Industry Director Directive #2 on the Proper Treatment of Upfront Fees, Milestone Payments, Royalties and Deferred Income
LB&I Control No.: 4-1110-031
Impacted IRM 4.51.2
December 9, 2010
INDUSTRY DIRECTORS, LB&I
Sergio E. Arellano, Industry Director
Tier II Issue – Industry Director Directive #2 on the Proper Treatment of Upfront Fees, Milestone Payments, Royalties and Deferred Income upon entering into a Collaboration Agreement in the Biotech and Pharmaceutical Industries
Change in Status
The Upfront Fees, Milestone Payments & Royalties in the Biotech & Pharmaceutical Industries Tier II Compliance Issue has been moved from an active to monitoring status. We will continue to monitor the issue using the examination guidance provided below.
Field personnel have guidance under the Coordinated Issue Paper for non-refundable Upfront Fees, Technology Access Fees, Milestone Payments, Royalties and Deferred Income under a Collaboration Agreement dated October 18, 2007. Additional guidance can be found in Industry Director Directive #1 dated May 7, 2007.
When examining the issue, examiners should continue to use the UIL codes as listed in Industry Director Directive #1.
Issue guidance and support will continue through the LB&I Pharmaceutical and Biotech Technical Advisors.
For questions regarding this issue, teams please contact the Pharmaceutical and Biotech Technical Advisors.
This Directive is not an official pronouncement of law and cannot be used, cited or relied upon as such.
cc: Commissioner, LB&I
Deputy Commissioner, LB&I
Deputy Commissioner, International, LB&I
Division Counsel, LB&I
Director, Planning, Quality, Analysis & Support
Director, Research & Workload Identification