2012 Annual Report  Reyataz  — a protease inhibitor for the treatment of the human immunodeficiency virus (HIV)  Sustiva  Franchise — a non-nucleoside reverse transcriptase inhibitor for the treatment of HIV, which includes  Sustiva , an  antiretroviral drug, and bulk efavirenz, which is also included in the combination therapy, Atripla (efavirenz 600 mg/emtricitabine 200 mg/tenofovir disoproxil fumarate 300 mg), a product sold through our joint venture with Gilead  Baraclude  — an oral antiviral agent for the treatment of chronic hepatitis B  Erbitux  — a monoclonal antibody designed to exclusively target and block the Epidermal Growth Factor Receptor, which is expressed  on the surface of certain cancer cells in multiple tumor types as well as normal cells and is currently indicated for use against  colorectal cancer and head and neck cancer. Erbitux  is part of our strategic alliance with Lilly.  Sprycel  — an oral inhibitor of multiple tyrosine kinases indicated for the treatment of adults with chronic, accelerated, or myeloid or  lymphoid blast phase chronic myeloid leukemia with resistance or intolerance to prior therapy, including  Gleevec  (imatinib  meslylate) and first-line treatment of adults with Philadelphia chromosome-positive chronic myeloid leukemia in chronic phase. Sprycel  is part of our strategic alliance with Otsuka.  Yervoy  — a monoclonal antibody for the treatment of patients with unresectable (inoperable) or metastatic melanoma  Orencia  — a fusion protein indicated for adult patients with moderate to severe rheumatoid arthritis who have had an inadequate  response to one or more currently available treatments, such as methotrexate or anti-tumor necrosis factor therapy  Nulojix  — a fusion protein with novel immunosuppressive activity targeted at prevention of kidney transplant rejection  • U.S. net sales increased in 2012 due to higher average net selling prices. Estimated total prescription demand decreased 5% in  2012 and increased 2% in 2011.  • International net sales decreased in 2012 due to unfavorable foreign exchange, the timing of government purchases in certain  countries and lower demand resulting from competing products. International net sales increased in 2011 due to higher demand.  • U.S. net sales increased in both periods primarily due to higher demand and higher average net selling prices. Estimated total  U.S. prescription demand decreased 1% in 2012 and increased 7% in 2011.  • International net sales decreased in 2012 due to unfavorable foreign exchange. International net sales in 2011 increased  primarily due to higher demand.  • Net sales in both periods increased primarily due to higher demand.  • We may experience a rapid and significant decline in U.S. net sales beginning in 2013 due to possible generic competition  following a federal court’s decision in February 2013 invalidating the composition of matter patent.  • Sold by us almost exclusively in the U.S., net sales remained relatively flat in 2012 and increased in 2011 primarily due to higher  demand.  • U.S. net sales in both periods increased primarily due to higher demand and higher average net selling prices. Estimated total  U.S. prescription demand increased 29% in 2012 and 30% in 2011.  • International net sales in both periods increased primarily due to higher demand. International net sales were impacted by  unfavorable foreign exchange in 2012 and favorable foreign exchange in 2011.  • Demand in 2011 was positively impacted by the approval of  Sprycel  for first-line treatment of adult patients with newly  diagnosed Philadelphia chromosome-positive chronic myeloid leukemia in chronic phase in the U.S. and the EU in the fourth  quarter of 2010. • Yervoy  net sales increased from higher demand since its launch in the U.S. in the second quarter of 2011 and continued launches  in a number of international countries since the second quarter of 2011.  • U.S. net sales increased in both periods primarily due to higher demand, including the launch of the  Orencia  subcutaneous  formulation (SC) in the fourth quarter of 2011, and higher average net selling prices.  • International net sales increased in both periods primarily due to higher demand, including the launch of  Orencia SC  in certain  European markets beginning in the second quarter of 2012. International net sales were impacted by unfavorable foreign  exchange in 2012 and favorable foreign exchange in 2011.  • Nulojix  was approved and launched in the U.S. and EU during 2011.  11 