Collaboration Profit Examples Clause Samples

Collaboration Profit Examples. Assume for purposes of this example that in Q4 2017 Ivory Net Revenues are $500,000,000 and the Inventorship Margin is $12,500,000 (consistent with the example above). Further assume that the total collaboration costs are $150,000,000 and both Amgen Costs and GSK Costs are $75,000,000. In such a case, the Collaboration Profit (Loss) for Q4 2017 would be $337,500,000, and each Party’s share of the Collaboration Profit (Loss) would be $168,750,000 ($500,000,000 - $12,500,000 - $150,000,000 = $337,500,000 / 2 = $168,750,000). In this example, of the $500,000,000 in Q4 2017 Ivory Net Revenues, GSK would be entitled to a true-up payment of $243,750,000, representing GSK’s share of the Collaboration Profit (Loss) plus reimbursement of the GSK Costs ($168,750,000 + $75,000,000 = $243,750,000), which would provide GSK with a net profit of $168,750,000 for the quarter, and Amgen would be entitled to the remaining $256,250,000, representing Amgen’s Inventorship Margin plus Amgen’s share of the Collaboration Profit (Loss) plus the Amgen Costs ($12,500,000 + $168,750,000 + $75,000,000 = $256,250,000), which would provide Amgen with a net profit of $168,750,000 for the quarter (not counting the Inventorship Margin). Net Revenues $500,000,000 $500,000,000 — Inventorship Margin $(12,500,000) $(12,500,000) — Collaboration Costs $(150,000,000) $(75,000,000) $(75,000,000) Collaboration Profit $337,500,000 $412,500,000 $(75,000,000) True-Up Payment $(243,750,000) $243,750,000 Share of Profit (Loss) $337,500,000 $168,750,000 $168,750,000 If, however, the collaboration costs that had been incurred by each Party in the quarter differed, then each Party’s share of the Ivory Net Revenues for the quarter would need to be adjusted. For example, if in the example above, the total collaboration costs were still $150,000,000, but the GSK Costs were $35,000,000 and the Amgen Costs were $115,000,000, then each Party’s share of the Collaboration Profit (Loss) would still be $168,750,000 ($500,000,000 - $12,500,000 - $150,000,000 = $337,500,000 / 2 = $168,750,000) and GSK would be entitled to a true-up payment of $203,750,000, representing GSK’s share of the Collaboration Profit (Loss) plus reimbursement of the GSK Costs ($168,750,000 + $35,000,000 = $203,750,000), which would provide GSK with a net profit of $168,750,000 for the quarter, and Amgen would be entitled to the remaining $296,250,000, representing Amgen’s Inventorship Margin plus Amgen’s share of the Collaboration Profit (Loss...