INTELLECTUAL PROPERTY AGREEMENT AND CERTAIN LITIGATION EXPENSES

12 Months Ended

Dec. 31, 2024

Commitments and Contingencies Disclosure [Abstract]

INTELLECTUAL PROPERTY AGREEMENT AND CERTAIN LITIGATION EXPENSES

INTELLECTUAL PROPERTY AGREEMENT AND CERTAIN LITIGATION EXPENSES

The Company incurred intellectual property litigation expenses, including settlements and external legal costs, of $40.4 million, $203.5 million and $15.8 million during 2024, 2023 and 2022, respectively.

On April 12, 2023, Edwards entered into an intellectual property agreement (the "Intellectual Property Agreement") with Medtronic, Inc. ("Medtronic") pursuant to which the parties agreed to a 15-year global covenant not to sue ("CNS") for infringement of certain patents in the structural heart space owned or controlled by each other. In consideration for the global CNS and related mutual access to certain intellectual property rights, Edwards paid to Medtronic a one-time, lump sum payment of $300.0 million and is making annual royalty payments that are tied to net sales of certain Edwards products. Based upon the terms of the Intellectual Property Agreement, the Company identified the relevant elements for accounting purposes and allocated the $300.0 million upfront payment based on their respective fair values. The Company recorded a $37.0 million pre-tax charge in Certain Litigation Expenses in March 2023 primarily related to prior commercial sales incurred through March 31, 2023. The Company recorded a prepaid royalty asset of $124.0 million in April 2023 related to future commercial sales, which will be amortized to expense during the term of the Intellectual Property Agreement. Separately, the Company recorded a $139.0 million pre-tax charge in Certain Litigation Expenses in April 2023 related to products currently in

development. As of December 31, 2024 and 2023, the prepaid royalty asset balance was $109.9 million and $118.1 million, respectively, included in Prepaid Expenses and Other Assets.