Other Intangibles

9 Months Ended

Sep. 30, 2012

Other Intangibles

7. Other Intangibles

In connection with mergers and acquisitions, the Company measures the fair value of marketed products and research and development pipeline programs and capitalizes these amounts. During the third quarter of 2012 and 2011, the Company recorded $40 million and $22 million, respectively, and during the first nine months of 2012 and 2011, recorded $176 million and $343 million, respectively, of in-process research and development (“IPR&D”) impairment charges within Research and development expenses primarily for pipeline programs that had previously been deprioritized and were subsequently deemed to have no alternative use in the period. Certain of the charges in 2011 were also attributable to compounds that were out-licensed to a third party for consideration that was less than the related asset’s carrying value. Also, during the first nine months of 2011, the Company recorded an intangible asset impairment charge of $118 million within Materials and production costs related to a marketed product. The Company may recognize additional non-cash impairment charges in the future related to other pipeline programs or marketed products and such charges could be material.