Otsuka Ono 69 BMS is the principal in the end customer product sales and has the exclusive right to develop, manufacture and commercialize  Opdivo  worldwide except in Japan, South Korea and Taiwan. Ono is entitled to receive royalties of 4% in North America and 15% in all territories excluding the three countries listed above, subject to customary adjustments. Summarized financial information related to this alliance was as follows: In 2018, BMS provided Ono with a right to accept NKTR-214 into their alliance upon completion of a Phase I clinical study of  Opdivo  and NKTR-214 in the Ono Territory. If the right is exercised, Ono will partially reimburse BMS for development costs incurred with the study and share in certain future development costs, contingent milestone payments, profits and losses under the collaboration with Nektar. In 2017, Ono granted BMS an exclusive license for the development and commercialization of ONO-4578, Ono’s Prostaglandin E2 receptor 4 antagonist. BMS acquired worldwide rights except in Japan, South Korea, and Taiwan where it was added to the existing collaboration and in China and ASEAN countries where Ono retained exclusive rights. BMS paid $40 million to Ono, which was included in Research and development expense in 2017. Ono is eligible to receive subsequent clinical, regulatory and sales-based milestone payments of up to $480 million and royalties in countries where BMS has exclusive licensing rights. BMS and Ono also jointly develop and commercialize  Orencia in Japan. BMS is responsible for the order fulfillment and distribution of the intravenous formulation and Ono is responsible for the subcutaneous formulation. Both formulations are jointly promoted by both parties with assigned customer accounts and BMS is responsible for the product supply. A co-promotion fee of 60% is paid when a sale is made to the other party’s assigned customer. BMS and Ono jointly develop and commercialize  Opdivo ,  Yervoy  and several BMS investigational compounds in Japan, South Korea and Taiwan. BMS is responsible for supply of the products. Profits, losses and development costs are shared equally for all combination therapies involving compounds of both parties. Otherwise, sharing is 80% and 20% for activities involving only one of the party’s compounds. BMS also had a worldwide commercialization agreement with Otsuka, to co-develop and co-promote  Abilify* . The U.S. portion of the agreement expired in April 2015 and the EU portion expired in June 2014. In other countries where BMS had the exclusive right to sell  Abilify* , expiration occurred on a country-by-country basis with the last expiration in Canada in January 2018. Summarized financial information related to this alliance was as follows: BMS and Otsuka co-promote  Sprycel  in the U.S. and the EU. Both parties actively participate in various governance committees, however, BMS has control over the decision making. BMS is responsible for the development and manufacture of the product and is also the principal in the end customer product sales. A fee is paid to Otsuka based on net sales levels in the Oncology Territory (U.S., Japan and the EU) that equates to $294 million on the first $1 billion of annual net sales plus 1% of net sales in excess of $1 billion. Year Ended December 31, Dollars in Millions 2018 2017 2016 Revenues from Ono alliances: Net product sales $ 165 $ 145 $ 147 Alliance revenues 294 268 280 Total Revenues $ 459 $ 413 $ 427 Year Ended December 31, Dollars in Millions 2018 2017 2016 Revenues from Otsuka alliances: Net product sales – Oncology territory $ 1,705 $ 1,699 $ 1,544 Payments to Otsuka: Cost of products sold – Oncology fee $ 297 $ 299 $ 304