Intangible Assets and Goodwill

9 Months Ended

Sep. 30, 2013

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets: Our intangible assets consist of developed product rights obtained primarily from the Pharmion, Gloucester and Abraxis acquisitions, in-process research and development (IPR&D) product rights from the Gloucester and Avila acquisitions and technology obtained primarily from the Avila acquisition. Also included are contract-based licenses and other miscellaneous intangibles. The amortization periods related to our finite-lived intangible assets range from one to 17 years. The following summary of intangible assets by category includes intangibles currently being amortized and intangibles not yet subject to amortization:



September 30, 2013	Gross Carrying Value		Accumulated Amortization			Intangible Assets, Net		Weighted Average Life (Years)
Amortizable intangible assets:
Acquired developed product rights	$	3,405.9	$	(973.4	)	$	2,432.5	13.0
Technology	333.7		(75.5		)	258.2		7.0
Licenses	66.2		(12.9		)	53.3		16.5
Other	45.0		(18.7		)	26.3		8.3
	3,850.8		(1,080.5		)	2,770.3		12.5
Non-amortized intangible assets:
Acquired IPR&D product rights	137.9		—			137.9
Total intangible assets	$	3,988.7	$	(1,080.5	)	$	2,908.2

December 31, 2012	Gross Carrying Value		Accumulated Amortization			Intangible Assets, Net		Weighted Average Life (Years)
Amortizable intangible assets:
Acquired developed product rights	$	3,400.4	$	(814.5	)	$	2,585.9	13.0
Technology	333.3		(39.8		)	293.5		7.0
Licenses	64.3		(10.0		)	54.3		16.8
Other	43.4		(14.6		)	28.8		8.5
	3,841.4		(878.9		)	2,962.5		12.5
Non-amortized intangible assets:
Acquired IPR&D product rights	137.9		—			137.9
Total intangible assets	$	3,979.3	$	(878.9	)	$	3,100.4

The gross carrying value of intangible assets increased by $9.4 million at September 30, 2013 compared to December 31, 2012 primarily resulting from the acquisition of $5.5 million in developed product rights and $3.9 million from other miscellaneous agreements.

Amortization expense was $67.5 million and $46.4 million for the three-month periods ended September 30, 2013 and 2012, respectively, and $201.6 million and $133.0 million for the nine-month periods ended September 30, 2013 and 2012, respectively. The increases in amortization expense in the quarter and year-to-date periods ended September 30, 2013 were primarily due to the October 2012 approval of ABRAXANE^® in the U.S. for the treatment of non-small cell lung cancer (NSCLC) which resulted in the commencement of amortization of the related intangible asset and an increase in amortization of technology related to the March 7, 2012 acquisition of Avila and its Avilomics™ platform. Assuming no changes in the gross carrying amount of intangible assets, the amortization of intangible assets for years 2013 through 2017 is estimated to be in the range of approximately $255.0 million to $270.0 million annually.

Goodwill: At September 30, 2013, our goodwill related to the 2012 acquisition of Avila, the 2010 acquisitions of Abraxis and Gloucester, the 2008 acquisition of Pharmion and the 2004 acquisition of Penn T Limited.

The change in carrying value of goodwill is summarized as follows:



Balance at December 31, 2012	$	2,042.8
Tax benefit on the exercise of Pharmion converted stock options	(0.7		)
Balance at September 30, 2013	$	2,042.1

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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