Segment and other information

3 Months Ended

Mar. 31, 2025

Segment Reporting [Abstract]

Segment and other information

Segment and other information

We operate our business in one operating segment, which also represents one reportable segment: human therapeutics. Therefore, results of our operations are reported on a consolidated basis for purposes of segment reporting, consistent with internal management reporting.

The human therapeutics segment is engaged in the discovery, development, manufacturing and delivery of innovative medicines to fight some of the world’s toughest diseases. The Company’s Chief Executive Officer has been identified as the chief operating decision maker (CODM). The CODM manages and allocates resources on a consolidated basis. The determination of a single segment is consistent with the financial information regularly reviewed by the CODM for purposes of evaluating performance and allocating resources, which is reviewed on a consolidated basis.

As the Company’s CODM evaluates the financial performance of the Company’s human therapeutics segment on a consolidated basis, the measure of segment performance is net income, as reflected in the Condensed Consolidated Statements of Income (Loss). The CODM uses net income to allocate resources on a consolidated basis, which enables the CODM to both assess the overall level of resources available and optimize the distribution of resources across functions, therapeutic areas, regions and research and development programs in line with our long-term corporate-wide strategic goals. In addition, the CODM may also evaluate financial performance based on net income adjusted for certain items that are unusual and non-recurring. As the Company manages its assets on a consolidated basis, the measure of segment assets is total assets, as reflected in the Condensed Consolidated Balance Sheets. See Note 6, Investments, for further information regarding equity method investments, and Net cash used in investing activities in the Condensed Consolidated Statements of Cash Flows for further information regarding capital expenditures.

The following table provides segment revenues, significant segment expenses, other segment items, reported segment net income (loss) and a reconciliation of segment net income (loss) to the Company’s total consolidated net income (loss) for the three months ended March 31, 2025 and 2024 (in millions):

	Three months ended March 31,
	2025		2024
Revenues:
Product sales	$	7,873	$	7,118
Other revenues	276		329
Total revenues	8,149		7,447
Less:
Manufacturing cost of sales(1)(2)	2,528		2,814
Profit share and royalties in cost of sales(1)	440		386
Research and development(1)	1,486		1,343
Sales and marketing(1)	1,066		1,204
General and administrative(1)	621		604
Other segment items(3)	(573)		520
Equity in loss (income) of equity method investments	11		(27)
Interest income	(126)		(153)
Interest expense, net	723		824
Provision for income taxes	243		45
Segment net income (loss)	1,730		(113)
Reconciliation of profit or loss:
Adjustments and reconciling items	—		—
Consolidated net income (loss)	$	1,730	$	(113)

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(1)    During both the three months ended March 31, 2025 and 2024, amortization of our finite-lived intangible assets was $1.2 billion, which was primarily included in Cost of sales in the Condensed Consolidated Statements of Income (Loss). In addition, during the three months ended March 31, 2025 and 2024, we recognized depreciation and right-of-use asset amortization of $209 million and $201 million, respectively.

(2)    During the three months ended March 31, 2025 and 2024, manufacturing cost of sales included amortization of step-up to fair value of inventory acquired in business combinations of $363 million and $693 million, respectively.

(3)    Other segment items included in Segment net income (loss) primarily consisted of fair value adjustments on equity securities (see Note 6, Investments) and net impairment charges on intangible assets (see Note 8, Goodwill and other intangible assets).