XML 39 R28.htm IDEA: XBRL DOCUMENT v3.24.3
Other (Income)/Deductions—Net (Tables)
 9 Months Ended
Sep. 29, 2024
Other Income and Expenses [Abstract]  
Schedule of Other (Income)/Deductions - Net
Components of Other (income)/deductions––net include:
 Three Months EndedNine Months Ended
(MILLIONS)September 29,
2024		October 1,
2023		September 29,
2024		October 1,
2023
Interest income$(116)$(523)$(374)$(1,015)
Interest expense783 695 2,352 1,521 
Net interest expense(a)
668 173 1,977 505 
Net (gains)/losses recognized during the period on equity securities
(446)393 (129)709 
Income from collaborations, out-licensing arrangements and sales of compound/product rights(1)(10)(25)(84)
Net periodic benefit costs/(credits) other than service costs(102)(92)(311)(260)
Certain legal matters, net(b)
45 71 422 246 
Certain asset impairments(c)
— — 349 264 
Haleon equity method (income)/loss(d)
(150)(131)(102)(354)
Other, net(e)
228 (222)(153)(645)
Other (income)/deductions––net$243 $181 $2,030 $381 
(a)The increase in net interest expense in the third quarter of 2024 reflects (i) a decrease in interest income due to lower investment balances after completion of our $43.4 billion Seagen acquisition in December 2023 and (ii) higher interest expense driven by the remaining balance of our $8 billion of commercial paper issued in the fourth quarter of 2023 as part of the financing for our acquisition of Seagen. The increase in net interest expense in the first nine months of 2024 reflects (i) higher interest expense driven by our $31 billion aggregate principal amount of senior unsecured notes issued in May 2023, as well as the remaining balance of the $8 billion of commercial paper issued in the fourth quarter of 2023, both part of the financing for our acquisition of Seagen and (ii) a decrease in interest income due to lower investment balances after completion of our $43.4 billion Seagen acquisition in December 2023.
(b)The third quarter and first nine months of 2024 primarily include certain product liability expenses related to products discontinued and/or divested by Pfizer. The third quarter of 2023 included legal obligations related to pre-acquisition matters and certain product liability expenses related to products discontinued and/or divested by Pfizer. The first nine months of 2023 primarily included certain product liability and other legal expenses related to products discontinued and/or divested by Pfizer and legal obligations related to pre-acquisition matters.
(c)The first nine months of 2024 include a $240 million intangible asset impairment charge, associated with our Biopharma segment that represents IPR&D related to a Phase 3 study for the treatment of DMD, which reflects unfavorable clinical trial results. The first nine months of 2023 primarily represented intangible asset impairment charges, including (i) $128 million associated with Other business activities, related to IPR&D and developed technology rights for acquired software assets and reflected unfavorable pivotal trial results and updated commercial forecasts, and (ii) $120 million associated with our Biopharma segment resulting from the discontinuation of a study related to an out-licensed IPR&D asset for the treatment of prostate cancer.
(d)See Note 2B.
(e)The third quarter and first nine months of 2024 primarily include, among other things, a charge of $420 million related to the expected sale of one of our facilities resulting from the discontinuation of our DMD program. The first nine months of 2024 also includes, among other things, a $150 million gain on the partial sale of our investment in Haleon in the first quarter of 2024 and dividend income of $183 million from our investment in ViiV. The third quarter and first nine months of 2023 included, among other things, a $222 million gain on the divestiture of our early-stage rare disease gene therapy portfolio to Alexion. The first nine months of 2023 included, among other things, dividend income of $213 million from our investment in ViiV and $211 million from our investment in Nimbus resulting from Takeda’s acquisition of Nimbus’s oral, selective allosteric tyrosine kinase 2 (TYK2) inhibitor program subsidiary.
Schedule of Impaired Intangible Assets
Additional information about the intangible assets that were impaired during 2024 follows:
Nine Months Ended
Fair Value(a)
September 29, 2024
(MILLIONS)AmountLevel 1Level 2Level 3Impairment
Intangible assets–– IPR&D(b)
$— $— — $— $240 
Intangible assets––Developed technology rights(b)
102 — — 102 109 
Total
$102 $— $— $102 $349 
(a)The fair value amount is presented as of the date of impairment, as this asset is not measured at fair value on a recurring basis. See also Note 1E in our 2023 Form 10-K.
(b)Reflects intangible assets written down to fair value in 2024. Fair value was determined using the income approach, specifically the multi-period excess earnings method, also known as the discounted cash flow method. We started with a forecast of all the expected net cash flows for the asset and then applied an asset-specific discount rate to arrive at a net present value amount. Some of the more significant estimates and assumptions inherent in this approach include: the amount and timing of the projected net cash flows, which includes the expected impact of competitive, legal and/or regulatory forces on the product; the discount rate, which seeks to reflect the various risks inherent in the projected cash flows; and the tax rate, which seeks to incorporate the geographic diversity of the projected cash flows.