QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||||||
(Address of principal executive offices) | (Zip Code) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
☑ | Accelerated filer | ☐ | Non-accelerated filer | ☐ | |||||||||||||
Smaller reporting company | Emerging growth company |
Page No. | ||||||||
Item 1. | ||||||||
Item 2. | ||||||||
Item 3. | ||||||||
Item 4. | ||||||||
Item 1. | ||||||||
Item 1A. | ||||||||
Item 2. | ||||||||
Item 6. | ||||||||
Term | Description | ||||
2017 Tax Act | Tax Cuts and Jobs Act of 2017 | ||||
ANDA | Abbreviated New Drug Application | ||||
AOCI | accumulated other comprehensive income (loss) | ||||
ASR | accelerated share repurchase | ||||
BeiGene | BeiGene, Ltd. | ||||
Bergamo | Laboratorio Quimico Farmaceutico Bergamo Ltda | ||||
ChemoCentryx | ChemoCentryx, Inc. | ||||
CMS | Centers for Medicare & Medicaid Services | ||||
COVID-19 | coronavirus disease 2019 | ||||
Eczacıbaşı | EIS Eczacıbaşı İlaç, Sınai ve Finansal Yatırımlar Sanayi ve Ticaret A.Ş. | ||||
EMA | European Medicines Agency | ||||
EPS | earnings per share | ||||
FASB | Financial Accounting Standards Board | ||||
FDA | U.S. Food and Drug Administration | ||||
Fitch | Fitch Ratings, Inc. | ||||
Five Prime | Five Prime Therapeutics, Inc. | ||||
FTC | Federal Trade Commission | ||||
GAAP | U.S. generally accepted accounting principles | ||||
Gensenta | Gensenta İlaç Sanayi ve Ticaret A.Ş. | ||||
HHS | U.S. Department of Health & Human Services | ||||
IPR&D | in-process research and development | ||||
IRP | international reference pricing | ||||
IRS | Internal Revenue Service | ||||
LIBOR | London Interbank Offered Rate | ||||
Lp(a) | lipoprotein(a) | ||||
MD&A | management’s discussion and analysis | ||||
MFN | most-favored nation | ||||
Moody’s | Moody’s Investors Service, Inc. | ||||
Neumora | Neumora Therapeutics, Inc. | ||||
OECD | Organisation for Economic Co-operation and Development | ||||
PBM | pharmacy benefit manager | ||||
PTAB | Patent Trial and Appeal Board | ||||
R&D | research and development | ||||
RAR | Revenue Agent Report | ||||
ROW | rest of world | ||||
S&P | Standard & Poor’s Financial Services LLC | ||||
SEC | U.S. Securities and Exchange Commission | ||||
SG&A | selling, general and administrative | ||||
Teneobio | Teneobio, Inc. | ||||
U.S. Treasury | U.S. Department of Treasury | ||||
USPTO | U.S. Patent and Trademark Office | ||||
UTB | unrecognized tax benefit | ||||
Term | Description | |||||||
Aimovig | Aimovig® (erenumab-aooe) | |||||||
AMGEVITA | AMGEVITA™ (adalimumab) | |||||||
Aranesp | Aranesp® (darbepoetin alfa) | |||||||
AVSOLA | AVSOLA® (infliximab-axxq) | |||||||
BLINCYTO | BLINCYTO® (blinatumomab) | |||||||
Corlanor | Corlanor® (ivabradine) | |||||||
ENBREL | Enbrel® (etanercept) | |||||||
EPOGEN | EPOGEN® (epoetin alfa) | |||||||
EVENITY | EVENITY® (romosozumab-aqqg) | |||||||
IMLYGIC | IMLYGIC® (talimogene laherparepvec) | |||||||
KANJINTI | KANJINTI® (trastuzumab-anns) | |||||||
KYPROLIS | KYPROLIS® (carfilzomib) | |||||||
LUMAKRAS/LUMYKRAS | LUMAKRAS® / LUMYKRAS™ (sotorasib) | |||||||
MVASI | MVASI® (bevacizumab-awwb) | |||||||
Neulasta | Neulasta® (pegfilgrastim) | |||||||
NEUPOGEN | NEUPOGEN® (filgrastim) | |||||||
Nplate | Nplate® (romiplostim) | |||||||
Olpasiran | Olpasiran (formerly AMG 890) | |||||||
Onpro | Onpro® | |||||||
Otezla | Otezla® (apremilast) | |||||||
Parsabiv | Parsabiv® (etelcalcetide) | |||||||
Prolia | Prolia® (denosumab) | |||||||
Repatha | Repatha® (evolocumab) | |||||||
RIABNI | RIABNI™ (rituximab-arrx) | |||||||
Sensipar/Mimpara | Sensipar®/Mimpara™ (cinacalcet) | |||||||
TEZSPIRE | TEZSPIRE® (tezepelumab-ekko) | |||||||
Vectibix | Vectibix® (panitumumab) | |||||||
XGEVA | XGEVA® (denosumab) |
Item 1. | FINANCIAL STATEMENTS |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Revenues: | |||||||||||||||||||||||
Product sales | $ | $ | $ | $ | |||||||||||||||||||
Other revenues | |||||||||||||||||||||||
Total revenues | |||||||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||
Cost of sales | |||||||||||||||||||||||
Research and development | |||||||||||||||||||||||
Acquired in-process research and development | |||||||||||||||||||||||
Selling, general and administrative | |||||||||||||||||||||||
Other | |||||||||||||||||||||||
Total operating expenses | |||||||||||||||||||||||
Operating income | |||||||||||||||||||||||
Other income (expense): | |||||||||||||||||||||||
Interest expense, net | ( | ( | ( | ( | |||||||||||||||||||
Other (expense) income, net | ( | ( | |||||||||||||||||||||
Income before income taxes | |||||||||||||||||||||||
Provision for income taxes | |||||||||||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||||||||||
Earnings per share: | |||||||||||||||||||||||
Basic | $ | $ | $ | $ | |||||||||||||||||||
Diluted | $ | $ | $ | $ | |||||||||||||||||||
Shares used in calculation of earnings per share: | |||||||||||||||||||||||
Basic | |||||||||||||||||||||||
Diluted |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||||||||||
Other comprehensive income (loss), net of reclassification adjustments and taxes: | |||||||||||||||||||||||
Foreign currency translation | ( | ( | ( | ||||||||||||||||||||
Cash flow hedges | ( | ||||||||||||||||||||||
Other | ( | ||||||||||||||||||||||
Other comprehensive income (loss), net of reclassification adjustments and taxes | ( | ||||||||||||||||||||||
Comprehensive income | $ | $ | $ | $ |
June 30, 2022 | December 31, 2021 | ||||||||||
(Unaudited) | |||||||||||
ASSETS | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Marketable securities | |||||||||||
Trade receivables, net | |||||||||||
Inventories | |||||||||||
Other current assets | |||||||||||
Total current assets | |||||||||||
Property, plant and equipment, net | |||||||||||
Intangible assets, net | |||||||||||
Goodwill | |||||||||||
Other noncurrent assets | |||||||||||
Total assets | $ | $ | |||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
Current liabilities: | |||||||||||
Accounts payable | $ | $ | |||||||||
Accrued liabilities | |||||||||||
Current portion of long-term debt | |||||||||||
Total current liabilities | |||||||||||
Long-term debt | |||||||||||
Long-term tax liabilities | |||||||||||
Other noncurrent liabilities | |||||||||||
Contingencies and commitments | |||||||||||
Stockholders’ equity: | |||||||||||
Common stock and additional paid-in capital; $ | |||||||||||
Accumulated deficit | ( | ( | |||||||||
Accumulated other comprehensive loss | ( | ( | |||||||||
Total stockholders’ equity | |||||||||||
Total liabilities and stockholders’ equity | $ | $ |
Number of shares of common stock | Common stock and additional paid-in capital | Accumulated deficit | Accumulated other comprehensive loss | Total | |||||||||||||||||||||||||
Balance as of December 31, 2021 | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||
Net income | — | — | — | ||||||||||||||||||||||||||
Other comprehensive income, net of taxes | — | — | — | ||||||||||||||||||||||||||
Dividends declared on common stock ($ | — | — | ( | — | ( | ||||||||||||||||||||||||
Issuance of common stock in connection with the Company’s equity award programs | — | — | |||||||||||||||||||||||||||
Stock-based compensation expense | — | — | — | ||||||||||||||||||||||||||
Tax impact related to employee stock-based compensation expense | — | ( | — | — | ( | ||||||||||||||||||||||||
Repurchases of common stock (Note 10) | ( | ( | ( | — | ( | ||||||||||||||||||||||||
Balance as of March 31, 2022 | ( | ( | |||||||||||||||||||||||||||
Net income | — | — | — | ||||||||||||||||||||||||||
Other comprehensive income, net of taxes | — | — | — | ||||||||||||||||||||||||||
Issuance of common stock in connection with the Company’s equity award programs | — | — | |||||||||||||||||||||||||||
Stock-based compensation expense | — | — | — | ||||||||||||||||||||||||||
Tax impact related to employee stock-based compensation expense | — | ( | — | — | ( | ||||||||||||||||||||||||
Other | — | — | ( | — | ( | ||||||||||||||||||||||||
Balance as of June 30, 2022 | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||
Number of shares of common stock | Common stock and additional paid-in capital | Accumulated deficit | Accumulated other comprehensive loss | Total | |||||||||||||||||||||||||
Balance as of December 31, 2020 | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||
Net income | — | — | — | ||||||||||||||||||||||||||
Other comprehensive income, net of taxes | — | — | — | ||||||||||||||||||||||||||
Dividends declared on common stock ($ | — | — | ( | — | ( | ||||||||||||||||||||||||
Issuance of common stock in connection with the Company’s equity award programs | — | — | |||||||||||||||||||||||||||
Stock-based compensation expense | — | — | — | ||||||||||||||||||||||||||
Tax impact related to employee stock-based compensation expense | — | ( | — | — | ( | ||||||||||||||||||||||||
Repurchases of common stock | ( | — | ( | — | ( | ||||||||||||||||||||||||
Balance as of March 31, 2021 | ( | ( | |||||||||||||||||||||||||||
Net income | — | — | — | ||||||||||||||||||||||||||
Other comprehensive loss, net of taxes | — | — | — | ( | ( | ||||||||||||||||||||||||
Issuance of common stock in connection with the Company’s equity award programs | — | — | |||||||||||||||||||||||||||
Stock-based compensation expense | — | — | — | ||||||||||||||||||||||||||
Tax impact related to employee stock-based compensation expense | — | ( | — | — | ( | ||||||||||||||||||||||||
Repurchases of common stock | ( | — | ( | — | ( | ||||||||||||||||||||||||
Other | — | — | — | ||||||||||||||||||||||||||
Balance as of June 30, 2021 | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||
Six months ended June 30, | |||||||||||
2022 | 2021 | ||||||||||
Cash flows from operating activities: | |||||||||||
Net income | $ | $ | |||||||||
Depreciation, amortization and other | |||||||||||
Deferred income taxes | ( | ( | |||||||||
Acquired in-process research and development | |||||||||||
Adjustments for equity method investments | ( | ||||||||||
Loss on divestiture | |||||||||||
Other items, net | |||||||||||
Changes in operating assets and liabilities, net of acquisitions: | |||||||||||
Trade receivables, net | ( | ||||||||||
Inventories | ( | ( | |||||||||
Other assets | ( | ||||||||||
Accounts payable | ( | ( | |||||||||
Accrued income taxes, net | ( | ( | |||||||||
Long-term tax liabilities | |||||||||||
Other liabilities | |||||||||||
Net cash provided by operating activities | |||||||||||
Cash flows from investing activities: | |||||||||||
Purchases of marketable securities | ( | ( | |||||||||
Proceeds from sales of marketable securities | |||||||||||
Proceeds from maturities of marketable securities | |||||||||||
Purchases of property, plant and equipment | ( | ( | |||||||||
Cash paid for acquisitions, net of cash acquired | ( | ||||||||||
Other | ( | ||||||||||
Net cash (used in) provided by investing activities | ( | ||||||||||
Cash flows from financing activities: | |||||||||||
Net proceeds from issuance of debt | |||||||||||
Repurchases of common stock (Note 10) | ( | ( | |||||||||
Dividends paid | ( | ( | |||||||||
Other | ( | ( | |||||||||
Net cash used in financing activities | ( | ( | |||||||||
(Decrease) increase in cash and cash equivalents | ( | ||||||||||
Cash and cash equivalents at beginning of period | |||||||||||
Cash and cash equivalents at end of period | $ | $ |
Amounts | ||||||||
Cash purchase price | $ | |||||||
Contingent consideration | ||||||||
Total consideration | $ | |||||||
Cash and cash equivalents | $ | |||||||
In-process research and development | ||||||||
Finite-lived intangible asset – research and development technology rights | ||||||||
Finite-lived intangible assets – licensing rights | ||||||||
Goodwill | ||||||||
Other assets, net | ||||||||
Deferred tax liability | ( | |||||||
Total assets acquired, net | $ |
Three months ended June 30, | ||||||||||||||||||||||||||||||||||||||
2022 | 2021 | |||||||||||||||||||||||||||||||||||||
U.S. | ROW | Total | U.S. | ROW | Total | |||||||||||||||||||||||||||||||||
ENBREL | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Prolia | ||||||||||||||||||||||||||||||||||||||
Otezla | ||||||||||||||||||||||||||||||||||||||
XGEVA | ||||||||||||||||||||||||||||||||||||||
Aranesp | ||||||||||||||||||||||||||||||||||||||
Neulasta | ||||||||||||||||||||||||||||||||||||||
Repatha | ||||||||||||||||||||||||||||||||||||||
KYPROLIS | ||||||||||||||||||||||||||||||||||||||
Nplate | ||||||||||||||||||||||||||||||||||||||
Other products | ||||||||||||||||||||||||||||||||||||||
Total product sales(1) | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
Other revenues | ||||||||||||||||||||||||||||||||||||||
Total revenues | $ | $ | ||||||||||||||||||||||||||||||||||||
Six months ended June 30, | ||||||||||||||||||||||||||||||||||||||
2022 | 2021 | |||||||||||||||||||||||||||||||||||||
U.S. | ROW | Total | U.S. | ROW | Total | |||||||||||||||||||||||||||||||||
ENBREL | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Prolia | ||||||||||||||||||||||||||||||||||||||
Otezla | ||||||||||||||||||||||||||||||||||||||
XGEVA | ||||||||||||||||||||||||||||||||||||||
Aranesp | ||||||||||||||||||||||||||||||||||||||
Neulasta | ||||||||||||||||||||||||||||||||||||||
Repatha | ||||||||||||||||||||||||||||||||||||||
KYPROLIS | ||||||||||||||||||||||||||||||||||||||
Nplate | ||||||||||||||||||||||||||||||||||||||
Other products | ||||||||||||||||||||||||||||||||||||||
Total product sales(1) | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
Other revenues | ||||||||||||||||||||||||||||||||||||||
Total revenues | $ | $ | ||||||||||||||||||||||||||||||||||||
Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Income (Numerator): | |||||||||||||||||||||||
Net income for basic and diluted EPS | $ | $ | $ | $ | |||||||||||||||||||
Shares (Denominator): | |||||||||||||||||||||||
Weighted-average shares for basic EPS | |||||||||||||||||||||||
Effect of dilutive securities | |||||||||||||||||||||||
Weighted-average shares for diluted EPS | |||||||||||||||||||||||
Basic EPS | $ | $ | $ | $ | |||||||||||||||||||
Diluted EPS | $ | $ | $ | $ |
Types of securities as of June 30, 2022 | Amortized cost | Gross unrealized gains | Gross unrealized losses | Fair values | ||||||||||||||||||||||
U.S. Treasury notes | $ | $ | $ | $ | ||||||||||||||||||||||
U.S. Treasury bills | ||||||||||||||||||||||||||
Money market mutual funds | ||||||||||||||||||||||||||
Other short-term interest-bearing securities | ||||||||||||||||||||||||||
Total interest-bearing securities | $ | $ | $ | $ |
Types of securities as of December 31, 2021 | Amortized cost | Gross unrealized gains | Gross unrealized losses | Fair values | ||||||||||||||||||||||
U.S. Treasury notes | $ | $ | $ | $ | ||||||||||||||||||||||
U.S. Treasury bills | ||||||||||||||||||||||||||
Money market mutual funds | ||||||||||||||||||||||||||
Other short-term interest-bearing securities | ||||||||||||||||||||||||||
Total interest-bearing securities | $ | $ | $ | $ |
Condensed Consolidated Balance Sheets locations | June 30, 2022 | December 31, 2021 | ||||||||||||
Cash and cash equivalents | $ | $ | ||||||||||||
Marketable securities | ||||||||||||||
Total interest-bearing securities | $ | $ |
June 30, 2022 | December 31, 2021 | ||||||||||
Raw materials | $ | $ | |||||||||
Work in process | |||||||||||
Finished goods | |||||||||||
Total inventories | $ | $ |
Six months ended June 30, 2022 | |||||
Beginning balance | $ | ||||
Adjustments to goodwill resulting from acquisitions and divestitures, net(1) | |||||
Currency translation adjustment | ( | ||||
Ending balance | $ |
June 30, 2022 | December 31, 2021 | ||||||||||||||||||||||||||||||||||
Gross carrying amounts | Accumulated amortization | Other intangible assets, net | Gross carrying amounts | Accumulated amortization | Other intangible assets, net | ||||||||||||||||||||||||||||||
Finite-lived intangible assets: | |||||||||||||||||||||||||||||||||||
Developed-product-technology rights | $ | $ | ( | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||
Licensing rights | ( | ( | |||||||||||||||||||||||||||||||||
Marketing-related rights | ( | ( | |||||||||||||||||||||||||||||||||
Research and development technology rights | ( | ( | |||||||||||||||||||||||||||||||||
Total finite-lived intangible assets | ( | ( | |||||||||||||||||||||||||||||||||
Indefinite-lived intangible assets: | |||||||||||||||||||||||||||||||||||
In-process research and development | — | — | |||||||||||||||||||||||||||||||||
Total other intangible assets | $ | $ | ( | $ | $ | $ | ( | $ |
June 30, 2022 | December 31, 2021 | ||||||||||
$ | $ | ||||||||||
— | |||||||||||
Other notes due 2097 | |||||||||||
Unamortized bond discounts, premiums and issuance costs, net | ( | ( | |||||||||
Fair value adjustments | ( | ||||||||||
Other | |||||||||||
Total carrying value of debt | |||||||||||
Less current portion | ( | ( | |||||||||
Total long-term debt | $ | $ |
2022 | 2021 | ||||||||||||||||||||||
Shares | Dollars | Shares | Dollars | ||||||||||||||||||||
First quarter | $ | $ | |||||||||||||||||||||
Second quarter | |||||||||||||||||||||||
Total stock repurchases | $ | $ |
Foreign currency translation | Cash flow hedges | Available-for-sale securities | Other | AOCI | |||||||||||||||||||||||||
Balance as of December 31, 2021 | $ | ( | $ | $ | $ | ( | $ | ( | |||||||||||||||||||||
Foreign currency translation adjustments | ( | — | — | — | ( | ||||||||||||||||||||||||
Unrealized gains | — | ||||||||||||||||||||||||||||
Reclassification adjustments to income | — | — | |||||||||||||||||||||||||||
Income taxes | ( | — | ( | ||||||||||||||||||||||||||
Balance as of March 31, 2022 | ( | ( | ( | ||||||||||||||||||||||||||
Foreign currency translation adjustments | ( | — | — | — | ( | ||||||||||||||||||||||||
Unrealized gains | — | ||||||||||||||||||||||||||||
Reclassification adjustments to income | — | — | |||||||||||||||||||||||||||
Income taxes | ( | — | ( | ||||||||||||||||||||||||||
Balance as of June 30, 2022 | $ | ( | $ | $ | $ | ( | $ | ( | |||||||||||||||||||||
Three months ended June 30, | ||||||||||||||||||||
Components of AOCI | 2022 | 2021 | Condensed Consolidated Statements of Income locations | |||||||||||||||||
Cash flow hedges: | ||||||||||||||||||||
Foreign currency contract gains (losses) | $ | $ | ( | Product sales | ||||||||||||||||
Cross-currency swap contract (losses) gains | ( | Other (expense) income, net | ||||||||||||||||||
( | Income before income taxes | |||||||||||||||||||
( | Provision for income taxes | |||||||||||||||||||
$ | ( | $ | Net income | |||||||||||||||||
Six months ended June 30, | ||||||||||||||||||||
Components of AOCI | 2022 | 2021 | Condensed Consolidated Statements of Income locations | |||||||||||||||||
Cash flow hedges: | ||||||||||||||||||||
Foreign currency contract gains (losses) | $ | $ | ( | Product sales | ||||||||||||||||
Cross-currency swap contract losses | ( | ( | Other (expense) income, net | |||||||||||||||||
( | ( | Income before income taxes | ||||||||||||||||||
Provision for income taxes | ||||||||||||||||||||
$ | ( | $ | ( | Net income | ||||||||||||||||
Level 1 | — | Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access | ||||||
Level 2 | — | Valuations for which all significant inputs are observable either directly or indirectly—other than Level 1 inputs | ||||||
Level 3 | — | Valuations based on inputs that are unobservable and significant to the overall fair value measurement |
Quoted prices in active markets for identical assets (Level 1) | Significant other observable inputs (Level 2) | Significant unobservable inputs (Level 3) | ||||||||||||||||||||||||
Fair value measurement as of June 30, 2022, using: | Total | |||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||
Available-for-sale securities: | ||||||||||||||||||||||||||
U.S. Treasury notes | $ | $ | $ | $ | ||||||||||||||||||||||
U.S. Treasury bills | ||||||||||||||||||||||||||
Money market mutual funds | ||||||||||||||||||||||||||
Other short-term interest-bearing securities | ||||||||||||||||||||||||||
Equity securities | ||||||||||||||||||||||||||
Derivatives: | ||||||||||||||||||||||||||
Foreign currency contracts | ||||||||||||||||||||||||||
Cross-currency swap contracts | ||||||||||||||||||||||||||
Interest rate swap contracts | ||||||||||||||||||||||||||
Total assets | $ | $ | $ | $ | ||||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||||
Derivatives: | ||||||||||||||||||||||||||
Foreign currency contracts | $ | $ | $ | $ | ||||||||||||||||||||||
Cross-currency swap contracts | ||||||||||||||||||||||||||
Interest rate swap contracts | ||||||||||||||||||||||||||
Contingent consideration obligations | ||||||||||||||||||||||||||
Total liabilities | $ | $ | $ | $ |
Quoted prices in active markets for identical assets (Level 1) | Significant other observable inputs (Level 2) | Significant unobservable inputs (Level 3) | ||||||||||||||||||||||||
Fair value measurement as of December 31, 2021, using: | Total | |||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||
Available-for-sale securities: | ||||||||||||||||||||||||||
U.S. Treasury notes | $ | $ | $ | $ | ||||||||||||||||||||||
U.S. Treasury bills | ||||||||||||||||||||||||||
Money market mutual funds | ||||||||||||||||||||||||||
Other short-term interest-bearing securities | ||||||||||||||||||||||||||
Equity securities | ||||||||||||||||||||||||||
Derivatives: | ||||||||||||||||||||||||||
Foreign currency contracts | ||||||||||||||||||||||||||
Cross-currency swap contracts | ||||||||||||||||||||||||||
Interest rate swap contracts | ||||||||||||||||||||||||||
Total assets | $ | $ | $ | $ | ||||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||||
Derivatives: | ||||||||||||||||||||||||||
Foreign currency contracts | $ | $ | $ | $ | ||||||||||||||||||||||
Cross-currency swap contracts | ||||||||||||||||||||||||||
Interest rate swap contracts | ||||||||||||||||||||||||||
Contingent consideration obligations | ||||||||||||||||||||||||||
Total liabilities | $ | $ | $ | $ |
Three months ended June 30, | Six months ended June 30, | |||||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||
Beginning balance | $ | $ | $ | $ | ||||||||||||||||||||||
Payments | ( | ( | ( | ( | ||||||||||||||||||||||
Net changes in valuations | ( | ( | ||||||||||||||||||||||||
Ending balance | $ | $ | $ | $ |
Foreign currency | U.S. dollars | |||||||||||||||||||||||||
Hedged notes | Notional amounts | Interest rates | Notional amounts | Interest rates | ||||||||||||||||||||||
0.41% 2023 Swiss franc Bonds | CHF | % | $ | % | ||||||||||||||||||||||
2.00% 2026 euro Notes | € | % | $ | % | ||||||||||||||||||||||
5.50% 2026 pound sterling Notes | £ | % | $ | % | ||||||||||||||||||||||
4.00% 2029 pound sterling Notes | £ | % | $ | % |
Three months ended June 30, | Six months ended June 30, | |||||||||||||||||||||||||
Derivatives in cash flow hedging relationships | 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||||
Foreign currency contracts | $ | $ | ( | $ | $ | |||||||||||||||||||||
Cross-currency swap contracts | ( | ( | ( | |||||||||||||||||||||||
Total unrealized gains (losses) | $ | $ | ( | $ | $ |
Carrying amounts of hedged liabilities(1) | Cumulative amounts of fair value hedging adjustments related to the carrying amounts of the hedged liabilities(2) | |||||||||||||||||||||||||
Condensed Consolidated Balance Sheets locations | June 30, 2022 | December 31, 2021 | June 30, 2022 | December 31, 2021 | ||||||||||||||||||||||
Current portion of long-term debt | $ | $ | $ | $ | ||||||||||||||||||||||
Long-term debt | $ | $ | $ | ( | $ |
Three months ended June 30, 2022 | Six months ended June 30, 2022 | |||||||||||||||||||||||||||||||||||||
Product sales | Other (expense) income, net | Interest expense, net | Product sales | Other (expense) income, net | Interest expense, net | |||||||||||||||||||||||||||||||||
Total amounts recorded in income and (expense) line items presented in the Condensed Consolidated Statements of Income | $ | $ | ( | $ | ( | $ | $ | ( | $ | ( | ||||||||||||||||||||||||||||
The effects of cash flow and fair value hedging: | ||||||||||||||||||||||||||||||||||||||
Gains (losses) on cash flow hedging relationships reclassified out of AOCI: | ||||||||||||||||||||||||||||||||||||||
Foreign currency contracts | $ | $ | — | $ | — | $ | $ | — | $ | — | ||||||||||||||||||||||||||||
Cross-currency swap contracts | $ | — | $ | ( | $ | — | $ | — | $ | ( | $ | — | ||||||||||||||||||||||||||
Gains (losses) on fair value hedging relationships—interest rate swap agreements: | ||||||||||||||||||||||||||||||||||||||
Hedged items(1) | $ | — | $ | — | $ | $ | — | $ | — | $ | ||||||||||||||||||||||||||||
Derivatives designated as hedging instruments | $ | — | $ | — | $ | ( | $ | — | $ | — | $ | ( |
Three months ended June 30, 2021 | Six months ended June 30, 2021 | |||||||||||||||||||||||||||||||||||||
Product sales | Other (expense) income, net | Interest expense, net | Product sales | Other (expense) income, net | Interest expense, net | |||||||||||||||||||||||||||||||||
Total amounts recorded in income and (expense) line items presented in the Condensed Consolidated Statements of Income | $ | $ | $ | ( | $ | $ | $ | ( | ||||||||||||||||||||||||||||||
The effects of cash flow and fair value hedging: | ||||||||||||||||||||||||||||||||||||||
(Losses) gains on cash flow hedging relationships reclassified out of AOCI: | ||||||||||||||||||||||||||||||||||||||
Foreign currency contracts | $ | ( | $ | — | $ | — | $ | ( | $ | — | $ | — | ||||||||||||||||||||||||||
Cross-currency swap contracts | $ | — | $ | $ | — | $ | — | $ | ( | $ | — | |||||||||||||||||||||||||||
(Losses) gains on fair value hedging relationships—interest rate swap agreements: | ||||||||||||||||||||||||||||||||||||||
Hedged items(1) | $ | — | $ | — | $ | ( | $ | — | $ | — | $ | |||||||||||||||||||||||||||
Derivatives designated as hedging instruments | $ | — | $ | — | $ | $ | — | $ | — | $ | ( |
Derivative assets | Derivative liabilities | |||||||||||||||||||||||||
June 30, 2022 | Condensed Consolidated Balance Sheets locations | Fair values | Condensed Consolidated Balance Sheets locations | Fair values | ||||||||||||||||||||||
Derivatives designated as hedging instruments: | ||||||||||||||||||||||||||
Foreign currency contracts | Other current assets/ Other noncurrent assets | $ | Accrued liabilities/ Other noncurrent liabilities | $ | ||||||||||||||||||||||
Cross-currency swap contracts | Other current assets/ Other noncurrent assets | Accrued liabilities/ Other noncurrent liabilities | ||||||||||||||||||||||||
Interest rate swap contracts | Other current assets/ Other noncurrent assets | Accrued liabilities/ Other noncurrent liabilities | ||||||||||||||||||||||||
Total derivatives designated as hedging instruments | $ | $ | ||||||||||||||||||||||||
Derivative assets | Derivative liabilities | |||||||||||||||||||||||||
December 31, 2021 | Condensed Consolidated Balance Sheets locations | Fair values | Condensed Consolidated Balance Sheets locations | Fair values | ||||||||||||||||||||||
Derivatives designated as hedging instruments: | ||||||||||||||||||||||||||
Foreign currency contracts | Other current assets/ Other noncurrent assets | $ | Accrued liabilities/ Other noncurrent liabilities | $ | ||||||||||||||||||||||
Cross-currency swap contracts | Other current assets/ Other noncurrent assets | Accrued liabilities/ Other noncurrent liabilities | ||||||||||||||||||||||||
Interest rate swap contracts | Other current assets/ Other noncurrent assets | Accrued liabilities/ Other noncurrent liabilities | ||||||||||||||||||||||||
Total derivatives designated as hedging instruments | $ | $ | ||||||||||||||||||||||||
Item 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||||||||||||||
2022 | 2021 | Change | 2022 | 2021 | Change | ||||||||||||||||||||||||||||||
Product sales | |||||||||||||||||||||||||||||||||||
U.S. | $ | 4,446 | $ | 4,374 | 2 | % | $ | 8,483 | $ | 8,277 | 2 | % | |||||||||||||||||||||||
ROW | 1,835 | 1,740 | 5 | % | 3,529 | 3,429 | 3 | % | |||||||||||||||||||||||||||
Total product sales | 6,281 | 6,114 | 3 | % | 12,012 | 11,706 | 3 | % | |||||||||||||||||||||||||||
Other revenues | 313 | 412 | (24) | % | 820 | 721 | 14 | % | |||||||||||||||||||||||||||
Total revenues | $ | 6,594 | $ | 6,526 | 1 | % | $ | 12,832 | $ | 12,427 | 3 | % | |||||||||||||||||||||||
Operating expenses | $ | 4,418 | $ | 5,698 | (22) | % | $ | 8,156 | $ | 9,470 | (14) | % | |||||||||||||||||||||||
Operating income | $ | 2,176 | $ | 828 | * | $ | 4,676 | $ | 2,957 | 58 | % | ||||||||||||||||||||||||
Net income | $ | 1,317 | $ | 464 | * | $ | 2,793 | $ | 2,110 | 32 | % | ||||||||||||||||||||||||
Diluted EPS | $ | 2.45 | $ | 0.81 | * | $ | 5.13 | $ | 3.65 | 41 | % | ||||||||||||||||||||||||
Diluted shares | 537 | 576 | (7) | % | 544 | 578 | (6) | % |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||||||||||||||
2022 | 2021 | Change | 2022 | 2021 | Change | ||||||||||||||||||||||||||||||
ENBREL | $ | 1,051 | $ | 1,144 | (8) | % | $ | 1,913 | $ | 2,068 | (7) | % | |||||||||||||||||||||||
Prolia | 922 | 814 | 13 | % | 1,774 | 1,572 | 13 | % | |||||||||||||||||||||||||||
Otezla | 594 | 534 | 11 | % | 1,045 | 1,010 | 3 | % | |||||||||||||||||||||||||||
XGEVA | 533 | 488 | 9 | % | 1,035 | 956 | 8 | % | |||||||||||||||||||||||||||
Aranesp | 357 | 367 | (3) | % | 715 | 722 | (1) | % | |||||||||||||||||||||||||||
Neulasta | 310 | 486 | (36) | % | 658 | 968 | (32) | % | |||||||||||||||||||||||||||
Repatha | 325 | 286 | 14 | % | 654 | 572 | 14 | % | |||||||||||||||||||||||||||
KYPROLIS | 317 | 280 | 13 | % | 604 | 531 | 14 | % | |||||||||||||||||||||||||||
Nplate | 284 | 245 | 16 | % | 550 | 472 | 17 | % | |||||||||||||||||||||||||||
Other products | 1,588 | 1,470 | 8 | % | 3,064 | 2,835 | 8 | % | |||||||||||||||||||||||||||
Total product sales | $ | 6,281 | $ | 6,114 | 3 | % | $ | 12,012 | $ | 11,706 | 3 | % |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||||||||||||||
2022 | 2021 | Change | 2022 | 2021 | Change | ||||||||||||||||||||||||||||||
ENBREL — U.S. | $ | 1,036 | $ | 1,113 | (7) | % | $ | 1,879 | $ | 2,007 | (6) | % | |||||||||||||||||||||||
ENBREL — Canada | 15 | 31 | (52) | % | 34 | 61 | (44) | % | |||||||||||||||||||||||||||
Total ENBREL | $ | 1,051 | $ | 1,144 | (8) | % | $ | 1,913 | $ | 2,068 | (7) | % |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||||||||||||||
2022 | 2021 | Change | 2022 | 2021 | Change | ||||||||||||||||||||||||||||||
Prolia — U.S. | $ | 611 | $ | 538 | 14 | % | $ | 1,193 | $ | 1,039 | 15 | % | |||||||||||||||||||||||
Prolia — ROW | 311 | 276 | 13 | % | 581 | 533 | 9 | % | |||||||||||||||||||||||||||
Total Prolia | $ | 922 | $ | 814 | 13 | % | $ | 1,774 | $ | 1,572 | 13 | % |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||||||||||||||
2022 | 2021 | Change | 2022 | 2021 | Change | ||||||||||||||||||||||||||||||
Otezla — U.S. | $ | 487 | $ | 423 | 15 | % | $ | 837 | $ | 789 | 6 | % | |||||||||||||||||||||||
Otezla — ROW | 107 | 111 | (4) | % | 208 | 221 | (6) | % | |||||||||||||||||||||||||||
Total Otezla | $ | 594 | $ | 534 | 11 | % | $ | 1,045 | $ | 1,010 | 3 | % |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||||||||||||||
2022 | 2021 | Change | 2022 | 2021 | Change | ||||||||||||||||||||||||||||||
XGEVA — U.S. | $ | 391 | $ | 355 | 10 | % | $ | 759 | $ | 689 | 10 | % | |||||||||||||||||||||||
XGEVA — ROW | 142 | 133 | 7 | % | 276 | 267 | 3 | % | |||||||||||||||||||||||||||
Total XGEVA | $ | 533 | $ | 488 | 9 | % | $ | 1,035 | $ | 956 | 8 | % |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||||||||||||||
2022 | 2021 | Change | 2022 | 2021 | Change | ||||||||||||||||||||||||||||||
Aranesp — U.S. | $ | 132 | $ | 135 | (2) | % | $ | 269 | $ | 260 | 3 | % | |||||||||||||||||||||||
Aranesp — ROW | 225 | 232 | (3) | % | 446 | 462 | (3) | % | |||||||||||||||||||||||||||
Total Aranesp | $ | 357 | $ | 367 | (3) | % | $ | 715 | $ | 722 | (1) | % |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||||||||||||||
2022 | 2021 | Change | 2022 | 2021 | Change | ||||||||||||||||||||||||||||||
Neulasta — U.S. | $ | 263 | $ | 434 | (39) | % | $ | 567 | $ | 855 | (34) | % | |||||||||||||||||||||||
Neulasta — ROW | 47 | 52 | (10) | % | 91 | 113 | (19) | % | |||||||||||||||||||||||||||
Total Neulasta | $ | 310 | $ | 486 | (36) | % | $ | 658 | $ | 968 | (32) | % |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||||||||||||||
2022 | 2021 | Change | 2022 | 2021 | Change | ||||||||||||||||||||||||||||||
Repatha — U.S. | $ | 154 | $ | 143 | 8 | % | $ | 319 | $ | 282 | 13 | % | |||||||||||||||||||||||
Repatha — ROW | 171 | 143 | 20 | % | 335 | 290 | 16 | % | |||||||||||||||||||||||||||
Total Repatha | $ | 325 | $ | 286 | 14 | % | $ | 654 | $ | 572 | 14 | % |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||||||||||||||
2022 | 2021 | Change | 2022 | 2021 | Change | ||||||||||||||||||||||||||||||
KYPROLIS — U.S. | $ | 213 | $ | 190 | 12 | % | $ | 409 | $ | 349 | 17 | % | |||||||||||||||||||||||
KYPROLIS — ROW | 104 | 90 | 16 | % | 195 | 182 | 7 | % | |||||||||||||||||||||||||||
Total KYPROLIS | $ | 317 | $ | 280 | 13 | % | $ | 604 | $ | 531 | 14 | % |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||||||||||||||
2022 | 2021 | Change | 2022 | 2021 | Change | ||||||||||||||||||||||||||||||
Nplate — U.S. | $ | 156 | $ | 136 | 15 | % | $ | 312 | $ | 248 | 26 | % | |||||||||||||||||||||||
Nplate — ROW | 128 | 109 | 17 | % | 238 | 224 | 6 | % | |||||||||||||||||||||||||||
Total Nplate | $ | 284 | $ | 245 | 16 | % | $ | 550 | $ | 472 | 17 | % |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||||||||||||||
2022 | 2021 | Change | 2022 | 2021 | Change | ||||||||||||||||||||||||||||||
MVASI — U.S. | $ | 161 | $ | 206 | (22) | % | $ | 329 | $ | 430 | (23) | % | |||||||||||||||||||||||
MVASI — ROW | 82 | 88 | (7) | % | 158 | 158 | — | % | |||||||||||||||||||||||||||
Vectibix — U.S. | 96 | 92 | 4 | % | 181 | 171 | 6 | % | |||||||||||||||||||||||||||
Vectibix— ROW | 111 | 147 | (24) | % | 227 | 259 | (12) | % | |||||||||||||||||||||||||||
EVENITY — U.S. | 130 | 79 | 65 | % | 240 | 136 | 76 | % | |||||||||||||||||||||||||||
EVENITY— ROW | 61 | 52 | 17 | % | 121 | 102 | 19 | % | |||||||||||||||||||||||||||
BLINCYTO — U.S. | 77 | 62 | 24 | % | 156 | 127 | 23 | % | |||||||||||||||||||||||||||
BLINCYTO — ROW | 62 | 46 | 35 | % | 121 | 88 | 38 | % | |||||||||||||||||||||||||||
EPOGEN — U.S. | 136 | 130 | 5 | % | 256 | 255 | — | % | |||||||||||||||||||||||||||
AMGEVITA — ROW | 116 | 107 | 8 | % | 224 | 213 | 5 | % | |||||||||||||||||||||||||||
Aimovig — U.S. | 88 | 82 | 7 | % | 186 | 148 | 26 | % | |||||||||||||||||||||||||||
Aimovig — ROW | 4 | — | NM | 7 | — | NM | |||||||||||||||||||||||||||||
Parsabiv — U.S. | 71 | 37 | 92 | % | 128 | 83 | 54 | % | |||||||||||||||||||||||||||
Parsabiv — ROW | 32 | 34 | (6) | % | 61 | 67 | (9) | % | |||||||||||||||||||||||||||
KANJINTI — U.S. | 69 | 132 | (48) | % | 149 | 262 | (43) | % | |||||||||||||||||||||||||||
KANJINTI — ROW | 16 | 24 | (33) | % | 32 | 55 | (42) | % | |||||||||||||||||||||||||||
LUMAKRAS — U.S. | 51 | 9 | * | 99 | 9 | * | |||||||||||||||||||||||||||||
LUMYKRAS — ROW | 26 | — | NM | 40 | — | NM | |||||||||||||||||||||||||||||
NEUPOGEN — U.S. | 21 | 36 | (42) | % | 44 | 54 | (19) | % | |||||||||||||||||||||||||||
NEUPOGEN — ROW | 16 | 15 | 7 | % | 31 | 31 | — | % | |||||||||||||||||||||||||||
Sensipar — U.S. | 5 | 4 | 25 | % | 9 | 4 | * | ||||||||||||||||||||||||||||
Sensipar/Mimpara — ROW | 15 | 20 | (25) | % | 31 | 43 | (28) | % | |||||||||||||||||||||||||||
Other — U.S.(1) | 98 | 38 | * | 162 | 80 | * | |||||||||||||||||||||||||||||
Other — ROW(1) | 44 | 30 | 47 | % | 72 | 60 | 20 | % | |||||||||||||||||||||||||||
Total other products | $ | 1,588 | $ | 1,470 | 8 | % | $ | 3,064 | $ | 2,835 | 8 | % | |||||||||||||||||||||||
Total U.S. — other products | $ | 1,003 | $ | 907 | 11 | % | $ | 1,939 | $ | 1,759 | 10 | % | |||||||||||||||||||||||
Total ROW — other products | 585 | 563 | 4 | % | 1,125 | 1,076 | 5 | % | |||||||||||||||||||||||||||
Total other products | $ | 1,588 | $ | 1,470 | 8 | % | $ | 3,064 | $ | 2,835 | 8 | % |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||||||||||||||
2022 | 2021 | Change | 2022 | 2021 | Change | ||||||||||||||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||||||||||||||
Cost of sales | $ | 1,510 | $ | 1,637 | (8) | % | $ | 3,071 | $ | 3,127 | (2) | % | |||||||||||||||||||||||
% of product sales | 24.0 | % | 26.8 | % | 25.6 | % | 26.7 | % | |||||||||||||||||||||||||||
% of total revenues | 22.9 | % | 25.1 | % | 23.9 | % | 25.2 | % | |||||||||||||||||||||||||||
Research and development | $ | 1,039 | $ | 1,082 | (4) | % | $ | 1,998 | $ | 2,049 | (2) | % | |||||||||||||||||||||||
% of product sales | 16.5 | % | 17.7 | % | 16.6 | % | 17.5 | % | |||||||||||||||||||||||||||
% of total revenues | 15.8 | % | 16.6 | % | 15.6 | % | 16.5 | % | |||||||||||||||||||||||||||
Acquired in-process research and development | $ | — | $ | 1,505 | NM | $ | — | $ | 1,505 | NM | |||||||||||||||||||||||||
% of product sales | — | % | 24.6 | % | — | % | 12.9 | % | |||||||||||||||||||||||||||
% of total revenues | — | % | 23.1 | % | — | % | 12.1 | % | |||||||||||||||||||||||||||
Selling, general and administrative | $ | 1,327 | $ | 1,384 | (4) | % | $ | 2,555 | $ | 2,638 | (3) | % | |||||||||||||||||||||||
% of product sales | 21.1 | % | 22.6 | % | 21.3 | % | 22.5 | % | |||||||||||||||||||||||||||
% of total revenues | 20.1 | % | 21.2 | % | 19.9 | % | 21.2 | % | |||||||||||||||||||||||||||
Other | $ | 542 | $ | 90 | * | $ | 532 | $ | 151 | * | |||||||||||||||||||||||||
Total operating expenses | $ | 4,418 | $ | 5,698 | (22) | % | $ | 8,156 | $ | 9,470 | (14) | % |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Interest expense, net | $ | (328) | $ | (281) | $ | (623) | $ | (566) | |||||||||||||||
Other (expense) income, net | $ | (317) | $ | 11 | $ | (847) | $ | 24 | |||||||||||||||
Provision for income taxes | $ | 214 | $ | 94 | $ | 413 | $ | 305 | |||||||||||||||
Effective tax rate | 14.0 | % | 16.8 | % | 12.9 | % | 12.6 | % |
June 30, 2022 | December 31, 2021 | ||||||||||
Cash, cash equivalents and marketable securities | $ | 7,183 | $ | 8,037 | |||||||
Total assets | $ | 59,294 | $ | 61,165 | |||||||
Current portion of long-term debt | $ | 817 | $ | 87 | |||||||
Long-term debt | $ | 35,705 | $ | 33,222 | |||||||
Stockholders’ equity | $ | 2,419 | $ | 6,700 |
Six months ended June 30, | |||||||||||
2022 | 2021 | ||||||||||
Net cash provided by operating activities | $ | 4,094 | $ | 4,035 | |||||||
Net cash (used in) provided by investing activities | $ | (2,304) | $ | 890 | |||||||
Net cash used in financing activities | $ | (4,576) | $ | (4,561) |
Item 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
Item 4. | CONTROLS AND PROCEDURES |
Item 1. | LEGAL PROCEEDINGS |
Item 1A. | RISK FACTORS |
Item 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS |
Period | Total number of shares purchased (1) | Average price paid per share | Total number of shares purchased as part of publicly announced program | Maximum dollar value that may yet be purchased under the program | ||||||||||||||||||||||
April 1 - 30 | — | — | — | 4,579,263,848 | ||||||||||||||||||||||
May 1 - 31 | — | — | — | 4,579,263,848 | ||||||||||||||||||||||
June 1 - 30 | — | — | — | 4,579,263,848 | ||||||||||||||||||||||
Total | — | — |
Item 6. | EXHIBITS |
Exhibit No. | Description | |||||||
2.1 | Asset Purchase Agreement, dated August 25, 2019, by and between Amgen Inc. and Celgene Corporation. (Filed as an exhibit to Form 8-K on August 26, 2019 and incorporated herein by reference.) | |||||||
2.2 | Amendment No. 1 to the Asset Purchase Agreement, dated October 17, 2019, by and between Amgen Inc. and Celgene Corporation. (Filed as an exhibit to Form 8-K on October 17, 2019 and incorporated herein by reference.) | |||||||
2.3 | Amendment No. 2 to the Asset Purchase Agreement, dated October 17, 2019, by and between Amgen Inc. and Celgene Corporation. (Filed as an exhibit to Form 10-K for the year ended December 31, 2019 on February 12, 2020 and incorporated herein by reference.) | |||||||
2.4 | Letter Agreement, dated November 21, 2019, by and between Amgen Inc. and the parties named therein re: Treatment of Certain Product Inventory in connection with Amgen’s acquisition of Otezla. (Filed as an exhibit to Form 10-K for the year ended December 31, 2019 on February 12, 2020 and incorporated herein by reference.) | |||||||
2.5 | Irrevocable Guarantee, dated August 25, 2019, by and between Amgen Inc. and Bristol-Myers Squibb Company. (Filed as an exhibit to Form 8-K on August 26, 2019 and incorporated herein by reference.) | |||||||
2.6 | Agreement and Plan of Merger, dated July 27, 2021, by and among Amgen Inc., Teneobio, Inc., Tuxedo Merger Sub, Inc., and Fortis Advisors LLC. (portions of the exhibit have been omitted because they are both (i) not material and (ii) is the type of information that the Company treats as private or confidential)(Filed as an exhibit to Form 10-Q for the quarter ended September 30, 2021 on November 3, 2021 and incorporated herein by reference.) | |||||||
3.1 | Restated Certificate of Incorporation of Amgen Inc. (As Restated March 6, 2013.) (Filed as an exhibit to Form 10-Q for the quarter ended March 31, 2013 on May 3, 2013 and incorporated herein by reference.) | |||||||
3.2 | Amended and Restated Bylaws of Amgen Inc. (As Amended and Restated February 15, 2016.) (Filed as an exhibit to Form 8-K on February 17, 2016 and incorporated herein by reference.) | |||||||
4.1 | Form of stock certificate for the common stock, par value $.0001 of the Company. (Filed as an exhibit to Form 10-Q for the quarter ended March 31, 1997 on May 14, 1997 and incorporated herein by reference.) | |||||||
4.2 | Form of Indenture, dated January 1, 1992. (Filed as an exhibit to Form S-3 Registration Statement filed on December 19, 1991 and incorporated herein by reference.) | |||||||
4.3 | Agreement of Resignation, Appointment and Acceptance dated February 15, 2008. (Filed as an exhibit to Form 10-K for the year ended December 31, 2007 on February 28, 2008 and incorporated herein by reference.) | |||||||
4.4 | First Supplemental Indenture, dated February 26, 1997. (Filed as an exhibit to Form 8-K on March 14, 1997 and incorporated herein by reference.) | |||||||
4.5 | 8-1/8% Debentures due April 1, 2097. (Filed as an exhibit to Form 8-K on April 8, 1997 and incorporated herein by reference.) | |||||||
4.6 | Officer’s Certificate of Amgen Inc., dated April 8, 1997, establishing a series of securities entitled “8 1/8% Debentures due April 1, 2097.” (Filed as an exhibit to Form 8-K on April 8, 1997 and incorporated herein by reference.) | |||||||
4.7 | Indenture, dated August 4, 2003. (Filed as an exhibit to Form S-3 Registration Statement on August 4, 2003 and incorporated herein by reference.) | |||||||
4.8 | Corporate Commercial Paper - Master Note between and among Amgen Inc., as Issuer, Cede & Co., as Nominee of The Depository Trust Company, and Citibank, N.A., as Paying Agent. (Filed as an exhibit to Form 10-Q for the quarter ended March 31, 1998 on May 13, 1998 and incorporated herein by reference.) | |||||||
4.9 | Officers’ Certificate of Amgen Inc., dated May 30, 2007, including form of the Company’s 6.375% Senior Notes due 2037. (Filed as an exhibit to Form 8-K on May 30, 2007 and incorporated herein by reference.) | |||||||
4.10 | Officers’ Certificate of Amgen Inc., dated May 23, 2008, including form of the Company’s 6.90% Senior Notes due 2038. (Filed as exhibit to Form 8-K on May 23, 2008 and incorporated herein by reference.) | |||||||
4.11 | Officers’ Certificate of Amgen Inc., dated January 16, 2009, including form of the Company’s 6.40% Senior Notes due 2039. (Filed as exhibit to Form 8-K on January 16, 2009 and incorporated herein by reference.) | |||||||
Exhibit No. | Description | |||||||
10.30 | Amendment to Collaboration Agreement, dated February 1, 1999, by and between Bayer Corporation and Onyx Pharmaceuticals, Inc. (Filed as an exhibit to Form 10-Q for the quarter ended March 31, 2006 by Onyx Pharmaceuticals, Inc. on May 10, 2006 and incorporated herein by reference.) | |||||||
10.31 | Settlement Agreement and Release, dated October 11, 2011, by and between Bayer Corporation, Bayer AG, Bayer HealthCare LLC and Bayer Pharma AG and Onyx Pharmaceuticals, Inc. (Filed as an exhibit to Form 10-K for the year ended December 31, 2011 by Onyx Pharmaceuticals, Inc. on February 27, 2012 and incorporated herein by reference.) | |||||||
10.32 | Fourth Amendment to Collaboration Agreement, dated October 11, 2011, by and between Bayer Corporation and Onyx Pharmaceuticals, Inc. (Filed as an exhibit to Form 10-K for the year ended December 31, 2011 by Onyx Pharmaceuticals, Inc. on February 27, 2012 and incorporated herein by reference.) | |||||||
10.33 | Side Letter Regarding Collaboration Agreement, dated May 29, 2015, by and between Bayer HealthCare LLC and Onyx Pharmaceuticals, Inc. (Filed as an exhibit to Form 10-Q for the quarter ended June 30, 2015 on August 5, 2015 and incorporated herein by reference.) | |||||||
10.34 | Side Letter Regarding Collaboration Agreement and Stivarga Agreement, dated February 13, 2020, by and between Onyx Pharmaceuticals, Inc. and Bayer HealthCare LLC. (Filed as an exhibit to Form 10-Q for the quarter ended March 31, 2020 on May 1, 2020 and incorporated herein by reference.) | |||||||
10.35 | Sourcing and Supply Agreement, dated January 6, 2017, by and between Amgen USA Inc., a wholly owned subsidiary of Amgen Inc., and DaVita Inc. (portions of the exhibit have been omitted pursuant to a request for confidential treatment). (Filed as an exhibit to Form 10-Q for the quarter ended March 31, 2017 on April 27, 2017 and incorporated herein by reference.) | |||||||
10.36 | Exclusive License and Collaboration Agreement, dated August 28, 2015, by and between Amgen Inc. and Novartis Pharma AG (portions of the exhibit have been omitted pursuant to a request for confidential treatment). (Filed as an exhibit to Form 10-Q for the quarter ended June 30, 2017 on July 26, 2017 and incorporated herein by reference.) | |||||||
10.37 | Amendment No. 1 to the Exclusive License and Collaboration Agreement, dated April 21, 2017, by and between Amgen Inc. and Novartis Pharma AG (portions of the exhibit have been omitted pursuant to a request for confidential treatment). (Filed as an exhibit to Form 10-Q for the quarter ended June 30, 2017 on July 26, 2017 and incorporated herein by reference.) | |||||||
10.38 | Amendment No. 2 to the Exclusive License and Collaboration Agreement, dated April 21, 2017, by and between Amgen Inc. and Novartis Pharma AG (portions of the exhibit have been omitted pursuant to a request for confidential treatment). (Filed as an exhibit to Form 10-Q for the quarter ended June 30, 2017 on July 26, 2017 and incorporated herein by reference.) | |||||||
10.39 | Amendment No. 3 to the Exclusive License and Collaboration Agreement, dated January 31, 2022, by and between Amgen Inc. and Novartis Pharma AG (portions of the exhibit have been omitted because they are both (i) not material and (ii) is the type of information that the Company treats as private or confidential). (Filed as an exhibit to the Company’s Current Report on Form 8-K on January 31, 2022 and incorporated herein by reference.) | |||||||
10.40 | Collaboration Agreement, dated October 31, 2019, by and between Amgen Inc. and BeiGene Switzerland GmbH, a wholly-owned subsidiary of BeiGene, Ltd. (portions of the exhibit have been omitted because they are both (i) not material and (ii) would be competitively harmful if publicly disclosed). (Filed as an exhibit to Form 10-K for the year ended December 31, 2019 on February 12, 2020 and incorporated herein by reference.) | |||||||
10.41* | First Amendment to Collaboration Agreement, dated April 20, 2022, by and between Amgen Inc. and BeiGene Switzerland GmbH, and BeiGene, Ltd. (portions of the exhibit have been omitted because they are both (i) not material and (ii) is the type of information that the Company treats as private or confidential.) | |||||||
10.42 | Guarantee, dated as of October 31, 2019, made by and among BeiGene, Ltd. and Amgen Inc. (Filed as an exhibit to Form 10-K for the year ended December 31, 2019 on February 12, 2020 and incorporated herein by reference.) | |||||||
10.43 | Share Purchase Agreement, dated October 31, 2019, by and between Amgen Inc. and BeiGene, Ltd. (portions of the exhibit have been omitted because they are both (i) not material and (ii) would be competitively harmful if publicly disclosed). (Filed as an exhibit to Schedule 13D on January 8, 2020 and incorporated herein by reference.) | |||||||
10.44 | Amendment No. 1 to Share Purchase Agreement, dated December 6, 2019, by and among BeiGene, Ltd. and Amgen Inc. (Filed as an exhibit to Schedule 13D on January 8, 2020 and incorporated herein by reference.) |
Exhibit No. | Description | |||||||
10.45 | Restated Amendment No. 2 to Share Purchase Agreement, dated September 24, 2020, by and among BeiGene, Ltd. and Amgen Inc. (Filed as an exhibit to Form 10-Q for the quarter ended September 30, 2020 on October 29, 2020 and incorporated herein by reference.) | |||||||
10.46* | Collaboration Agreement dated March 30, 2012 by and between Amgen Inc. and AstraZeneca Collaboration Ventures, LLC, a wholly owned subsidiary of AstraZeneca Pharmaceuticals LP (portions of the exhibit have been omitted because they are both (i) not material and (ii) is the type of information that the Company treats as private or confidential.) | |||||||
10.47* | Amendment No. 1 to the Collaboration Agreement, dated October 1, 2014, by and among Amgen Inc., AstraZeneca Collaboration Ventures, LLC and AstraZeneca Pharmaceuticals LP (portions of the exhibit have been omitted because they are both (i) not material and (ii) is the type of information that the Company treats as private or confidential.) | |||||||
10.48 | Amendment Nos. 2 through 6 to the March 30, 2012 Collaboration Agreement between Amgen Inc. and AstraZeneca Collaboration Ventures, LLC, dated May 2 and 27 and October 2, 2016, January 31, 2018, and May 15, 2020, respectively (portions of the exhibit have been omitted because they are both (i) not material and (ii) would be competitively harmful if publicly disclosed.) (Filed as an exhibit to Form 10-Q for the quarter ended June 30, 2020 on July 29, 2020 and incorporated herein by reference.) | |||||||
10.49 | Amendment No. 7 to the Collaboration Agreement, dated December 17, 2020, by and between Amgen Inc. and AstraZeneca Collaboration Ventures, LLC (portions of the exhibit have been omitted because they are both (i) not material and (ii) would be competitively harmful if publicly disclosed.) (Filed as an exhibit to Form 10-K for the year ended December 31, 2020 on February 9, 2021 and incorporated herein by reference.) | |||||||
10.50 | Amendment No. 8 to the Collaboration Agreement, dated November 19, 2021, by and between Amgen Inc. and AstraZeneca Collaboration Ventures, LLC (portions of the exhibit have been omitted because they are both (i) not material and (ii) is the type of information that the Company treats as private or confidential.)(Filed as an exhibit to Form 10-K for the year ended December 31, 2021 on February 16, 2022 and incorporated herein by reference.) | |||||||
10.51 | License and Collaboration Agreement, dated June 1, 2021, by and between Amgen Inc. and Kyowa Kirin Co., Ltd. (portions of the exhibit have been omitted because they are both (i) not material and (ii) would be competitively harmful if publicly disclosed). (Filed as an exhibit to Form 10-Q for the quarter ended June 30, 2021 on August 4, 2021 and incorporated herein by reference.) | |||||||
10.52 | Form of ASR Agreement. (Filed as an exhibit to Form 8-K on February 24, 2022 and incorporated herein by reference.) | |||||||
31* | ||||||||
32** | ||||||||
101.INS | Inline XBRL Instance Document - The instance document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL document. | |||||||
101.SCH* | Inline XBRL Taxonomy Extension Schema Document. | |||||||
101.CAL* | Inline XBRL Taxonomy Extension Calculation Linkbase Document. | |||||||
101.DEF* | Inline XBRL Taxonomy Extension Definition Linkbase Document. | |||||||
101.LAB* | Inline XBRL Taxonomy Extension Label Linkbase Document. | |||||||
101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase Document. | |||||||
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |
Amgen Inc. | ||||||||||||||
(Registrant) | ||||||||||||||
Date: | August 4, 2022 | By: | /S/ PETER H. GRIFFITH | |||||||||||
Peter H. Griffith | ||||||||||||||
Executive Vice President and Chief Financial Officer | ||||||||||||||
(Principal Financial Officer) |
[*] | [*] |
/s/ Rachna Khosla |
/s/ Beatriz Martinez-Lahuerta |
/s/ Angus Grant |
Calendar Year | Quarterly Cap | ||||
2012 | 65% of Total Costs for the applicable calendar quarter - [*] | ||||
2013 | 65% of Total Costs for the applicable calendar quarter + [*] | ||||
2014 | 65% of Total Costs for the applicable calendar quarter | ||||
2015 and each year thereafter | 50% of Total Costs for the applicable calendar quarter |
Inventorship Margin | |||||
AMG827 | Other Products | ||||
[*] | [*] |
Calendar Year Net Revenues for Terminated Product | Royalty Rate | ||||
Less than or equal to [*] | [*] | ||||
Greater than [*] and less than or equal to [*] | [*] | ||||
Greater than [*] | [*] |
Column 1 | Column 2 | Column 3 | ||||||
European Countries | Central and South American Countries | African and Middle East Countries | ||||||
Albania | Antigua and Barbuda | Algeria | ||||||
Andorra | Argentina | Angola | ||||||
Armenia | Bahamas | Bahrain | ||||||
Austria | Barbados | Angola | ||||||
Azerbaijan | Belize | Benin | ||||||
Belarus | Bolivia | Botswana | ||||||
Belgium | Brazil | Burkina Faso | ||||||
Bosnia-Herzg. | Chile | Cameroon | ||||||
Bulgaria | Colombia | Central African Republic | ||||||
Croatia | Costa Rica | Congo (Democratic Republic of) | ||||||
Czech Republic | Cuba | Congo (Republic of the) | ||||||
Denmark | Dominica | Cote D’Ivoire/Ivory Coast | ||||||
Estonia | Dominican Republic | Cyprus | ||||||
Finland | Ecuador | Djibouti | ||||||
France | El Salvador | Egypt | ||||||
Georgia | French Guiana | Eritrea | ||||||
Germany | Grenada | Ethiopia | ||||||
Greece | Guatemala | Gabon | ||||||
Hungary | Guyana | Gambia | ||||||
Iceland | Honduras | Ghana | ||||||
Ireland | Jamaica | Gibraltar | ||||||
Italy | Nicaragua | Greenland | ||||||
Latvia | Panama | Iran | ||||||
Lithuania | Paraguay | Iraq | ||||||
Liechtenstein | Peru | Israel | ||||||
Luxembourg | Saint Kitts and Nevis | Jordan | ||||||
Macedonia | Saint Lucia | Kazakhstan | ||||||
Malta | Saint Vincent and the Grenadines | Kenya | ||||||
Moldova | Suriname | Kuwait | ||||||
Monaco | Trinidad and Tobago | Kyrgyzstan | ||||||
Netherlands | Uruguay | Lesotho | ||||||
Norway | Venezuela | Lebanon | ||||||
Poland | Liberia | |||||||
Portugal | Libya | |||||||
Romania | Madagascar | |||||||
Russia | Malawi | |||||||
San Marino | Mauritania | |||||||
Serbia and Montenegro | Mauritius |
Column 1 | Column 2 | Column 3 | ||||||
Slovakia | Morocco | |||||||
Slovenia | Mozambique | |||||||
Sweden | Namibia | |||||||
Switzerland | Niger | |||||||
Spain | Nigeria | |||||||
Oman | ||||||||
Qatar | ||||||||
Rwanda | ||||||||
Saudi Arabia | ||||||||
Senegal | ||||||||
Seychelles | ||||||||
Sierra Leone | ||||||||
Somalia | ||||||||
South Africa | ||||||||
Sudan | ||||||||
Swaziland | ||||||||
Syria | ||||||||
Tajikistan | ||||||||
Tanzania | ||||||||
Tunisia | ||||||||
Turkey | ||||||||
Turkmenistan | ||||||||
Uganda | ||||||||
United Arab Emirates | ||||||||
Uzbekistan | ||||||||
Yemen | ||||||||
Zambia | ||||||||
Zimbabwe |
[*] | [*] [*] [*] [*] [*] | [*] [*] [*] [*] [*] | [*] [*] [*] [*] [*] | ||||||||
[*] | [*] [*] [*] [*] [*] [*] [*] [*] [*] [*] [*] [*] [*] [*] [*] | [*] [*] [*] [*] [*] [*] [*] [*] [*] [*] [*] [*] [*] [*] | [*] [*] [*] [*] [*] [*] [*] [*] [*] [*] [*] [*] [*] [*] | ||||||||
[*] | [*] [*] [*] | [*] [*] [*] [*] | [*] [*] [*] [*] | ||||||||
[*] | [*] [*] [*] [*] [*] | [*] [*] [*] [*] [*] | [*] [*] [*] [*] [*] | ||||||||
[*] | [*] |
Amgen | Partner | ||||
AMG827 | AMG139 | ||||
AMG557 | AMG157 | ||||
AMG181 |
Product | Product Target | Distracting Target* | ||||||
AMG 139 | [*] | [*] | ||||||
AMG 157 | [*] | [*] | ||||||
AMG 181 | [*] | [*] | ||||||
AMG 557 | [*] | [*] | ||||||
AMG 827 | [*] | [*] |
A | B | C = A + B | D | E | F = D + E | G = A - F | <<< Amount Billed or Reimbursed to Partner | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total Quarterly Spend* | Amgen’s Share of...** | Amount due | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Product | Amgen | Partner | Total | Amgen’s Spend | Partner’s Spend | Total Spend | (From)/To Amgen | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
AMG 139 | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
AMG 157 | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
AMG 181 | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
AMG 557 | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
AMG 827 | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - |
A | B | C = A + B | D = C x 35% | E = C - D | F | G | H = F + G | I = H x 70% | J = H - I | K = C + H | L = D + I | M = E + J | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total Costs Excluding AMG827 Ph2b Asthma Study | Costs for AMG827 Ph2b Asthma Study | Total Amgen Costs | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Gross Spend | Amgen Share | Partner Share | Gross Spend | Amgen Share | Partner Share | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Function | Product | OSE | FTE | Total | 35% | 65% | OSE | FTE | Total | 70% | 30% | Total | Amgen Share | Partner Share | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
R&D | AMG 139 | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
AMG 157 | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
AMG 181 | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
AMG 557 | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
AMG 827 | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sub-Total R&D | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Operations | AMG 139 | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
AMG 157 | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
AMG 181 | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
AMG 557 | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
AMG 827 | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sub-Total Ops | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial | AMG 139 | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
AMG 157 | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
AMG 181 | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
AMG 557 | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
AMG 827 | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sub-Total Comm’l | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | AMG 139 | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
AMG 157 | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
AMG 181 | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
AMG 557 | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
AMG 827 | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Grand Total | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - |
A | B | C = B+A | D = 35% x C | E = C-D | ||||||||||||||||
Amgen Share | Partner Share | |||||||||||||||||||
Function | Product | FTE | OSE | Total Costs | 35% | 65% | ||||||||||||||
R&D | AMG 139 | $ - | $ - | $ - | ||||||||||||||||
AMG 157 | $ - | $ - | $ - | |||||||||||||||||
AMG 181 | $ - | $ - | $ - | |||||||||||||||||
AMG 557 | $ - | $ - | $ - | |||||||||||||||||
AMG 827 | $ - | $ - | $ - | |||||||||||||||||
Total | $ - | $ - | $ - | $ - | $ - | |||||||||||||||
Operations | AMG 139 | $ - | $ - | $ - | ||||||||||||||||
AMG 157 | $ - | $ - | $ - | |||||||||||||||||
AMG 181 | $ - | $ - | $ - | |||||||||||||||||
AMG 557 | $ - | $ - | $ - | |||||||||||||||||
AMG 827 | $ - | $ - | $ - | |||||||||||||||||
Total | $ - | $ - | $ - | $ - | $ - | |||||||||||||||
Commercial | AMG 139 | $ - | $ - | $ - | ||||||||||||||||
AMG 157 | $ - | $ - | $ - | |||||||||||||||||
AMG 181 | $ - | $ - | $ - | |||||||||||||||||
AMG 557 | $ - | $ - | $ - | |||||||||||||||||
AMG 827 | $ - | $ - | $ - | |||||||||||||||||
Total | $ - | $ - | $ - | $ - | $ - | |||||||||||||||
Total | AMG 139 | $ - | $ - | $ - | $ - | $ - | ||||||||||||||
AMG 157 | $ - | $ - | $ - | $ - | $ - | |||||||||||||||
AMG 181 | $ - | $ - | $ - | $ - | $ - | |||||||||||||||
AMG 557 | $ - | $ - | $ - | $ - | $ - | |||||||||||||||
AMG 827 | $ - | $ - | $ - | $ - | $ - | |||||||||||||||
Total | $ - | $ - | $ - | $ - | $ - |
• | Brodalumab (AMG 827) is a human monoclonal antibody that binds to and blocks signaling via the IL-17 receptor. Brodalumab is being investigated for psoriasis (completed Phase 2 and planned Phase 3), psoriatic arthritis (Phase 2) and asthma (Phase 2). |
• | AMG 139 is a human monoclonal antibody. AMG 139 is being investigated in Phase 1b for Crohn’s disease. |
• | AMG 181 is a human monoclonal antibody. AMG 181 is being investigated in Phase 1a and Phase 1b for ulcerative colitis and Crohn’s disease. |
• | AMG 557 is a human monoclonal antibody that binds to B7-related protein 1 (B7RP-1). AMG 557 is being investigated in Phase 1b for autoimmune diseases such as systemic lupus erythematosus. |
• | AMG 157 is a human monoclonal antibody that blocks interaction of thymic stromal lymphopoietin (TSLP) with the TSLP receptor. AMG 157 is being investigated in Phase 1b for asthma. |
Media Enquiries | ||||||||||||||
Esra Erkal-Paler | +44 20 7604 8030 | |||||||||||||
Sarah Lindgreen | +44 20 7604 8033 | |||||||||||||
Investor Enquiries UK |
James Ward-Lilley | +44 20 7604 8122 mob: +44 7785 432613 | |||||||||||||
Karl Hård | +44 20 7604 8123 mob: +44 7789 654364 | |||||||||||||
Nicklas Westerholm | +44 20 7604 8124 mob: +44 7585 404950 | |||||||||||||
Investor Enquiries US | ||||||||||||||
Ed Seage | +1 302 886 4065 mob: +1 302 373 1361 | |||||||||||||
Jorgen Winroth | +1 212 579 0506 mob: +1 917 612 4043 |
Product | ||
AMG 139 | ||
AMG 157 | ||
AMG 181 | ||
AMG 557 | ||
AMG 827 |
Q1 2017 | Q2 2017 | Q3 2017 | Q4 2017 | |||||||||||
Net Revenues (excluding AMG827): | [*] | [*] | [*] | [*] | ||||||||||
Net Revenues (AMG827 only): | [*] | [*] | [*] | [*] | ||||||||||
Total | Amgen | Partner | |||||||||
Net Revenues | [*] | [*] | [*] | ||||||||
Inventorship Margin | [*] | [*] | [*] | ||||||||
Share of Net Revenues | [*] | [*] | [*] | ||||||||
Collaboration Costs | [*] | [*] | [*] | ||||||||
True-Up Payment | [*] | [*] | |||||||||
Total | Amgen | Partner | |||||||||
Net Revenues | [*] | [*] | [*] | ||||||||
Inventorship Margin | [*] | [*] | [*] | ||||||||
Share of Net Revenues | [*] | [*] | [*] | ||||||||
Collaboration Costs | [*] | [*] | [*] | ||||||||
True-Up Payment | [*] | [*] | |||||||||
Agreed and accepted for: | Agreed and accepted for: | |||||||||||||||||||
Partner | Amgen Inc. | |||||||||||||||||||
By: | By: | |||||||||||||||||||
Printed | Printed | |||||||||||||||||||
Name: | Michael Kinley | Name: | Astrid McLean | |||||||||||||||||
Title: | Sr. Director, Quality Assurance | Title: | Director, Quality Assurance | |||||||||||||||||
Date: | Date: |
1. | BACKGROUND INFORMATION | 3 | |||||||||
2. | SCOPE | 3 | |||||||||
3. | DEFINITIONS | 4 | |||||||||
4. | RESPONSIBILITIES | 6 | |||||||||
5. | COMMUNICATION | 6 | |||||||||
6. | BATCH DISPOSITION (PRODUCT RELEASE) | 7 | |||||||||
7. | LABEL APPROVAL | 8 | |||||||||
8. | QUALITY CONTROL | 8 | |||||||||
9. | REFERENCE SAMPLES | 9 | |||||||||
10. | RETENTION SAMPLES | 9 | |||||||||
11. | RECEIVING, SHIPPING, STORAGE AND DESTRUCTION | 9 | |||||||||
12. | CHANGE CONTROL | 10 | |||||||||
13. | INVESTIGATIONS OF NONCONFORMANCES, DISCREPANCIES (POST DISTRIBUTION NC’S) | 11 | |||||||||
14. | AUDITS AND INSPECTIONS | 11 | |||||||||
15. | DISPUTE RESOLUTION | 13 | |||||||||
16. | CUSTOMER COMPLAINTS | 13 | |||||||||
17. | STOCK RECOVERY | 13 | |||||||||
18. | RESPONSIBLE PERSONS: CONTACT INFORMATION | 14 | |||||||||
EXHIBIT A | 15 |
1. | BACKGROUND INFORMATION |
1.1 | Amgen Inc. (hereinafter referred to as “AMGEN”) and Partner (hereinafter referred to as “PARTNER”) (hereinafter referred to individually as “Party” or collectively as “Parties”) have entered into that certain Collaboration Agreement dated as of March 30, 2012 (the “Collaboration Agreement”), pursuant to which AMGEN supplies PARTNER with Drug Product and Placebo. |
2. | SCOPE |
2.1 | This Quality Agreement defines the quality obligations of the Parties and their respective affiliates or approved contractors, with respect to the manufacture, labeling, packaging, testing, release, shipment and storage of Product in accordance with the Collaboration Agreement. |
2.2 | The provisions of this Quality Agreement supplement the provisions of the Collaboration Agreement. The terms of the Collaboration Agreement shall remain in full force and effect. In the event of any conflict between the Collaboration Agreement and this Quality Agreement, the Collaboration Agreement shall govern over the conflict. |
2.3 | This Quality Agreement may be amended only by mutual written agreement of the Parties. |
2.4 | Exhibits to this Quality Agreement are intended to provide additional definition to the applicable topic and, as such, should be updated to reflect the current information and business process, as applicable. Amendment of the Exhibits does not require re-approval of the Quality Agreement unless the Quality Agreement itself is affected. Exhibits and all amendments of Exhibits shall be approved by mutually written agreement by the Parties. |
2.5 | All activities under this Quality Agreement shall be performed in compliance with standard industry practices, regulatory agency guidelines, AMGEN specifications, and all applicable federal, state, and local laws and regulations, including, without limitations, cGMPs. |
2.6 | This Quality Agreement shall expire at the termination, cancellation, or expiration, as the case may be, of AMGEN’s obligation to supply Drug Product and Placebo for PARTNER’s clinical use. |
2.7 | PARTNER’s use of Product shall be limited to use in clinical trials approved by the Joint Steering Committee (JSC) as defined in the Collaboration Agreement and where PARTNER has been allocated responsibility to conduct such clinical trials. |
3. | DEFINITIONS |
3.1 | All capitalized terms not otherwise defined in this Quality Agreement shall have the definition set forth in the Collaboration Agreement. |
3.2 | As used in this Quality Agreement, the following terms shall have the following meanings: |
CoA | Certificate of Analysis prepared by AMGEN for the Product representing the analytical results of the Product. | |||||||
CoC | Certificate of Compliance or Quality Assurance Disposition (QAD), prepared by AMGEN for the Product representing that the Product was manufactured according to cGMP requirements. | |||||||
Disposition Manager | AMGEN Quality Assurance staff member qualified to perform the comprehensive quality assessment and make the disposition decision. | |||||||
Disposition Package | Documentation set provided to PARTNER representing AMGEN batch disposition of the Product. | |||||||
Drug Product | AMG 139, AMG 157, AMG 181, AMG 557, AMG 827 Drug Product in finished form as manufactured by AMGEN under the terms of the Collaboration Agreement. | |||||||
Final Release | Release of Product by AMGEN or PARTNER in accordance with standard operating procedures (“SOPs”). | |||||||
cGMP | All applicable laws and regulations relating to current Good Manufacturing Practices, as promulgated by the United States Food and Drug Administration (FDA) and ‘Good Manufacturing Practices as defined in EC Volume IV of The Rules Governing Medical Products in the European Community’. | |||||||
Manufacturer’s Release | Release of Product by AMGEN, according to its SOPs. Manufacturer’s Release signifies that Product has been produced using approved processes, in compliance with applicable cGMP regulations, and meets the specifications established for the Product, as determined by review of all appropriate documentation. | |||||||
Material Change | A change which materially modifies the regulatory filing for the Product or is determined by AMGEN to have significant potential to materially affect the Safety, Quality, Identity, Potency, or Purity of the Product. |
Nonconformance | Deviations incurred during the manufacture, labeling, packaging, testing, storage or shipment of the Product, which AMGEN determined to have the potential to impact the Safety, Quality, Identity, Potency, or Purity of the Product, upon preliminary evaluation and required performing an investigation according to AMGEN SOPs. | |||||||
OOS Result | An examination, measurement or test result that does not conform with pre-established specification requirements established by the relevant Party. | |||||||
Placebo | A mock treatment or drug that has no effect on the illness, given in a clinical trial to the control group to help differentiate the specific versus non-specific effects of an experimental treatment. | |||||||
Product | The Drug Product and finished Placebo as manufactured by AMGEN for PARTNER under the terms of the Collaboration Agreement. | |||||||
Regulatory Agency | A public authority or government agency responsible for protecting and promoting public health through regulation or rulemaking (codifying and enforcing rules and regulations and imposing supervision or oversight for the benefit of the public at large). | |||||||
Reference Sample | Sample collected from the manufacture of Product for the purpose of being analyzed, should the need arise, to support significant investigations. | |||||||
Retention Samples | A fully packaged unit from a batch of finished Product stored for identification purposes. | |||||||
AMGEN Quality Specifications | AMGEN approved set of analytical methods, requirements, and limits as used to judge the identity, purity and potency of all source materials, raw materials, and finished filled, labeled and packaged Product which comprises the Product. | |||||||
Stock Recovery | The removal or correction of a non-marketed product used in a clinical trial for reasons related to product Safety, Quality, Identity, Potency, or Purity, that has not been marketed or that has not left the direct control of PARTNER. |
4. | RESPONSIBILITIES |
4.1 | Without limiting any other provision of this Quality Agreement, the Parties agree that this Quality Agreement is intended to carry out the following guiding principles: |
4.1.1 | The Parties’ quality obligations with respect to the manufacture, labeling, packaging, testing, release, shipment and storage of Product are as set forth in this Quality Agreement and the Collaboration Agreement. |
4.1.2 | The Parties shall comply with all Applicable Laws in the conduct of activities under this Quality Agreement. |
4.1.3 | The Parties acknowledge that AMGEN and PARTNER shall each have the right to perform responsibilities hereunder through their Affiliates and contractors. |
4.1.4 | The Parties shall collaborate to address any disagreements. |
5. | COMMUNICATION |
5.1 | AMGEN and PARTNER agree to provide verbal communication to one another, in a timely manner, as necessary or appropriate for a given issue. Both Parties also agree to follow-up and clarify promptly in writing those important verbal communications to ensure clarity of issues. All official communications and documentation between AMGEN and PARTNER will be conducted in English. |
5.1.1 | The forwarding by PARTNER of any written communication from any global Regulatory Agency concerning the Product outlined in this document shall be done within 3 business days in the original language in which it was received by PARTNER with supplementary comments in English. An English translated version will also be forwarded. |
5.1.2 | The forwarding of any oral communication from any global Regulatory Agency concerning the Product outlined in this document shall be done within 3 business days in the original language in which the notes concerning the correspondence were taken by PARTNER with supplementary comments in English. An English translated version will also be forwarded. |
5.2 | Routine verbal and written communications required herein shall be delivered to the individuals indicated in EXHIBIT A or their delegates. |
6. | BATCH DISPOSITION (PRODUCT RELEASE) |
6.1 | AMGEN Quality Responsibility |
6.1.1 | AMGEN shall be responsible for the Manufacturer’s Release of the Product to PARTNER. |
6.1.2 | AMGEN shall provide to PARTNER the Disposition Package for each batch of Product supplied to PARTNER, upon shipment. The documents to be included in the Disposition Package will be outlined in amendments which are specific to the Product. |
6.1.3 | The Disposition Package for the batch will include a list of Nonconformance(s) incurred during the manufacture, labeling, packaging, testing, or storage of the Product. The list of Nonconformance(s) will include a summary of only lot-specific Nonconformances determined by AMGEN to have significant potential to adversely impact the Safety, Quality, Identity, Potency, or Purity of the Product, according to AMGEN procedures or regulatory filing. Such list will be sent to PARTNER upon shipment of the Product by AMGEN to PARTNER. |
6.1.4 | AMGEN shall use commercially reasonable efforts to mitigate the risk of Transmissible Spongiform Encephalopathy (TSE) for raw materials and components used during perform of Services per current requirements of Regulatory Agencies and current compendial requirements. |
6.2 | PARTNER Quality Responsibility |
6.2.1 | PARTNER shall be responsible for the Final Release of the Product for clinical distribution after reviewing the Disposition Package provided by AMGEN and any shipping records and, if applicable, results of acceptance testing as conducted by a PARTNER qualified laboratory. |
6.2.2 | In the event PARTNER provides AMGEN with notice of Nonconformance of the Product within 60 days from the date of delivery of Product, AMGEN and PARTNER agree to collaborate to investigate the Nonconformance prior to the disposition of the lot by PARTNER according to each Party’s respective failure investigation policies and procedures in accordance with the Quality Agreement. |
6.2.3 | In the event PARTNER is responsible for a specific European clinical trial, a PARTNER QP or one authorized by PARTNER, will be responsible for certification of Product according to the requirements set out in the European cGMPs. |
7. | LABEL APPROVAL |
7.1 | Physical Label Creation and Approval |
7.1.1 | Physical labels for Product will be generated and approved according to established procedures of AMGEN, for any such activities performed by such Party. |
7.1.2 | Label Application |
7.1.2.1 | AMGEN is responsible for labeling and bulk packaging of the clinical supplies. |
7.1.2.2 | AMGEN shall apply physical labels to Product prior to supply to PARTNER. |
8. | QUALITY CONTROL |
8.1 | AMGEN Quality Control Laboratory Testing Responsibility |
8.1.1 | AMGEN will conduct testing of Product according to AMGEN Quality Specifications and its methods, policies and procedures. |
8.2 | PARTNER Importation and Testing Responsibility |
8.2.1 | PARTNER shall be responsible for preparing all documents required for import clearance and entry of shipment with reasonable cooperation from AMGEN. Product batches will be evaluated by PARTNER upon receipt for conformance to applicable import and transport requirements, such as temperature monitoring, damage and documentation requirements. |
8.2.2 | PARTNER is responsible for sampling upon receipt and conducting testing, as required. Such testing will be conducted by PARTNER (or if AMGEN expressly consent in writing, by appropriately qualified laboratories) by appropriately qualified personnel according to testing procedures mutually agreed by the Parties. |
8.2.3 | If AMGEN expressly consents to PARTNER using a contract laboratory for import testing, then PARTNER is responsible for shipping Product to its contract laboratory to perform import testing, if necessary. |
8.2.4 | In the case of OOS, an investigation will be performed per Section 13 (INVESTIGATION OF NONCONFORMANCES, DISCREPANCIES) of this Quality Agreement and PARTNER should notify and obtain consent from AMGEN prior to conducting testing using any other analytical method during the investigation. |
8.3 | Stability Tesing |
8.3.1 | AMGEN will conduct routine stability testing of the Product according to AMGEN’s clinical stability program requirements. |
8.3.2 | AMGEN will communicate the expiration of each lot in the Disposition Package. |
8.3.3 | AMGEN shall notify PARTNER within two (2) business days of any confirmed stability failure of the Product and provide periodic updates on the OOS investigation. |
8.3.4 | PARTNER will not conduct any stability testing on the Product unless authorized to do so by AMGEN. |
8.3.5 | AMGEN will provide PARTNER the current Stability Summary Report, including trending, upon request. |
9. | REFERENCE SAMPLES |
9.1 | AMGEN shall retain Reference Samples for each manufactured lot of Product released to PARTNER for a minimum of five (5) years after the expiration period. This period may be shortened if the period of stability of the material, as indicated in its specification, is shorter. |
10. | RETENTION SAMPLES |
10.1 | PARTNER shall retain Retention Samples for each packaged lot of Product released for clinical distribution per established PARTNER procedure. |
11. | RECEIVING, SHIPPING, STORAGE and DESTRUCTION |
11.1 | Unless otherwise agreed by the Parties, AMGEN shall ship Product EXW (Incoterms 2010) AMGEN’s facility. |
11.2 | PARTNER is responsible for reviewing temperature recording data upon receipt of Product shipment. |
11.3 | PARTNER is responsible for adequate storage of the Product upon receipt according to the storage requirements specified in the product specification. |
11.4 | Shipping excursions will be investigated per Section 13 (INVESTIGATIONS OF NONCONFORMANCES, DISCREPANCIES) of this Quality Agreement. |
11.5 | PARTNER is responsible for reviewing temperature recording data of the Product according to the storage requirements if a temperature excursion is identified at a clinical investigation site. |
11.5.1 | PARTNER notifies AMGEN of any shipping Nonconformances, such as temperature excursions, upon receiving shipping records. |
11.5.2 | AMGEN shall provide PARTNER adequate training and relevant stability data to support temperature excursions obtained at clinical investigation sites, provided that, AMGEN shall not have any obligation to conduct new tests to support assessment of temperature excursions. If a temperature excursion exceeds any of the limits supported by the stability data, AMGEN shall provide reasonable support to properly assess the product impact, if requested by PARTNER. |
11.6 | PARTNER shall be responsible for the destruction of any unused and partially used Product in accordance with Applicable Laws and regulations. |
12. | CHANGE CONTROL |
12.1 | AMGEN shall notify PARTNER of AMGEN’s intention to implement such Material Change and the details of such Material Change for the material changes of manufacturing of the Product, specifically impacting the following documents, if applicable: (1) Analytical Methods, (2) Master Batch/Labeling/Packaging Records, (3) Primary Packaging Components Specifications, (4) Product Specifications, and (5) Raw Material/Component Specifications. |
12.2 | Within fourteen (14) calendar days after the receipt of such notification, to the extent such Material Change impacts a Regulatory Filing for which PARTNER is the Designated Regulatory Party, PARTNER shall provide to AMGEN a writtenassessment of whether the Material Change constitutes a change which is reportable to Governmental Authorities. |
12.3 | If a Material Change requires the approval of a Governmental Authority in the Collaboration Territory, then, where PARTNER is the Designated Regulatory Party, PARTNER shall use reasonable efforts to file for such approval within sixty (60) days of receipt of the necessary documentation from AMGEN and obtain necessary regulatory approvals. |
12.4 | PARTNER shall provide updates to AMGEN of any regulatory submissions relating to said changes. |
12.5 | PARTNER shall inform AMGEN of any required regulatory change and reporting category in writing within two (2) business days after PARTNER first becomes aware of such information. PARTNER must inform AMGEN of the request in writing, at a minimum the request should describe the proposed change and rationale. |
13. | INVESTIGATIONS OF NONCONFORMANCES, DISCREPANCIES (POST DISTRIBUTION NC’S) |
13.1 | If a Nonconformance is identified after a Product batch has been shipped to PARTNER, AMGEN shall inform PARTNER within two (2) business days of such Nonconformance. |
13.2 | AMGEN will provide support, as necessary and reasonable, to enable PARTNER to comply with applicable regulatory reporting requirements that may result from the occurrence of a post-distribution Nonconformance. |
13.3 | Each Party shall inform the other Party as soon as reasonably possible of issues which may adversely impact Product quality, safety, efficacy or adverse events relating to the batch of Product received by PARTNER. |
14. | AUDITS AND INSPECTIONS |
14.1 | PARTNER Audits |
14.1.1 | All audits of AMGEN are limited to the facilities where the Products are manufactured, Quality Systems and documentation directly related to the Products, and Batch Records related to lots provided to PARTNER, The scope, agenda, and timeline must be approved by AMGEN prior to each audit. |
14.1.2 | All audits of AMGEN facilities will be conducted during regular business hours in the presence of AMGEN representatives. Audits shall be conducted by not more than two (2) PARTNER representatives at each AMGEN facility, and, unless otherwise agreed upon by AMGEN, for not more than two (2) business days at each site. PARTNER shall provide AMGEN written notification of such audit no less than one hundred twenty days (120) days in advance. The written notification must clearly state the scope of the audit and regulatory standards to be used to conduct the audit. PARTNER may conduct an audit once in a twelve (12) month period, upon AMGEN’s approval of the audit request. |
14.1.3 | In addition to the annual audit described in Section 14.1.2 above, PARTNER is permitted to request an unplanned “For Cause” audit during the case of a quality or regulatory event. AMGEN will consider any such request in good faith, but will have sole discretion whether or not to grant such request. |
14.1.3.1 | Such “For Cause” audits require prior written notice by PARTNER to AMGEN and shall be conducted during AMGEN’s normal business hours. Each party must approve the audit scope, agenda and timeline prior to conducting the audit. For Cause audits shall be conducted by not more than two (2) PARTNER representatives at each AMGEN facility, and, unless otherwise agreed upon by AMGEN, for not more than two (2) business days. |
14.2 | Audit Findings |
14.2.1 | PARTNER shall provide AMGEN a copy of the audit report within thirty (30) calendar days of completion of an audit. After delivery of the audit report, AMGEN shall provide PARTNER with a written response to such report within thirty (30) calendar days from AMGEN’s receipt of the report from PARTNER. All information contained in the audit report shall be deemed the confidential information of AMGEN under the Collaboration Agreement. |
14.3 | Regulatory Agency Inspections |
14.3.1 | PARTNER shall notify AMGEN immediately upon notification by any Regulatory Agency or other Government Authority of any intended inspection of AMGEN’s facilities or records relating to the manufacturing, testing, packaging, labeling, and storage of the Product. |
14.3.2 | PARTNER shall have the right to have a maximum of one (1) representative present during a regulatory inspection of AMGEN’s facilities that perform manufacturing or testing of Product. Presence of PARTNER during an inspection at an AMGEN facility will be according to the direction of AMGEN. PARTNER representative shall not have direct participation during inspection discussions with Regulatory Agency inspector(s). |
14.3.3 | AMGEN shall provide PARTNER with a copy of the final response immediately after submission to the Regulatory Agency. |
14.3.4 | PARTNER is responsible for the arrangement of interpreters and translation of documents which may be required by the Regulatory Agency during inspection of AMGEN facilities. AMGEN shall have the right to arrange interpreter and document translation services upon agreement with PARTNER or if PARTNER fails to do so. |
15. | DISPUTE RESOLUTION |
15.1 | Disputes relating to non-compliance or nonconformance of Product with the product specifications shall be governed by the terms set forth in the Collaboration Agreement. The provisions of Section 15.3 (choice of law; jurisdiction) of the Collaboration Agreement are deemed incorporated into this Quality Agreement. |
16. | CUSTOMER COMPLAINTS |
16.1 | Any information related to customer complaints (i.e., communication that alleges deficiencies relating to the identity, quality, durability, reliability, safety, effectiveness, or performance of a drug, condition of labeling, or packaging, after it is released by PARTNER for clinical studies) shall be forwarded to AMGEN within one (1) business day after PARTNER first becomes aware of such information. |
16.2 | AMGEN shall investigate according to AMGEN’s applicable policy and procedures customer complaints submitted by PARTNER. Complaints which require an AMGEN investigation will be sent to this e-mail address: XXXXXXXXX@amgen.com |
16.3 | AMGEN shall provide PARTNER with an Interim Report within 30 days and an investigation closure Final Report within forty-five (45) days of receipt of the customer complaint. |
17. | STOCK RECOVERY |
17.1 | If any problems are discovered and identified as recall/stock recovery issues related to the Product, the discovering Party shall notify the other immediately. |
17.2 | PARTNER and AMGEN shall each notify the other Party within three (3) business days if it becomes aware that any Product is alleged or proven to be the subject of a recall or stock recovery in the Collaboration Territory. |
17.3 | The Parties shall meet to discuss the circumstances that merit the Product recall or stock recovery and to determine the appropriate course of action. Such course of action shall be consistent with the internal SOP of the Party having the right to control such recall pursuant to this section. |
17.4 | If either Party proposes to initiate a Stock Recovery or other corrective action with respect to the Product in the Collaboration Territory, the Parties will promptly discuss such proposed action. Any decisions by the Parties shall be governed by the terms of the Collaboration Agreement. The Parties shall cooperate, as reasonably necessary, in the implementation of such actions. |
17.5 | The Parties shall cooperate and promptly perform investigations into the root causes leading up to the Product Stock Recovery, when appropriate. Investigation reports regarding the defect or cause for such regulatory reporting shall be provided to the corresponding Party within an appropriate timeframe dependent on regulatory reporting requirements. |
17.6 | The Parties shall each maintain complete and accurate records of any Stock Recovery it has the right to control pursuant to this section of the Quality Agreement for such periods as may be required by legal requirements, but in any event for no less than three (3) years from the date of Stock Recovery. |
17.7 | Each Party maintains the responsibility for Product distributed within the Collaboration Territory for its own clinical studies. |
18. | RESPONSIBLE PERSONS: CONTACT INFORMATION |
18.1 | The individuals listed in EXHIBIT A shall be the key points of contact between AMGEN and PARTNER relating to the rights and obligations of the Parties in this Quality Agreement. The responsible individuals, or their respective delegates, must be notified in official communications as required by this Quality Agreement. |
AMGEN | ||||||||||||||||||||
Name | Email Address | Contact Number | Responsibility | |||||||||||||||||
XXXXXXXXX | XXXXXXXXX | XXXXXXXXX | Manager, International Quality | |||||||||||||||||
XXXXXXXXX | XXXXXXXXX | XXXXXXXXX | Director, International Quality |
PARTNER | ||||||||||||||||||||
Name | Email Address | Contact Number | Responsibility | |||||||||||||||||
XXXXXXXXX | XXXXXXXXX | XXXXXXXXX | Director of QA and EU QP | |||||||||||||||||
XXXXXXXXX | XXXXXXXXX | XXXXXXXXX | Senior Director, Quality Assurance |
Agreed and accepted for: Partner | Agreed and accepted for: Amgen Inc. | |||||||||||||||||||||||||
By: | By: | |||||||||||||||||||||||||
Printed Name: | Michael Kinley | Printed Name: | Astrid McLean | |||||||||||||||||||||||
Title: | Sr. Director, Quality Assurance | Title: | Director, Quality Assurance | |||||||||||||||||||||||
Date: | Date: |
Product | Stage 1 Clinical Trial | ||||
AMG139 | [*] | ||||
AMG157 | [*] | ||||
AMG181 | [*] | ||||
AMG557 | [*] | ||||
AMG827 | [*] |
ASTRAZENECA COLLABORATION VENTURES, LLC | AMGEN INC. | |||||||||||||
By: | /s/ Pascal Soriot | By: | /s/ Robert A. Bradway | |||||||||||
Name: | Pascal Soriot | Name: | Robert A. Bradway | |||||||||||
Title: | CEO | Title: | Chairman and Chief Executive Officer | |||||||||||
ASTRAZENECA PHARMACEUTICALS LP | ||||||||||||||
By: | /s/ Pascal Soriot | |||||||||||||
Name: | Pascal Soriot | |||||||||||||
Title: | CEO |
Amgen | Partner | ||||
AMG827 | AMG139 | ||||
AMG557 | AMG157 | ||||
AMG570 | AMG181 |
Product | Product Target | Distracting Target* | ||||||
AMG 139 | [*] | [*] | ||||||
AMG 157 | [*] | [*] | ||||||
AMG 181 | [*] | [*] | ||||||
AMG 557 | [*] | [*] | ||||||
AMG 570 | [*] | [*] | ||||||
AMG 827 | [*] | [*] |
Product | ||
AMG 139 | ||
AMG 157 | ||
AMG 181 | ||
AMG 557 | ||
AMG 827 | ||
AMG 570 |
Product | Stage 1 Clinical Trial | ||||
AMG139 | [*] | ||||
AMG157 | [*] | ||||
AMG181 | [*] | ||||
AMG557 | [*] | ||||
AMG827 | [*] | ||||
AMG570 | [*] |
August 4, 2022 | /s/ ROBERT A. BRADWAY | ||||
Robert A. Bradway | |||||
Chairman of the Board, | |||||
Chief Executive Officer and President |
August 4, 2022 | /s/ PETER H. GRIFFITH | ||||
Peter H. Griffith | |||||
Executive Vice President and Chief Financial Officer |
August 4, 2022 | /s/ ROBERT A. BRADWAY | ||||
Robert A. Bradway | |||||
Chairman of the Board, | |||||
Chief Executive Officer and President |
August 4, 2022 | /s/ PETER H. GRIFFITH | ||||
Peter H. Griffith | |||||
Executive Vice President and Chief Financial Officer |
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
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Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 1,317 | $ 464 | $ 2,793 | $ 2,110 |
Other comprehensive income (loss), net of reclassification adjustments and taxes: | ||||
Foreign currency translation | (65) | 14 | (116) | (25) |
Cash flow hedges | 156 | (48) | 240 | 142 |
Other | 0 | (1) | 0 | 0 |
Other comprehensive income (loss), net of reclassification adjustments and taxes | 91 | (35) | 124 | 117 |
Comprehensive income | $ 1,408 | $ 429 | $ 2,917 | $ 2,227 |
Condensed Consolidated Statements of Income - USD ($) shares in Millions, $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
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Revenues: | ||||
Total revenues | $ 6,594 | $ 6,526 | $ 12,832 | $ 12,427 |
Operating expenses: | ||||
Cost of sales | 1,510 | 1,637 | 3,071 | 3,127 |
Research and development | 1,039 | 1,082 | 1,998 | 2,049 |
Acquired in-process research and development | 0 | 1,505 | 0 | 1,505 |
Selling, general and administrative | 1,327 | 1,384 | 2,555 | 2,638 |
Other | 542 | 90 | 532 | 151 |
Total operating expenses | 4,418 | 5,698 | 8,156 | 9,470 |
Operating income | 2,176 | 828 | 4,676 | 2,957 |
Interest expense, net | (328) | (281) | (623) | (566) |
Other (expense) income, net | (317) | 11 | (847) | 24 |
Income before income taxes | 1,531 | 558 | 3,206 | 2,415 |
Provision for income taxes | 214 | 94 | 413 | 305 |
Net income | $ 1,317 | $ 464 | $ 2,793 | $ 2,110 |
Earnings per share: | ||||
Basic (in usd per share) | $ 2.46 | $ 0.81 | $ 5.16 | $ 3.67 |
Diluted (in usd per share) | $ 2.45 | $ 0.81 | $ 5.13 | $ 3.65 |
Shares used in calculation of earnings per share: | ||||
Basic (in shares) | 535 | 573 | 541 | 575 |
Diluted (in shares) | 537 | 576 | 544 | 578 |
Product sales [Member] | ||||
Revenues: | ||||
Total revenues | $ 6,281 | $ 6,114 | $ 12,012 | $ 11,706 |
Other revenues [Member] | ||||
Revenues: | ||||
Total revenues | $ 313 | $ 412 | $ 820 | $ 721 |
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares shares in Millions |
Jun. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Common stock and additional paid-in capital, par value (in usd per share) | $ 0.0001 | $ 0.0001 |
Common stock and additional paid-in capital, shares authorized | 2,750.0 | 2,750.0 |
Common stock and additional paid-in capital, shares outstanding | 534.9 | 558.3 |
Condensed Consolidated Statements of Stockholders' Equity (Parenthetical) - $ / shares |
1 Months Ended | 3 Months Ended | ||
---|---|---|---|---|
Mar. 31, 2022 |
Dec. 31, 2021 |
Mar. 31, 2022 |
Mar. 31, 2021 |
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Statement of Stockholders' Equity [Abstract] | ||||
Common stock, dividends declared per share (in usd per share) | $ 1.94 | $ 1.94 | $ 1.94 | $ 1.76 |
Summary of significant accounting policies |
6 Months Ended |
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Jun. 30, 2022 | |
Accounting Policies [Abstract] | |
Summary of significant accounting policies | Summary of significant accounting policies Business Amgen Inc. (including its subsidiaries, referred to as “Amgen,” “the Company,” “we,” “our” or “us”) is a global biotechnology pioneer that discovers, develops, manufactures and delivers innovative human therapeutics. We operate in one business segment: human therapeutics. Basis of presentation The financial information for the three and six months ended June 30, 2022 and 2021, is unaudited but includes all adjustments (consisting of only normal, recurring adjustments unless otherwise indicated), which Amgen considers necessary for a fair presentation of its condensed consolidated results of operations for those periods. Interim results are not necessarily indicative of results for the full fiscal year. The condensed consolidated financial statements should be read in conjunction with our consolidated financial statements and the notes thereto contained in our Annual Report on Form 10-K for the year ended December 31, 2021, and with our condensed consolidated financial statements and the notes thereto contained in our Quarterly Report on Form 10-Q for the period ended March 31, 2022. Principles of consolidation The condensed consolidated financial statements include the accounts of Amgen as well as its majority-owned subsidiaries. In determining whether we are the primary beneficiary of a variable interest entity, we consider whether we have both the power to direct activities of the entity that most significantly impact the entity’s economic performance and the obligation to absorb losses of or the right to receive benefits from the entity that could potentially be significant to that entity. We do not have any significant interests in any variable interest entities of which we are the primary beneficiary. All material intercompany transactions and balances have been eliminated in consolidation. Use of estimates The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results may differ from those estimates. Property, plant and equipment, net Property, plant and equipment is recorded at historical cost, net of accumulated depreciation and amortization, of $9.0 billion and $8.8 billion as of June 30, 2022 and December 31, 2021, respectively. Recent accounting pronouncements In March 2020, the FASB issued a new accounting standard to ease the financial reporting burdens caused by the expected market transition from LIBOR and other interbank offered rates to alternative reference rates, commonly referred to as reference rate reform. The new standard provides temporary optional expedients and exceptions to current GAAP guidance on contract modifications and hedge accounting. Specifically, a modification to transition to an alternative reference rate is treated as an event that does not require contract remeasurement or reassessment of a previous accounting treatment. Moreover, for all types of hedging relationships, an entity is permitted to change the reference rate without having to dedesignate the hedging relationship. The standard is generally effective for all contract modifications made and hedging relationships evaluated through December 31, 2022. In January 2021, the FASB issued a new accounting standard that expanded the scope of the original March 2020 standard to include derivative instruments on discounting transactions. We do not expect the two standards to have a material impact on our condensed consolidated financial statements. In November 2021, the FASB issued a new accounting standard around the recognition and measurement of contract assets and contract liabilities from revenue contracts with customers acquired in a business combination. The new standard clarifies that contract assets and contract liabilities acquired in a business combination from an acquiree should initially be recognized by applying revenue recognition principles and not at fair value. The standard is effective for interim and annual periods beginning on January 1, 2023, and early adoption is permitted. The impact of this standard will depend on the facts and circumstances of future transactions.
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Acquisitions |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Business Combination and Asset Acquisition [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisitions | Acquisitions and divestitures Acquisition of Teneobio, Inc. On October 19, 2021, we acquired all of the outstanding stock of Teneobio, a privately held, clinical-stage biotechnology company developing a new class of biologics called human heavy-chain antibodies, which are single-chain antibodies composed of the human heavy-chain domain. The transaction, which was accounted for as a business combination, includes Teneobio’s proprietary bispecific and multispecific antibody technologies, which complement Amgen’s existing antibody capabilities and bispecific T-cell engager (BiTE®) platform and will enable significant acceleration and efficiency in the discovery and development of new molecules to treat diseases across Amgen’s core therapeutic areas. Upon its acquisition, Teneobio became a wholly owned subsidiary of Amgen, and its operations have been included in our condensed consolidated financial statements commencing on the acquisition date. Measurement period adjustments for the six months ended June 30, 2022, included changes to the purchase price allocation and total consideration, resulting in a net increase of $22 million to goodwill. The measurement period adjustments resulted primarily from valuation inputs pertaining to certain acquired assets based on facts and circumstances that existed as of the acquisition date and did not result from events subsequent to the acquisition date. These adjustments did not have a significant impact on Amgen’s results of operations during the six months ended June 30, 2022, and would not have had a significant impact on prior-period results if these adjustments had been made as of the acquisition date. The following table summarizes the total consideration and allocated acquisition date fair values of assets acquired and liabilities assumed, inclusive of measurement period adjustments (in millions):
Consideration for this transaction comprised (i) an upfront cash payment of $993 million, which included a working-capital adjustment, and (ii) future contingent milestone payments to Teneobio’s former equity holders of up to $1.6 billion in cash, based on the achievement of various development and regulatory milestones with regard to the leading asset (AMG 340, formerly TNB-585) and to various development milestones for other drug candidates. The estimated fair values of the contingent consideration obligations aggregated $299 million as of the acquisition date and were determined using a probability-weighted expected return methodology. The assumptions in this method include the probability of achieving the milestones and the expected payment dates, with such amounts discounted to present value based on our pretax cost of debt. See Note 11, Fair value measurement, for information regarding the estimated fair value of these obligations as of June 30, 2022. The estimated fair values of acquired IPR&D assets totaled $991 million, of which $784 million relates to AMG 340, that is in a phase 1 clinical trial for the treatment of metastatic castration-resistant prostate cancer (mCRPC), and the balance relates to four separate preclinical oncology programs. The R&D technology rights of $115 million relate to Teneobio’s proprietary bispecific and multispecific antibody technologies; the amount is being amortized over 10 years by using the straight-line method. Teneobio has also licensed its technology and certain identified targets to various third parties, representing contractual agreements valued at $41 million. The estimated fair values for these intangible assets were determined using a multi-period excess earnings income approach that discounts expected future cash flows to present value by applying a discount rate that represents the estimated rate that market participants would use to value the intangible assets. The projected cash flows were based on certain assumptions attributable to the respective intangible asset, including estimates of future revenues and expenses, the time and resources needed to complete development and the probabilities of obtaining marketing approval from the FDA and other regulatory agencies. A deferred tax liability of $244 million was recognized on temporary differences related to the book bases and tax bases of the acquired identifiable assets and assumed liabilities, primarily driven by the intangible assets acquired. The excess of the acquisition date consideration over the fair values assigned to the assets acquired and the liabilities assumed of $273 million was recorded as goodwill, which is not deductible for tax purposes. The goodwill value represents expected synergies from both AMG 340 and the technologies acquired. Our accounting for this acquisition is preliminary and will be finalized upon completion of our analysis of certain tax-related items as we obtain additional information during the measurement period of up to one year from the acquisition date. Acquisition of Five Prime Therapeutics, Inc. On April 16, 2021, Amgen completed its acquisition of Five Prime for a total cash consideration of $1.6 billion, net of cash acquired. The purchase price was funded with cash on hand. This transaction was accounted for as an asset acquisition because substantially all the value of the assets acquired was concentrated in the intellectual property rights of bemarituzumab, a phase 3 trial-ready, first-in-class program for gastric cancer. Five Prime’s operations have been included in our condensed consolidated financial statements commencing after the acquisition date. We allocated the consideration to acquire Five Prime to: the bemarituzumab IPR&D program of $1.5 billion, which was expensed immediately in Acquired IPR&D expense in the Condensed Consolidated Statements of Income; deferred tax assets of $177 million; and other net liabilities of $47 million. The Acquired IPR&D expense was not tax deductible. Divestiture of Gensenta İlaç Sanayi ve Ticaret A.Ş. On June 28, 2022, we entered into a share purchase agreement with Eczacıbaşı under which Eczacıbaşı will acquire all of our shares in Gensenta—a subsidiary in Turkey. Net assets related to Gensenta of $80 million met the criteria to be classified as held-for-sale and did not meet the criteria to be classified as discontinued operations. Upon closing of the transaction, we expect to receive $135 million in cash. The transaction is expected to close in the third quarter of 2022 upon approval by the Turkish Competition Authority. As of June 30, 2022, held-for-sale assets and liabilities of $100 million and $20 million were included in Other current assets and Accrued liabilities, respectively, in the Condensed Consolidated Balance Sheets. During the three months ended June 30, 2022, we recognized a loss of $560 million recorded to Other operating expenses in the Condensed Consolidated Statements of Income, primarily due to the impact of the cumulative foreign currency translation loss, with valuation allowances to Other current assets and Accrued liabilities in the Condensed Consolidated Balance Sheets.
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Revenues |
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Revenues | Revenues We operate in one business segment: human therapeutics. Therefore, results of our operations are reported on a consolidated basis for purposes of segment reporting, consistent with internal management reporting. Revenues by product and by geographic area, based on customers’ locations, are presented below. The majority of ROW revenues relates to products sold in Europe. Revenues were as follows (in millions):
____________ (1) Hedging gains and losses, which are included in product sales, were not material for the three and six months ended June 30, 2022 and 2021.
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Income taxes |
6 Months Ended |
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Jun. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Income taxes | Income taxes The effective tax rates for the three and six months ended June 30, 2022, were 14.0% and 12.9%, respectively, compared with 16.8% and 12.6%, respectively, for the corresponding periods of the prior year. The decrease in our effective tax rate for the three months ended June 30, 2022, was primarily due to the prior year nondeductible IPR&D expense arising from the acquisition of Five Prime, partially offset by current year unfavorable items including a loss on a nonstrategic divestiture. The increase in our effective tax rate for the six months ended June 30, 2022, was primarily due to current year unfavorable items compared to last year including a loss on a nonstrategic divestiture, partially offset by the prior year nondeductible IPR&D expense arising from the acquisition of Five Prime and changes in earnings mix. The effective tax rates differ from the federal statutory rate primarily as a result of foreign earnings from the Company’s operations conducted in Puerto Rico, a territory of the United States treated as a foreign jurisdiction for U.S. tax purposes, that are currently subject to a tax incentive grant through 2035. In addition, the Company’s operations conducted in Singapore are subject to a tax incentive grant through 2034. These foreign earnings are also subject to U.S. tax at a reduced rate of 10.5%. See Note 2, Acquisitions and divestitures. The U.S. territory of Puerto Rico imposes a 4% excise tax on the gross intercompany purchase price of goods and services from our manufacturer in Puerto Rico. We account for the excise tax as a manufacturing cost that is capitalized in Inventories and expensed in Cost of sales when the related products are sold. For U.S. income tax purposes, in 2022, the excise tax results in foreign tax credits that are generally recognized in our provision for income taxes when the excise tax is incurred. One or more of our legal entities file income tax returns in the U.S. federal jurisdiction, various U.S. state jurisdictions and certain foreign jurisdictions. Our income tax returns are routinely examined by tax authorities in those jurisdictions. Significant disputes can and have arisen with tax authorities involving issues regarding the timing and amount of deductions, the use of tax credits and allocations of income and expenses among various tax jurisdictions because of differing interpretations of tax laws, regulations and relevant facts. Tax authorities, including the IRS, are becoming more aggressive and are particularly focused on such matters. In 2017, we received an RAR and a modified RAR from the IRS for the years 2010–2012, proposing significant adjustments that primarily relate to the allocation of profits between certain of our entities in the United States and the U.S. territory of Puerto Rico. We disagreed with the proposed adjustments and calculations and pursued resolution with the IRS appeals office but were unable to reach resolution. In July 2021, we filed a petition in the U.S. Tax Court to contest two duplicate Statutory Notices of Deficiency (Notices) for the years 2010–2012 that we received in May and July 2021, which seek to increase our U.S. taxable income for the years 2010–2012 by an amount that would result in additional federal tax of approximately $3.6 billion plus interest. Any additional tax that could be imposed for the years 2010–2012 would be reduced by up to approximately $900 million of repatriation tax previously accrued on our foreign earnings. In 2020, we received an RAR and a modified RAR from the IRS for the years 2013–2015, also proposing significant adjustments that primarily relate to the allocation of profits between certain of our entities in the United States and the U.S. territory of Puerto Rico similar to those proposed for the years 2010–2012. We disagreed with the proposed adjustments and calculations and pursued resolution with the IRS appeals office but were unable to reach resolution. In July 2022, we filed a petition in the U.S. Tax Court to contest a Notice for the years 2013–2015 that we previously reported receiving in April 2022 that seeks to increase our U.S. taxable income for the years 2013–2015 by an amount that would result in additional federal tax of approximately $5.1 billion, plus interest. In addition, the Notice asserts penalties of approximately $2.0 billion. Any additional tax that could be imposed for the years 2013–2015 would be reduced by up to approximately $2.2 billion of repatriation tax previously accrued on our foreign earnings. We firmly believe that the IRS positions set forth in the 2010–2012 and 2013–2015 Notices are without merit. We are contesting the 2010–2012 and 2013–2015 Notices through the judicial process, and we will seek consolidation of the two periods into one case in the U.S. Tax Court. We are currently under examination by the IRS for the years 2016–2018 with respect to issues similar to those for the 2010 through 2015 period. In addition, we have examinations by a number of state and foreign tax jurisdictions. Final resolution of these complex matters is not likely within the next 12 months. We believe our accrual for income tax liabilities is appropriate based on past experience, interpretations of tax law, application of the tax law to our facts and judgments about potential actions by tax authorities; however, due to the complexity of the provision for income taxes and uncertain resolution of these matters, the ultimate outcome of any tax matters may result in payments substantially greater than amounts accrued and could have a material adverse impact on our condensed consolidated financial statements. We are no longer subject to U.S. federal income tax examinations for years ended on or before December 31, 2009. See Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations, Income Taxes, for further discussion and Part II, Item 1A, Risk Factors—The adoption and interpretation of new tax legislation or exposure to additional tax liabilities could affect our profitability. During the three and six months ended June 30, 2022, the gross amounts of our UTBs increased by $50 million and $95 million, respectively, as a result of tax positions taken during the current year. Substantially all of the UTBs as of June 30, 2022, if recognized, would affect our effective tax rate.
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Earnings per share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings per share | Earnings per share The computation of basic EPS is based on the weighted-average number of our common shares outstanding. The computation of diluted EPS is based on the weighted-average number of our common shares outstanding and dilutive potential common shares, which primarily include shares that may be issued under our stock option, restricted stock and performance unit award programs (collectively, dilutive securities), as determined by using the treasury stock method. The computations for basic and diluted EPS were as follows (in millions, except per-share data):
For the three and six months ended June 30, 2022 and 2021, the number of antidilutive employee stock-based awards excluded from the computation of diluted EPS was not significant.
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Investments |
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Investments, Debt and Equity Securities [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments | Investments Available-for-sale investments The amortized cost, gross unrealized gains, gross unrealized losses and fair values of interest-bearing securities, which are considered available-for-sale, by type of security were as follows (in millions):
The fair values of interest-bearing securities by location in the Condensed Consolidated Balance Sheets were as follows (in millions):
Cash and cash equivalents in the above table excludes bank account cash of $770 million and $733 million as of June 30, 2022 and December 31, 2021, respectively. Total interest-bearing securities as of June 30, 2022 and December 31, 2021, mature in one year or less. For the three and six months ended June 30, 2022 and 2021, realized gains and losses on interest-bearing securities were not material. Realized gains and losses on interest-bearing securities are recorded in Other (expense) income, net, in the Condensed Consolidated Statements of Income. The cost of securities sold is based on the specific-identification method. The primary objective of our investment portfolio is to maintain safety of principal, prudent levels of liquidity and acceptable levels of risk. Our investment policy limits interest-bearing security investments to certain types of debt and money market instruments issued by institutions with investment-grade credit ratings, and it places restrictions on maturities and concentration by asset class and issuer. Equity securities We held investments in equity securities with readily determinable fair values (publicly traded securities) of $361 million and $611 million as of June 30, 2022 and December 31, 2021, respectively, which are included in Other noncurrent assets in the Condensed Consolidated Balance Sheets. During the three months ended June 30, 2022 and 2021, net unrealized gains and losses on publicly traded securities were a $106 million net loss and a $25 million net gain, respectively. During the six months ended June 30, 2022 and 2021, net unrealized losses on publicly traded securities were $276 million and $31 million, respectively. Realized gains and losses on sales of publicly traded securities for the three and six months ended June 30, 2022 and 2021, were not material. We held investments of $280 million and $262 million in equity securities without readily determinable fair values as of June 30, 2022 and December 31, 2021, respectively, which are included in Other noncurrent assets in the Condensed Consolidated Balance Sheets. During the three and six months ended June 30, 2022 and 2021, upward adjustments and downward adjustments on these securities were not material. Adjustments were based on observable price transactions. Equity method investments BeiGene, Ltd. As of June 30, 2022 and December 31, 2021, we had an ownership interest in BeiGene of approximately 18.2% and 18.4%, respectively, which is included in Other noncurrent assets in the Condensed Consolidated Balance Sheets and accounted for under the equity method of accounting. We amortize the difference between the fair value of equity securities acquired and our proportionate share of the carrying value of the underlying net assets of BeiGene over the useful lives of the assets that gave rise to this basis difference. This amortization and our share of the results of operations of BeiGene are included in Other (expense) income, net, in the Condensed Consolidated Statements of Income one quarter in arrears. During the three months ended June 30, 2022 and 2021, the carrying value of our equity investment was adjusted by our share of BeiGene’s net loss of $80 million and net income of $14 million, respectively, and amortization of the basis difference of $48 million and $42 million, respectively. During the six months ended June 30, 2022 and 2021, the carrying value of our equity investment was adjusted by our share of BeiGene’s net losses of $188 million and $83 million, respectively, and amortization of the basis difference of $95 million and $84 million, respectively. As of June 30, 2022 and December 31, 2021, the carrying values of our investment in BeiGene totaled $2.5 billion and $2.8 billion, respectively, and the fair values of our investment totaled $3.1 billion and $5.1 billion, respectively. As of June 30, 2022, we believe the carrying value of our equity investment in BeiGene is fully recoverable. Neumora Therapeutics, Inc. On September 30, 2021, we acquired an approximately 25.9% ownership interest in Neumora, a privately held company, for $257 million, which is included in Other noncurrent assets in the Condensed Consolidated Balance Sheets, in exchange for a $100 million cash payment and $157 million in noncash consideration primarily related to future services. Although our equity investment provides us with the ability to exercise significant influence over Neumora, we have elected the fair value option to account for our equity investment. Under the fair value option, changes in the fair value of the investment are recognized through earnings each reporting period. We believe the fair value option best reflects the economics of the underlying transaction. As of June 30, 2022 and December 31, 2021, our ownership interest in Neumora was approximately 25.7% and 25.9%, respectively, and the fair values of our investment were $131 million and $220 million, respectively. Accordingly, for the reduction in fair value of our investment during the three and six months ended June 30, 2022, we recognized a loss of $39 million and $89 million, respectively, for the reduction in fair value of our investment in Other (expense) income, net, in the Condensed Consolidated Statements of Income. For information on determination of fair values, see Note 11, Fair value measurement. Limited partnerships We held limited partnership investments of $338 million and $573 million as of June 30, 2022 and December 31, 2021, respectively, which are included in Other noncurrent assets in the Condensed Consolidated Balance Sheets. These investments, primarily investment funds of early-stage biotechnology companies, are accounted for by using the equity method of accounting and are measured by using our proportionate share of the net asset values of the underlying investments held by the limited partnerships as a practical expedient. These investments are typically redeemable only through distributions upon liquidation of the underlying assets. As of June 30, 2022, unfunded additional commitments to be made for these investments during the next several years were $209 million. For the three months ended June 30, 2022 and 2021, net unrealized losses from our limited partnership investments were $60 million and $43 million, respectively. For the six months ended June 30, 2022 and 2021, net unrealized gains and losses from our limited partnership investments were a $220 million net loss and a $165 million net gain, respectively.
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Inventories |
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories | Inventories Inventories consisted of the following (in millions):
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Goodwill and other intangible assets |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and other intangible assets | Goodwill and other intangible assets Goodwill The change in the carrying amount of goodwill was as follows (in millions):
____________ (1) Composed of adjustments to goodwill resulting from changes to the acquisition date fair values of net assets acquired in the acquisition of Teneobio and the nonstrategic Gensenta divestiture. See Note 2, Acquisitions and divestitures. Other intangible assets Other intangible assets consisted of the following (in millions):
Developed-product-technology rights consists of rights related to marketed products. Licensing rights primarily consists of contractual rights to receive future milestone, royalty and profit-sharing payments; capitalized payments to third parties for milestones related to regulatory approvals to commercialize products; and upfront payments associated with royalty obligations for marketed products. Marketing-related rights primarily consists of rights related to the sale and distribution of marketed products. R&D technology rights pertains to technologies used in R&D that have alternative future uses. IPR&D consists of R&D projects acquired in a business combination that are not complete at the time of acquisition due to remaining technological risks and/or lack of receipt of required regulatory approvals. We review IPR&D projects for impairment annually, whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable and upon the establishment of technological feasibility or regulatory approval. During the three months ended June 30, 2022 and 2021, we recognized amortization associated with our finite-lived intangible assets of $629 million and $652 million, respectively. During the six months ended June 30, 2022 and 2021, we recognized amortization associated with our finite-lived intangible assets of $1.3 billion in both periods. Amortization of intangible assets is primarily included in Cost of sales in the Condensed Consolidated Statements of Income. The total estimated amortization for our finite-lived intangible assets for the remaining six months ending December 31, 2022, and the years ending December 31, 2023, 2024, 2025, 2026 and 2027, are $1.3 billion, $2.5 billion, $2.5 billion, $2.4 billion, $1.7 billion and $1.8 billion, respectively.
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Financing arrangements |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financing arrangements | Financing arrangements Our borrowings consisted of the following (in millions):
There are no material differences between the effective interest rates and coupon rates of any of our borrowings, except for the 4.563% 2048 Notes, the 4.663% 2051 Notes and the 2.77% 2053 Notes, which have effective interest rates of 6.3%, 5.6% and 5.2%, respectively. During the three months ended March 31, 2022, we issued $4.0 billion of debt consisting of $750 million of the 3.00% 2029 Notes, $1.0 billion of the 3.35% 2032 Notes, $1.0 billion of the 4.20% 2052 Notes and $1.25 billion of the 4.40% 2062 Notes. The 3.00% 2029 Notes were issued to finance eligible projects that meet specified criteria to benefit the environment. In the event of a change-in-control triggering event, as defined in the terms of the notes, we may be required to purchase all or a portion of these notes at a price equal to 101% of the principal amount of the notes plus accrued and unpaid interest. In addition, these notes may be redeemed at any time at our option, in whole or in part, at the principal amount of the notes being redeemed plus accrued and unpaid interest and a make-whole amount, which are defined by the terms of the notes. The notes may be redeemed without payment of make-whole amounts if redemption occurs during a specified period of time immediately prior to the maturing of the notes. Such time periods range from two months to six months prior to maturity.
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Stockholders' equity |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' equity | Stockholders’ equity Stock repurchase program Activity under our stock repurchase program, on a trade date basis, was as follows (in millions):
On February 24, 2022, the Company entered into ASR agreements with three third-party financial institutions (Dealers). Under the ASR agreements, the Company made payments in an aggregate amount of $6.0 billion on February 25, 2022, to the Dealers and received and retired an initial 23.3 million shares of the Company’s common stock from the Dealers. The payments were recorded as reductions to shareholders’ equity, consisting of a $5.1 billion increase to accumulated deficit, which reflects the value of the initial shares received, and a $0.9 billion decrease in additional paid-in capital, which reflects the value of the stock that remains to be delivered by the Dealers pending final settlement. The final number of shares to be repurchased by the Company will be based on the daily volume-weighted average stock price of the Company’s common stock during the terms of the ASR agreements, less a discount and subject to adjustments pursuant to the terms and conditions of the ASR agreements. At settlement, under certain circumstances, one or more of the Dealers may be required to deliver additional shares of common stock to the Company, or under certain circumstances, the Company may be required to deliver shares of common stock or to make a cash payment, at its election, to a Dealer. The final settlement under the ASR agreements is scheduled to occur in the third quarter of 2022, subject to an earlier termination under certain limited circumstances, as set forth in the ASR agreements. In total, we repurchased 24.6 million shares of common stock in the first quarter of 2022, including shares received under the ASR agreements. As of June 30, 2022, $4.6 billion of authorization remained available under our stock repurchase program. Dividends In March 2022 and December 2021, the Board of Directors declared a quarterly cash dividend of $1.94 per share, which were paid in June 2022 and March 2022, respectively. In August 2022, the Board of Directors declared a quarterly cash dividend of $1.94 per share, which will be paid on September 8, 2022. Accumulated other comprehensive income (loss) The components of AOCI were as follows (in millions):
Reclassifications out of AOCI and into earnings, including related income tax expenses, were as follows (in millions):
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Fair value measurement |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair value measurement | Fair value measurement To estimate the fair value of our financial assets and liabilities, we use valuation approaches within a hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing an asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about inputs that market participants would use in pricing an asset or liability and are developed based on the best information available in the circumstances. The fair value hierarchy is divided into three levels based on the source of inputs as follows:
The availability of observable inputs can vary among different types of financial assets and liabilities. To the extent that the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. In certain cases, inputs used for measuring fair value may fall into different levels of the fair value hierarchy. In such cases, for financial statement disclosure purposes, the level in the fair value hierarchy within which the fair value measurement is categorized is based on the lowest level of input used that is significant to the overall fair value measurement. The fair values of each major class of the Company’s financial assets and liabilities measured at fair value on a recurring basis were as follows (in millions):
Interest-bearing and equity securities The fair values of our U.S. Treasury securities, money market mutual funds and equity investments in publicly traded securities are based on quoted market prices in active markets, with no valuation adjustment. The fair value of equity securities without readily determinable fair values are initially valued at the transaction price and subsequently valued based on a combination of market performance and publicly available market information for similar companies that have actively traded equity securities. Derivatives All of our foreign currency forward derivative contracts have maturities of three years or less, and all are with counterparties that have minimum credit ratings of A– or equivalent by S&P, Moody’s or Fitch. We estimate the fair values of these contracts by taking into consideration valuations obtained from a third-party valuation service that uses an income-based industry-standard valuation model for which all significant inputs are observable either directly or indirectly. These inputs include foreign currency exchange rates, LIBOR, swap rates and obligor credit default swap rates. In addition, inputs for our foreign currency option contracts include implied volatility measures. These inputs, when applicable, are at commonly quoted intervals. See Note 12, Derivative instruments. Our cross-currency swap contracts are with counterparties that have minimum credit ratings of A– or equivalent by S&P, Moody’s or Fitch. We estimate the fair values of these contracts by taking into consideration valuations obtained from a third-party valuation service that uses an income-based industry-standard valuation model for which all significant inputs are observable either directly or indirectly. These inputs include foreign currency exchange rates, LIBOR, swap rates, obligor credit default swap rates and cross-currency-basis swap spreads. See Note 12, Derivative instruments. Our interest rate swap contracts are with counterparties that have minimum credit ratings of A– or equivalent by S&P, Moody’s or Fitch. We estimate the fair values of these contracts by using an income-based industry-standard valuation model for which all significant inputs are observable either directly or indirectly. These inputs include LIBOR, swap rates and obligor credit default swap rates. See Note 12, Derivative instruments. Contingent consideration obligations As a result of our business acquisitions, we have incurred contingent consideration obligations as discussed below. The contingent consideration obligations are recorded at their fair values by using probability-adjusted discounted cash flows, and we revalue these obligations each reporting period until the related contingencies have been resolved. The fair value measurements of these obligations are based on significant unobservable inputs related to licensing rights and product candidates acquired in business combinations, and they are reviewed quarterly by management in our R&D and commercial sales organizations. The inputs include, as applicable, estimated probabilities and the timing of achieving specified development, regulatory and commercial milestones as well as estimated annual sales. Significant changes that increase or decrease the probabilities of achieving the related development, regulatory and commercial events or that shorten or lengthen the time required to achieve such events or that increase or decrease estimated annual sales would result in corresponding increases or decreases in the fair values of the obligations, as applicable. Changes in the fair values of contingent consideration obligations are recognized in Other operating expenses in the Condensed Consolidated Statements of Income. Changes in the carrying amounts of contingent consideration obligations were as follows (in millions):
As of June 30, 2022 and December 31, 2021, our contingent consideration obligations are primarily the result of our acquisition of Teneobio in October 2021, which obligates us to pay the former shareholders up to $1.6 billion upon achieving separate development and regulatory milestones with regard to various R&D programs. See Note 2, Acquisitions and divestitures. Summary of the fair values of other financial instruments Cash equivalents The fair values of cash equivalents approximate their carrying values due to the short-term nature of such financial instruments. Borrowings We estimated the fair values of our borrowings by using Level 2 inputs. As of June 30, 2022 and December 31, 2021, the aggregate fair values of our borrowings were $34.4 billion and $37.9 billion, respectively, and the carrying values were $36.5 billion and $33.3 billion, respectively. Investment in BeiGene, Ltd. We estimated the fair value of our investment in BeiGene by using Level 1 inputs. As of June 30, 2022 and December 31, 2021, the fair values were $3.1 billion and $5.1 billion, and the carrying values were $2.5 billion and $2.8 billion, respectively. During the three and six months ended June 30, 2022 and 2021, there were no transfers of assets or liabilities between fair value measurement levels, and there were no material remeasurements to the fair values of assets and liabilities that are not measured at fair value on a recurring basis, except with respect to the impairment of net assets in connection with the nonstrategic Gensenta divestiture. See Note 2, Acquisitions and divestitures.
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Derivative instruments |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative instruments | Derivative instruments The Company is exposed to foreign currency exchange rate and interest rate risks related to its business operations. To reduce our risks related to such exposures, we use or have used certain derivative instruments, including foreign currency forward, cross-currency swap, forward interest rate and interest rate swap contracts. We do not use derivatives for speculative- trading purposes. Cash flow hedges We are exposed to possible changes in the values of certain anticipated foreign currency cash flows resulting from changes in foreign currency exchange rates primarily associated with our euro-denominated international product sales. Increases and decreases in the cash flows associated with our international product sales due to movements in foreign currency exchange rates are partially offset by corresponding increases and decreases in the cash flows from our international operating expenses resulting from these foreign currency exchange rate movements. To further reduce our exposure to foreign currency exchange rate fluctuations with regard to our international product sales, we enter into foreign currency forward contracts to hedge a portion of our projected international product sales up to a maximum of three years into the future; and at any given point in time, a higher percentage of nearer-term projected product sales are being hedged than in successive periods. As of June 30, 2022 and December 31, 2021, we had outstanding foreign currency forward contracts with aggregate notional amounts of $5.6 billion and $5.7 billion, respectively. We have designated these foreign currency forward contracts, which are primarily euro based, as cash flow hedges. Accordingly, we report the unrealized gains and losses on these contracts in AOCI in the Condensed Consolidated Balance Sheets, and we reclassify them to Product sales in the Condensed Consolidated Statements of Income in the same periods during which the hedged transactions affect earnings. To hedge our exposure to foreign currency exchange rate risk associated with certain of our long-term debt denominated in foreign currencies, we enter into cross-currency swap contracts. Under the terms of such contracts, we paid euros, pounds sterling and Swiss francs and received U.S. dollars for the notional amounts at the inception of the contracts; and based on these notional amounts, we exchange interest payments at fixed rates over the lives of the contracts by paying U.S. dollars and receiving euros, pounds sterling and Swiss francs. In addition, we will pay U.S. dollars to and receive euros, pounds sterling and Swiss francs from the counterparties at the maturities of the contracts for these same notional amounts. The terms of these contracts correspond to the related hedged debt, thereby effectively converting the interest payments and principal repayment on the debt from euros, pounds sterling and Swiss francs to U.S. dollars. We have designated these cross-currency swap contracts as cash flow hedges. Accordingly, the unrealized gains and losses on these contracts are reported in AOCI in the Condensed Consolidated Balance Sheets and reclassified to Other (expense) income, net, in the Condensed Consolidated Statements of Income in the same periods during which the hedged debt affects earnings. The notional amounts and interest rates of our cross-currency swaps as of June 30, 2022, were as follows (notional amounts in millions):
In connection with the anticipated issuance of long-term fixed-rate debt, we occasionally enter into forward interest rate contracts in order to hedge the variability in cash flows due to changes in the applicable U.S. Treasury rate between the time we enter into these contracts and the time the related debt is issued. Gains and losses on forward interest rate contracts, which are designated as cash flow hedges, are recognized in AOCI in the Condensed Consolidated Balance Sheets and are amortized into Interest expense, net, in the Condensed Consolidated Statements of Income over the lives of the associated debt issuances. Amounts recognized in connection with forward interest rate swaps during the six months ended June 30, 2022, and amounts expected to be recognized during the subsequent 12 months are not material. The unrealized gains and losses recognized in AOCI for our derivative instruments designated as cash flow hedges were as follows (in millions):
Fair value hedges To achieve a desired mix of fixed-rate and floating-rate debt, we entered into interest rate swap contracts that qualified for and were designated as fair value hedges. These interest rate swap contracts effectively convert fixed-rate coupons to floating-rate LIBOR-based coupons over the terms of the related hedge contracts. As of both June 30, 2022 and December 31, 2021, we had interest rate swap contracts with aggregate notional amounts of $6.7 billion that hedge certain portions of our long-term debt issuances. For interest rate swap contracts that qualify for and are designated as fair value hedges, we recognize in Interest expense, net, in the Condensed Consolidated Statements of Income the unrealized gain or loss on the derivative resulting from the change in fair value during the period, as well as the offsetting unrealized loss or gain of the hedged item resulting from the change in fair value during the period attributable to the hedged risk. If a hedging relationship involving an interest rate swap contract is terminated, the gain or loss realized on contract termination is recorded as an adjustment to the carrying value of the debt and amortized into Interest expense, net, over the remaining life of the previously hedged debt. The hedged liabilities and related cumulative-basis adjustments for fair value hedges of those liabilities were recorded in the Condensed Consolidated Balance Sheets as follows (in millions):
____________ (1) Current portion of long-term debt includes $82 million and $85 million of carrying value with discontinued hedging relationships as of June 30, 2022 and December 31, 2021, respectively. Long-term debt includes $399 million and $440 million of carrying value with discontinued hedging relationships as of June 30, 2022 and December 31, 2021, respectively. (2) Current portion of long-term debt includes $82 million and $85 million of hedging adjustments on discontinued hedging relationships as of June 30, 2022 and December 31, 2021, respectively. Long-term debt includes $299 million and $340 million of hedging adjustments on discontinued hedging relationships as of June 30, 2022 and December 31, 2021, respectively. Impact of hedging transactions The following tables summarize the amounts recorded in income and expense line items and the effects thereon from fair value and cash flow hedging, including discontinued hedging relationships (in millions):
__________ (1) Gains on hedged items do not exactly offset losses on the related designated hedging instruments due to amortization of the cumulative amounts of fair value hedging adjustments included in the carrying amount of the hedged debt for discontinued hedging relationships and the recognition of gains on terminated hedges when the corresponding hedged item was paid down in the period. No portions of our cash flow hedge contracts were excluded from the assessment of hedge effectiveness. As of June 30, 2022, we expected to reclassify $179 million of net gains on our foreign currency and cross-currency swap contracts out of AOCI and into earnings during the next 12 months. Derivatives not designated as hedges To reduce our exposure to foreign currency fluctuations in certain assets and liabilities denominated in foreign currencies, we enter into foreign currency forward contracts that are not designated as hedging transactions. Most of these exposures are hedged on a month-to-month basis. As of June 30, 2022 and December 31, 2021, the total notional amounts of these foreign currency forward contracts were $550 million and $680 million, respectively. Gains and losses recognized in earnings for our derivative instruments not designated as hedging instruments were not material for the three and six months ended June 30, 2022 and 2021. The fair values of derivatives included in the Condensed Consolidated Balance Sheets were as follows (in millions):
Our derivative contracts that were in liability positions as of June 30, 2022, contain certain credit-risk-related contingent provisions that would be triggered if (i) we were to undergo a change in control and (ii) our or the surviving entity’s creditworthiness deteriorates, which is generally defined as having either a credit rating that is below investment grade or a materially weaker creditworthiness after the change in control. If these events were to occur, the counterparties would have the right, but not the obligation, to close the contracts under early-termination provisions. In such circumstances, the counterparties could request immediate settlement of these contracts for amounts that approximate the then current fair values of the contracts. In addition, our derivative contracts are not subject to any type of master netting arrangement, and amounts due either to or from a counterparty under the contracts may be offset against other amounts due either to or from the same counterparty only if an event of default or termination, as defined, were to occur. The cash flow effects of our derivative contracts in the Condensed Consolidated Statements of Cash Flows are included in Net cash provided by operating activities, except for the settlement of notional amounts of cross-currency swaps, which are included in Net cash used in financing activities.
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Contingencies and commitments |
6 Months Ended |
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Jun. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies and commitments | Contingencies and commitments Contingencies In the ordinary course of business, we are involved in various legal proceedings, government investigations and other matters that are complex in nature and have outcomes that are difficult to predict. See our Annual Report on Form 10-K for the year ended December 31, 2021, Part I, Item 1A. Risk Factors—Our business may be affected by litigation and government investigations. We describe our legal proceedings and other matters that are significant or that we believe could become significant in this footnote; in Note 19, Contingencies and commitments, to the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2021; and in Note 13, Contingencies and commitments, to the condensed consolidated financial statements in our Quarterly Report on Form 10-Q for the period ended March 31, 2022. We record accruals for loss contingencies to the extent that we conclude it is probable that a liability has been incurred and the amount of the related loss can be reasonably estimated. We evaluate, on a quarterly basis, developments in legal proceedings and other matters that could cause an increase or decrease in the amount of the liability that has been accrued previously. Our legal proceedings involve various aspects of our business and a variety of claims, some of which present novel factual allegations and/or unique legal theories. In each of the matters described in this filing; in Note 19, Contingencies and commitments, to the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2021; and in Note 13, Contingencies and commitments, to the condensed consolidated financial statements in our Quarterly Report on Form 10-Q for the period ended March 31, 2022, in which we could incur a liability, our opponents seek an award of a not-yet-quantified amount of damages or an amount that is not material. In addition, a number of the matters pending against us are at very early stages of the legal process, which in complex proceedings of the sort we face often extend for several years. As a result, none of the matters described in this filing; in Note 19, Contingencies and commitments, to the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2021; and in Note 13, Contingencies and commitments, to the condensed consolidated financial statements in our Quarterly Report on Form 10-Q for the period ended March 31, 2022, in which we could incur a liability, have progressed sufficiently through discovery and/or the development of important factual information and legal issues to enable us to estimate a range of possible loss, if any, or such amounts are not material. Although it is not possible to accurately predict or determine the eventual outcomes of these matters, an adverse determination in one or more of these matters currently pending could have a material adverse effect on our consolidated results of operations, financial position or cash flows. Certain recent developments concerning our legal proceedings and other matters are discussed below: ANDA Patent Litigation Otezla ANDA Patent Litigation Amgen Inc. v. Apotex Inc. On June 14, 2022, Amgen filed a lawsuit in the U.S. District Court for the District of New Jersey (the New Jersey District Court) against Apotex Inc. (Apotex) for infringement of U.S. Patent Nos. 7,427,638, 9,872,854 and 10,092,541, which are listed in the Orange Book for Otezla. This lawsuit was based on Apotex’s submission of an ANDA seeking FDA approval to market a generic version of Otezla and seeks an order of the New Jersey District Court making any FDA approval of Apotex’s ANDA effective no earlier than the expiration of the applicable patents. Repatha Patent Litigation Patent Disputes in the International Region On July 21, 2022, Sanofi Biotechnology SAS filed an action against Amgen GmbH and Amgen (Europe) B.V. before the Regional Court of Dusseldorf alleging that the marketing and sale of Repatha infringes European Patent No. 2,756,004 (the EP’004 Patent), seeking infringement damages and injunctive relief. The EP’004 Patent is currently in opposition proceedings, initiated by Amgen and an anonymous third party, before the European Patent Office (EPO). A hearing before the Opposition Division of the EPO was held on June 8 and 9, 2022, and the Opposition Division upheld the validity of the claims at issue with narrowing amendments. The parties are awaiting the Opposition Division’s written opinion. Amgen filed a Notice of Appeal on July 6, 2022. Antitrust Actions Sensipar Antitrust Class Actions On May 11, 2022, the parties filed motions asking permission to seek interlocutory appeal of the U.S. District Court for the District of Delaware’s (the Delaware District Court’s) March 11, 2022 order denying Amgen’s Motion to Dismiss solely with respect to the reverse payment claim and the various state law claims. The plaintiffs did not oppose Amgen’s motion and instead argued all issues should be appealed at this time. Amgen filed its opposition to plaintiffs’ motion on June 10, 2022, and reply briefs were filed on June 24, 2022. HUMIRA® Biosimilar Antitrust Actions On August 1, 2022, the U.S. Court of Appeals for the Seventh Circuit issued an opinion affirming the June 30, 2020 dismissal with prejudice by the U.S. District Court for the Northern District of Illinois of a consolidated complaint against Amgen along with AbbVie Inc., AbbVie Biotechnology Ltd., Samsung Bioepis Co. and Sandoz Inc. Regeneron Pharmaceuticals, Inc. Antitrust Action On May 27, 2022, Regeneron Pharmaceuticals, Inc. (Regeneron) filed suit against Amgen in the Delaware District Court for federal and state antitrust and unfair competition violations and tortious interference with prospective business relations. Regeneron alleges that Amgen’s sales contracting practices for Repatha, ENBREL and Otezla with key insurers, third-party payors and PBMs have harmed the sales of its product PRALUENT® and focuses on two primary arguments: that Amgen improperly bundled sales of Repatha with ENBREL, Otezla and potentially other products and sought exclusive or de facto exclusive formulary positioning for Repatha. Amgen’s initial responsive pleading was filed on August 1, 2022. U.S. Tax Litigation Amgen Inc. & Subsidiaries v. Commissioner of Internal Revenue See Note 4, Income taxes, for discussion of the IRS tax dispute and the Company’s petition in the U.S. Tax Court.
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Summary of significant accounting policies (Policies) |
6 Months Ended |
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Jun. 30, 2022 | |
Accounting Policies [Abstract] | |
Business | Business Amgen Inc. (including its subsidiaries, referred to as “Amgen,” “the Company,” “we,” “our” or “us”) is a global biotechnology pioneer that discovers, develops, manufactures and delivers innovative human therapeutics. We operate in one business segment: human therapeutics.
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Basis of presentation | Basis of presentation The financial information for the three and six months ended June 30, 2022 and 2021, is unaudited but includes all adjustments (consisting of only normal, recurring adjustments unless otherwise indicated), which Amgen considers necessary for a fair presentation of its condensed consolidated results of operations for those periods. Interim results are not necessarily indicative of results for the full fiscal year. The condensed consolidated financial statements should be read in conjunction with our consolidated financial statements and the notes thereto contained in our Annual Report on Form 10-K for the year ended December 31, 2021, and with our condensed consolidated financial statements and the notes thereto contained in our Quarterly Report on Form 10-Q for the period ended March 31, 2022.
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Principles of consolidation | Principles of consolidation The condensed consolidated financial statements include the accounts of Amgen as well as its majority-owned subsidiaries. In determining whether we are the primary beneficiary of a variable interest entity, we consider whether we have both the power to direct activities of the entity that most significantly impact the entity’s economic performance and the obligation to absorb losses of or the right to receive benefits from the entity that could potentially be significant to that entity. We do not have any significant interests in any variable interest entities of which we are the primary beneficiary. All material intercompany transactions and balances have been eliminated in consolidation.
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Use of estimates | Use of estimates The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results may differ from those estimates.
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Property, plant and equipment, net | Property, plant and equipment, net Property, plant and equipment is recorded at historical cost, net of accumulated depreciation and amortization, of $9.0 billion and $8.8 billion as of June 30, 2022 and December 31, 2021, respectively.
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Other recent accounting pronouncements | Recent accounting pronouncements In March 2020, the FASB issued a new accounting standard to ease the financial reporting burdens caused by the expected market transition from LIBOR and other interbank offered rates to alternative reference rates, commonly referred to as reference rate reform. The new standard provides temporary optional expedients and exceptions to current GAAP guidance on contract modifications and hedge accounting. Specifically, a modification to transition to an alternative reference rate is treated as an event that does not require contract remeasurement or reassessment of a previous accounting treatment. Moreover, for all types of hedging relationships, an entity is permitted to change the reference rate without having to dedesignate the hedging relationship. The standard is generally effective for all contract modifications made and hedging relationships evaluated through December 31, 2022. In January 2021, the FASB issued a new accounting standard that expanded the scope of the original March 2020 standard to include derivative instruments on discounting transactions. We do not expect the two standards to have a material impact on our condensed consolidated financial statements. In November 2021, the FASB issued a new accounting standard around the recognition and measurement of contract assets and contract liabilities from revenue contracts with customers acquired in a business combination. The new standard clarifies that contract assets and contract liabilities acquired in a business combination from an acquiree should initially be recognized by applying revenue recognition principles and not at fair value. The standard is effective for interim and annual periods beginning on January 1, 2023, and early adoption is permitted. The impact of this standard will depend on the facts and circumstances of future transactions.
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Acquisitions (Tables) |
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Schedule of Business Acquisitions, by Acquisition | The following table summarizes the total consideration and allocated acquisition date fair values of assets acquired and liabilities assumed, inclusive of measurement period adjustments (in millions):
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Revenues (Tables) |
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---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of revenue by product and by geographic area | Revenues were as follows (in millions):
____________ (1) Hedging gains and losses, which are included in product sales, were not material for the three and six months ended June 30, 2022 and 2021.
|
Earnings per share (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Computation for basic and diluted earnings per share | The computations for basic and diluted EPS were as follows (in millions, except per-share data):
|
Investments (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Amortized cost, gross unrealized gains, gross unrealized losses and estimated fair values of available-for-sale investments by type of security | The amortized cost, gross unrealized gains, gross unrealized losses and fair values of interest-bearing securities, which are considered available-for-sale, by type of security were as follows (in millions):
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Fair values of available-for-sale investments by classification in the Consolidated Balance Sheets | The fair values of interest-bearing securities by location in the Condensed Consolidated Balance Sheets were as follows (in millions):
|
Inventories (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories | Inventories consisted of the following (in millions):
|
Goodwill and other intangible assets (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of goodwill | The change in the carrying amount of goodwill was as follows (in millions):
____________ (1) Composed of adjustments to goodwill resulting from changes to the acquisition date fair values of net assets acquired in the acquisition of Teneobio and the nonstrategic Gensenta divestiture. See Note 2, Acquisitions and divestitures.
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Schedule of identifiable intangible assets | Other intangible assets consisted of the following (in millions):
|
Financing arrangements (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of borrowings | Our borrowings consisted of the following (in millions):
|
Stockholders' equity (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of activity under our stock repurchase program | Activity under our stock repurchase program, on a trade date basis, was as follows (in millions):
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Components of accumulated other comprehensive income | The components of AOCI were as follows (in millions):
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Reclassifications out of accumulated other comprehensive income | Reclassifications out of AOCI and into earnings, including related income tax expenses, were as follows (in millions):
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Fair value measurement (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair value of each major class of financial assets and liabilities measured at fair value on a recurring basis | The fair values of each major class of the Company’s financial assets and liabilities measured at fair value on a recurring basis were as follows (in millions):
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Schedule of Business Acquisitions by Acquisition, Contingent Consideration | Changes in the carrying amounts of contingent consideration obligations were as follows (in millions):
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Derivative instruments (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of notional amounts and interest rates for cross-currency swaps | The notional amounts and interest rates of our cross-currency swaps as of June 30, 2022, were as follows (notional amounts in millions):
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Unrealized gain (loss) recognized in Other Comprehensive Income for our derivative instruments designated as cash flow hedges | The unrealized gains and losses recognized in AOCI for our derivative instruments designated as cash flow hedges were as follows (in millions):
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Derivatives in fair value hedging relationships | The hedged liabilities and related cumulative-basis adjustments for fair value hedges of those liabilities were recorded in the Condensed Consolidated Balance Sheets as follows (in millions):
____________ (1) Current portion of long-term debt includes $82 million and $85 million of carrying value with discontinued hedging relationships as of June 30, 2022 and December 31, 2021, respectively. Long-term debt includes $399 million and $440 million of carrying value with discontinued hedging relationships as of June 30, 2022 and December 31, 2021, respectively. (2) Current portion of long-term debt includes $82 million and $85 million of hedging adjustments on discontinued hedging relationships as of June 30, 2022 and December 31, 2021, respectively. Long-term debt includes $299 million and $340 million of hedging adjustments on discontinued hedging relationships as of June 30, 2022 and December 31, 2021, respectively.
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Summary of amounts of income and expense line items | The following tables summarize the amounts recorded in income and expense line items and the effects thereon from fair value and cash flow hedging, including discontinued hedging relationships (in millions):
__________ (1) Gains on hedged items do not exactly offset losses on the related designated hedging instruments due to amortization of the cumulative amounts of fair value hedging adjustments included in the carrying amount of the hedged debt for discontinued hedging relationships and the recognition of gains on terminated hedges when the corresponding hedged item was paid down in the period.
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Fair values of derivatives included in the Condensed Consolidated Balance Sheets | The fair values of derivatives included in the Condensed Consolidated Balance Sheets were as follows (in millions):
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Summary of significant accounting policies (Details) $ in Billions |
6 Months Ended | |
---|---|---|
Jun. 30, 2022
USD ($)
segment
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Dec. 31, 2021
USD ($)
|
|
Accounting Policies [Abstract] | ||
Number of operating segments | segment | 1 | |
Accumulated depreciation and amortization on property, plant and equipment | $ | $ 9.0 | $ 8.8 |
Acquisitions - Aggregate Consideration Paid (Details) - USD ($) $ in Millions |
6 Months Ended | |
---|---|---|
Jun. 30, 2022 |
Dec. 31, 2021 |
|
Business Acquisition [Line Items] | ||
Goodwill | $ 14,865 | $ 14,890 |
Teneobio | ||
Business Acquisition [Line Items] | ||
Cash paid | 993 | |
Contingent consideration obligation for acquisition | 299 | |
Business asset acquisition, consideration transferred | 1,292 | |
Fair value of assets acquired, cash | 100 | |
IPR&D | 991 | |
Goodwill | 273 | |
Other assets, net | 16 | |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Deferred Tax Liabilities | (244) | |
Total assets acquired, net | 1,292 | |
Teneobio | R & D Technology rights | ||
Business Acquisition [Line Items] | ||
Fair value of assets acquired, licensing rights | 115 | |
Teneobio | Licensing rights | ||
Business Acquisition [Line Items] | ||
Fair value of assets acquired, licensing rights | $ 41 |
Income taxes (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||||
---|---|---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
Apr. 28, 2022 |
May 31, 2021 |
|
Income Tax Examination [Line Items] | ||||||
Effective income tax rate | 14.00% | 16.80% | 12.90% | 12.60% | ||
Increase in unrecognized tax benefits resulting from tax positions taken during the current period | $ 50 | $ 95 | ||||
Domestic Tax Authority | ||||||
Income Tax Examination [Line Items] | ||||||
Proposed additional income tax | $ 3,600 | |||||
Repatriation tax on proposed additional tax | $ 900 | |||||
Proposed additional income tax 2013-2015 | $ 5,100 | |||||
Penalties on proposed additional income tax 2013-2015 | 2,000 | |||||
Repatriation tax on proposed additional tax 2013-2015 | $ 2,200 |
Earnings per share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions |
3 Months Ended | 6 Months Ended | ||||
---|---|---|---|---|---|---|
Jun. 30, 2022 |
Mar. 31, 2022 |
Jun. 30, 2021 |
Mar. 31, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
|
Income (Numerator): | ||||||
Net income for basic and diluted EPS | $ 1,317 | $ 1,476 | $ 464 | $ 1,646 | $ 2,793 | $ 2,110 |
Shares (Denominator): | ||||||
Weighted-average shares for basic EPS (in shares) | 535 | 573 | 541 | 575 | ||
Effect of dilutive securities (in shares) | 2 | 3 | 3 | 3 | ||
Weighted-average shares for diluted EPS (in shares) | 537 | 576 | 544 | 578 | ||
Basic EPS (in usd per share) | $ 2.46 | $ 0.81 | $ 5.16 | $ 3.67 | ||
Diluted EPS (in usd per share) | $ 2.45 | $ 0.81 | $ 5.13 | $ 3.65 |
Investments (Details) - USD ($) $ in Millions |
Jun. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Debt Securities, Available-for-sale [Line Items] | ||
Amortized cost | $ 6,413 | $ 7,304 |
Gross unrealized gains | 0 | 0 |
Gross unrealized losses | 0 | 0 |
Fair values | 6,413 | 7,304 |
U.S. Treasury notes [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized cost | 0 | 47 |
Gross unrealized gains | 0 | 0 |
Gross unrealized losses | 0 | 0 |
Fair values | 0 | 47 |
U.S. Treasury bills [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized cost | 1,980 | 1,400 |
Gross unrealized gains | 0 | 0 |
Gross unrealized losses | 0 | 0 |
Fair values | 1,980 | 1,400 |
Money market mutual funds [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized cost | 4,433 | 5,856 |
Gross unrealized gains | 0 | 0 |
Gross unrealized losses | 0 | 0 |
Fair values | 4,433 | 5,856 |
Other short-term interest-bearing securities [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized cost | 0 | 1 |
Gross unrealized gains | 0 | 0 |
Gross unrealized losses | 0 | 0 |
Fair values | $ 0 | $ 1 |
Investments (Fair Values by Classification) (Details) - USD ($) $ in Millions |
Jun. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Fair values of available-for-sale investments by classification in the Consolidated Balance Sheets | ||
Marketable securities | $ 1,980 | $ 48 |
Total interest-bearing securities | 6,413 | 7,304 |
Available-for-sale investments [Member] | ||
Fair values of available-for-sale investments by classification in the Consolidated Balance Sheets | ||
Cash and cash equivalents | 4,433 | 7,256 |
Marketable securities | 1,980 | 48 |
Total interest-bearing securities | $ 6,413 | $ 7,304 |
Investments (Available-for-sale Investments) (Details Textual) - USD ($) $ in Millions |
Jun. 30, 2022 |
Dec. 31, 2021 |
Jun. 30, 2021 |
Dec. 31, 2020 |
---|---|---|---|---|
Investments, Debt and Equity Securities [Abstract] | ||||
Cash | $ 770 | $ 733 | ||
Debt Securities, Available-for-sale [Line Items] | ||||
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | $ 5,203 | $ 7,989 | $ 6,630 | $ 6,266 |
Investments (Fair Values by Contractual Maturity) (Details) - USD ($) $ in Millions |
Jun. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Investments, Debt and Equity Securities [Abstract] | ||
Total interest-bearing securities | $ 6,413 | $ 7,304 |
Investments (Equity Securities) (Details Textual) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
Dec. 31, 2021 |
|
Debt Securities, Available-for-sale [Line Items] | |||||
Equity securities | $ 492 | $ 492 | $ 831 | ||
Equity Securities, FV-NI, Unrealized Gain (Loss) | (106) | $ 25 | (276) | $ (31) | |
Equity securities without readily determinable fair value | 280 | 280 | 262 | ||
Fair Value, Inputs, Level 1 [Member] | |||||
Debt Securities, Available-for-sale [Line Items] | |||||
Equity securities | $ 361 | $ 361 | $ 611 |
Investments (BeiGene) (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
Dec. 31, 2021 |
|
Net Investment Income [Line Items] | |||||
Income (Loss) from Equity Method Investments | $ (497) | $ 36 | |||
Collaborative arrangement with BeiGene, Ltd. [Member] | |||||
Net Investment Income [Line Items] | |||||
Ownership percentage | 18.20% | 18.20% | 18.40% | ||
Income (Loss) from Equity Method Investments | $ (80) | $ 14 | $ (188) | (83) | |
Equity Method Investment, Amortization of Difference Between Carrying Amount and Underlying Equity | 48 | $ 42 | 95 | $ 84 | |
Carrying value of equity method investment | 2,500 | 2,500 | $ 2,800 | ||
Equity Method Investments,Quoted Market Price | $ 3,100 | $ 3,100 | $ 5,100 |
Investments (Neumora Therapeutics, Inc.) (Details) - Neumora Therapeutics, Inc. [Member] - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2022 |
Dec. 31, 2021 |
|
Net Investment Income [Line Items] | ||||
Ownership percentage | 25.90% | 25.70% | 25.70% | 25.90% |
Equity Method Investment, Aggregate Cost | $ 257 | |||
Payments to Acquire Equity Method Investments | 100 | |||
Noncash or Part Noncash Acquisition, Investments Acquired | $ 157 | |||
Equity Method Investments, Fair Value Disclosure | $ 131 | $ 131 | $ 220 | |
Equity method investment, change in carrying value | $ 39 | $ 89 |
Investments Investments (Limited Partnership Investments) (Details) - Fair Value Measured at Net Asset Value Per Share [Member] - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
Dec. 31, 2021 |
|
Net Investment Income [Line Items] | |||||
Investment Company, Financial Support to Investee Contractually Required, Amount | $ 209 | $ 209 | |||
Limited Partnership [Member] | |||||
Net Investment Income [Line Items] | |||||
Alternative investments | 338 | 338 | $ 573 | ||
Net gains (losses) from limited partnership investments | $ (60) | $ (43) | $ (220) | $ 165 |
Inventories (Details) - USD ($) $ in Millions |
Jun. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Inventory Disclosure [Abstract] | ||
Raw materials | $ 779 | $ 647 |
Work in process | 2,763 | 2,367 |
Finished goods | 1,012 | 1,072 |
Total inventories | $ 4,554 | $ 4,086 |
Goodwill and other intangible assets (Goodwill Roll Forward) (Details) $ in Millions |
6 Months Ended |
---|---|
Jun. 30, 2022
USD ($)
| |
Goodwill [Roll Forward] | |
Beginning balance | $ 14,890 |
Net increase in goodwill | 7 |
Currency translation adjustment | (32) |
Ending balance | $ 14,865 |
Goodwill and other intangible assets (Details Textual) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
|
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization charges associated with finite-lived intangible assets | $ 629 | $ 652 | $ 1,300 | $ 1,300 |
Total estimated amortization of finite-lived intangible assets for the six months ending December 31, 2022 | 1,300 | 1,300 | ||
Total estimated amortization of finite-lived intangible assets for 2023 | 2,500 | 2,500 | ||
Total estimated amortization of finite-lived intangible assets for 2024 | 2,500 | 2,500 | ||
Total estimated amortization of finite-lived intangible assets for 2025 | 2,400 | 2,400 | ||
Total estimated amortization of finite-lived intangible assets for 2026 | 1,700 | 1,700 | ||
Total estimated amortization of finite-lived intangible assets for 2027 | $ 1,800 | $ 1,800 |
Stockholders' equity (Share Repurchase Program) (Details) - USD ($) shares in Millions, $ in Millions |
3 Months Ended | 6 Months Ended | ||||
---|---|---|---|---|---|---|
Jun. 30, 2022 |
Mar. 31, 2022 |
Jun. 30, 2021 |
Mar. 31, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
|
Equity [Abstract] | ||||||
Stock repurchased, Shares | 0.0 | 24.6 | 6.5 | 3.7 | 24.6 | 10.2 |
Stock repurchased | $ 0 | $ 5,410 | $ 1,592 | $ 865 | $ 5,410 | $ 2,457 |
Fair value measurement (Details Textual) - USD ($) $ in Millions |
6 Months Ended | |
---|---|---|
Jun. 30, 2022 |
Dec. 31, 2021 |
|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Length of time hedged in foreign currency contracts (or less) | 3 years | |
Long-term debt, fair value | $ 34,400 | $ 37,900 |
Carrying value of debt | 36,522 | 33,309 |
Collaborative arrangement with BeiGene, Ltd. [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity Method Investments,Quoted Market Price | 3,100 | 5,100 |
Carrying value of equity method investment | 2,500 | 2,800 |
Teneobio Inc. | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Maximum additional consideration due contingent on certain milestones | $ 1,600 | $ 1,600 |
Fair value measurement (Contingent Consideration Obligations) (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
|
Business Combination, Contingent Consideration [Roll Forward] | ||||
Beginning balance | $ 330 | $ 39 | $ 342 | $ 33 |
Payments | (1) | (2) | (3) | (3) |
Net changes in valuations | (19) | 11 | (29) | 18 |
Ending balance | $ 310 | $ 48 | $ 310 | $ 48 |
Derivative instruments (Effective Portion of Unrealized Gain (Loss)) (Details) - Cash flow hedge [Member] - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
|
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Total unrealized gains (losses) | $ 67 | $ (31) | $ 123 | $ 77 |
Foreign currency contracts [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Total unrealized gains (losses) | 252 | (46) | 330 | 137 |
Cross-currency swap contracts [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Total unrealized gains (losses) | $ (185) | $ 15 | $ (207) | $ (60) |
Derivative instruments (Hedged Liabilities and Cumulative Amount) (Details) - USD ($) $ in Millions |
Jun. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Derivative [Line Items] | ||
Cumulative amounts of fair value hedging adjustments related to the carrying amounts of the hedged liabilities | $ (210) | $ 284 |
Current portion of long-term debt [Member] | ||
Derivative [Line Items] | ||
Hedged Liability, Fair Value Hedge | 82 | 85 |
Cumulative amounts of fair value hedging adjustments related to the carrying amounts of the hedged liabilities | 82 | 85 |
Carrying value with discontinued hedging relationships | 82 | 85 |
Hedging adjustments on discontinued hedging relationships | 82 | 85 |
Long-term debt [Member] | ||
Derivative [Line Items] | ||
Hedged Liability, Fair Value Hedge | 6,241 | 6,729 |
Cumulative amounts of fair value hedging adjustments related to the carrying amounts of the hedged liabilities | (292) | 199 |
Carrying value with discontinued hedging relationships | 399 | 440 |
Hedging adjustments on discontinued hedging relationships | $ 299 | $ 340 |
Contingencies and commitments (Details) |
May 27, 2022
argument
|
---|---|
Loss Contingencies [Line Items] | |
Litigation Settlement, Number Of Primary Arguments | 2 |
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