What changed in this filing

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Item 9A. Controls and Procedures

2023-02-09 compared with 2022-02-16 · 388 added, 478 removed, 1781 unchanged (33% of the section changed)

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EXECUTIVE COMPENSATION

Information about director and executive compensation is incorporated by reference from the section entitled EXECUTIVE COMPENSATION in our Proxy Statement.

Information about director and executive compensation is incorporated by reference from the sections entitled COMPENSATION DISCUSSION AND ANALYSIS, EXECUTIVE COMPENSATION TABLES, DIRECTOR COMPENSATION and CORPORATE GOVERNANCE—Pay Ratio in our Proxy Statement.

Information about compensation committee matters is incorporated by reference from the sections entitled CORPORATE GOVERNANCE—Compensation and Management Development Committee and CORPORATE GOVERNANCE—Compensation Committee Report in our Proxy Statement.

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The following table sets forth certain information as of December 31, 2022, concerning the shares of our common stock that may be issued under any form of award granted under our equity compensation plans in effect as of December 31, 2022 (including upon the exercise of options, upon the vesting of awards of RSUs or when performance units are earned and related dividend equivalents have been granted).

Plan category Number of securities to be issued upon exercise of outstanding options and rights Weighted-average exercise price of outstanding options and rights Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))

Equity compensation plans approved by Amgen security holders:

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Total all plans 10,237,811 $ 207.29 19,657,894

(1) The Amended and Restated 2009 Equity Incentive Plan employs a fungible share-counting formula for determining the number of shares available for issuance under the plan.

(1) The Amended 2009 Plan employs a fungible share-counting formula for determining the number of shares available for issuance under the plan.

In accordance with this formula, each option or stock appreciation right counts as one share, while each RSU, performance unit or dividend equivalent counts as 1.9 shares.

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(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.)

2.5 Agreement and Plan of Merger, dated as of August 3, 2022, among ChemoCentryx, Inc., Amgen Inc.

and Carnation Merger Sub, Inc.

(Filed as an exhibit to Form 8-K on August 4, 2022 and incorporated herein by reference.)

2.6 Transaction Agreement, dated as of December 11, 2022, by and among Amgen Inc., Pillartree Limited and Horizon Therapeutics plc.

(Filed as an exhibit to Form 8-K on December 12, 2022 and incorporated herein by reference.)

2.7 Appendix 3 to the Rule 2.7 Announcement, dated as of December 12, 2022 (Conditions Appendix).

(Filed as an exhibit to Form 8-K on December 12, 2022 and incorporated herein by reference.)

3.1 Restated Certificate of Incorporation of Amgen Inc.

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(Filed as an exhibit to Form 8-K on August 18, 2020 and incorporated herein by reference.)

4.31 Registration Rights Agreement, dated as of August 17, 2020, by and among Amgen Inc., BofA Securities, Inc.

Morgan Securities LLC, as lead dealer managers, and BNP Paribas Securities Corp., Deutsche Bank Securities Inc., RBC Capital Markets, LLC, Blaylock Van, LLC and Siebert Williams Shank & Co., LLC, as co-dealer managers.

4.31 Officer’s Certificate of Amgen Inc., dated as of August 9, 2021, including forms of the Company’s 1.650% Senior Notes due 2028, 2.000% Senior Notes due 2032, 2.800% Senior Notes due 2041 and 3.000% Senior Notes due 2052.

(Filed as an exhibit to Form 8-K on August 9, 2021 and incorporated herein by reference.)

4.32 Officer’s Certificate of Amgen Inc., dated as of February 22, 2022, including forms of the Company’s 3.000% Senior Notes due 2029, 3.350% Senior Notes due 2032, 4.200% Senior Notes due 2052 and 4.400% Senior Notes due 2062.

(Filed as an exhibit to Form 8-K on February 22, 2022 and incorporated herein by reference.)

4.33 Officer’s Certificate of Amgen Inc., dated as of August 18, 2022, including forms of the Company’s 4.050% Senior Notes due 2029, 4.200% Senior Notes due 2033 and 4.875% Senior Notes due 2053.

(Filed as an exhibit to Form 8-K on August 18, 2022 and incorporated herein by reference.)

4.34* Description of Amgen Inc.’s Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934.

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(As Amended and Restated on October 21, 2020.) (Filed as an exhibit to Form 10-K for the year ended December 31, 2020 on February 9, 2021 and incorporated herein by reference.)

10.9+ Form of Grant of Non-Qualified Stock Option Agreement for the Amgen Inc.

2009 Director Equity Incentive Program.

(Filed as an exhibit to Form 8-K on May 8, 2009 and incorporated herein by reference.)

10.9+ Form of Restricted Stock Unit Agreement for the Amgen Inc.

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Supplemental Retirement Plan, effective October 20, 2021.

(Filed as an exhibit to Form 10-K for the year ended December 31, 2021 on February 16, 2022 and incorporated herein by reference.)

10.11.4+* Fourth Amendment to the Amgen Inc.

Supplemental Retirement Plan, effective October 20, 2022.

10.12+ Amended and Restated Amgen Change of Control Severance Plan.

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Executive Incentive Plan.

(As Amended and Restated effective January 1, 2009.) (Filed as an exhibit to Form 10-Q for the quarter ended September 30, 2008 on November 7, 2008 and incorporated herein by reference.)

10.18+ First Amendment to the Amgen Inc.

Executive Incentive Plan, effective December 13, 2012.

(Filed as an exhibit to Form 10-K for the year ended December 31, 2012 on February 27, 2013 and incorporated herein by reference.)

10.19+ Second Amendment to the Amgen Inc.

Executive Incentive Plan, effective January 1, 2017.

(Filed as an exhibit to Form 10-Q for the quarter ended March 31, 2017 on April 27, 2017 and incorporated herein by reference.)

(As Amended and Restated effective January 1, 2022.) (Filed as an exhibit to Form 10-Q for the quarter ended March 31, 2022 on April 28, 2022 and incorporated herein by reference.)

10.14+ Amgen Nonqualified Deferred Compensation Plan.

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10.14.3+ Third Amendment to the Amgen Nonqualified Deferred Compensation Plan, effective January 1, 2022.

10.24+ Agreement between Amgen Inc.

and Peter Griffith, dated October 18, 2019.

(Filed as an exhibit to Form 10-Q for the quarter ended March 31, 2020 on May 1, 2020 and incorporated herein by reference.)

(Filed as an exhibit to Form 10-K for the year ended December 31, 2021 on February 16, 2022 and incorporated herein by reference.)

10.15+ Aircraft Time Sharing Agreement, dated December 3, 2021, by and between Amgen Inc.

and Robert A.

(Filed as an exhibit to Form 10-K for the year ended December 31, 2021 on February 16, 2022 and incorporated herein by reference.)

10.16 Second Amended and Restated Credit Agreement, dated December 12, 2019, among Amgen Inc., the Banks therein named, Citibank, N.A., as administrative agent, and JPMorgan Chase Bank, N.A., as syndication agent.

(Filed as an exhibit to Form 8-K on December 12, 2019 and incorporated herein by reference.)

10.16.1* Amendment No.

1 to the Second Amended and Restated Credit Agreement, dated as of December 29, 2022, between Amgen Inc.

and Citibank, N.A., as the Administrative Agent and an Issuing Bank.

10.17 Bridge Credit Agreement, dated as of December 12, 2022, by and among Amgen Inc., Citibank, N.A., as administrative agent, Bank of America, N.A., as syndication agent, Citibank, N.A.

and Bank of America, N.A., as lead arrangers and book runners, and the other banks party thereto.

(Filed as an exhibit to Form 8-K on December 12, 2022 and incorporated herein by reference.)

10.18 Term Loan Credit Agreement, dated as of December 22, 2022, by and among Amgen Inc., Citibank, N.A., as administrative agent, Bank of America, N.A., as syndication agent, Citibank, N.A., Bank of America, N.A., Goldman Sachs Bank USA and Mizuho Bank, Ltd., as lead arrangers and book runners, Goldman Sachs Bank USA and Mizuho Bank, Ltd.

as documentation agents, and the other banks party thereto.

(Filed as an exhibit to Form 8-K on December 22, 2022 and incorporated herein by reference.)

10.19 Collaboration and License Agreement between Amgen Inc.

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(Filed as an exhibit to Form 10-Q for the quarter ended June 30, 2019 on July 31, 2019 and incorporated herein by reference.)

10.30 Collaboration Agreement, dated April 22, 1994, by and between Bayer Corporation (formerly Miles, Inc.) and Onyx Pharmaceuticals, Inc.

(Filed as an exhibit to Form 10-Q for the quarter ended March 31, 2011 by Onyx Pharmaceuticals, Inc.

on May 10, 2011 and incorporated herein by reference.)

10.31 Amendment to Collaboration Agreement, dated April 24, 1996, 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.)

10.32 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.)

10.33 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.)

10.34 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.)

10.35 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.)

10.36 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.)

10.37 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.)

10.38 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.)

10.39 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.)

10.40 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.)

10.41 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.)

10.21 Collaboration Agreement, dated October 31, 2019, by and between Amgen Inc.

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(Filed as an exhibit to Form 10-K for the year ended December 31, 2019 on February 12, 2020 and incorporated herein by reference.)

10.21.1 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.) (Filed as an exhibit to Form 10-Q for the quarter ended June 30, 2022 on August 5, 2022 and incorporated herein by reference.)

10.22 Guarantee, dated as of October 31, 2019, made by and among BeiGene, Ltd.

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10.24 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 pursuant to a request for confidential treatment).

(Filed as an exhibit to Form 10-Q for the quarter ended March 31, 2012 on May 8, 2012 and incorporated herein by reference.)

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.) (Filed as an exhibit to Form 10-Q for the quarter ended June 30, 2022 on August 5, 2022 and incorporated herein by reference.)

10.24.1 Amendment No.

(Filed as an exhibit to Form 10-K for the year ended December 31, 2014 on February 19, 2015 and incorporated herein by reference.)

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.) (Filed as an exhibit to Form 10-Q for the quarter ended June 30, 2022 on August 5, 2022 and incorporated herein by reference.)

10.24.2 Amendment Nos.

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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.)

10.25 License and Collaboration Agreement, dated June 1, 2021, by and between Amgen Inc.

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February 9, 2023 By:

/ S / PETER H.

Executive Vice President and Chief Financial Officer

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AUSTIN Director 2/9/2023

/S/ MICHAEL V.

DRAKE Director 2/9/2023

DRUKER Director 2/9/2023

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To test management’s estimated sales deductions, we obtained management’s calculations for the respective estimates and performed the following procedures, among others.

We tested management’s estimation process over the determination of sales discount accruals by developing an independent expectation of the estimated accrual balances, including comparing accrual balances recorded by management to those implied by historical payment trends, performing a lookback analysis using actual historical data to evaluate the forecasted amounts, assessing subsequent events to determine whether there was any new information that would require adjustment to the initial accruals, evaluating trends in actual sales and discount accrual balances, comparing cash receipts to product sales, confirming terms and conditions for a sample of contracts with the Company’s customers, testing a sample of credits issued and payments made throughout the year, and agreeing rates to underlying contract terms.

We tested management’s estimation process over the determination of sales discount accruals by developing an independent expectation of the estimated accrual balances, including comparing accrual balances recorded by management to those implied by historical payment trends, performing a lookback analysis using actual historical data to evaluate the forecasted amounts, assessing subsequent events to determine whether there was any new information that would require adjustment to the initial accruals, evaluating trends in actual sales and discount accrual balances, comparing cash receipts to product sales, confirming terms and conditions for a sample of contracts, testing a sample of credits issued and payments made throughout the year, and agreeing rates to underlying contract terms.

Unrecognized tax benefits

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We evaluated developments in the applicable regulatory environments to assess potential effects on the Company’s recorded positions.

We assessed management’s consideration of current tax controversy, litigation and tax litigation trends.

We analyzed the assumptions and data used by the Company when it determined the amount of tax benefits to recognize, including applicable interest and penalties, and we tested the accuracy of those underlying calculations.

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Interest expense, net ( 1,406 ) ( 1,197 ) ( 1,262 )

Other income, net 259 256 753

Other (expense) income, net ( 814 ) 259 256

Income before income taxes 7,346 6,701 8,133

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Other comprehensive income (loss), net of reclassification adjustments and taxes:

(Losses) gains on foreign currency translation ( 135 ) 9 ( 48 )

Gains (losses) on foreign currency translation 496 ( 135 ) 9

Gains (losses) on cash flow hedges 67 324 ( 438 )

(Losses) gains on available-for-sale securities ( 1 ) ( 21 ) 360

Losses on available-for-sale securities — ( 1 ) ( 21 )

Other 2 1 ( 7 )

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Balance as of December 31, 2019 591.4 $ 31,531 $ ( 21,330 ) $ ( 528 ) $ 9,673

Cumulative effect of changes in accounting principles, net of taxes

— — ( 2 ) — ( 2 )

Net income — — 7,264 — 7,264

Other comprehensive income, net of taxes — — — 241 241

Other comprehensive loss, net of taxes — — — ( 457 ) ( 457 )

Dividends declared on common stock ($ 6.56 per share)

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Balance as of December 31, 2020 578.3 31,802 ( 21,408 ) ( 985 ) 9,409

Cumulative effect of changes in accounting principles, net of taxes

— — ( 2 ) — ( 2 )

Net income — — 5,893 — 5,893

Other comprehensive loss, net of taxes — — — ( 457 ) ( 457 )

Other comprehensive income, net of taxes — — — 189 189

Dividends declared on common stock ($ 7.22 per share)

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Acquired in-process research and development — 1,505 —

Adjustments for equity method investments 891 33 65

Loss on divestiture 567 — —

Other items, net ( 176 ) ( 262 ) ( 260 )

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Purchases of equity method investments ( 18 ) ( 157 ) ( 3,219 )

Proceeds from business divestiture, net of divested cash 130 — —

Other ( 12 ) ( 35 ) ( 75 )

Net cash provided by (used in) investing activities 733 ( 5,401 ) 5,709

Net cash (used in) provided by investing activities ( 6,044 ) 733 ( 5,401 )

Cash flows from financing activities:

Net proceeds from issuance of debt 6,919 4,945 8,914

Extinguishment of debt ( 297 ) — —

Repayment of debt — ( 4,150 ) ( 6,450 )

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Net cash used in financing activities ( 4,037 ) ( 8,271 ) ( 4,867 )

Increase (decrease) in cash and cash equivalents 1,723 229 ( 908 )

(Decrease) increase in cash and cash equivalents ( 360 ) 1,723 229

Cash and cash equivalents at beginning of year 7,989 6,266 6,037

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IPR&D projects with no alternative future use are recorded in R&D expense upon acquisition, and contingent consideration obligations incurred in connection with an asset acquisition are recorded when it is probable that they will occur and they can be reasonably estimated.

See Note 2, Acquisitions, and Note 17, Fair value measurement.

See Note 2, Acquisitions and divestitures, and Note 17, Fair value measurement.

Cash equivalents

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Marketable and nonmarketable equity securities

Investments in publicly traded equity securities with readily determinable fair values are recorded at quoted market prices for identical securities, with changes in fair value recorded in Other Income, net, in the Consolidated Statements of Income.

Investments in publicly traded equity securities with readily determinable fair values are recorded at quoted market prices for identical securities, with changes in fair value recorded in Other (expense) income, net, in the Consolidated Statements of Income.

Investments in equity securities without readily determinable fair values are recorded at cost minus impairment, if any, adjusted for changes resulting from observable price changes in orderly transactions for identical or similar securities.

Such adjustments are recorded in Other Income, net, in the Consolidated Statements of Income.

Such adjustments are recorded in Other (expense) income, net, in the Consolidated Statements of Income.

Equity method investments

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The equity method of accounting requires us to allocate the difference between the fair value of securities acquired and our proportionate share of the carrying value of the underlying assets (the basis difference) to various items and amortize such differences over their useful lives.

Our share of investees’ earnings or losses and amortization of basis differences, if any, are recorded one quarter in arrears in Other income, net, in the Consolidated Statements of Income.

Our share of investees’ earnings or losses and amortization of basis differences, if any, are recorded one quarter in arrears in Other (expense) income, net, in the Consolidated Statements of Income.

We record impairment losses on our equity method investments if we deem the impairment to be other-than-temporary.

We deem an impairment to be other-than-temporary based on various factors, including but not limited to, the length of time the fair value is below the carrying value, volatility of the security price and our intent and ability to retain the investment to allow for a recovery in fair value.

For equity method investments for which we have elected the fair value option, changes in fair value are recorded in Other income, net, in the Consolidated Statements of Income.

For equity method investments for which we have elected the fair value option, changes in fair value are recorded in Other (expense) income, net, in the Consolidated Statements of Income.

Additionally, we hold investments in limited partnerships, which primarily invest in early-stage biotechnology companies.

As a practical expedient, such limited partnership investments are measured by using our proportionate share of the net asset values of the underlying investments held by the limited partnerships, with such changes included in Other income, net, in the Consolidated Statements of Income.

As a practical expedient, such limited partnership investments are measured by using our proportionate share of the net asset values of the underlying investments held by the limited partnerships, with such changes included in Other (expense) income, net, in the Consolidated Statements of Income.

Recent accounting pronouncements

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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 to expand 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 consolidated financial statements.

The provisions of these standards have not had and are not expected to have a material impact on our 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.

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The impact of this standard will depend on the facts and circumstances of future transactions.

Teneobio, Inc.

Acquisitions and divestitures

Proposed acquisition of Horizon Therapeutics plc

On December 12, 2022, we announced that we entered into a transaction agreement under which Amgen will acquire all shares of Horizon for $ 116.50 per share in cash for a transaction equity value of approximately $ 27.8 billion.

Horizon is a global biotechnology company headquartered in Dublin, Ireland and is focused on the discovery, development and commercialization of medicines that address critical needs for people impacted by rare, autoimmune and severe inflammatory diseases.

Horizon has 12 marketed medicines and a pipeline with more than 20 development programs.

The closing of this transaction is contingent upon satisfaction of certain regulatory (including FTC review) and other customary closing conditions.

In connection with the proposed acquisition of Horizon, Amgen entered into a 364 -day bridge credit agreement with a syndicated group of banks for an aggregate amount of $ 28.5 billion on December 12, 2022.

On December 22, 2022, we entered into a term loan credit agreement with an aggregate principal amount of $ 4.0 billion which provides for two equally sized tranches of term loans, one with an 18-month term and one with a three-year term.

Accordingly, the bridge credit agreement was reduced by the amount of the term loan credit agreement to $ 24.5 billion.

As of December 31, 2022, no amounts have been drawn under the bridge credit agreement or the term loan credit agreement.

In connection with these credit agreements, Amgen incurred approximately $ 97 million of financing costs, which was capitalized primarily in Other current assets in our Consolidated Balance Sheets and is being amortized to Interest expense, net, in our Consolidated Statements of Income over the terms of the agreements.

Additionally, we have agreed to maintain a cash balance of $ 2.96 billion that, together with any borrowings under the bridge credit agreement and term loan credit agreement, represents sources of funds available to finance the acquisition.

On January 30, 2023, the Company and Horizon each received a request for additional information and documentary materials (Second Request) from the FTC in connection with the FTC’s review of the Company’s proposed acquisition of Horizon.

The effect of the Second Request is to extend the waiting period imposed by the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, until 30 days after the Company and Horizon have substantially complied with the Second Request, unless that period is extended voluntarily by the Company and Horizon or terminated sooner by the FTC.

Acquisition of ChemoCentryx, Inc.

On October 20, 2022, we acquired all the outstanding stock of ChemoCentryx, a publicly traded biotechnology company focused on orally-administered therapeutics to treat autoimmune diseases, inflammatory disorders and cancer, for $ 52.00 per share in cash, representing a total consideration of $ 3.9 billion.

The acquisition, which was accounted for as a business combination, includes TAVNEOS, an orally administered selective complement 5a receptor inhibitor that was approved by the U.S.

FDA in October 2021 as an adjunctive therapy for adults with severe active anti-neutrophil cytoplasmic autoantibody-associated vasculitis (ANCA-associated vasculitis).

TAVNEOS is commercialized by us in the United States;

for markets outside the United States, TAVNEOS is commercialized by a collaboration partner, and Amgen is entitled to royalties and milestones based off future sales of the product.

Upon its acquisition, ChemoCentryx became a wholly owned subsidiary of Amgen, and its operations have been included in our consolidated financial statements commencing on the acquisition date.

During the three months ended December 31, 2022, the Company incurred approximately $ 106 million of costs directly related to the acquisition of ChemoCentryx, consisting of share-based payments to settle non-vested equity awards attributable to post-combination services, severance and other transaction costs.

These costs were included primarily in SG&A expense in the Consolidated Statements of Income.

The following table summarizes the total consideration and allocated acquisition date fair values of assets acquired and liabilities assumed (in millions):

Cash and cash equivalents $ 86

Marketable securities 235

Inventories 41

Finite-lived intangible assets – developed-product-technology rights 3,497

Other liabilities, net ( 85 )

Deferred tax liability, net ( 516 )

Total assets acquired, net $ 3,925

The $ 3.9 billion total consideration consisted of (i) a $ 3.7 billion cash payment to outstanding common stockholders of ChemoCentryx and (ii) a $ 181 million cash payment to equity award holders of ChemoCentryx for services rendered prior to the acquisition date of October 20, 2022, under the ChemoCentryx equity award plans.

The developed-product-technology rights acquired relates to TAVNEOS, which is approved in the United States and EU for ANCA-associated vasculitis.

The estimated fair values of $ 3.5 billion were determined by 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 developed-product-technology rights are being amortized on a straight-line basis over a weighted-average period of approximately 11 years using the straight-line method.

The estimated fair value of the acquired inventory of $ 41 million was determined using the comparative sales method, which uses actual or expected selling prices of inventory as the base amount to which adjustments for selling effort and a profit on the buyer’s effort are applied.

The inventory fair value adjustment is being amortized as inventory turns over, which we estimate to be approximately 13 months.

A net deferred tax liability of $ 516 million was recognized on the 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 $ 667 million was recorded as goodwill, which is not deductible for tax purposes.

The goodwill value is primarily attributable to the expected synergies from the TAVNEOS asset.

Our accounting for this acquisition is preliminary and will be finalized upon completion of our analysis to determine the acquisition date fair values of certain assets acquired, liabilities assumed and tax-related items as we obtain additional information during the measurement period of up to one year from the acquisition date.

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 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.

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 consolidated financial statements commencing on the acquisition date.

The following table summarizes the total consideration and allocated acquisition date fair values of assets acquired and liabilities assumed (in millions):

Measurement period adjustments for the year ended December 31, 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 year ended December 31, 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 final total consideration and allocated acquisition date fair values of assets acquired and liabilities assumed, inclusive of measurement period adjustments (in millions):

Cash purchase price $ 993

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Total assets acquired, net $ 1,292

The consideration for this transaction were (i) an upfront cash payment of $ 994 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 value of the contingent consideration obligations aggregated $ 309 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 pre-tax cost of debt.

Consideration for this transaction comprised of (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 17, Fair value measurement, for information regarding the estimated fair value of these obligations as of December 31, 2022.

The estimated fair values of acquired IPR&D assets totaled $ 1.1 billion, of which $ 784 million relates to AMG 340, that is in a phase 1 clinical trial for the treatment of mCRPC, and the balance relates to four separate preclinical oncology programs.

The R&D technology rights of $ 94 million relate to Teneobio’s proprietary bispecific and multispecific antibody technologies and will be amortized over ten years using the straight-line method.

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.

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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 $ 253 million was recognized on the 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.

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.

Five Prime Therapeutics, Inc.

On April 16, 2021, Amgen acquired the outstanding stock of Five Prime for total consideration of $ 1.6 billion, net of cash acquired.

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.

The operations of Five Prime have been included in our consolidated financial statements commencing after the acquisition date.

Five Prime’s operations have been included in our 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 Consolidated Statements of Income;

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The acquired IPR&D expense was not tax deductible.

On November 21, 2019, we acquired worldwide rights to Otezla, the only oral, non-biologic treatment for psoriasis and psoriatic arthritis, along with certain related assets and liabilities, from Celgene.

Otezla is primarily used for the treatment of patients with moderate-to-severe plaque psoriasis for whom phototherapy or systemic therapy is appropriate and is approved in more than 50 markets outside the United States, including the European Union and Japan.

The acquisition was accounted for as an asset acquisition under GAAP because substantially all of the value of the assets acquired was concentrated in the global intellectual property rights of Otezla.

The operations of Otezla have been included in our consolidated financial statements commencing on the acquisition date.

The following table summarizes the consideration transferred and the allocation of the estimated accumulated cost, including tax adjustments, to the assets acquired and liabilities assumed (in millions):

Cash purchase price $ 13,400

Transaction costs 40

Accumulated cost (consideration transferred) $ 13,440

Intangible assets:

Developed-product-technology rights $ 13,007

Marketing-related rights 195

Inventory 367

Deferred tax liability, net ( 24 )

Deferred credit ( 96 )

Other liabilities, net ( 9 )

Total assets acquired, net $ 13,440

Amgen allocated the accumulated cost of the acquisition to the assets acquired based on their relative fair values.

The accumulated cost of the acquisition includes direct acquisition-related costs and applicable taxes.

Goodwill is not recognized in the accounting for an asset acquisition.

Rather, the excess of the accumulated cost over the fair value of the net assets acquired is reallocated to the nonfinancial assets acquired.

The developed-product-technology rights acquired relate to Otezla.

The estimated fair value was determined by using a multi-period excess earnings income approach, which is based on the present value of the incremental after-tax cash flows attributable only to the intangible asset.

The developed-product-technology rights is being amortized over a weighted-average period of 8.5 years by using the straight-line method.

The estimated fair value of marketing-related rights, which relate to assembled workforce, was determined using a replacement cost approach, which consists of developing an estimate of the current cost of a similar new asset having the nearest equivalent utility to the asset being valued.

The assembled workforce is being amortized over a period of 5 years by using the straight-line method.

The estimated fair value of the acquired inventory was determined using the comparative sales method, which uses actual or expected selling prices of inventory as the base amount to which adjustments for selling effort and a profit on the buyer’s effort are applied.

Inventory fair value adjustments is being amortized as inventory turns over, which we estimate to approximate 2.5 years.

Upon closing, we had a difference between the book basis and tax basis of the assets acquired.

The Company used the simultaneous equations method to determine the assigned value of the net assets acquired and the related deferred tax assets or liabilities.

Use of this methodology resulted in an increase to the carrying value of the intangible assets of $ 119 million, a net deferred tax liability of $ 24 million and a deferred credit of $ 96 million.

The tax effects of the acquisition are based on Amgen’s estimated blended statutory tax rate of 20 %.

Nuevolution AB

On July 15, 2019, we acquired all of the outstanding stock of Nuevolution, a publicly traded, Denmark-based biotechnology company with a leading small molecule drug discovery platform, for total consideration of $ 183 million in cash.

The transaction, which was accounted for as a business combination, expands our ability to discover novel small molecules against difficult-to-drug targets and with greater speed and efficiency.

Nuevolution’s operations, which are not material, have been included in our consolidated financial statements commencing on the acquisition date.

We allocated the consideration to acquire Nuevolution to finite-lived intangible assets of $ 150 million, primarily comprised of technology rights for a drug discovery platform with an estimated useful life of 10 years;

goodwill of $ 26 million, which is not tax deductible;

deferred tax liabilities of $ 22 million;

and other net assets of $ 29 million.

The estimated fair values of intangible assets were determined primarily by using a probability-weighted-income approach, which discounts expected future cash flows to present value by using a discount rate that represents the estimated rate that market participants would use to value the intangible assets.

Divestiture of Gensenta İlaç Sanayi ve Ticaret A.Ş.

On November 2, 2022, we sold our shares in Gensenta, a subsidiary in Turkey, to Eczacıbaşı for net cash proceeds of approximately $ 130 million.

The transaction was accounted for as a sale of a business and did not meet the criteria to be classified as discontinued operations.

Upon closing of this transaction, net assets related to Gensenta of $ 86 million were divested, and during the year ended December 31, 2022, we recognized a loss on divestiture of $ 567 million recorded in Other operating expenses in the Consolidated Statements of Income, primarily due to the reclassification of $ 615 million of cumulative foreign currency translation losses from AOCI into earnings.

See Note 16, Stockholders’ equity.

We operate in one business segment:

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Prolia 2,465 1,163 3,628 2,150 1,098 3,248 1,830 933 2,763

1,804 445 2,249 1,790 405 2,195 139 39 178

Otezla 1,886 402 2,288 1,804 445 2,249 1,790 405 2,195

XGEVA 1,480 534 2,014 1,434 584 2,018 1,405 494 1,899

Neulasta 1,514 220 1,734 2,001 292 2,293 2,814 407 3,221

Aranesp 521 900 1,421 537 943 1,480 629 939 1,568

Nplate 848 459 1,307 566 461 1,027 485 365 850

608 688 1,296 557 560 1,117 459 428 887

KYPROLIS 850 397 1,247 736 372 1,108 710 355 1,065

Nplate 566 461 1,027 485 365 850 480 315 795

Neulasta 959 167 1,126 1,514 220 1,734 2,001 292 2,293

EVENITY 533 254 787 331 199 530 191 159 350

Other products (1)

3,549 2,021 5,570 3,305 2,016 5,321 3,630 1,744 5,374

Total product sales (2)

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Total revenues $ 18,595 $ 7,728 $ 26,323 $ 18,194 $ 7,785 $ 25,979 $ 18,496 $ 6,928 $ 25,424

(1) Otezla was acquired on November 21, 2019.

(1) Consists of product sales of our non-principal products, as well as our Gensenta and Bergamo subsidiaries.

(2) Hedging gains and losses, which are included in product sales, were not material for the years ended December 31, 2022, 2021 and 2020.

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We monitor the financial condition of our larger customers and limit our credit exposure by setting credit limits and, in certain circumstances, by requiring letters of credit or obtaining credit insurance.

We had product sales to three customers, each of them accounting for more than 10% of total revenues for each of the years ended December 31, 2021, 2020 and 2019.

We had product sales to three customers that individually accounted for more than 10% of total revenues for each of the years ended December 31, 2022, 2021 and 2020.

For the year ended December 31, 2022, on a combined basis, these customers accounted for 82 % of total gross revenues as shown in the following table.

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The payout simulation model assumes correlations of returns of the stock prices of our common stock and the common stocks of the comparator groups of companies and stock price volatilities of the comparator groups of companies to simulate stockholder returns over the performance periods and their resulting impact on the payout percentages based on the contractual terms of the performance units.

As of December 31, 2021 and 2020, 1.6 million and 1.8 million performance units were outstanding, with weighted-average grant date fair values per unit of $ 229.39 and $ 207.52 per unit, respectively.

As of both December 31, 2022 and 2021, 1.6 million performance units were outstanding, with weighted-average grant date fair values per unit of $ 250.27 and $ 229.39 per unit, respectively.

During the year ended December 31, 2022, 0.6 million performance units with a weighted-average grant date fair value per unit of $ 247.48 were granted, and 0.1 million performance units with a weighted-average grant date fair value per unit of $ 250.94 were forfeited.

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Deferred income taxes reflect the tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes, tax credit carryforwards and the tax effects of NOL carryforwards.

As of December 31, 2022, we elected to establish deferred taxes with respect to the U.S.

minimum tax on the earnings of our foreign subsidiaries for the reversal of temporary items in future years.

Significant components of our deferred tax assets and liabilities were as follows (in millions):

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Accrued expenses 584 600

Capitalized research and development expenses 515 —

Investments 270 —

Expenses capitalized for tax 211 244

Earnings of foreign subsidiaries 192 —

Stock-based compensation 104 96

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Valuation allowances are provided to reduce the amounts of our deferred tax assets to an amount that is more likely than not to be realized based on an assessment of positive and negative evidence, including estimates of future taxable income necessary to realize future deductible amounts.

The valuation allowance increased in 2021, primarily driven by the Company’s expectation that some state R&D credits will not be utilized and certain foreign and acquired net operating losses will expire unused.

As of December 31, 2021, we had $ 75 million of federal tax credit carryforwards available to reduce future federal income taxes and have provided no valuation allowance for those federal tax credit carryforwards.

The valuation allowance increased in 2022, primarily driven by the Company’s expectation that certain state R&D credits will expire unused.

As of December 31, 2022, we had $ 170 million of federal tax credit carryforwards available to reduce future federal income taxes and have provided a valuation allowance for $ 6 million of those federal tax credit carryforwards.

The federal tax credit carryforwards expire between 2023 and 2042.

We had $ 896 million of state tax credit carryforwards available to reduce future state income taxes and have provided a valuation allowance for $ 813 million of those state tax credit carryforwards.

As of December 31, 2021, we had $ 606 million of federal NOL carryforwards available to reduce future federal income taxes and have provided a valuation allowance for $ 6 million of those federal NOL carryforwards.

For the federal NOL carryforwards for which no valuation allowance has been provided, $ 426 million have no expiration;

We had $ 51 million of tax credit carryforwards related to our foreign jurisdictions available to offset future foreign income taxes for which we have provided no valuation allowance.

As of December 31, 2022, we had $ 1.3 billion of federal NOL carryforwards available to reduce future federal income taxes and have provided no valuation allowance on those federal NOL carryforwards.

Additionally, $ 1.0 billion of those federal NOL carryforwards have no expiration;

the remainder begin to expire between 2023 and 2037.

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We had $ 1.9 billion of foreign NOL carryforwards available to reduce future foreign income taxes and have provided a valuation allowance for $ 186 million of those foreign NOL carryforwards.

For the foreign NOLs with no valuation allowance provided, $ 800 million has no expiry;

For the foreign NOLs with no valuation allowance provided, $ 640 million have no expiration;

and the remainder will expire between 2023 and 2051.

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Reductions for tax positions of prior years ( 14 ) ( 4 ) ( 35 )

Reductions for expiration of statute of limitations ( 3 ) — —

Settlements — ( 8 ) ( 68 )

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During the years ended December 31, 2022, 2021 and 2020, we recognized $ 189 million, $ 98 million and $ 116 million, respectively, of interest and penalties through the income tax provision in the Consolidated Statements of Income.

The decrease in interest expense for the year ended December 31, 2021, was primarily due to lower interest rates during 2021 and settlement of a prior year audit.

As of December 31, 2021 and 2020, accrued interest and penalties associated with UTBs were $ 881 million and $ 783 million, respectively.

The increase in interest expense for the year ended December 31, 2022, was primarily due to higher interest rates during 2022.

As of December 31, 2022 and 2021, accrued interest and penalties associated with UTBs were $ 1.1 billion and $ 881 million, respectively.

The reconciliations between the federal statutory tax rate applied to income before income taxes and our effective tax rate were as follows:

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tax at a reduced rate of 10.5%.

territory of Puerto Rico imposes an excise tax on the gross intercompany purchase price of goods and services from our manufacturing site in Puerto Rico.

The rate of 4% is effective through December 31, 2027.

We account for the excise tax as a manufacturing cost that is capitalized in inventory and expensed in Cost of sales when the related products are sold.

income tax purposes in 2021, the excise tax results in foreign tax credits that are generally recognized in our provision for income taxes when the excise tax is incurred.

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 effective through December 31, 2022.

For 2022, 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.

income tax purposes, the excise tax results in foreign tax credits that are generally recognized in our provision for income taxes when the excise tax is incurred.

Income taxes paid during the years ended December 31, 2022, 2021 and 2020, were $ 2.4 billion, $ 1.9 billion and $ 1.4 billion, respectively.

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Our income tax returns are routinely examined by tax authorities in those jurisdictions.

Significant disputes may arise 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.

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, 2011 and 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.

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.

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In July 2021, we filed a petition in the U.S.

Tax Court to contest two duplicate Notices for 2010, 2011 and 2012 that we received in May and July 2021, which seek to increase our U.S.

taxable income.

The Notices seek to increase our U.S.

taxable income by an amount that would result in additional federal tax of approximately $ 3.6 billion plus interest.

Any additional tax that could be imposed would be reduced by up to approximately $ 900 million of repatriation tax previously accrued on our foreign earnings.

We firmly believe that the IRS’s positions set forth in the Notices are without merit, and we are contesting the Notices through the judicial process.

In 2020, we received an RAR and a modified RAR from the IRS for the years 2013, 2014 and 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, 2011 and 2012.

We disagreed with the proposed adjustments and calculations and pursued resolution with the IRS appeals office.

We were unable to reach resolution at the administrative appeals level, and we anticipate that we will receive a statutory notice of deficiency for these years as well.

We expect to contest any such notice related to 2013–15 through the judicial process.

We are also currently under examination by the IRS for the years 2016, 2017 and 2018 and by a number of state and foreign tax jurisdictions.

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.

The two cases were consolidated in U.S.

Tax Court on December 19, 2022.

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 are under examination 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;

We continue to 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 consolidated financial statements.

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From time to time, we enter into collaborative arrangements for the R&D, manufacture and/or commercialization of products and/or product candidates.

These collaborations generally provide for nonrefundable upfront license fees, development and commercial-performance milestone payments, cost sharing, royalty payments and/or profit sharing.

These collaborations generally provide for nonrefundable upfront license fees, development and commercial-performance milestone payments, cost sharing, royalties and/or profit sharing.

Our collaboration arrangements are performed with no guarantee of either technological or commercial success, and each arrangement is unique in nature.

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BeiGene, Ltd.

On January 2, 2020, we acquired a 20.5 % stake in BeiGene for approximately $ 2.8 billion in cash as part of a collaboration to expand our oncology presence in China.

In January 2020, we acquired an equity stake in BeiGene for approximately $ 2.8 billion in cash as part of a collaboration to expand our oncology presence in China.

For additional information regarding our equity investment in BeiGene, see Note 9, Investments.

Under the collaboration, BeiGene began selling XGEVA in 2020, BLINCYTO in 2021 and KYPROLIS in early 2022 in China, and Amgen shares profits and losses equally during the initial product-specific commercialization periods;

Under the collaboration, BeiGene began selling XGEVA in 2020, BLINCYTO in 2021 and KYPROLIS in 2022 in China, and Amgen shares profits and losses equally during the initial product-specific commercialization periods;

thereafter, product rights may revert to Amgen, and Amgen will pay royalties to BeiGene on sales in China of such products for a specified period.

Amgen manufactures and supplies the collaboration products to BeiGene.

In addition, we jointly develop a portion of our oncology portfolio with BeiGene, which shares in global R&D costs by providing cash and development services of up to $ 1.25 billion.

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For product sales outside China, Amgen will also pay royalties to BeiGene.

During the years ended December 31, 2021 and 2020, net costs recovered from BeiGene for oncology product candidates were $ 220 million and $ 225 million, respectively, and were recorded as an offset to R&D expense in the Consolidated Statements of Income.

During the year ended December 31, 2021, product sales from Amgen to BeiGene under the collaboration were $ 72 million and were recorded in Product sales in the Consolidated Statements of Income.

During the year ended December 31, 2021, profit and loss share expenses related to the initial product-specific commercialization period were $ 64 million and were recorded primarily in SG&A expense in the Consolidated Statements of Income.

During the years ended December 31, 2022, 2021 and 2020, net costs recovered from BeiGene for oncology product candidates were $ 199 million, $ 220 million and $ 225 million, respectively, and were recorded as an offset to R&D expense in the Consolidated Statements of Income.

During the years ended December 31, 2022 and 2021, product sales from Amgen to

BeiGene under the collaboration were $ 64 million and $ 72 million, respectively, and were recorded in Product sales in the Consolidated Statements of Income.

During the years ended December 31, 2022 and 2021, profit and loss share expenses related to the initial product-specific commercialization period were $ 53 million and $ 64 million, respectively, and were recorded in SG&A expense in the Consolidated Statements of Income.

Product sales from Amgen to BeiGene and profit and loss share expenses were not material during the year ended December 31, 2020.

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Net amounts owed from BeiGene for cost recoveries and profit and loss share payments were $ 47 million and $ 61 million as of December 31, 2022 and 2021, respectively, which are included in Other current assets in the Consolidated Balance Sheets.

AstraZeneca plc

We are in a collaboration with AstraZeneca for the development and commercialization of TEZSPIRE.

Under our collaboration, both companies share global costs, profits and losses equally after payment by AstraZeneca of a mid-single-digit royalty to Amgen.

AstraZeneca leads global development, and both Amgen and AstraZeneca jointly commercialize TEZSPIRE in North America.

In North America, Amgen, as the principal, recognizes product sales of TEZSPIRE in the United States, and AstraZeneca, as the principal, recognizes product sales of TEZSPIRE in Canada.

AstraZeneca leads commercialization for TEZSPIRE outside North America.

Amgen manufactures and supplies TEZSPIRE worldwide.

During the years ended December 31, 2022, 2021 and 2020, net costs due to AstraZeneca for global development were $ 74 million, $ 49 million and $ 52 million, respectively, and were recorded in R&D Expense in the Consolidated Statements of Income.

During the years ended December 31, 2022, 2021 and 2020, net costs due to AstraZeneca for global commercialization were $ 60 million, $ 39 million and $ 16 million, respectively, and were recorded in SG&A Expense in the Consolidated Statements of Income.

During the year ended December 31, 2022, global profit and loss share expenses were $ 119 million and were recorded primarily in Cost of sales in the Consolidated Statements of Income.

TEZSPIRE launched in the United States in January 2022.

We are in a collaboration with UCB for the development and commercialization of EVENITY.

Under our collaboration, UCB has rights to lead commercialization for EVENITY in most countries in Europe and China (excluding Hong Kong).

Amgen, as the principal, leads commercialization for EVENITY and recognizes product sales in all other territories, including the United States.

Global development costs and commercialization profits and losses related to the collaboration are shared equally.

Amgen manufactures and supplies EVENITY worldwide.

During the years ended December 31, 2022, 2021 and 2020, global profit and loss share expenses were $ 255 million, $ 186 million and $ 115 million, respectively, and were recorded primarily in Cost of sales in the Consolidated Statements of Income.

Net costs recovered from and due to UCB during the years ended December 31, 2022, 2021 and 2020, were not material.

Novartis Pharma AG

We are in a collaboration with Novartis to jointly develop and commercialize Aimovig.

On January 31, 2022, concurrent with the settlement of the previously disclosed litigation between Amgen and Novartis we modified the terms of the collaboration.

See Note 19, Contingencies and commitments.

Arrangement through December 31, 2021

In the United States, Amgen and Novartis jointly developed and collaborated on the commercialization of Aimovig.

Amgen, as the principal, recognized product sales of Aimovig in the United States, shared U.S.

commercialization costs with Novartis and paid Novartis a significant royalty on net sales in the United States.

Novartis holds global co-development rights and exclusive commercial rights outside the United States and Japan for Aimovig (the ex-U.S.

Novartis Rights).

Novartis paid Amgen double-digit royalties on net sales of the product in the ex-U.S.

Novartis Rights territories and funded a portion of global R&D expenses.

In addition, Novartis was required to make a payment to Amgen of up to $ 100 million if certain commercial and expenditure thresholds were achieved with respect to Aimovig in the United States.

Arrangement after January 1, 2022

Pursuant to the amendment effective January 1, 2022, Novartis retains the ex-U.S.

Novartis Rights and will continue to pay double-digit royalties on net sales in the ex-U.S.

Novartis Rights territories.

In the United States, Novartis will no longer collaborate with Amgen, share Aimovig commercialization costs or pay milestones and Amgen will no longer pay royalties to Novartis on sales of Aimovig.

Amgen and Novartis will continue to share development expenses worldwide.

In the United States, Novartis will no longer collaborate with Amgen or share Aimovig commercialization costs and Amgen will no longer pay royalties to Novartis on sales of Aimovig.

Amgen and Novartis will continue to share development expenses worldwide .

On January 31, 2022, we modified the terms of the collaboration.

Effective January 1, 2022, in the United States, Novartis no longer collaborates with Amgen, shares Aimovig commercialization costs or is required to pay milestones, and Amgen no longer pays royalties to Novartis on U.S.

sales of Aimovig.

Novartis continues to hold global co-development rights and exclusive commercial rights outside the United States and Japan for Aimovig.

Amgen and Novartis share global development expenses, and Novartis pays Amgen double-digit royalties on net sales of the product outside the United States and Japan.

Amgen manufactures and supplies Aimovig worldwide.

During the years ended December 31, 2021, 2020 and 2019, net costs recovered from Novartis for migraine products were $ 160 million, $ 192 million and $ 187 million, respectively, and were recorded primarily in SG&A expense in the Consolidated Statements of Income.

During the years ended December 31, 2021, 2020 and 2019, royalties due to Novartis for Aimovig were $ 116 million, $ 139 million and $ 115 million, respectively, and were recorded in Cost of sales in the Consolidated Statements of Income.

During the year ended December 31, 2022, net costs recovered from Novartis for migraine products were $ 53 million and were recorded in R&D expense in the Consolidated Statements of Income.

During the years ended December 31, 2021 and 2020, net costs recovered from Novartis for migraine products were $ 160 million and $ 192 million, respectively, and were recorded primarily in SG&A expense in the Consolidated Statements of Income.

During the years ended December 31, 2021 and 2020, royalties due to Novartis for Aimovig were $ 116 million and $ 139 million, respectively, and were recorded in Cost of sales in the Consolidated Statements of Income.

During the years ended December 31, 2022, 2021 and 2020, royalties due from Novartis for Aimovig were not material.

Kyowa Kirin Co., Ltd.

On July 30, 2021, we closed our collaboration and licensing agreement with KKC to jointly develop and commercialize an anti-OX40 fully human monoclonal antibody (AMG 451) worldwide, except in Japan.

AMG 451 is for the treatment of atopic dermatitis, with potential for treatment of other autoimmune diseases.

Under the terms of the agreement, we will lead the global development, manufacture and commercialization of AMG 451, except in Japan.

KKC will co-promote AMG 451 with Amgen in the United States and have opt-in rights to co-promote AMG 451 in various other markets outside the United States, including in Europe and Asia.

On July 30, 2021, we closed our collaboration and licensing agreement with KKC to jointly develop and commercialize rocatinlimab, an anti-OX40 fully human monoclonal antibody, worldwide, except in Japan.

Rocatinlimab is for the treatment of atopic dermatitis, with potential for treatment of other autoimmune diseases.

Under the terms of the agreement, we lead the global development, manufacture and commercialization of rocatinlimab, except in Japan.

KKC will co-promote rocatinlimab with Amgen in the United States and have opt in rights to co-promote rocatinlimab in various other markets outside the United States, including in Europe and Asia.

We made an upfront payment of $ 400 million to KKC that was recognized in R&D expense in the third quarter of 2021.

Amgen and KKC will share equally the global development costs, except in Japan, and the U.S.

Amgen and KKC share equally the global development costs, except in Japan, and the U.S.

commercialization costs.

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We will also pay KKC significant double-digit royalties on global sales, except in Japan.

Net costs due to KKC were not material during the year ended December 31, 2021.

Net costs recovered from and due to KKC were not material during the years ended December 31, 2022 and 2021.

In addition to the collaborations discussed above, we have various other collaborations that are not individually significant to our business at this time.

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Available-for-sale investments

The amortized cost, gross unrealized gains, gross unrealized losses and fair values of interest-bearing securities, all of which are considered available-for-sale, by type of security were as follows (in millions):

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):

Types of securities as of December 31, 2022 Amortized

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Cash and cash equivalents in the above table excludes bank account cash of $ 4,970 million and $ 733 million as of December 31, 2022 and 2021, respectively.

The fair values of available-for-sale investments by contractual maturity were as follows (in millions):

Contractual maturities 2021 2020

Maturing in one year or less $ 7,304 $ 9,795

Maturing after one year through three years — 50

Total available-for-sale investments $ 7,304 $ 9,845

All interest-bearing securities as of December 31, 2022 and 2021, mature in one year or less.

For the years ended December 31, 2022, 2021 and 2020, realized gains and losses on interest-bearing securities were not material.

For the year ended December 31, 2019, realized gains on interest-bearing securities were $ 92 million and realized losses were not material.

Realized gains and losses on interest-bearing securities are recorded in Other income, net, in the Consolidated Statements of Income.

Realized gains and losses on interest-bearing securities are recorded in Other (expense) income, net, in the Consolidated Statements of Income.

The cost of securities sold is based on the specific-identification method.

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Equity securities

We held investments in equity securities with readily determinable fair values of $ 611 million and $ 477 million as of December 31, 2021 and 2020, respectively, which are included in Other noncurrent assets in the Consolidated Balance Sheets.

For the years ended December 31, 2021, 2020 and 2019, net unrealized gains on publicly traded securities were $ 161 million, $ 174 million and $ 112 million, respectively.

We held investments in equity securities with readily determinable fair values (publicly traded securities) of $ 480 million and $ 611 million as of December 31, 2022 and 2021, respectively, which are included in Other noncurrent assets in the Consolidated Balance Sheets.

For the years ended December 31, 2022, 2021 and 2020, net unrealized gains and losses on publicly traded securities were a loss of $ 165 million and gains of $ 161 million and $ 174 million, respectively.

Realized gains and losses on publicly traded securities for the years ended December 31, 2022, 2021 and 2020, were not material.

We held investments of $ 233 million and $ 262 million in equity securities without readily determinable fair values as of December 31, 2022 and 2021, respectively, which are included in Other noncurrent ass ets in the Consolidated Balance Sheets.

For the year ended December 31, 2021, gains due to upward adjustments on these securities were $ 152 million, and gains realized on the dispositions of these securities were $ 41 million;

for the years ended December 31, 2020 and 2019, gains due to upward adjustments and gains realized upon dispositions of these securities were not material.

For the years ended December 31, 2021, 2020 and 2019, downward adjustments to the carrying values of these securities were not material.

For the years ended December 31, 2022 and 2020, gains due to upward adjustments and gains realized upon dispositions of

these securities were not material.

For the year ended December 31, 2021, gains due to upward adjustments were $ 152 million, and gains realized on the dispositions of these securities were $ 41 million.

For the year ended December 31, 2022, downward adjustments to the carrying values of these securities were $ 67 million.

For the years ended December 31, 2021 and 2020, downward adjustments were not material.

Adjustments were based on observable price transactions.

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Our equity investment in BeiGene is included in Other noncurrent assets in the Consolidated Balance Sheets.

Our equity investment is accounted for under the equity method of accounting due to our ability to exert significant influence over BeiGene.

As of December 31, 2022 , our equity investment is accounted for under the equity method of accounting due to our ability to exert significant influence over BeiGene.

See Note 1, Summary of significant accounting policies, for factors in concluding our ability to exert significant influence over BeiGene.

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The equity method of accounting requires us to identify and allocate amounts to items that give rise to the basis difference and to amortize these items over their useful lives.

This amortization, along with our share of the results of operations of BeiGene, is included in Other income, net, in our Consolidated Statements of Income.

This amortization, along with our share of the results of operations of BeiGene, is included in Other (expense) income, net, in our Consolidated Statements of Income.

Recognition occurs one quarter in arrears, which began in the second quarter of 2020.

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The finite-lived intangible assets are being amortized over a period ranging from 8 to 15 years.

During the years ended December 31, 2021 and 2020, the carrying value of the investment was reduced by our share of BeiGene’s net losses of $ 265 million and $ 229 million, respectively, and amortization of the basis difference of $ 172 million and $ 109 million, respectively.

During the years ended December 31, 2021 and 2020, we increased the carrying value by $ 50 million and $ 569 million, respectively, as a result of our purchase of additional shares of BeiGene.

In addition, during the years ended December 31, 2021 and 2020, the carrying value increased by $ 265 million and $ 34 million, respectively, from the impact of other BeiGene ownership transactions.

During the years ended December 31, 2022, 2021 and 2020 , the carrying value of the investment was reduced by our share of BeiGene’s net losses of $ 394 million, $ 265 million and $ 229 million, respectively, and amortization of the basis difference of $ 190 million, $ 172 million and $ 109 million, respectively.

During the years ended December 31, 2021 and 2020, we increased the carrying value by $ 50 million and $ 569 million, respectively, as a result of our purchases of additional shares of BeiGene;

we did not purchase additional shares of BeiGene during the year ended December 31, 2022 .

In addition, during the years ended December 31, 2022, 2021 and 2020 , the carrying value increased by $ 11 million, $ 265 million and $ 34 million, respectively, from the impact of other BeiGene ownership transactions.

As of December 31, 2022 and 2021, our ownership interest in BeiGene was approximately 18.2 % and 18.4 %, respectively.

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For information on a collaboration agreement we entered into with BeiGene in connection with this investment, see Note 8, Collaborations.

Effective January 30, 2023, we relinquished our right to appoint a director to BeiGene’s Board of Directors.

We no longer have the ability to exert significant influence over BeiGene and therefore will account for our equity investment at fair value, with changes in fair value recorded in earnings starting in the first quarter of 2023.

Neumora Therapeutics, Inc.

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We believe the fair value option best reflects the economics of the underlying transaction.

As of December 31, 2021, our ownership interest in Neumora remained at approximately 25.9 %, and the fair value of our investment was $ 220 million.

Accordingly, during the fourth quarter of 2021, we recognized a loss of $ 37 million for the reduction in the fair value in Other income, net, in the Consolidated Statements of Income.

During the year ended December 31, 2022, we made an additional $ 10 million cash investment via participation in Neumora’s subsequent financing round.

As of December 31, 2022 and 2021, our ownership interest in Neumora was approximately 24.9 % and 25.9 %, respectively, and the fair value of our investment was $ 335 million and $ 220 million, respectively.

During the years ended December 31, 2022 and 2021, we recognized a net gain of $ 105 million and a net loss of $ 37 million, respectively, for the change in fair values in Other (expense) income, net, in the Consolidated Statements of Income.

For information on determination of fair values, see Note 17, Fair value measurement.

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As of December 31, 2022, unfunded additional commitments to be made for these investments during the next several years were $ 187 million.

For the years ended December 31, 2021, 2020 and 2019, net gains recognized from our limited partnership investments were $ 143 million, $ 241 million and $ 27 million, respectively.

For the years ended December 31, 2022, 2021 and 2020, net gains and losses recognized from our limited partnership investments were a net loss of $ 284 million and net gains of $ 143 million and $ 241 million, respectively.

Inventories consisted of the following (in millions):

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Certain geographic information with respect to property, plant and equipment, net (long-lived assets), was as follows (in millions):

United States $ 2,801 $ 2,473

$ 3,154 $ 2,801

Puerto Rico 1,247 1,311

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Beginning balance $ 14,890 $ 14,689

Addition from acquisitions 251 —

Changes to goodwill resulting from acquisitions and divestitures, net (1)

Currency translation adjustments ( 12 ) ( 50 )

Ending balance $ 15,529 $ 14,890

(1) For 2022, the changes to goodwill consist of goodwill resulting from the acquisition of ChemoCentryx, 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

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R&D technology rights pertains to technologies used in R&D that have alternative future uses.

Developed-product-technology rights include assets acquired with the ChemoCentryx acquisition.

IPR&D, R&D technology rights and licensing rights includes assets acquired with the Teneobio acquisition.

See Note 2, Acquisitions and divestitures.

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.

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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 year ended December 31, 2021, we acquired certain finite-lived and indefinite-lived intangible assets as a result of the Teneobio acquisition, including IPR&D of $ 1.1 billion, R&D technology rights of $ 94 million and licensing rights of $ 41 million.

See Note 2, Acquisitions.

During the years ended December 31, 2022, 2021 and 2020, we recognized amortization associated with our finite-lived intangible assets of $ 2.6 billion, $ 2.6 billion and $ 2.8 billion, respectively.

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The total estimated amortization for our finite-lived intangible assets for the years ending December 31, 2023, 2024, 2025, 2026 and 2027, are $ 2.8 billion, $ 2.7 billion, $ 2.5 billion, $ 2.1 billion and $ 2.1 billion, respectively.

We lease certain facilities and equipment related primarily to administrative, R&D and sales and marketing activities.

Leases with terms of 12 months or less are expensed on a straight-line basis over the term and are not recorded in the Consolidated Balance Sheets.

We lease certain facilities and equipment related primarily to R&D, administrative and commercial activities.

Leases with terms of 12 months or less are expensed as incurred and are not recorded in the Consolidated Balance Sheets.

Most leases include one or more options to renew, with renewal terms that may extend the lease term up to seven years .

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Operating leases $ 191 $ 340 $ 101

As of December 31, 2021, we have entered into leases that have not yet commenced, with total undiscounted future lease payments of $ 35 million.

These leases will commence in 2022 with lease terms from 4 to 6 years.

As of December 31, 2022, the total undiscounted future lease payments for leases that have not yet commenced were not material.

Other current assets and accrued liabilities

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Sales deductions $ 5,986 $ 5,174

Income taxes payable 1,195 701

Dividends payable 1,137 1,083

Employee compensation and benefits 1,099 1,081

Income taxes payable 701 828

Sales returns reserve 548 542

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Our borrowings consisted of the following (in millions):

1.25 % € 1,250 million notes due 2022 (1.25% 2022 euro Notes)

2.70 % notes due 2022 (2.70% 2022 Notes)

2.65 % notes due 2022 (2.65% 2022 Notes)

3.625 % notes due 2022 (3.625% 2022 Notes)

0.41 % CHF 700 million bonds due 2023 (0.41% 2023 Swiss franc Bonds)

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1.65 % notes due in 2028 (1.65% 2028 Notes)

3.00 % notes due 2029 (3.00% 2029 Notes)

4.05 % notes due 2029 (4.05% 2029 Notes)

4.00 % £ 700 million notes due 2029 (4.00% 2029 pound sterling Notes)

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4.663 % notes due 2051 (4.663% 2051 Notes)

3.00 % notes due 2052 (3.00% 2052 Notes)

4.20 % notes due 2052 (4.20% 2052 Notes)

4.875 % notes due 2053 (4.875% 2053 Notes)

2.77 % notes due 2053 (2.77% 2053 Notes)

4.40 % notes due 2062 (4.40% 2062 Notes)

Other notes due 2097 100 100

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During the years ended December 31, 2022, 2021 and 2020, we issued debt securities in the following offerings:

• In 2022, we issued $ 7.0 billion of debt consisting of $ 750 million of the 3.00 % 2029 Notes, $ 1.25 billion of the 4.05 % 2029 Notes, $ 1.0 billion of the 3.35 % 2032 Notes, $ 750 million of the 4.20 % 2033 Notes, $ 1.0 billion of the 4.20 % 2052 Notes, $ 1.0 billion of the 4.875 % 2053 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 reduce our impact on the environment.

• In 2021, we issued $ 5.0 billion of debt consisting of $ 1.25 billion of the 1.65 % 2028 Notes, $ 1.25 billion of the 2.00 % 2032 Notes, $ 1.15 billion of the 2.80 % 2041 Notes and $ 1.35 billion of the 3.00 % 2052 Notes.

• In 2020, we issued $ 9.0 billion of debt consisting of $ 500 million of the 1.90 % 2025 Notes, $ 1.75 billion of the 2.20 % 2027 Notes, $ 1.25 billion of the 2.45 % 2030 Notes, $ 1.25 billion of the 2.30 % 2031 Notes, $ 2.0 billion of the 3.15 % 2040 Notes and $ 2.25 billion of the 3.375 % 2050 Notes.

We did not issue any debt or debt securities during the year ended December 31, 2019.

Debt extinguishment

In 2022, we repurchased portions of the 2.20 % 2027 Notes, the 1.65 % 2028 Notes, the 2.00 % 2032 Notes, the 2.80 % 2041 Notes and the 3.00 % 2052 Notes for an aggregate cost of $ 297 million, which resulted in the recognition of a $ 78 million gain on extinguishment of debt recorded in Other (expense) income, net, in the Consolidated Statements of Income.

Debt repayments/redemptions

We made debt repayments/redemptions during the years ended December 31, 2022, 2021 and 2020, as follows:

• In 2022, no debt was repaid/redeemed.

• In 2021, we redeemed $ 4.2 billion of debt, including the € 1.25 billion aggregate principal amount ($ 1.4 billion upon settlement of the related cross-currency swap) of the 1.25 % 2022 euro Notes, the $ 500 million aggregate principal amount of the 2.70 % 2022 Notes, the $ 1.5 billion aggregate principal amount of the 2.65 % 2022 Notes and the $ 750 million aggregate principal amount of the 3.625 % 2022 Notes.

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In connection with the redemption of the $ 900 million aggregate principal amount of the 3.45 % 2020 Notes, the $ 1.0 billion aggregate principal balance of the 4.10 % 2021 Notes, the $ 750 million aggregate principal balance of the 1.85 % 2021 Notes and the $ 1.75 billion aggregate principal balance of the 3.875 % 2021 Notes, we paid a total of $ 96 million in make-whole amounts plus associated accrued and unpaid interest, all of which was recognized in Interest expense, net, in the Consolidated Statements of Income.

• In 2019, we repaid $ 4.5 billion of debt, including the $ 1.4 billion aggregate principal amount of the 2.20 % 2019 Notes, the $ 1.0 billion aggregate principal amount of the 5.70 % 2019 Notes, the € 675 million aggregate principal amount ($ 864 million upon settlement of the related cross-currency swap) of the 2.125 % 2019 euro Notes, the $ 700 million aggregate principal amount of the 1.90 % 2019 Notes and the $ 550 million Floating Rate Notes due 2019.

Interest rate swaps

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See Note 18, Derivative instruments.

The effective interest rates on notes for which we have entered into interest rate swap contracts and the related notional amounts of these contracts were as follows (dollar amounts in millions):

December 31, 2021 December 31, 2020

Notes Notional amounts Effective interest rates Notional amounts Effective interest rates

3.625 % 2022 Notes

$ — N/A $ 750 LIBOR + 2.7 %

As of December 31, 2022 and 2021, the effective interest rates on notes for which we have entered into interest rate swap contracts and the related notional amounts of these contracts were as follows (dollar amounts in millions):

Notes Notional amounts Effective interest rates

3.625 % 2024 Notes

$ 1,400 LIBOR + 3.2 %

1,400 LIBOR + 3.2 %

3.125 % 2025 Notes

1,000 LIBOR + 1.8 %

2.60 % 2026 Notes

1,250 LIBOR + 1.8 %

2.45 % 2030 Notes

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1,500 LIBOR + 4.1 %

Total notional amounts $ 6,650

N/A = not applicable

Debt exchange

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Annual commitment fees for this agreement are 0.1 % of the unused portion of the facility based on our current credit rating.

Generally, we would be charged interest for any amounts borrowed under this facility, based on our current credit rating, at (i) LIBOR plus 1 % or (ii) the highest of (A) the syndication agent bank base commercial lending rate, (B) the overnight federal funds rate plus 0.50 % or (C) one-month LIBOR plus 1 %.

The agreement contains provisions relating to the determination of successor rates to address the possible phase-out or unavailability of designated reference rates.

In December 2022, this revolving credit agreement was further amended to replace LIBOR with SOFR as the reference rate, pursuant to provisions contained therein related to determination of successor rates in case of phaseout or unavailability of existing designated reference rates.

Generally, we would be charged interest for any amounts borrowed under this facility, based on our current credit rating, at (i) SOFR plus 1.125 % or (ii) the highest of (A) the syndication agent bank base commercial lending rate, (B) the overnight federal funds rate plus 0.50 % or (C) one-month SOFR plus 1.1 %.

As of December 31, 2022 and 2021, no amounts were outstanding under this facility.

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preferred stock;

warrants to purchase debt securities, common stock, preferred stock or depository shares;

warrants to purchase debt securities, common stock, preferred stock or depositary shares;

rights to purchase common stock or preferred stock;

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securities purchase units;

and depository shares.

and depositary shares.

Under this shelf registration statement, all of the securities available for issuance may be offered from time to time with terms to be determined at the time of issuance.

This shelf registration statement expires in February 2023.

This shelf registration statement expires in February 2023, and our Board has approved a new shelf registration statement to replace it.

In December 2022, in connection with the proposed acquisition of Horizon, we entered into a bridge credit agreement and a term loan credit agreement which provide for borrowings aggregating $ 28.5 billion.

As of December 31, 2022, no amounts have been borrowed under either agreement.

See Note 2, Acquisitions and divestitures.

Certain of our financing arrangements contain nonfinancial covenants.

In addition, our revolving credit agreement includes a financial covenant, which requires us to maintain a specified minimum interest coverage ratio of (i) the sum of consolidated net income, interest expense, provision for income taxes, depreciation expense, amortization expense, unusual or nonrecurring charges and other noncash items (Consolidated EBITDA) to (ii) Consolidated Interest Expense, each as defined and described in the credit agreement.

In addition, our revolving credit agreement, bridge credit agreement and term loan agreement include a financial covenant, which requires us to maintain a specified minimum interest coverage ratio of (i) the sum of consolidated net income, interest expense, provision for income taxes, depreciation expense, amortization expense, unusual or nonrecurring charges and other noncash items (Consolidated EBITDA) to (ii) Consolidated Interest Expense, each as defined and described in the respective agreements.

We were in compliance with all applicable covenants under these arrangements as of December 31, 2022.

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Interest costs capitalized for the years ended December 31, 2022, 2021 and 2020, were not material.

Interest paid, including the ongoing impact of interest rate and cross-currency swap contracts, during the years ended December 31, 2021, 2020 and 2019, were $ 1.2 billion, $ 1.2 billion and $ 1.3 billion, respectively.

Interest paid, including the ongoing impact of interest rate and cross-currency swap contracts, during each of the years ended December 31, 2022, 2021 and 2020, were $ 1.2 billion.

Stockholders’ equity

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Total stock repurchases 26.1 $ 6,310 21.7 $ 4,987 15.2 $ 3,497

* Total shares do not add due to rounding.

In March 2021, October 2021 and December 2021, our Board of Directors increased the amount authorized under our stock repurchase program by an additional $ 3.4 billion, $ 4.5 billion and $ 5.0 billion, respectively.

During the first quarter of 2022, the Company entered into ASR agreements with third-party financial institutions (Dealers) whereby the Company made payments in an aggregate amount of $ 6.0 billion 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 remained to be delivered by the Dealers.

During the third quarter of 2022, an additional 1.5 million shares of the Company’s common stock were received from the Dealers which constituted final settlement under the ASR agreements, and accordingly, the $ 0.9 billion decrease in additional paid-in capital recorded in the first quarter was reclassified to accumulated deficit.

In total, we repurchased 26.1 million shares of common stock during the year ended December 31, 2022, consisting primarily of the 24.8 million shares received under the ASR agreements.

In October 2022, our Board of Directors increased the amount authorized under our stock repurchase program by an additional $ 2.4 billion.

As of December 31, 2022, $ 7.0 billion remained available under our stock repurchase program.

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Historically, we have declared dividends in December of each year, which were paid in the first quarter of the following fiscal year and in March, July and October, which were paid in the second, third and fourth quarters, respectively, of the same fiscal year.

Additionally, on December 3, 2021, the Board of Directors declared a quarterly cash dividend of $ 1.94 per share of common stock, which will be paid on March 8, 2022, to all stockholders of record as of the close of business on February 15, 2022.

Additionally, on December 12, 2022, the Board of Directors declared a quarterly cash dividend of $ 2.13 per share of common stock, which will be paid in March 2023, to all stockholders of record as of the close of business on February 15, 2023.

Accumulated other comprehensive loss

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Foreign currency translation adjustments 9 — — — 9

Unrealized gains — 127 424 — 551

Unrealized (losses) gains — ( 61 ) 6 — ( 55 )

Reclassification adjustments to income — ( 501 ) ( 33 ) — ( 534 )

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Foreign currency translation adjustments ( 135 ) — — — ( 135 )

Unrealized (losses) gains — ( 61 ) 6 — ( 55 )

Unrealized gains (losses) — 159 ( 1 ) — 158

Reclassification adjustments to income — 253 — — 253

Other losses — — — ( 7 ) ( 7 )

Other gains — — — 1 1

Income taxes — ( 88 ) — — ( 88 )

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Foreign currency translation adjustments 496 — — — 496

Unrealized gains (losses) — 159 ( 1 ) — 158

Unrealized gains — 84 — — 84

Reclassification adjustments to income — 2 — — 2

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Balance as of December 31, 2022 $ ( 348 ) $ 128 $ — $ ( 11 ) $ ( 231 )

With respect to the table above, income tax expenses or benefits for unrealized gains and losses and the related reclassification adjustments to income for cash flow hedges were a $ 33 million expense and a $ 55 million expense in 2021, a $ 14 million benefit and a $ 110 million benefit in 2020 and a $ 28 million expense and a $ 46 million benefit in 2019, respectively.

Income tax expenses or benefits for unrealized gains and losses and the related reclassification adjustments to income for available-for-sale securities were a $ 1 million expense and a $ 7 million benefit in 2020 and a $ 22 million expense and a $ 14 million benefit in 2019, respectively.

With respect to the table above, income tax expenses or benefits for unrealized gains and losses and the related reclassification adjustments to income for cash flow hedges were a $ 19 million expense and a $ 0 million expense in 2022, a $ 33 million expense and a $ 55 million expense in 2021 and a $ 14 million benefit and a $ 110 million benefit in 2020, respectively.

Reclassifications out of AOCI and into earnings were as follows (in millions):

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Cash flow hedges:

Foreign currency contract (losses) gains $ ( 8 ) $ 178 $ 101 Product sales

Cross-currency swap contract (losses) gains ( 245 ) 323 110 Other income, net

Foreign currency contract gains (losses) $ 231 $ ( 8 ) $ 178 Product sales

Cross-currency swap contract (losses) gains ( 233 ) ( 245 ) 323 Other (expense) income, net

( 2 ) ( 253 ) 501 Income before income taxes

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Available-for-sale securities:

Net realized gains $ — $ 33 $ 56 Other income, net

Net realized gains $ — $ — $ 33 Other (expense) income, net

— — ( 7 ) Provision for income taxes

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Other short-term interest-bearing securities — — — —

Other investments — 130 — 130

Equity securities 480 — 335 815

Foreign currency contracts — 183 — 183

Foreign currency forward contracts — 287 — 287

Cross-currency swap contracts — 54 — 54

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Total assets $ 4,815 $ 471 $ 335 $ 5,621

Foreign currency contracts $ — $ 39 $ — $ 39

Foreign currency forward contracts $ — $ 76 $ — $ 76

Cross-currency swap contracts — 541 — 541

Interest rate swap contracts — 776 — 776

Forward interest rate contracts — 5 — 5

Contingent consideration obligations

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Other short-term interest-bearing securities — 1 — 1

Other investments — — — —

Equity securities 611 — 220 831

Foreign currency contracts — 28 — 28

Foreign currency forward contracts — 183 — 183

Cross-currency swap contracts — 66 — 66

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Total assets $ 7,914 $ 266 $ 220 $ 8,400

Foreign currency contracts $ — $ 237 $ — $ 237

Foreign currency forward contracts $ — $ 39 $ — $ 39

Cross-currency swap contracts — 339 — 339

Interest rate swap contracts — 156 — 156

Forward interest rate contracts — — — —

Contingent consideration obligations — — 342 342

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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 values 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 information for similar companies that have actively traded equity securities.

All of our foreign currency forward and option 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 18, 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.

Other investments consist of interest-bearing deposits that are valued at amortized cost, which approximates fair value given their near term maturity.

The fair value of equity securities for which the fair value option was elected are initially valued at the transaction price and subsequently valued based on a combination of observable price transactions, when available, market performance and publicly available market information for similar companies that have actively traded equity securities.

See Note 9, Investments— Neumora Therapeutics, Inc.

Our foreign currency forward contracts, cross-currency swap contracts and interest rate swap contracts are with counterparties that have minimum credit ratings of A– or equivalent by S&P, Moody’s or Fitch.

These inputs include foreign currency exchange rates, LIBOR, swap rates, obligor credit default swap rates and cross-currency basis swap spreads.

See Note 18, 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.

These inputs, as applicable, include foreign currency exchange rates, LIBOR, swap rates, obligor credit default swap rates and cross-currency basis swap spreads.

Certain inputs, when applicable, are at commonly quoted intervals.

See Note 18, Derivative instruments.

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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.

Significant changes to these inputs 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 Consolidated Statements of Income.

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As a result of our acquisition of Teneobio in 2021, we are obligated to pay its 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.

As a result of our acquisition of K-A in 2018, we are obligated to make single-digit royalty payments to Kirin contingent upon sales of brodalumab.

See Note 2, Acquisitions and divestitures.

As a result of our acquisition of K-A in 2018, we are obligated to make single-digit royalty payments to Kirin Holdings Company, Limited contingent upon sales of brodalumab.

As a result of our acquisition of BioVex Group Inc.

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To reduce our risks related to such exposures, we use or have used certain derivative instruments, including foreign currency forward, foreign currency option, cross-currency swap, forward interest rate and interest rate swap contracts.

We have designated certain of our derivatives as cash flow and fair value hedges;

we also have derivatives not designated as hedges.

We do not use derivatives for speculative trading purposes.

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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;

The foreign currency exchange rate fluctuation exposure associated with cash inflows from our international product sales are partially offset by corresponding cash outflows from our international operating expenses.

To further reduce this exposure, 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 is being hedged than in successive periods.

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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 Consolidated Balance Sheets and reclassified to Other income, net, in the Consolidated Statements of Income in the same periods during which the hedged debt affects earnings.

Accordingly, the unrealized gains and losses on these contracts are reported in AOCI in the Consolidated Balance Sheets and reclassified to Other (expense) income, net, in the 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 December 31, 2022, were as follows (notional amounts in millions):

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4.00% 2029 pound sterling Notes £ 700 4.0 % $ 1,111 4.6 %

During the year ended December 31, 2021, our 1.25 % euro Notes were redeemed, and the related cross-currency swaps were settled, resulting in an immaterial loss.

During the year ended December 31, 2019, our 2.125 % 2019 euro Notes matured, and the related cross-currency swaps were settled.

In connection with the anticipated issuance of long-term fixed-rate debt, we occasionally enter into forward interest rate contracts to hedge variability in cash flows due to changes in the applicable U.S.

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 Consolidated Balance Sheets and are amortized into Interest expense, net, in the Consolidated Statements of Income over the lives of the associated debt issuances.

Amounts recognized in connection with forward interest rate swaps during the year ended December 31, 2021, and amounts expected to be recognized during the subsequent 12 months are not material.

In December 2022, we entered into a forward interest rate contract with an aggregate notional amount of $ 700 million.

Amounts expected to be recognized during the subsequent 12 months on forward interest rate contracts 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):

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Derivatives in cash flow hedging relationships 2022 2021 2020

Foreign currency contracts $ 373 $ ( 251 ) $ 148

Foreign currency forward contracts $ 308 $ 373 $ ( 251 )

Cross-currency swap contracts ( 219 ) ( 214 ) 190

Forward interest rate contracts ( 5 ) — —

Total unrealized gains (losses) $ 84 $ 159 $ ( 61 )

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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 December 31, 2021 and 2020, we had interest rate swap contracts with aggregate notional amounts of $ 6.7 billion and $ 5.9 billion, respectively, that hedge certain portions of our long-term debt issuances.

As of both December 31, 2022 and 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.

See Note 15, Financing arrangements, for information on our interest rate swaps.

During the year ended December 31, 2021, we entered into interest rate swap contracts with an aggregate notional amount of $ 1.5 billion.

Interest rate swaps with an aggregate notional value of $ 750 million were terminated in connection with the redemption of certain of our notes.

The resulting gain on these terminations was immaterial.

During the year ended December 31, 2020, interest rate swaps with an aggregate notional value of $ 3.7 billion were terminated in connection with the redemption of certain of our notes.

The terminations of these interest rate swaps resulted in a gain of $ 40 million, recognized in Interest expense, net, in the Consolidated Statements of Income.

Additionally, we terminated $ 5.2 billion aggregate notional amount of interest rate swaps, which resulted in receipt of $ 576 million from the counterparties and which was included in Net cash provided by operating activities in the Consolidated Statements of Cash Flows for the year ended December 31, 2020.

This amount is being recognized as a reduction in Interest expense, net, in the Consolidated Statements of Income over the remaining life of the underlying notes.

Immediately following the terminations of these interest rate swap contracts, we entered into new interest rate swap agreements at then-current interest rates on the same $ 5.2 billion principal amount of notes.

For interest rate swap contracts that qualify for and are designated as fair value hedges, we recognize in Interest expense, net, in the 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.

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Year ended December 31, 2022

Product sales Other 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 Consolidated Statements of Income $ 24,801 $ ( 814 ) $ ( 1,406 )

The effects of cash flow and fair value hedging:

Losses on cash flow hedging relationships reclassified out of AOCI:

Foreign currency contracts $ ( 8 ) $ — $ —

Gains (losses) on cash flow hedging relationships reclassified out of AOCI:

Foreign currency forward contracts $ 231 $ — $ —

Cross-currency swap contracts $ — $ ( 233 ) $ —

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Year ended December 31, 2021

Product sales Other 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 Consolidated Statements of Income $ 24,297 $ 259 $ ( 1,197 )

The effects of cash flow and fair value hedging:

Gains on cash flow hedging relationships reclassified out of AOCI:

Foreign currency contracts $ 178 $ — $ —

Losses on cash flow hedging relationships reclassified out of AOCI:

Foreign currency forward contracts $ ( 8 ) $ — $ —

Cross-currency swap contracts $ — $ ( 245 ) $ —

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Year ended December 31, 2020

Product sales Other 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 Consolidated Statements of Income $ 24,240 $ 256 $ ( 1,262 )

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Gains on cash flow hedging relationships reclassified out of AOCI:

Foreign currency contracts $ 101 $ — $ —

Foreign currency forward contracts $ 178 $ — $ —

Cross-currency swap contracts $ — $ 323 $ —

(Losses) gains on fair value hedging relationships—interest rate swap agreements:

Gains (losses) on fair value hedging relationships—interest rate swap agreements:

Hedged items (1)

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Most of these exposures are hedged on a month-to-month basis.

As of December 31, 2021, 2020 and 2019, the total notional amounts of these foreign currency forward contracts were $ 680 million, $ 1.0 billion and $ 1.2 billion, respectively.

As of December 31, 2022, 2021 and 2020, the total notional amounts of these foreign currency forward contracts were $ 517 million, $ 680 million and $ 1.0 billion, respectively.

Gains and losses recognized in earnings for our derivative instruments not designated as hedging instruments were not material for the years ended December 31, 2022, 2021 and 2020.

Fair values of derivatives

The fair values of derivatives included in the Consolidated Balance Sheets were as follows (in millions):

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Derivatives designated as hedging instruments:

Foreign currency contracts Other current assets/ Other noncurrent assets $ 183 Accrued liabilities/ Other noncurrent liabilities

Foreign currency forward contracts Other current assets/ Other noncurrent assets $ 287 Accrued liabilities/ Other noncurrent liabilities

Cross-currency swap contracts Other current assets/ Other noncurrent assets 54 Accrued liabilities/ Other noncurrent liabilities

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Other current assets/ Other noncurrent assets — Accrued liabilities/ Other noncurrent liabilities

Forward interest rate contracts Other current assets/ Other noncurrent assets — Accrued liabilities/ Other noncurrent liabilities

Total derivatives designated as hedging instruments

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Derivatives designated as hedging instruments:

Foreign currency contracts Other current assets/ Other noncurrent assets $ 28 Accrued liabilities/ Other noncurrent liabilities

Foreign currency forward contracts Other current assets/ Other noncurrent assets $ 183 Accrued liabilities/ Other noncurrent liabilities

Cross-currency swap contracts Other current assets/ Other noncurrent assets 66 Accrued liabilities/ Other noncurrent liabilities

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Other current assets/ Other noncurrent assets 16 Accrued liabilities/ Other noncurrent liabilities

Forward interest rate contracts Other current assets/ Other noncurrent assets — Accrued liabilities/ Other noncurrent liabilities

Total derivatives designated as hedging instruments

Total derivatives $ 265 $ 534

For additional information, see Note 17, Fair value measurement.

Our derivative contracts that were in liability positions as of December 31, 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.

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Each defendant has filed an answer to the above-listed complaints and amended complaints disputing infringement and/or validity of the patents asserted against it.

Along with their answers, each of Alkem, Hetero, Cipla

Ltd, DRL, Emcure, Glenmark, Macleods, Mankind, Pharmascience, Sandoz, Shilpa, Actavis, Torrent, Unichem and Zydus filed declaratory judgment counterclaims asserting that some or all of the patents are not infringed and/or are invalid.

Along with their answers, each of Alkem, Hetero, Cipla Ltd, DRL, Emcure, Glenmark, Macleods, Mankind, Pharmascience, Sandoz, Shilpa, Actavis, Torrent, Unichem and Zydus filed declaratory judgment counterclaims asserting that some or all of the patents are not infringed and/or are invalid.

In August 2019, based on a joint request by Celgene and Glenmark, the New Jersey District Court entered a consent judgment and injunction prohibiting the making, having made, using, selling, offering to sell, importing, or distributing of Glenmark’s apremilast product during the term of the ’940, ’638, ’302, ’101, ’536, ’243, ’330 and ’541 Patents, unless authorized pursuant to a confidential settlement agreement.

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On May 25, 2021, based on a joint request by Amgen and MSN, the New Jersey District Court entered a consent judgment and injunction prohibiting the making, using, selling, offering to sell, or importing of MSN’s apremilast product during the term of the ’940, ’638, ’302, ’536, ’330 and ’541 Patents, unless authorized pursuant to a confidential settlement agreement.

On June 11, 2021, based on a joint request by Amgen and Pharmascience, the New Jersey District Court entered a consent judgment and

injunction prohibiting the making, using, selling, offering to sell, or importing of Pharmascience’s apremilast product during the term of the ’243, ’940, ’638, ’302, ’101, ’536, ’330 and ’541 Patents, unless authorized pursuant to a confidential settlement agreement.

On June 11, 2021, based on a joint request by Amgen and Pharmascience, the New Jersey District Court entered a consent judgment and injunction prohibiting the making, using, selling, offering to sell, or importing of Pharmascience’s apremilast product during the term of the ’243, ’940, ’638, ’302, ’101, ’536, ’330 and ’541 Patents, unless authorized pursuant to a confidential settlement agreement.

On June 17, 2021, based on a joint request by Amgen and DRL, the New Jersey District Court entered a consent judgment and injunction prohibiting the making, using, selling, offering to sell, or importing of DRL’s apremilast product during the term of the ’638, ’101, ’536 and ’541 Patents, unless authorized pursuant to a confidential settlement agreement.

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On November 10, 2021, Amgen filed a notice of appeal to the Federal Circuit Court.

ENBREL Patent Litigation

Immunex Corporation, et al.

Samsung Bioepis Co., Ltd.

On April 30, 2019, two affiliates of Amgen Inc., Immunex Corporation and Amgen Manufacturing, Limited (collectively, Amgen), along with Hoffmann-La Roche Inc.

(Roche), filed a lawsuit in the New Jersey District Court against Samsung Bioepis Co., Ltd.

This lawsuit stems from Bioepis’ submission of an application for FDA licensure of an etanercept product as biosimilar to Amgen’s ENBREL.

Amgen and Roche have asserted infringement of five patents:

8,063,182, 8,163,522 (the ’522 Patent), 7,915,225, 8,119,605 and 8,722,631.

By their complaint, Amgen and Roche seek an injunction to prohibit Bioepis from commercializing its biosimilar etanercept product in the United States prior to the expiry of such patents.

On August 5, 2019, Bioepis responded to the complaint, denying infringement and seeking judgment that the patents-in-suit are invalid, unenforceable and/or not infringed.

On January 9, 2020 and subject to the terms of a confidential stipulation and court order of January 6, 2020, the New Jersey District Court entered a consent injunction that prohibits Bioepis from making, using, offering to sell, selling or importing into the United States Bioepis’ etanercept product.

Amgen and Bioepis entered into an agreement with respect to an injunction regarding etanercept as set out in the New Jersey District Court’s order of January 6, 2020.

On January 15, 2020, the New Jersey District Court entered an order administratively staying the case pursuant to a joint request of Amgen and Bioepis.

On November 2, 2021, Amgen and Bioepis, with the consent of Roche, jointly submitted to the New Jersey District Court a confidential stipulation and a form of final judgment and order of permanent injunction resolving the dispute between the parties and enjoining Bioepis from making, using, offering to sell, or selling within the United States, or importing into the United States, any product containing etanercept until the April 24, 2029 expiry of Roche’s ’522 Patent.

On November 3, 2021, the New Jersey District Court entered final judgment and ordered a permanent injunction against Bioepis in conformity with the parties’ submission.

Oral argument for Amgen’s, Sandoz’s and Zydus’ appeals was held on February 8, 2023.

On June 14, 2022, Amgen filed a lawsuit in the New Jersey District Court against Apotex Inc.

(Apotex) for infringement of the ’638 Patent, the ’854 Patent and the ’541 Patent.

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.

On October 14, 2022, Apotex filed its answer, disputing infringement and/or validity of the patents-in-suit.

Along with its answer, Apotex also filed declaratory judgment counterclaims asserting that the patents-in-suit are not infringed and/or are invalid.

On January 20, 2023, based on a joint request by Amgen and Apotex, the New Jersey District Court entered a consent judgment and injunction prohibiting the making, using, selling, offering to sell, or importing of Apotex’s apremilast product during the term of the ’638, ’854, and ’541 Patents, unless authorized pursuant to a confidential settlement agreement.

Repatha Patent Litigation

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In March 2016, the Delaware District Court entered judgment in favor of Amgen following a five-day jury trial and a unanimous jury verdict that these patent claims are all valid.

In January 2017, the Delaware District Court denied Sanofi and Regeneron’s post-trial motions seeking a new trial and for judgment as a matter of law, and granted Amgen’s motion for a permanent injunction prohibiting the infringing manufacture, use, sale, offer for sale or import of alirocumab in the United States.

In January 2017, the Delaware District Court denied Sanofi and Regeneron’s posttrial motions seeking a new trial and for judgment as a matter of law, and granted Amgen’s motion for a permanent injunction prohibiting the infringing manufacture, use, sale, offer for sale or import of alirocumab in the United States.

Sanofi and Regeneron filed an appeal of the judgment and the permanent injunction to the Federal Circuit Court.

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The jury also found that claims 7 and 15 of the ’165 Patent meet the enablement requirement, but are invalid for failure to meet the written description requirement.

On March 18, 2019, Sanofi and Regeneron filed post-trial motions seeking to reverse the jury verdict against them or for a new trial, and Amgen filed a motion for a permanent injunction.

On August 28, 2019, the Delaware District Court ruled on the post-trial motions, denying Sanofi and Regeneron’s request for a new trial and their request to reverse the jury verdict that the ’165 Patent and the ’741 Patent provide written description support for the claimed inventions.

On March 18, 2019, Sanofi and Regeneron filed posttrial motions seeking to reverse the jury verdict against them or for a new trial, and Amgen filed a motion for a permanent injunction.

On August 28, 2019, the Delaware District Court ruled on the posttrial motions, denying Sanofi and Regeneron’s request for a new trial and their request to reverse the jury verdict that the ’165 Patent and the ’741 Patent provide written description support for the claimed inventions.

The Delaware District Court also ruled as a matter of law that claims 19 and 29 of the ’165 Patent and claim 7 of the ’741 Patent are invalid for failing to meet the enablement requirement, overturning the jury verdict.

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Supreme Court seeking review of the invalidation of claims 19 and 29 of the ’165 Patent and claim 7 of the ’741 Patent as lacking an enabling disclosure of the invention.

On January 11, 2022, the U.S.

Supreme Court requested that Sanofi and Regeneron file a response to Amgen’s petition, which is due March 14, 2022.

On November 4, 2022, the U.S.

Supreme Court granted review on Amgen’s petition for certiorari on the question of whether the appropriate standard was applied by the lower courts in invalidating claims 19 and 29 of the ’165 Patent and claim 7 of the ’741 Patent as lacking an enabling disclosure of the invention.

Amgen filed its opening brief on December 27, 2022.

On February 3, 2023, Sanofi and Regeneron filed a brief in response.

Oral argument before the U.S.

Supreme Court is scheduled for March 27, 2023.

Patent Disputes in the International Region

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In Germany, Sanofi-Aventis Deutschland GmbH and Regeneron have filed actions seeking damages arising from the provisional enforcement of an injunction against PRALUENT that was lifted after the TBA’s October 29, 2020 ruling.

On March 23, 2022, Amgen filed counterclaims alleging that PRALUENT infringes Amgen’s European Patent No.

2,641,917 (the ’917 Patent).

A EPO opposition to the ’917 Patent, filed by Sanofi on February 5, 2021, is pending, and the hearing before the EPO’s Opposition Division is scheduled for February 21, 2023.

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 EPO.

A hearing before the Opposition Division of the EPO was held on June 8 and 9, 2022, and on August 16, 2022, the Opposition Division issued a written decision upholding the validity of the EP’004 Patent claims at issue, with narrowing amendments.

Proceedings before the TBA commenced on August 17, 2022.

On November 22, 2022, Amgen filed Grounds of Appeal before the TBA, and on December 30, 2022, Regeneron filed Grounds of Appeal before the TBA.

On January 23, 2023, the TBA invited Amgen to file any response to Regeneron’s Grounds of Appeal by May 23, 2023.

On April 24, 2020, the Supreme Court of Japan declined to hear Sanofi K.K.’s appeals making final the Japanese High Court’s decisions that PRALUENT infringes Amgen’s valid patent rights in Japan.

On June 24, 2020, Amgen filed written answers to the invalidity trials initiated by Regeneron on February 12, 2020 before the Japan Patent Office seeking to invalidate Amgen’s Japanese patents that were previously held infringed by PRALUENT and valid over challenges filed by Sanofi K.K.

The Japanese Patent Office dismissed Regeneron’s invalidity trials and Regeneron has appealed the decisions to the Japanese High Court.

On April 15, 2021, the Japanese Patent Office dismissed Regeneron’s invalidity trials, and in August 2021 Regeneron appealed the decisions to the Japanese High Court.

On January 26, 2023, the Japanese High Court found Amgen’s patent claims invalid for lacking adequate support.

The decision is subject to appeal to the Japanese Supreme Court.

Damages proceedings against Sanofi K.K.

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has initiated new validity challenges to Amgen patents in Japan.

NEUPOGEN (filgrastim)/Neulasta Patent Litigation

Amgen Inc., et al.

On February 11, 2020, Amgen Inc.

and its wholly owned subsidiary, Amgen Manufacturing, Limited (collectively, Amgen), filed a lawsuit in the Delaware District Court against Hospira Inc.

and Pfizer Inc.

(collectively, Pfizer).

This lawsuit stems from Pfizer’s submission of an application for FDA licensure of a pegfilgrastim product as biosimilar to Amgen’s Neulasta.

Amgen has asserted infringement of U.S.

8,273,707 (the ’707 Patent) and seeks, among other remedies, injunctive relief to prohibit Pfizer from infringing the ’707 Patent.

On March 4, 2020, Pfizer filed a motion requesting the Delaware District Court to dismiss the complaint by Amgen alleging noninfringement of the ’707 Patent.

In June 2020, the FDA approved Pfizer’s NYVEPRIA, a biosimilar to Amgen’s Neulasta.

On April 6, 2021, the Delaware District Court stayed further proceedings in the matter pending claim construction of the patent claims and, based on a subsequent hearing, determined on June 11, 2021 that the term at issue required no construction.

Currently pending before the Delaware District Court is Pfizer’s motion for summary judgment of noninfringement, which has been fully briefed.

No date has been set for argument on the motion.

Patent Trial and Appeal Board (PTAB) Challenge

Apotex PTAB Challenge

In February 2017, the PTAB of the USPTO granted Apotex’s petition to institute inter partes review (IPR) proceeding of U.S.

8,952,138 (the ’138 Patent), challenging claims of the ’138 Patent as unpatentable.

In May 2017, Amgen filed its response.

In February 2018, the PTAB issued a final decision holding all but one claim of the ’138 Patent as unpatentable and Apotex filed a request for rehearing in March 2018.

On May 20, 2019, the PTAB issued a decision denying Apotex’s request for rehearing on the PTAB’s finding and sua sponte amending the final decision with a finding that the one remaining claim in Amgen’s ’138 Patent is unpatentable.

On July 22, 2019, Amgen filed a notice of appeal to the Federal Circuit Court with respect to all claims held to be unpatentable.

On August 5, 2019, Apotex provided notice that it would not participate in the appeal.

On September 16, 2019, the USPTO filed a notice of intervention on the appeal.

On March 24, 2020, the Federal Circuit Court vacated the decision by the PTAB and remanded the case to the PTAB for proceeding consistent with the Federal Circuit Court’s decision in Arthrex Inc.

Smith & Nephew, Inc ., 941 F.3d 1320 (Fed.

On July 14, 2020, Amgen and Apotex filed a joint motion to terminate the IPR proceedings stating that there is no current dispute between the parties with respect to the ’138 Patent.

On July 29, 2020, the U.S.

government filed a petition for writ of certiorari with respect to the cases that the Federal Circuit Court remanded to the PTAB, including the case regarding the ’138 Patent, for proceedings consistent with its decision in Arthrex Inc.

Smith & Nephew, Inc.

, requesting that such remanded cases be held pending the U.S.

Supreme Court’s disposition of the petition for writ of certiorari in United States v.

Arthrex, Inc.

On August 25, 2020, Amgen filed its response to the U.S.

government’s petition for writ of certiorari indicating that Amgen did not intend to respond unless requested by the U.S.

Supreme Court.

On June 21, 2021, the U.S.

Supreme Court decided United States v.

Arthrex, Inc.

On June 28, 2021, the U.S.

Supreme Court granted the government’s pending certiorari petition and vacated and remanded the Federal Circuit Court’s judgment for further consideration under Arthrex.

On September 2, 2021, the Federal Circuit Court issued a remand to permit Amgen to request rehearing of the PTAB’s final written decision holding that all claims of the ’138 Patent as unpatentable.

On October 4, 2021, Amgen filed a request for the USPTO Director for a rehearing and review of the Final Written Decision pursuant to Arthrex .

On November 22, 2021, the Director denied this request.

On December 6, 2021, Amgen filed the Notice of Director review with the patent office.

Pfizer PTAB Challenge

On February 10, 2021, Pfizer filed a petition to institute IPR proceeding at the USPTO of U.S.

8,273,707 (the ’707 Patent), challenging claims of the ’707 Patent as unpatentable.

Amgen’s preliminary response was filed on May 18, 2021.

On August 17, 2021, the PTAB of the USPTO granted Pfizer’s petition to institute IPR of the ’707 Patent.

On August 23, 2021, the PTAB issued the schedule for the proceeding, including oral argument (if requested) on May 18, 2022.

On November 17, 2021, Amgen filed its Patent Owner’s Response.

Breach of Contract Action

Novartis Pharma AG v.

On April 4, 2019, Amgen filed a lawsuit in the U.S.

District Court for the Southern District of New York (the New York Southern District Court) against Novartis seeking a declaratory judgment that Novartis materially breached two collaboration agreements Amgen and Novartis entered into in 2015 and 2017 (the 2015 Agreement and the 2017 Agreement, respectively) related to the development and commercialization of Aimovig due to Novartis’ affiliate Sandoz GmbH entering into a contract manufacturing agreement with Alder BioPharmaceuticals, Inc.

(Alder) related to eptinezumab, an expected direct competitor to Aimovig and entrant in the CGRP-related migraine therapy market.

Amgen seeks to terminate its collaboration agreements with Novartis and also seeks damages from Novartis for breach of contract and negligent misrepresentation.

Also on April 4, 2019, Novartis initiated a separate lawsuit against Amgen in the same court seeking declaratory judgment that Novartis, alternatively, did not materially breach the collaboration agreements or, even if it did breach the collaboration agreements, such breach was not material and has been cured, and that Amgen may not terminate the collaboration agreements.

On April 8, 2019, Amgen answered Novartis’ complaint and filed counterclaims seeking a declaratory judgment that Novartis materially breached the collaboration agreements due to its affiliate Sandoz GmbH entering into the contract manufacturing agreement with Alder.

In its counterclaim, Amgen seeks to terminate its collaboration agreements with Novartis and also seeks damages from Novartis for breach of contract and negligent misrepresentation.

On July 16, 2019, Novartis filed an amended complaint adding a claim for breach of contract alleging Novartis is owed amounts associated with 2018 budget overruns, and Amgen responded with a counterclaim alleging additional breaches by Novartis of the collaboration agreements.

On September 17, 2019 and October 8, 2019, Novartis and Amgen, respectively, each filed its motion for judgment on the pleadings.

On February 3, 2020, Amgen was granted leave to file its amended counterclaims.

On February 4, 2020, Amgen filed its amended answer to Novartis’ first amended complaint and second amended counterclaims for affirmative relief to add a fraudulent inducement claim.

On February 18, 2020, Novartis filed its answer and affirmative defenses to Amgen’s second amended counterclaims.

On June 9, 2020, the New York Southern District Court entered an order granting Novartis’ motion for judgment on the pleadings that Novartis did not breach the 2017 Agreement, and denying Amgen’s motions for judgment on the pleadings seeking dismissal of Novartis’ amended complaint that Novartis did not breach the 2015 Agreement or the 2017 Agreement, and Novartis timely cured any breach.

On June 23, 2020, Amgen filed a motion for clarification and/or reconsideration of the June 9, 2020 order, which was denied on September 14, 2020.

On June 2, 2021, the parties executed agreements to settle two claims in the litigation, relating to the 2018 budget overrun dispute and certain counterclaims alleging breaches by Novartis of the 2015 and 2017 Agreements related to the development and commercialization of Aimovig, and to amend and restate the 2017 collaboration agreement.

As part of the agreement, Amgen paid $ 48 million to Novartis to resolve the 2018 budget dispute.

On October 26, 2021, the New York Southern District Court held a status conference with the parties and set the dates for Novartis’ opening brief for its motion for partial summary judgment on two claims, fraudulent inducement and negligent misrepresentation.

On January 31, 2022, the parties resolved all claims in the litigation.

ABP 654 (ustekinumab) Patent Litigation

Janssen Biotech, Inc.

On November 29, 2022, Janssen filed a lawsuit in the Delaware District Court alleging Amgen’s infringement of two patents by Amgen’s submission of an application for FDA licensure of ABP 654, Amgen’s biosimilar version of Janssen’s STELARA (ustekinumab) and also seeking declaratory judgment of infringement of the same two patents.

Antitrust Class Action

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Amgen Inc., et al.

(March 14, 2019) (Local 237) and the four th action was brought in the U.S.

(March 14, 2019) (Local 237) and the fourth action was brought in the U.S.

District Court for the Eastern District of Pennsylvania (the Eastern Pennsylvania District Court), captioned KPH Healthcare Services, Inc.

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On July 31, 2019, the MDL panel entered an order consolidating in the Delaware District Court the four class action lawsuits.

On September 13, 2019, the plaintiffs filed amended complaints, and on October 15, 2019, Amgen filed its motion to dismiss both the direct purchaser plaintiffs’ consolidated class action complaint and the indirect purchaser end payor plaintiffs’ complaint.

On December 6, 2019, the plaintiffs responded to Amgen’s motion to dismiss and, on January 10, 2020, Amgen filed its response.

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A hearing on defendants’ motion to dismiss was held in the Delaware District Court on July 13, 2021.

Humira Biosimilar Antitrust Class Actions

From March to May 2019, twelve purported class actions against Amgen, along with AbbVie Inc.

and AbbVie Biotechnology Ltd.

(collectively, AbbVie), were filed in the U.S.

District Court for the Northern District of Illinois (the Illinois Northern District Court).

The cases are captioned:

UFCW Local 1500 Welfare Fund v.

AbbVie Inc., et al.

(March 18, 2019) (Local 1500);

Fraternal Order of Police, Miami Lodge 20, Insurance Trust Fund v.

AbbVie Inc., et al.

(March 20, 2019);

Mayor and City Council of Baltimore v.

AbbVie Inc., et al.

(March 22, 2019);

Pipe Trades Services MN Welfare Fund v.

AbbVie Inc., et al.

(March 29, 2019);

Paul Electrical Workers’ Health Plan v.

AbbVie Inc., et al.

(March 29, 2019);

Welfare Plan of the International Union of Operating Engineers Locals 137, 137A, 137B, 137C and 137R v.

AbbVie Inc., et al.

Law Enforcement Health Benefits, Inc.

AbbVie, Inc., et al.

(April 9, 2019) (Law Enforcement);

Kentucky Laborers District Council Health and Welfare Fund v.

AbbVie, Inc., et al.

(April 16, 2019);

Sheet Metal Workers’ Local Union No.

28 Welfare Fund v.

AbbVie, Inc., et al.

(April 19, 2019) (Sheet Metal Workers’);

Locals 302 & 612 of The International Union of Operating Engineers-Employers Construction Industry Health And Security Trust Fund v.

AbbVie Inc., et al.

(April 25, 2019) (Construction Industry);

Louisiana Health Service & Indemnity Co., d/b/a Blue Cross and Blue Shield of Louisiana and HMO Louisiana, Inc.

(April 30, 2019) (Louisiana Health);

and Cleveland Bakers and Teamsters Health and Welfare Fund v.

AbbVie Inc., et al.

(May 10, 2019) (Cleveland Bakers) (collectively, Humira Antitrust Class Actions).

In each of the Humira Antitrust Class Actions, the plaintiffs bring federal antitrust claims along with various state law claims under common law and antitrust, consumer protection and unfair competition statutes.

In each case, the plaintiffs specifically allege that AbbVie has unlawfully monopolized the alleged market for Humira and biosimilars of Humira, including by creating an allegedly unlawful so-called patent thicket around Humira.

In the Local 1500, Sheet Metal Workers’ and Construction Industry cases, the plaintiffs further allege that AbbVie entered into allegedly unlawful market division agreements with Amgen and other companies that had developed Humira biosimilars, including Bioepis, Mylan, Sandoz, Fresenius Kabi USA, LLC (Fresenius), Pfizer Inc.

and Momenta Pharmaceuticals, Inc., in connection with the settlement of patent litigation relating to Humira, whereby Amgen and the other defendants that have developed Humira biosimilars were permitted to market those products in Europe as early as October 2018, while remaining off the market in the United States until 2023.

In each of the Humira Antitrust Class Actions other than the Local 1500 and Construction Industry cases, the plaintiffs allege that AbbVie and Amgen entered into an allegedly unlawful settlement agreement under which Amgen allegedly agreed to delay its entry into the U.S.

market with AMGEVITA, its Humira biosimilar, in exchange for an alleged promise of exclusivity as the sole Humira biosimilar in that market for five months, beginning in January 2023.

In each of the Humira Antitrust Class Actions, plaintiffs seek injunctive relief, treble damages and attorney’s fees on behalf of a putative class of third-party payers and/or consumers that have indirectly purchased, paid for or provided reimbursement for Humira in the United States.

Defendants’ responses to the first six complaints were stayed by the court.

On June 4, 2019, the Illinois Northern District Court entered an order consolidating the twelve purported class action cases for pre-trial purposes.

On August 9, 2019, the plaintiffs filed their consolidated complaint, naming as defendants Amgen, along with AbbVie, Bioepis, Sandoz and Fresenius.

On October 11, 2019, the defendants filed a joint motion to dismiss the consolidated complaint (as well as brief individual motions), challenging the legal sufficiency of the plaintiffs’ allegations to state any claim for relief under the law.

On November 19, 2019, plaintiffs filed their opposition to the motion to dismiss.

On December 20, 2019, defendants filed their reply in support of the motion to dismiss.

On June 8, 2020, the Illinois Northern District Court issued an order granting the motion by the defendants to dismiss the consolidated class action complaint.

On June 29, 2020, the plaintiffs filed a status report asking the Illinois Northern District Court to convert the dismissal to one with prejudice.

On June 30, 2020, the Illinois Northern District Court granted the motion.

On July 28, 2020, the plaintiffs filed a notice of appeal.

On October 5, 2020, the plaintiffs-appellants filed their opening brief to the U.S.

Court of Appeals for the Seventh Circuit.

Plaintiffs-appellants amicus briefs were filed in October 2020, including one by the FTC and one on behalf of 20 states, each filed on October 13, 2020.

On December 21, 2020, the defendants-appellees filed their opposition brief.

Defendants-appellees amicus briefs, including one by the DoJ, were filed on December 28, 2020.

On February 25, 2021, oral argument was held by the U.S.

Court of Appeals for the Seventh Circuit on the appeal by plaintiffs-appellants of the lower court’s dismissal of the consolidated complaint with prejudice.

On March 11, 2022, the Delaware District Court granted defendants’ (including Amgen’s) motion to dismiss except as to the reverse payment claim and various state law claims from ten of the states in which plaintiffs reside.

On May 11, 2022, the parties filed motions asking permission to seek interlocutory appeal.

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.

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 payers 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, a motion to dismiss, was filed on August 1, 2022.

On August 11, 2022, Amgen moved to stay the case pending the ultimate decision on the merits of the ongoing patent litigation between Amgen and Regeneron in Amgen Inc., et al.

Sanofi, et al.

On January 6, 2023, the Delaware District Court heard oral argument on the motion to stay and the motion to dismiss.

Tax Litigation.

1 unchanged sentence

Commissioner of Internal Revenue

See Note 6, Income taxes, for discussion of the IRS tax dispute and the Company’s petition in the U.S.

See Note 6, Income taxes, for discussion of the IRS tax dispute and the Company’s petitions in the U.S.

ChemoCentryx, Inc.

Securities Matters

On May 5 and June 8 of 2021, ChemoCentryx and its Chief Executive Officer were named as defendants in two putative shareholder class actions filed in the U.S.

District Court for the Northern District of California (Northern District Court of California).

These cases were consolidated into Homyk v.

ChemoCentryx, Inc.

in which the plaintiffs allege violations of Sections 10(b) and 20(a) of the Securities Exchange Act in connection with statements regarding the New Drug Application for TAVNEOS and the underlying Phase 3 clinical trial, seeking an award of damages, interest and attorneys’ fees.

On March 28, 2022, the plaintiffs filed their consolidated amended complaint, and on May 19, 2022, ChemoCentryx moved to dismiss these claims.

On January 25, 2022, the Board of Directors and certain of ChemoCentryx’s officers were named as defendants in a putative shareholder derivative action filed in the Northern District Court of California, Napoli v.

Schall, and on March 11, 2022, the Northern District Court of California stayed the action until judgment is entered in the Homyk v.

ChemoCentryx, Inc.

On December 5, 2022 the plaintiffs in Napoli filed a Notice of Voluntary Dismissal, and on December 22, 2022, the Court ordered the dismissal of the case.

Commitments – U.S.

18 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures