients and
`physicians, and bring value to our
`shareholders and customers.
`In 2008, we took decisive steps to
`ensure the robust future of our bio-
`logic medicines and specialty drugs. To
`focus on these assets more completely,
`we’ve captained a massive and cleanly
`executed reallocation of resources. We
`monetized the non-pharma assets that
`had become peripheral to our strategy
`while investing further in our core
`business — in part by engaging in new
`partnerships and alliances that deepen
`our expertise, capabilities and offerings
`in certain select therapeutic areas.
`By August, we had completed the
`sales of both our Medical Imaging
`business and our ConvaTec wound
`care business, for gross proceeds of
`more than $4.6 billion.
`We also announced the initial public
`offering of Mead Johnson Nutrition,
`which we completed in the early part of
`2009. By retaining an 83 percent stake
`in Mead Johnson, we are poised to con-
`tinue deriving a steady source of income
`and growth from this vital infant and
`pediatric nutrition business. At the
`same time, we believe the access to pub-
`lic investment will help Mead Johnson
`grow as an independent company.
`Our non-pharma divestitures, as
`well as the sale of our 17 percent stake
`in ImClone, contributed to a total cash
`balance of approximately $8 billion by
`the end of 2008. Our ability to complete
`these transactions and amass such
`liquidity at a time when access to cash is
`increasingly fleeting speaks to the lead-
`ership and foresight that are making
`Bristol-Myers Squibb a better company.
`
`This strong cash balance puts us
`in an excellent position in 2009 to
`make the investments in innovation
`that are critical to our future as a
`BioPharma company.
`
`medicineS For SeriouS diSeaSe
`The changes we’ve made to our
`business portfolio and expenses mean
`we’re free to focus and invest more in
`our medicines. The pharmaceuticals
`segment of our company accounted
`for 86 percent of net sales in 2008, as
`it had in 2007 and 2006.
`We’re proud of the expanded ben-
`efits we’re bringing patients with our
`existing portfolio. As we prepare for
`the likelihood of generic and branded
`competition for Plavix this year, we
`are extremely proud that this product
`continues to play a critical role in the
`medical regimens of cardiovascular
`disease patients worldwide.
`Abilify, our second-largest product,
`had a remarkable growth rate of 30
`percent in 2008, reflecting the value
`of developing additional indications
`— such as major depressive disorder
`— that our patients tell us make them
`feel like themselves again.
`Our research and development
`efforts continue to lead to a steady
`flow of milestones. Our late-stage
`pipeline assets continued to advance
`in 2008. We submitted Onglyza, the
`diabetes medicine we are develop-
`ing jointly with AstraZeneca, in the
`United States and Europe. In Japan,
`we received approval for Erbitux in
`2008 and for Sprycel in January 2009.
`We also continue to advance our
`early-stage pipeline. In our fast-grow-
`ing oncology pipeline, for example,
`we now have three significant cancer
`medicines in the marketplace, up
`
`from just one in 2004. We now have
`15 oncology compounds in preclinical
`or clinical development, up from 10 in
`2004, and 20 programs in Discovery,
`up from 15 five years ago.
`In the areas of Alzheimer’s disease
`and hepatitis C, where unmet medical
`need is huge and growing, we demon-
`strated proof of confidence in 2008
`for two key compounds. Across all
`therapeutic areas, we delivered 13
`new compounds into Exploratory
`Development from Discovery.
`We did all this while making our
`research and development processes
`more efficient.
`
`nurturing Strong PartnerShiPS
`Expanding our capabilities
`through partnerships has been an
`historic strength of Bristol-Myers
`Squibb, and it continues to be central
`to our BioPharma philosophy.
`With late-stage products, strategic
`partnerships with other large phar-
`maceutical companies are helping us
`balance risk and reach more patients
`while freeing resources to make room
`for further investment in our core
`development and commercialization
`capabilities. We’re currently engaged
`in broad partnerships for many of our
`key products, including Plavix, Avapro,
`Abilify and Atripla, as well as several
`for our late-stage medicines, including
`Onglyza, dapagliflozin and apixaban.
`To bolster our early- and mid-stage
`research and pipeline, we’re forming
`select alliances with biotech partners
`through a series of transactions that
`we call our “String of Pearls.”
`New pearls are helping us bol-
`ster our pipeline and balance our
`portfolio for 2011 and beyond. We
`are building clusters of expertise in
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`key therapeutic areas where there is
`great unmet medical need, including
`cardiovascular disease, solid tumors,
`hematologic malignancies, hepatitis
`C and Alzheimer’s disease.
`This exciting work gained ground
`in 2008, following in the path of our
`acquisition of Adnexus in 2007. Among
`the year’s transactions were our acquisi-
`tion of Kosan Biosciences and global
`collaborations with Exelixis, PDL
`BioPharma and KAI Pharmaceuticals.
`In early 2009, we added a global
`collaboration agreement with Zymo-
`Genetics, as well as a collaboration
`agreement with Nissan Chemical
`Industries and Teijin Pharma.
`Importantly, we’ve positioned our-
`selves as a strong partner in biotech
`circles, gaining a higher profile by
`demonstrating our ability to nurture
`innovation, assets and talent.
`It’s worth noting that we’ve pursued
`our String of Pearls with rigor, but
`also with restraint. When our bid for
`ImClone was met with a counter-offer
`that we deemed too expensive, we acted
`with discipline and withdrew our offer.
`That decision ultimately resulted in
`approximately $1 billion in proceeds
`for the shares we sold, and earned us
`respect in the investment community.
`
`BioPharma culture ShiFt
`Underpinning the ultimate success
`of our transition to a BioPharma com-
`pany is a cultural shift transforming
`how we approach our daily work.
`When we announced our new
`strategy, we said we needed to be-
`come more agile, entrepreneurial
`and accountable to achieve our goals.
`Over the year, we’ve measured prog-
`ress in these areas by the rapid pace
`of change and accomplishments.
`
`“Bristol-Myers Squibb
`has emerged in 2008 as a
`stronger, leaner and more
`effective enterprise.”
`
`James m. cornelius, Chairman and Chief Executive Officer
`
`For instance, the transactions
`we’ve made to build our String of
`Pearls required us to learn how to act
`quickly and decisively as opportunities
`emerge. We are rapidly reprioritiz-
`ing resources on a spot basis. Cross-
`functional “SWAT” teams, prepared
`to turn on a dime, are called upon to
`research new disease areas, evaluate
`unfamiliar assets and structure trans-
`actions accordingly.
`Our smaller, leaner scale is also
`accelerating our shift to a more agile,
`can-do culture. For instance, we set a
`top-down tone for how to accomplish
`more with less by eliminating the cor-
`porate aviation group and relocating
`our executive office space in Manhat-
`tan to more modest accommodations.
`At the same time, we are embrac-
`ing several employee-driven initiatives
`to speed decision-making and clarify
`lines of accountability.
`By holding up accountability as a
`central tenet of our culture, we’re sig-
`naling the importance of maintaining
`the highest levels of ethical conduct and
`compliance while also taking responsi-
`bility for our individual decisions.
`
`your management team
`I’m pleased that we’ve solidified a
`world-class management team — one
`of the best I’ve encountered in 45 years
`working in the health care industry.
`We expanded our Management
`Council to include Brian Daniels,
`who leads Global Development and
`Medical Affairs; Carlo de Notariste-
`fani, who leads Technical Operations
`and Global Support Functions, and
`Béatrice Cazala, who leads both Global
`Commercialization and Europe. The
`“MC” meets weekly and is the focal
`point for all key operational issues,
`discussion and resolution.
`In early 2009, we made some addi-
`tional changes to our management
`team and governance structure to bet-
`ter align as a BioPharma company. We
`established an Executive Committee
`to meet on an as-needed basis to deal
`with the most critical strategic issues
`facing the company. Joining me on this
`committee are Lamberto Andreotti,
`Elliott Sigal and Jean-Marc Huet.
`At the same time, Lamberto was
`also appointed president and chief
`operating officer, and elected a
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`our PiPeline
`As a BioPharma leader for the future, Bristol-Myers
`Squibb is dedicated to discovering and developing
`innovative medicines that address serious unmet
`medical needs in key disease areas. In doing so,
`we believe we can better help patients prevail.
`
`Compounds and research programs in discovery
`are at the earliest stages of research. Compounds in
`exploratory development are in preclinical or early
`clinical development. Full development compounds
`are investigational drugs that are in later-stage clinical
`development or have been submitted to regulatory
`agencies for approval. Finally, medicines in marketed
`Product development are driving current and future
`growth while also undergoing continued clinical
`development to determine whether additional indica-
`tions and formulations will benefit patients.
`
`each investigational compound or research program is
`represented in the chart as a bar.
`
`discovery
`
`exploratory development
`
`Full development
`
`marketed Product development
`
`Pipeline chart as of January 15, 2009
`
`member of the company’s Board of Directors. And
`Jean-Marc was promoted to executive vice president
`and chief financial officer, and given responsibility to
`oversee strategy and productivity, in addition to finance.
`
`BioPharma leaderShiP For the Future
`As a vastly improved enterprise, we look to the future
`with optimism and confidence. The next few years will
`bring tough challenges for our industry — and the global
`economy at large — but we know we are well-prepared
`for success in an uncertain age.
`As a result of our transformation, we have become a
`much more admirable enterprise by both internal and
`external measures. In the fifth annual survey by Barron’s
`of the world’s 100 most-respected companies, Bristol-
`Myers Squibb was included for the first time in three years
`— ranking 40th, based on a variety of attributes, includ-
`ing strong management, sound business strategy, ethical
`practices and financial performance.
`We’re also proud that as we move to a BioPharma
`future, we are retaining the most important aspects of
`
`4 Bristol-Myers Squibb 2008 Annual Report
`
`diSeaSe areaS
`Cancer
`
`Atherosclerosis/Thrombosis
`
`Diabetes
`
`Obesity
`
`Psychiatric Disorders
`
`Alzheimer’s Disease
`
`Hepatitis
`
`HIV/AIDS
`
`Immunology
`
`(Including Rheumatoid Arthritis and Solid Organ Transplant Rejection)
`
`our heritage, including an active role as a global health
`care leader. This year, we observe a decade since our
`company and Foundation first committed $100 million
`to address the epidemic of HIV/AIDS in Africa. At the
`time, our investment — which grew to $150 million —
`was the largest public or private pledge to the cause.
`In December, we committed another $75 million to our
`Foundation, to continue the good work we’ve done through
`SECURE THE FUTURE in Africa, and philanthropic initia-
`tives elsewhere around the world.
`And, of course, the greatest leadership opportunity of all
`is the one that inspires our employees to work harder every
`day. That is, the ability to connect with millions of patients
`around the world — patients who are grateful that it’s our
`mission and business to extend and enhance human life.
`
`James m. cornelius
`Chairman and Chief Executive Officer
`
`March 9, 2009
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`Financial Review
`
`Management’s Discussion and Analysis of
`Financial Condition and Results of Operations
`
`Quantitative and Qualitative Disclosures
`About Market Risk
`
`
`
`
`Consolidated Financial Statements
`
`
`
`
`
`
`
`Notes to the Consolidated Financial Statements
`
`Reports of Management
`
`Controls and Procedures
`
`
`
`
`
`Reports of independent
`Registered Public Accounting Firm
`
`Five-Year Financial Summary
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`Bristol-Myers Squibb
`
`MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
`
`EXECUTIVE SUMMARY
`
`About the Company
`
`Bristol-Myers Squibb Company (which may be referred to as Bristol-Myers Squibb, BMS or the Company) is a global biopharmaceutical
`and nutritional products company whose mission is to extend and enhance human life by providing the highest quality pharmaceutical and
`nutritional products. The Company is engaged in the discovery, development, licensing, manufacturing, marketing, distribution and sale
`of pharmaceuticals and nutritional products. The Company has two reportable segments—Pharmaceuticals and Nutritionals. The
`Pharmaceuticals segment consists of the global pharmaceutical/biotechnology and international consumer medicines business, which
`accounted for approximately 86% of the Company’s 2008 net sales. The Nutritionals segment consists of Mead Johnson Nutrition
`Company (Mead Johnson), primarily an infant formula and children’s nutritionals business, which accounted for approximately 14% of
`the Company’s 2008 net sales.
`
`2008 Financial Highlights
`
`The following table is a summary of operating activity:
`
`
`Year Ended December 31,
`2007
` 2008
` $ 20,597 $ 18,193
`
`
`
` 3,155
` 2,092
` 5,247
`
` 1,741
` 424
` 2,165
`
`
`Dollars in Millions
`Net Sales
`
`Net Earnings from Continuing Operations
`Net Earnings from Discontinued Operations
`Net Earnings
`
`Net Cash/(Debt)
`
`
`Net Sales
`The Company’s net sales from continuing operations increased 13%. Plavix (clopidogrel bisulfate) and Abilify (aripiprazole) continue to
`drive worldwide sales growth with sales increases of 18% and 30%, respectively. Significant contributions to sales growth are also
`provided by other key products including Orencia (abatacept), Sprycel (dasatinib) and the HIV and hepatitis portfolio.
`
`Net Earnings from Continued Operations
`The increase in net earnings from continuing operations is attributed to increased sales growth and favorability in gross margins, a portion
`of which is attributed to a favorable product mix as well as cost savings and avoidances resulting from the Company’s productivity
`transformation initiative (PTI). The $582 million after-tax gain related to the tendering of the Company’s shares in ImClone Systems, Inc.
`(ImClone) also had a significant impact on net earnings from continuing operations amongst other specified items discussed in “—
`Expenses/Gains” below.
`
`Net Earnings from Discontinued Operations
`In 2008, the Company completed the divestitures of its Bristol-Myers Squibb Medical Imaging (Medical Imaging) business for a gross
`purchase price of $525 million resulting in an after-tax loss of $43 million as well as the ConvaTec business for gross purchase price of
`approximately $4.1 billion resulting in an after-tax gain of $2.0 billion. The results of the Medical Imaging and ConvaTec businesses and
`the related gains and losses are included in discontinued operations for all years presented.
`
`Net Cash/(Debt)
`Net cash/(debt) position as of December 31, 2008 improved due to proceeds of $4.6 billion from the divestiture of the ConvaTec and
`Medical Imaging businesses and proceeds of $1.0 billion from the sale of our ImClone shares. Cash generated from operating activities of
`$3.7 billion was more than adequate to fund dividend payments of $2.5 billion as well as capital expenditure payments of $941 million.
`
`
`
`
` 1,526
`
` (4,047)
`
`
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`2008 Annual Report
`
`
`Business Environment
`
`The Company conducts its business primarily within the pharmaceutical/biotechnology industry, which is highly competitive and subject
`to numerous government regulations. Many competitive factors may significantly affect the Company’s sales of its products, including
`product efficacy, safety, price and cost-effectiveness, marketing effectiveness, product labeling, quality control and quality assurance of its
`manufacturing operations, and research and development of new products. To successfully compete for business in the health care
`industry, the Company must demonstrate that its products offer medical benefits as well as cost advantages. Currently, most of the
`Company’s new product introductions compete with other products already on the market in the same therapeutic category, in addition to
`potential competition of new products that competitors may introduce in the future. The Company manufactures branded products, which
`are priced higher than generic products. Generic competition is one of the Company’s leading challenges globally.
`
`In the pharmaceutical/biotechnology industry, the majority of an innovative product’s commercial value is usually realized during the
`period that the product has market exclusivity. When a product loses exclusivity, it is no longer protected by a patent and is subject to new
`competing products in the form of generic brands. Upon exclusivity loss, the Company can lose a major portion of that product’s sales in
`a short period of time. Currently, generic versions of biological products cannot be approved under United States (U.S.) law. However,
`the law could change in the future. Even in the absence of new legislation, the U.S. Food and Drug Administration (FDA) is taking steps
`toward allowing generic versions of certain biologics. Competitors seeking approval of biological products must file their own safety and
`efficacy data and address the challenges of biologics manufacturing, which involves more complex processes that are more costly than
`those of traditional pharmaceutical operations.
`
`Both in the U.S. and internationally, the health care industry is subject to various government-imposed regulations authorizing prices or
`price controls that have and will continue to have an impact on the Company’s sales. In the U.S., Congress and some state legislatures
`have considered a number of proposals and have enacted laws that could result in major changes in the current health care system, either
`nationally or at the state level. Driven in part by budget concerns, Medicaid access and reimbursement restrictions have been implemented
`in some states and proposed in many others. In addition, the Medicare Prescription Drug Improvement and Modernization Act provides
`outpatient prescription drug coverage to senior citizens in the U.S. This legislation has had a modest favorable impact on the Company as
`a result of an increase in the number of seniors with drug coverage. At the same time, there continues to be a potential negative impact on
`the U.S. pharmaceutical business that could result from pricing pressures or controls. In many markets outside the U.S., the Company
`operates in environments of government-mandated, cost-containment programs, or under other regulatory bodies or groups that can exert
`downward pressure on pricing. Pricing freedom is limited in the United Kingdom (UK), for instance, by the operation of a profit control
`plan and in Germany by the operation of a reference price system. Companies also face significant delays in market access for new
`products as more than two years can elapse after drug approval before new medicines become available in some countries.
`
`The growth of Managed Care Organizations (MCOs) in the U.S. has played a large role in the competition that surrounds the health care
`industry. MCOs seek to reduce health care expenditures for participants by making volume purchases and entering into long-term
`contracts to negotiate discounts with various pharmaceutical providers. Because of the market potential created by the large pool of
`participants, marketing prescription drugs to MCOs has become an important part of the Company’s strategy. Companies compete for
`inclusion in MCO formularies and the Company generally has been successful in having its major products included. The Company
`believes that developments in the managed care industry, including continued consolidation, have had and will continue to have a
`generally downward pressure on prices.
`
`Pharmaceutical/biotechnology production processes are complex, highly regulated and vary widely from product to product. Shifting or
`adding manufacturing capacity can be a lengthy process requiring significant capital expenditures and regulatory approvals. Biologics
`manufacturing involves more complex processes than those of traditional pharmaceutical operations. As biologics become more important
`to the Company’s product portfolio, the Company will continue to make arrangements with third-party manufacturers and to make
`substantial investments to increase its internal capacity to produce biologics on a commercial scale. One such investment is a new, state-
`of-the-art manufacturing facility for the production of biologics in Devens, Massachusetts, the construction of which began in May 2007.
`
`The Company has maintained a competitive position in the market and strives to uphold this position, which is dependent on its success in
`discovering and developing innovative, cost-effective products that serve unmet medical need. The Company has expanded PTI activities
`in order to achieve additional savings in order to further reduce costs, streamline operations and rationalize global manufacturing to
`become a more productive and competitive biopharmaceutical company.
`
`The Company and its subsidiaries are the subject of a number of significant pending lawsuits, claims, proceedings and investigations. It is
`not possible at this time reasonably to assess the final outcome of these investigations or litigations. For additional discussion of legal
`matters, see Note 25 “Legal Proceedings and Contingencies.”
`
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`Bristol-Myers Squibb
`
`Strategy
`
`The Company’s multi-year strategy is transformation into a next-generation BioPharma company. The strategy encompasses all aspects
`and all geographies of the business and will yield substantial cost savings and cost avoidance and increase the Company’s financial
`flexibility to take advantage of attractive market opportunities that may arise.
`
`Managing costs is one part of the Company’s overall strategy as it transitions to a next-generation BioPharma company, focused on
`delivering its present commitments, maximizing near-term growth opportunities and improving its earnings base in 2012-2013. The
`Company announced PTI designed to create a total of $2.5 billion in annual productivity savings and cost avoidance by 2012. The first
`wave, announced in December 2007, targeted $1.5 billion in savings and cost avoidance by 2010. The second wave, announced in July
`2008, targeted an additional $1.0 billion in savings and cost avoidance by 2012.
`
`The Company will continue to focus on the development of our biopharmaceutical business and will maintain its growth by investing in
`research and development of new product pipeline. The Company will continue to invest in key growth products, including specialty and
`biologic medicines, and cardiovascular and metabolic drugs. The Company is seeking to reallocate resources to continue its String of
`Pearls strategy and enable strategic transactions, such as the acquisition of Kosan Biosciences, Inc. (Kosan) and strategic alliances, such as
`the global codevelopment and cocommercialization agreement with Exelixis, Inc. (Exelixis) and a global collaboration agreement with
`ZymoGenetics, Inc. (ZymoGenetics), both entered in 2008. The Company will continue pursuing partnerships and expanding other
`collaborative arrangements with biopharmaceutical companies and will continue entering into strategic alliances with third parties in order
`to obtain rights to develop, manufacture, market and/or sell pharmaceutical products, the rights to which are owned by such third parties.
`
`The Company will continue to maximize the value of our non-core businesses. In 2008, the Company completed the divestiture of its
`ConvaTec and Medical Imaging businesses. The Company has also sold its mature brands business located in Egypt.
`
`New Product and Pipeline Developments
`
`Sprycel
`• In January 2009, the Company announced the approval of Sprycel in Japan.
`
`
`Ixempra
`• In December 2008, the Company announced new data from studies of Ixempra (ixabepilone) plus capecitabine compared to
`capecitabine alone, including a pre-specified sub set analysis demonstrating a significant increase in progression free survival in
`patients with triple negative breast cancer.
`In November 2008, the Committee for Medicinal Products for Human Use (CHMP) in Europe issued a negative opinion on the
`marketing authorization application for Ixempra in the treatment of patients with metastatic breast cancer. The Company
`requested a re-examination of the case, which is currently under consideration by CHMP.
`
`•
`
`
`Exelixis
`•
`
`
`Dapagliflozin
`•
`In December 2008, the Company and AstraZeneca PLC (AstraZeneca) announced expansion of their worldwide collaboration to
`include the development and commercialization of dapagliflozin in Japan. Dapagliflozin, one of two investigational drugs under
`joint development by the companies, is currently being studied in Phase III clinical trials in several countries, including the U.S.,
`to assess its efficacy and safety as a once-daily treatment for type 2 diabetes.
`
`In December 2008, the Company announced a global collaboration with Exelixis covering two novel molecules for cancer with
`their associated development programs: Exelixis' XL184, a small molecule inhibitor of MET, VEGFR2 and RET (XL184), which
`is currently in Phase III development for medullary thyroid cancer; and, Exelixis' XL281, a small molecule inhibitor of RAF
`kinase, which is currently in Phase I development for the treatment of patients with advanced solid tumor malignancies. Under
`the agreement, the Company receives development and commercialization rights to both programs.
`
`In January 2009, the Company and its marketing partner ImClone, a wholly-owned subsidiary of Eli Lilly and Company (Lilly),
`announced, that the companies will withdraw, and eventually resubmit, an application with the FDA to broaden the use of Erbitux
`(cetuximab) to include first-line treatment of patients with advanced non-small cell lung cancer in combination with platinum-
`based chemotherapy (cisplatin/vinorelbine).
`In October 2008, the FDA has accepted for filing and priority review, the supplemental Biologics License Application (sBLA) to
`broaden the indication for Erbitux to include use in combination with platinum-based chemotherapy for the first-line treatment of
`patients with recurrent or metastatic squamous cell carcinoma of the head and neck.
`
`4
`
`
`Erbitux
`•
`
`•
`
`Page 10 of 108
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`

`
`2008 Annual Report
`
`In October 2008, publication of study results showing that metast