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Goodwill and Other Intangibles
 12 Months Ended
Dec. 31, 2024
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Other Intangibles Goodwill and Other Intangibles
The following table summarizes goodwill activity by segment:
PharmaceuticalAnimal HealthTotal
Balance January 1, 2023
$17,936 $3,268 $21,204 
Other (1)
(14)7 (7)
Balance December 31, 2023 (2)
17,922 3,275 21,197 
Acquisitions
— 518 518 
Other (1)
(19)(28)(47)
Balance December 31, 2024 (2)
$17,903 $3,765 $21,668 
(1)    Includes cumulative translation adjustments on goodwill balances.
(2)    Accumulated goodwill impairment losses were $531 million at both December 31, 2024 and 2023.
Other acquired intangibles at December 31 consisted of:
 20242023
Gross
Carrying
Amount		Accumulated
Amortization		NetGross
Carrying
Amount		Accumulated
Amortization		Net
Product rights
$29,988 $19,066 $10,922 $23,643 $17,765 $5,878 
IPR&D430 — 430 6,816 — 6,816 
Trade names2,881 954 1,927 2,881 776 2,105 
Licenses and other8,863 5,772 3,091 8,263 5,051 3,212 
 $42,162 $25,792 $16,370 $41,603 $23,592 $18,011 
Some of the more significant acquired intangibles included in product rights, on a net basis, related to human health marketed products at December 31, 2024 were Winrevair, $5.9 billion; Reblozyl, $2.8 billion; and Zerbaxa, $260 million. Additionally, the Company had $4.3 billion of net acquired intangibles related to animal health at December 31, 2024, of which $1.7 billion related to product rights and $1.9 billion was attributable to trade names, primarily related to Allflex. At December 31, 2024, IPR&D primarily relates to MK-1026 (nemtabrutinib), obtained through the acquisition of ArQule, Inc. (ArQule), which had a balance of $418 million. Some of the more significant net intangible assets included in licenses and other above at December 31, 2024 include Lynparza, $1.2 billion, related to a collaboration with AstraZeneca; Lenvima, $442 million, related to a collaboration with Eisai; and Adempas, $372 million, related to a collaboration with Bayer. See Note 4 for additional information related to the intangible assets associated with these collaborations.
IPR&D that the Company acquires through business combinations represents the fair value assigned to incomplete research projects which, at the time of acquisition, have not reached technological feasibility. Amounts capitalized as IPR&D are accounted for as indefinite-lived intangible assets, subject to impairment testing until completion or abandonment of the projects. Upon successful completion of each IPR&D project, the Company will make a separate determination as to the then-useful life of the asset and begin amortization.
In 2023, the Company recorded a $779 million IPR&D impairment charge within Research and development expenses related to MK-7264, gefapixant, a non-narcotic, oral selective P2X3 receptor antagonist, that was in development for the treatment of refractory or unexplained chronic cough in adults. In December 2023, the FDA issued a Complete Response Letter (CRL) regarding the resubmission of Merck’s New Drug Application (NDA) for gefapixant. In the CRL, the FDA concluded that Merck’s application did not meet substantial evidence of effectiveness for treating refractory chronic cough and unexplained chronic cough. The CRL was not related to the safety of gefapixant. The marketing application for gefapixant was based on results from the COUGH-1 and COUGH-2 clinical trials. In January 2022, the FDA issued a CRL regarding Merck’s original NDA for gefapixant. In that CRL, the FDA requested additional information related to the cough counting system that was used to assess efficacy. Receipt of the second CRL from the FDA constituted a triggering event that required the evaluation of the gefapixant intangible asset for impairment. The Company estimated the current fair value of gefapixant utilizing an income approach, which calculates the present value of projected future cash flows. The market participant assumptions used to derive the forecasted cash flows were updated to reflect revised market launch plans, resulting in a reduction in the estimated fair value. The revised estimated fair value of gefapixant when compared with its related carrying value resulted in the impairment charge noted above. The remaining intangible asset balance related to Lyfnua (gefapixant) at December 31, 2024 of $21 million is included in product rights in the table above and is being amortized over its expected useful life as supported by projected future cash flows in the markets where it is approved including Japan and the EU.
In 2022, the Company recorded $1.7 billion of intangible asset impairment charges within Research and development expenses, of which $1.6 billion represents IPR&D impairment charges related to nemtabrutinib (MK-1026), an oral, reversible, non-covalent Bruton’s tyrosine kinase (BTK) inhibitor currently being evaluated for the treatment of hematological malignancies that was obtained through the 2020 acquisition of ArQule. Following discussions with regulatory authorities in the third quarter of 2022, the development period for nemtabrutinib was extended, which constituted a triggering event that required the evaluation of the nemtabrutinib intangible asset for impairment. The Company estimated the current fair value of nemtabrutinib utilizing an income approach which calculates the present value of projected future cash flows. The market participant assumptions used to derive the forecasted cash flows were updated to reflect a delay in the anticipated launch date for nemtabrutinib, which resulted in lower cumulative revenue forecasts and a reduction in the estimated fair value. The revised estimated fair value of nemtabrutinib when compared with its related carrying value resulted in a $807 million impairment charge recorded in the third quarter of 2022. In December 2022, regulatory authorities provided additional feedback with respect to clinical study design that led to a further reassessment of the development plan for nemtabrutinib, which was expected to result in changes to the clinical study design, and corresponding delays in the anticipated approval and launch timelines, which constituted a triggering event. Utilizing an income approach, the forecasted cash flows were updated to reflect a decline in forecasted revenue coupled with an increase in development cost forecasts, which reduced projected cash flows lowering the estimated fair value of nemtabrutinib. The revised estimated fair value of nemtabrutinib when compared with its then-related carrying value resulted in a $780 million impairment charge. The remaining IPR&D intangible asset related to nemtabrutinib is $418 million. If the assumptions used to estimate the fair value of nemtabrutinib prove to be incorrect and the development of nemtabrutinib does not progress as anticipated thereby adversely affecting projected future cash flows, the Company may record an additional impairment charge in the future and such charge could be material. The Company also recorded an $80 million intangible asset impairment charge in 2022 related to derazantinib resulting from the termination of the out-licensing agreement and the decision by Merck not to pursue development of derazantinib.
The IPR&D projects that remain in development are subject to the inherent risks and uncertainties in drug development and it is possible that the Company will not be able to successfully develop and complete the IPR&D programs and profitably commercialize the underlying product candidates.
The Company may recognize additional non-cash impairment charges in the future related to marketed products or pipeline programs and such charges could be material.
Aggregate amortization expense primarily recorded within Cost of sales was $2.4 billion in 2024, $2.0 billion in 2023 and $2.1 billion in 2022. The estimated aggregate amortization expense for each of the next five years is as follows: 2025, $2.4 billion; 2026, $2.3 billion; 2027, $2.1 billion; 2028, $1.8 billion; 2029, $1.5 billion.