What changed in this filing

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Item 9A. Controls and Procedures

2024-02-14 compared with 2023-02-09 · 496 added, 460 removed, 1709 unchanged (36% of the section changed)

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We maintain “disclosure controls and procedures,” as such term is defined under the Securities Exchange Act Rule 13a-15(e), that are designed to ensure that information required to be disclosed in Amgen’s Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to Amgen’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures.

In designing and evaluating the disclosure controls and procedures, Amgen’s management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and in reaching a reasonable level of assurance, Amgen’s management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

In designing and evaluating the disclosure controls and procedures, Amgen’s management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and in reaching a reasonable level of assurance, Amgen’s management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

We have carried out an evaluation under the supervision and with the participation of our management, including Amgen’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of Amgen’s disclosure controls and procedures.

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Based on our assessment, management believes that the Company maintained effective internal control over financial reporting as of December 31, 2023, based on the COSO criteria.

Management has excluded Horizon, which was acquired by us on October 6, 2023, from its assessment of internal control over financial reporting as of December 31, 2023.

Total assets and revenues of Horizon excluded from our assessment of internal control over financial reporting were approximately 7% of total assets and 3% of total revenues as of and for the year ended December 31, 2023, respectively.

The effectiveness of the Company’s internal control over financial reporting has been audited by Ernst & Young LLP, an independent registered public accounting firm, as stated in their attestation report appearing below, which expresses an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting as of December 31, 2023.

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(the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023, based on the COSO criteria.

As indicated in the accompanying Management’s Report on Internal Control over Financial Reporting, management’s assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal controls of Horizon Therapeutics plc, which is included in the 2023 consolidated financial statements of the Company and constituted 7% of total assets as of December 31, 2023 and 3% of revenues for the year then ended.

Our audit of internal control over financial reporting of the Company also did not include an evaluation of the internal control over financial reporting of Horizon Therapeutics plc.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2023 and 2022, the related consolidated statements of income, comprehensive income, stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2023, and the related notes and the financial statement schedule listed in the Index at Item 15(a)2 and our report dated February 14, 2024 expressed an unqualified opinion thereon.

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OTHER INFORMATION

Rule 10b5-1 trading arrangements

During the three months ended December 31, 2023, none of our directors or officers (as defined in Rule 16a-1(f) of the Exchange Act) adopted or terminated any “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408 of Regulation S-K.

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

Not applicable.

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Securities Authorized for Issuance Under Existing Equity Compensation Plans

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

Equity compensation plans approved by Amgen security holders:

Amended and Restated 2009 Equity Incentive Plan (1)

10,235,620 $ 207.29 15,255,297

Amended and Restated 1991 Equity Incentive Plan (2)

Amended and Restated Employee Stock Purchase Plan 4,180,287

Total approved plans 10,237,811 207.29 19,435,584

Equity compensation plan not approved by Amgen security holders:

Amgen Profit Sharing Plan for Employees in Ireland (3)

Total unapproved plans — — 222,310

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

(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.

The number under column (a) represents the actual number of shares issuable under our outstanding awards without giving effect to the fungible share-counting formula.

The number under column (c) represents the number of shares available for issuance under this plan based on each such available share counting as one share.

Commencing with the grants made in April 2012, RSUs and performance units accrue dividend equivalents that are payable in shares only to the extent and when the underlying RSUs vest or underlying performance units have been earned and the related shares are issued to the grantee.

The performance units granted under this plan are earned based on the accomplishment of specified performance goals at the end of their respective three-year performance periods;

the number of performance units granted represent target performance, and the maximum number of units that could be earned based on our performance is 200% of the performance units granted in 2020, 2021 and 2022.

As of December 31, 2022, the number of outstanding awards under column (a) includes (i) 5,322,407 shares issuable upon the exercise of outstanding options with a weighted-average exercise price of $207.29;

(ii) 3,173,806 shares issuable upon the vesting of outstanding RSUs (including 307,825 related dividend equivalents);

and (iii) 1,739,407 shares subject to outstanding 2020, 2021 and 2022 performance units (including 84,603 related dividend equivalents).

The weighted-average exercise price shown in column (b) is for the outstanding options only.

The number of available shares under column (c) represents the number of shares that remain available for future issuance under this plan as of December 31, 2022, employing the fungible share formula and presumes the issuance of target shares under the performance units granted in 2020, 2021 and 2022 and related dividend equivalents.

The numbers under columns (a) and (c) do not give effect to the additional shares that could be issuable in the event above target performance on the performance goals under these outstanding performance units is achieved.

Maximum performance under these goals could result in 200% of target shares being awarded for performance units granted in 2020, 2021 and 2022.

(2) This plan has terminated as to future grants.

The number under column (a) with respect to this plan includes 2,191 shares issuable upon the settlement of deferred RSUs (including 519 related dividend equivalents).

(3) The Profit Sharing Plan was approved by the Board of Directors on July 28, 2011.

The Profit Sharing Plan permits eligible employees of the Company’s subsidiaries located in Ireland who participate in the Profit Sharing Plan to apply a portion of their qualifying bonus and salary to the purchase of the Company’s common stock on the open market at the market price by a third-party trustee as described in the Profit Sharing Plan.

Information about securities authorized for issuance under existing equity compensation plans is incorporated by reference from the section entitled SECURITIES AUTHORIZED FOR ISSUANCE UNDER EXISTING EQUITY COMPENSATION PLANS in our Proxy Statement.

Security Ownership of Directors and Executive Officers and Certain Beneficial Owners

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and the parties named therein re:

Treatment of Certain Product Inventory in connection with Amgen’s acquisition of Otezla (Filed as an exhibit to Form 10-K for the year ended December 31, 2019 on February 12, 2020 and incorporated herein by reference.)

Treatment of Certain Product Inventory in connection with Amgen’s acquisition of Otezla.

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

2.3 Irrevocable Guarantee, dated August 25, 2019, by and between Amgen Inc.

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(Filed as an exhibit on Form 8-K on February 26, 2016 and incorporated herein by reference.)

4.23 Form of Permanent Global Certificate for the Company’s 0.410% bonds due 2023.

(Filed as an exhibit on Form 8-K on March 8, 2016 and incorporated herein by reference.)

4.24 Terms of the Bonds for the Company’s 0.410% bonds due 2023.

(Filed as an exhibit on Form 8-K on March 8, 2016 and incorporated herein by reference.)

4.23 Officer’s Certificate of Amgen Inc., dated as of June 14, 2016, including forms of the Company’s 4.563% Senior Notes due 2048 and 4.663% Senior Notes due 2051.

(Filed as an exhibit to Form 8-K on June 14, 2016 and incorporated herein by reference.)

4.26 Officer’s Certificate of Amgen Inc., dated as of August 19, 2016, including forms of the Company’s 2.250% Senior Notes due 2023 and 2.600% Senior Notes due 2026.

4.24 Officer’s Certificate of Amgen Inc., dated as of August 19, 2016, including forms of the Company’s 2.600% Senior Notes due 2026.

(Filed as an exhibit to Form 8-K on August 19, 2016 and incorporated herein by reference.)

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

Officer’s Certificate of the Company, dated as of March 2, 2023, including forms of the Company’s 5.250% Senior Notes due 2025, 5.507% Senior Notes due 2026, 5.150% Senior Notes due 2028, 5.250% Senior Notes due 2030, 5.250% Senior Notes due 2033, 5.600% Senior Notes due 2043, 5.650% Senior Notes due 2053 and 5.750% Senior Notes due 2063.

(Filed as an exhibit to Form 8-K on March 2, 2023 and incorporated herein by reference.)

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

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2009 Director Equity Incentive Program.

(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.)

(As Amended and Restated on October 24, 2023.)

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

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Supplemental Retirement Plan, effective October 20, 2022.

(Filed as an exhibit to Form 10-K for the year ended December 31, 2022 on February 9, 2023 and incorporated herein by reference.)

10.9.5+* Fifth Amendment to the Amgen Inc.

Supplemental Retirement Plan, effective January 1, 2024.

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

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

10.12.4+* Fourth Amendment to the Amgen Nonqualified Deferred Compensation Plan, effective January 1, 2024.

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

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(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.)

10.14+* Agreement between Amgen Inc.

and James Bradner, dated December 13, 2023.

10.15 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.

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

10.16 Third Amended and Restated Credit Agreement, dated as of March 9, 2023, 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 March 9, 2023 and incorporated herein by reference.)

Collaboration and License Agreement between Amgen Inc.

and Celltech R&D Limited dated May 10, 2002 (portions of the exhibit have been omitted pursuant to a request for confidential treatment) and Amendment No.

and Celltech R&D Limited dated May 10, 2002 (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.) and Amendment No.

1, effective June 9, 2003, to Collaboration and License Agreement between Amgen Inc.

and Celltech R&D Limited (portions of the exhibit have been omitted pursuant to a request for confidential treatment).

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

and Celltech R&D Limited (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.)

Amendment No.

2 to Collaboration and License Agreement, effective November 14, 2016, between Amgen Inc.

and Celltech R&D Limited (portions of the exhibit have been omitted pursuant to a request for confidential treatment).

(Filed as an exhibit to Form 10-K for the year ended December 31, 2016 on February 14, 2017 and incorporated herein by reference.)

and Celltech R&D Limited .

(portions of the exhibit have been omitted because they are both (i) not material and (ii) is the type of information that the Company treats as private or confidential.)

10.18 Letter Agreement, dated June 25, 2019, by and between Amgen Inc.

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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 June 30, 2022 on August 5, 2022 and incorporated herein by reference.)

10.19.2 Second Amendment to Collaboration Agreement, entered into as of February 26, 2023, 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 March 31, 2023 on April 28, 2023 and incorporated herein by reference.)

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

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(Filed as an exhibit to Form 10-Q for the quarter ended September 30, 2020 on October 29, 2020 and incorporated herein by reference.)

10.21.3 Amendment No.

3 to Share Purchase Agreement, dated January 30, 2023, by and among BeiGene, Ltd.

and Amgen Inc.

(Filed as an exhibit to Form 8-K on January 31, 2023 and incorporated herein by reference.)

10.22 Collaboration Agreement dated March 30, 2012 by and between Amgen Inc.

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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.)

10.22.5* Letter Agreement Regarding the Collaboration Agreement, dated as of December 1, 2023, by and between Amgen Inc.

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

and Kyowa Kirin Co., Ltd.

(portions of the exhibit have been omitted because they are both (i) not material and (ii) would be competitively harmful if publicly disclosed).

(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, 2021 on August 4, 2021 and incorporated herein by reference.)

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32** Section 1350 Certifications.

97* Policy Relating to Recovery of Erroneously Awarded Compensation.

101.INS Inline XBRL Instance Document - The instance document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL document.

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Amended and Restated Employee Stock Purchase Plan,

• Registration Statements (Form S-8 No.

33-39104, as amended by Form S-8 Nos.

• Registration Statements (Form S-8 Nos.

33-39104, 333-144581 and 333-216719) pertaining to the Amgen Retirement and Savings Plan,

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• Registration Statements (Form S-8 Nos.

333-81284, 333-177868, 333-216723 and 333-260723) pertaining to the Amgen Nonqualified Deferred Compensation Plan, and

• Registration Statement (Form S-8 Nos.

333-176240 and 333-260724) pertaining to the Amgen Profit Sharing Plan for Employees in Ireland;

333-81284, 333-177868, 333-216723 and 333-260723) pertaining to the Amgen Nonqualified Deferred Compensation Plan,

• Registration Statements (Form S-8 Nos.

333-176240 and 333-260724) pertaining to the Amgen Profit Sharing Plan for Employees in Ireland, and

• Registration Statement (Form S-8 No.

333-274900) pertaining to the Horizon Therapeutics Public Limited Company Amended and Restated 2014 Equity Incentive Plan, Horizon Therapeutics Public Limited Company Amended and Restated 2018 Equity Incentive Plan and 2018 Restricted Stock Unit Award Sub-Plan, and Horizon Therapeutics Public Limited Company Amended and Restated 2020 Equity Incentive Plan and 2020 Restricted Stock Unit Award Sub-Plan;

of our reports dated February 14, 2024, with respect to the consolidated financial statements of Amgen Inc.

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(Principal Financial Officer) 2/14/2024

LOUIE Vice President, Finance and

/S/ MATTHEW C.

BUSCH Vice President, Finance and

Chief Accounting Officer

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As described in Note 1 to the financial statements under the caption “Product sales and sales deductions,” revenues from product sales are recognized net of accruals for estimated rebates, wholesaler chargebacks, discounts and other deductions (collectively sales deductions), which are established at the time of sale.

Auditing the estimation of sales deductions, which are netted against product sales, is complex, requires significant judgment, and the amounts involved are material to the financial statements taken as a whole.

Auditing the estimation of sales deductions, specifically estimated chargebacks, commercial rebates, and Medicaid rebates related to U.S.

product sales, which are netted against product sales, is complex, requires significant judgment, and the amounts involved are material to the financial statements taken as a whole.

Revenue from product sales is recognized upon transfer of control of a product to a customer, generally upon delivery, and is based on an amount that reflects the consideration to which the Company expects to be entitled, which represents an amount that is net of accruals for estimated sales deductions.

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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, testing a sample of credits issued and payments made throughout the year, and agreeing rates to underlying contract terms.

Unrecognized tax benefits

Description of the Matter As discussed in Notes 1 and 6 to the consolidated financial statements, the Company operates in various jurisdictions in which differing interpretations of complex tax laws and regulations create uncertainty and necessitate the use of significant judgment in the determination of the Company’s unrecognized tax benefits related to allocation of profits among various jurisdictions (“transfer pricing”), particularly in the U.S.

Description of the Matter As discussed in Notes 1 and 7 to the consolidated financial statements, the Company operates in various jurisdictions in which differing interpretations of complex tax laws and regulations create uncertainty and necessitate the use of significant judgment in the determination of the Company’s unrecognized tax benefits, particularly in the U.S.

federal tax jurisdiction where the Company has significant assets and operations.

In this regard, the Company uses significant judgment in (1) determining whether a tax position’s technical merits are more-likely-than-not to be sustained and (2) measuring the amount of tax benefit that qualifies for recognition.

As of December 31, 2022, the Company accrued $3.8 billion of gross unrecognized tax benefits including those related to transfer pricing.

Auditing the assessment of the technical merits and measurement of the Company’s unrecognized tax benefits is challenging and can be complex, highly judgmental, and based on interpretations of tax laws and regulations and application of those interpretations to the Company’s facts and circumstances.

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of internal controls over the Company’s process to assess the technical merits of its tax positions, as well as management’s process to measure the unrecognized tax benefits of those tax positions, particularly in regard to transfer pricing.

As of December 31, 2023, the Company accrued $4.0 billion of gross unrecognized tax benefits.

Auditing the assessment of the technical merits and measurement of the Company’s unrecognized tax benefits is challenging due to the high degree of estimation and management judgement, given the ultimate resolution is dependent on uncontrollable factors such as the resolution of audit disputes with the IRS.

This included testing controls over management’s review of the inputs, calculations, assumptions and methods selected to measure the amount of tax benefits that qualify for recognition.

We involved tax and transfer pricing specialists to assist in assessing the technical merits and measurement of certain of the Company’s unrecognized tax benefits.

We involved tax controversy and transfer pricing specialists to assist in assessing the technical merits and measurement of certain of the Company’s unrecognized tax benefits.

Depending on the nature of the specific tax position and, as applicable, developments with the relevant tax authorities, our procedures included obtaining and reviewing the Company’s correspondence with such tax authorities and evaluating certain third-party advice to support the Company’s evaluations and recorded positions.

We used our knowledge of and experience with how the income tax laws and regulations related to transfer pricing are applied by the relevant tax authorities to evaluate the Company’s accounting for its unrecognized tax benefits.

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

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We have also evaluated the Company’s income tax disclosures included in Note 7 in relation to these matters.

Valuation of intangible assets acquired in a business combination

Description of the Matter As described in Note 3 to the financial statements, on October 6, 2023, the Company completed its acquisition of Horizon Therapeutics plc (“Horizon”) (“Horizon acquisition”).

The transaction was accounted for as a business combination using the acquisition method of accounting.

The acquisition date fair values of acquired intangible assets, primarily consisted of finite-lived developed-product-technology rights, inclusive of the TEPEZZA intangible asset.

The finite-lived intangible assets were valued using a multi-period excess earnings income approach that discounts expected future cash flows to present value.

Auditing the acquisition date fair values of the TEPEZZA finite-lived developed-product-technology rights intangible asset acquired from Horizon was complex due to the significant judgment required in estimating the fair value.

In particular, the fair value estimate required the use of a valuation methodology that was sensitive to changes in significant assumptions (e.g., revenue projections and discount rate), which were affected by expected future market or economic conditions.

How We Addressed the Matter in Our Audit We evaluated and tested the design and operating effectiveness of the Company’s internal controls over the determination of the estimated fair value of the intangible assets.

For example, we tested controls over management's review of the valuation methodologies and the significant assumptions used to develop the fair value estimate of the TEPEZZA intangible asset.

We also tested management's controls to validate that the data used in the fair value estimate was complete and accurate.

To test the Company’s estimated fair value of the TEPEZZA intangible asset, our audit procedures included, among others, evaluating the Company’s selection of the valuation methodology and the significant assumptions, with the assistance of a valuation specialist.

We also tested the completeness and accuracy of the underlying data utilized in the valuation.

For example, we compared the TEPEZZA revenue projections to analyst reports, current industry and market trends, historical results of the acquired business and to other relevant factors.

We also performed sensitivity analyses over significant assumptions to evaluate the impact that changes in significant assumptions would have on the fair value of the TEPEZZA acquired intangible asset.

In addition, we tested the estimated discount rate applied to the TEPEZZA intangible asset value.

/s/ Ernst & Young LLP

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Interest expense, net ( 2,875 ) ( 1,406 ) ( 1,197 )

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

Other income (expense), net 2,833 ( 814 ) 259

Income before income taxes 7,855 7,346 6,701

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Net income $ 6,717 $ 6,552 $ 5,893

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

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

Gains (losses) on foreign currency translation 50 496 ( 135 )

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

(Losses) gains on cash flow hedges ( 150 ) 67 324

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

Other 2 1 ( 7 )

Other comprehensive income (loss), net of taxes 565 189 ( 457 )

Other comprehensive (loss) income, net of taxes ( 58 ) 565 189

Comprehensive income $ 6,659 $ 7,117 $ 6,082

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Long-term debt 63,170 37,354

Long-term deferred tax liabilities 2,354 11

Long-term tax liabilities 4,680 5,757

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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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Net income — — 6,717 — 6,717

Other comprehensive income, net of taxes — — — 565 565

Other comprehensive loss, net of taxes — — — ( 58 ) ( 58 )

Dividends declared on common stock ($ 8.64 per share)

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Issuance of common stock in connection with the Company’s equity award programs 1.4 95 — — 95

1.8 138 — — 138

Stock-based compensation expense — 454 — — 454

Equity awards issued for Horizon acquisition, net

— 141 — — 141

Tax impact related to employee stock-based compensation expense

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Loss on divestiture — 567 —

(Gains) losses on equity securities ( 1,565 ) 127 —

Other items, net 563 ( 303 ) ( 262 )

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Long-term tax liabilities 371 229 204

Accrued sales incentives and allowance 935 846 404

Other liabilities 731 ( 85 ) ( 48 )

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Cash flows from investing activities:

Cash paid for acquisitions, net of cash acquired ( 26,989 ) ( 3,839 ) ( 2,529 )

Purchases of marketable securities ( 1 ) ( 2,587 ) ( 8,900 )

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Purchases of property, plant and equipment ( 1,112 ) ( 936 ) ( 880 )

Cash paid for acquisitions, net of cash acquired ( 3,839 ) ( 2,529 ) —

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

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

Other 225 100 ( 192 )

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Other ( 72 ) ( 103 ) ( 78 )

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

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

Net cash provided by (used in) financing activities 21,048 ( 4,037 ) ( 8,271 )

Increase (decrease) in cash and cash equivalents 3,315 ( 360 ) 1,723

Cash and cash equivalents at beginning of year 7,629 7,989 6,266

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All material intercompany transactions and balances have been eliminated in consolidation.

Certain reclassifications have been made to prior periods in the consolidated financial statements and accompanying notes to conform with the current presentation.

On October 6, 2023, Amgen completed its acquisition of Horizon, and its operations became included in our consolidated financial statements commencing on the acquisition date.

See Note 3, Acquisitions and divestitures, for additional information regarding this acquisition.

Use of estimates

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Indirect taxes collected from customers and remitted to government authorities that are related to sales of the Company’s products, primarily in Europe, are excluded from revenues.

As a practical expedient, sales commissions are expensed when incurred because the amortization period would have been one year or less.

As a practical expedient, sales commissions are expensed when incurred because the amortization period would have been

one year or less.

These costs are recorded in SG&A expense in the Consolidated Statements of Income.

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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 (expense) 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 income (expense), 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 (expense) income, net, in the Consolidated Statements of Income.

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

Recent accounting pronouncements

In March 2020, the FASB issued a new accounting standard to ease the financial reporting burdens caused by the expected market transition from the LIBOR and other interbank offered rates to alternative reference rates, commonly referred to as reference rate reform.

The new standard provides temporary optional expedients and exceptions to current GAAP guidance on contract modifications and hedge accounting.

Specifically, a modification to transition to an alternative reference rate is treated as an event that does not require contract remeasurement or reassessment of a previous accounting treatment.

Moreover, for all types of hedging relationships, an entity is permitted to change the reference rate without having to dedesignate the hedging relationship.

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.

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.

The new standard clarifies that contract assets and contract liabilities acquired in a business combination from an acquiree should initially be recognized by applying revenue recognition principles and not at fair value.

The standard is effective for interim and annual periods beginning on January 1, 2023, and early adoption is permitted.

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

In November 2023, the FASB issued a new accounting standard which improves reportable segment disclosure requirements.

The new standard will require enhanced disclosures about a public company’s significant segment expenses and more timely and detailed segment information reporting throughout the fiscal period, including for companies with a single reportable segment.

The standard is effective for annual periods beginning after December 15, 2023 and interim periods beginning after December 15, 2024, and early adoption is permitted.

We are currently evaluating the impact of this new standard on our consolidated financial statements and related disclosures.

In December 2023, the FASB issued a new accounting standard which improves income tax disclosure requirements.

The new standard will require more detailed information on several income tax disclosures, such as income taxes paid and the income tax rate reconciliation table.

The standard is effective for public business entities such as Amgen with annual periods beginning after December 15, 2024, and early adoption is permitted.

We are currently evaluating the impact of this new standard on our consolidated financial statements and related disclosures.

Restructuring

In the first quarter of 2023, we initiated a restructuring plan to enhance continued innovation, including investments in first-in-class medicines, while improving our cost structure.

As part of the plan, we are reallocating resources to the areas of the business that will enable long-term growth.

We completed substantially all the activities associated with this restructuring plan in 2023.

The following table summarizes recorded charges related to the restructuring plan by type of activity and the locations recognized within the Consolidated Statements of Income (in millions):

Year ended December 31, 2023

Separation costs Asset impairments and other charges Total

Cost of sales $ — $ 36 $ 36

Research and development — 29 29

Selling, general and administrative — 13 13

Other 186 3 189

Total $ 186 $ 81 $ 267

As of December 31, 2023, total restructuring liability decreased to $ 45 million primarily due to payments related to separation costs.

The total restructuring liability was included in Accrued liabilities in the Consolidated Balance Sheets.

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.

Acquisition of Horizon Therapeutics plc

On October 6, 2023, Amgen completed its acquisition of Horizon for $ 116.50 per share in cash, representing a total consideration of approximately $ 27.8 billion.

The acquisition was funded primarily through our March 2023 debt issuance and borrowings from our term loan credit agreement.

See Note 16, Financing arrangements.

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

The acquisition, which was accounted for as a business combination, aligns with Amgen’s core strategy of delivering innovative medicines that make a significant difference for patients suffering from serious diseases and strengthens Amgen’s leading rare disease portfolio by adding first-in-class, early-in-lifecycle medicines, including TEPEZZA for thyroid eye disease, KRYSTEXXA for chronic refractory gout and UPLIZNA for neuromyelitis optica spectrum disorder.

Upon its acquisition, Horizon 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, 2023, the Company incurred approximately $ 487 million of acquisition costs related to the closing of our Horizon acquisition, consisting of $ 167 million for share-based payments to settle non-vested equity awards attributable to post-combination services, severance and other employee-related expenses, and $ 320 million of transaction costs.

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

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Cash and cash equivalents $ 681

Inventories 5,025

Property, plant and equipment, net 318

Finite-lived intangible assets – developed-product-technology rights 19,590

Goodwill 3,111

Deferred tax asset 834

Deferred tax liability ( 2,492 )

Other assets and liabilities, net ( 294 )

Total assets acquired, net $ 27,833

The $ 27.8 billion total consideration for this transaction consisted of (i) cash consideration transferred to common shareholders of $ 26.7 billion;

(ii) cash consideration transferred to vested and outstanding options, outstanding RSU awards, and outstanding PSU awards of $ 523 million;

(iii) fair value of Amgen replacement awards (based on conversion of outstanding employee RSU awards) of $ 180 million representing non-cash consideration;

and (iv) a portion of Horizon’s debt, settled by Amgen on the closing date, of $ 382 million.

Amgen issued 1.7 million replacement equity awards with the original vesting conditions, and fair value was determined based on acquisition date fair value based on the conversion calculation.

See Note 5, Stock-based compensation.

The estimated fair values of $ 20.7 billion for the developed-product-technology rights and IPR&D intangible assets were determined using a multi-period excess earnings income approach that discounts expected future cash flows to present value by applying a discount rate that represents the estimated rate that market participants would use to value the intangible assets.

The projected cash flows were based on certain assumptions attributable to the respective intangible asset, including estimates of future revenues and expenses, the time and resources needed to complete development and the probabilities of obtaining marketing approval from the FDA and other regulatory agencies.

The developed-product-technology rights are being amortized on a straight-line basis over a weighted-average period of approximately 10 years using the straight-line methodology.

The estimated fair value of the acquired inventory of $ 5.0 billion 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 using a weighted-average inventory turnover, which we estimate to approximate 27 months.

A deferred tax liability of $ 2.5 billion 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, as well as associated deferred tax asset for anticipatory foreign tax credits of $ 834 million.

The excess of the acquisition date consideration over the fair values assigned to the assets acquired and the liabilities assumed of $ 3.1 billion was recorded as goodwill, which is not deductible for tax purposes.

The goodwill value represents expected synergies from the marketed products acquired and other benefits.

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.

Following the acquisition date of October 6, 2023, the operating results of Horizon have been included in our consolidated financial statements.

For the period from the acquisition date through December 31, 2023, total revenues and net losses attributable to Horizon were $ 955 million and $ 1.2 billion, respectively, inclusive of $ 633 million of inventory fair value step-up amortization and $ 479 million of intangible asset amortization recorded in Cost of sales in the Consolidated Statements of Income.

Supplemental Pro Forma Financial Information

The following table presents the unaudited supplemental pro forma results of a hypothetical combined Amgen and Horizon for the years ended December 31, 2023 and 2022, as if the acquisition of Horizon had occurred on January 1, 2022 (in millions):

Years ended December 31,

Total revenue $ 30,969 $ 29,964

Net income $ 5,383 $ 2,381

The unaudited supplemental pro forma combined financial information was prepared using the acquisition method of accounting and was based on the historical financial information of Amgen and Horizon.

In order to reflect the occurrence of the acquisition on January 1, 2022, the unaudited supplemental pro forma financial information includes adjustments to reflect the following:

(i) incremental amortization expense based on the current preliminary fair values of the identifiable intangible assets and inventory step-up;

(ii) the additional interest expense associated with the issuance of debt to finance the acquisition;

(iii) the reclassification of transaction and other acquisition-related costs incurred during the three months ended December 31, 2023, to the year ended December 31, 2022;

and (iv) the income tax impact using an estimated effective tax rate applied to the combined entity.

The unaudited supplemental pro forma financial information is not necessarily indicative of what the consolidated results of operations would have been had the acquisition been completed on January 1, 2022.

In addition, the unaudited pro forma financial information is not a projection of future results of operations of the combined company, nor does it reflect the expected realization of any synergies or cost savings associated with the acquisition.

Acquisition of ChemoCentryx, Inc.

On October 20, 2022, we acquired all of 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 FDA in October 2021 as an adjunctive therapy for adults with severe active antineutrophil 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 on future sales of the product.

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

Measurement period adjustments during the year ended December 31, 2023, included changes in the purchase price allocation and total consideration, resulting in a net decrease of approximately $ 18 million to goodwill.

The measurement period adjustments resulted primarily from valuation inputs pertaining to the TAVNEOS intangible assets, adjustments to vendor payables and deferred tax attributes based on facts and circumstances that existed as of the acquisition date and did not result from events subsequent to the acquisition date.

The adjustments did not have a significant impact on Amgen’s results of operations during the year ended December 31, 2023, and would not have had a significant impact on prior-period results if the 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 and cash equivalents $ 86

Marketable securities 235

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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 developed-product-technology rights acquired relates to TAVNEOS, which is approved in the United States and the 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.

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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.

The inventory fair value adjustment was amortized as inventory turned over, which we estimated to be approximately 13 months.

A net deferred tax liability of $ 502 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.

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

Acquisition of Teneobio, Inc.

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See Note 18, Fair value measurement, for information regarding the estimated fair value of these obligations as of December 31, 2023.

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 estimated fair values of acquired IPR&D assets totaled $ 991 million, of which $ 784 million related to AMG 340, and the balance related to four separate preclinical oncology programs.

See Note 13, Goodwill and other intangible assets, for information regarding the acquired IPR&D assets as of December 31, 2023.

The R&D technology rights of $ 115 million related to Teneobio’s proprietary bispecific and multispecific antibody technologies;

the amount is being amortized over 10 years by using the straight-line method.

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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.

The goodwill value represented expected synergies from both AMG 340 and the technologies acquired.

During the third quarter of 2023, the development of AMG 340 acquired in connection with our Teneobio acquisition was terminated.

See Note 13, Goodwill and other intangible assets, and Note 18, Fair value measurement, for additional information.

Acquisition of Five Prime Therapeutics, Inc.

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ROW Total U.S.

ENBREL $ 4,044 $ 73 $ 4,117 $ 4,352 $ 113 $ 4,465 $ 4,855 $ 141 $ 4,996

Prolia $ 2,733 $ 1,315 $ 4,048 $ 2,465 $ 1,163 $ 3,628 $ 2,150 $ 1,098 $ 3,248

ENBREL 3,650 47 3,697 4,044 73 4,117 4,352 113 4,465

Otezla 1,777 411 2,188 1,886 402 2,288 1,804 445 2,249

XGEVA 1,527 585 2,112 1,480 534 2,014 1,434 584 2,018

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

793 842 1,635 608 688 1,296 557 560 1,117

Nplate 996 481 1,477 848 459 1,307 566 461 1,027

KYPROLIS 921 482 1,403 850 397 1,247 736 372 1,108

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

Aranesp 452 910 1,362 521 900 1,421 537 943 1,480

EVENITY 809 351 1,160 533 254 787 331 199 530

Vectibix 461 523 984 396 497 893 347 526 873

BLINCYTO 566 295 861 336 247 583 278 194 472

441 7 448 — — — — — —

KRYSTEXXA (1)

272 — 272 — — — — — —

Other products (2)

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Total revenues $ 19,806 $ 8,384 $ 28,190 $ 18,595 $ 7,728 $ 26,323 $ 18,194 $ 7,785 $ 25,979

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

(1) TEPEZZA and KRYSTEXXA were acquired from the acquisition of Horizon on October 6, 2023, and includes product sales from the acquisition date through December 31, 2023.

(2) Consists of product sales of our non-principal products, as well as sales prior to the divestiture of our Bergamo and Gensenta subsidiaries in the second quarter of 2023 and fourth quarter of 2022, respectively.

(3) Hedging gains and losses, which are included in product sales, were not material for the years ended December 31, 2023, 2022 and 2021.

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% of total gross revenues 33 % 35 % 33 %

AmerisourceBergen Corporation:

Cencora, Inc.

(formerly AmerisourceBergen Corporation):

Gross product sales $ 16,625 $ 15,443 $ 14,783

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% of total gross revenues 17 % 16 % 17 %

As of December 31, 2022 and 2021, amounts due from these three customers each exceeded 10% of gross trade receivables and accounted for 75 % and 73 %, respectively, of net trade receivables on a combined basis.

As of both December 31, 2023 and 2022, amounts due from these three customers each exceeded 10% of gross trade receivables and accounted for 75 % of net trade receivables on a combined basis.

As of December 31, 2023 and 2022, 22 % and 26 %, respectively, of net trade receivables were due from customers located outside the United States, the majority of which were from Europe.

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Restricted stock units

The grant date fair value of an RSU equals the closing price of our common stock on the grant date, as RSUs accrue dividend equivalents during their vesting period.

The weighted-average grant date fair values per unit of RSUs granted during the years ended December 31, 2022, 2021 and 2020, were $ 234.47 , $ 233.10 and $ 235.63 , respectively.

The grant date fair value of an RSU equals the closing price of our common stock on the grant date, as RSUs accrue dividend equivalents during their vesting period, except with respect to Horizon replacement RSUs, discussed below.

The weighted-average grant date fair values per unit of RSUs granted (excluding replacement awards granted to Horizon RSU holders) during the years ended December 31, 2023, 2022 and 2021, were $ 237.70 , $ 234.47 and $ 233.10 , respectively.

The following table summarizes information regarding our RSUs:

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Granted 1.0 $ 237.70

Replacement awards granted - Horizon acquisition 1.7 $ 267.47

Vested ( 1.3 ) $ 231.81

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Balance nonvested as of December 31, 2023

Holders of Horizon unvested RSUs were granted replacement Amgen RSUs under the original terms of the awards in connection with the Horizon acquisition based on the terms of the transaction.

See Note 3, Acquisitions and divestitures.

Subsequent to the acquisition, $ 42 million of the RSUs were accelerated and cash settled.

The total grant date fair values of RSUs that vested during the years ended December 31, 2023, 2022 and 2021, were $ 309 million, $ 192 million and $ 166 million, respectively.

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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 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.

As of December 31, 2023 and 2022, 1.7 million and 1.6 million performance units were outstanding, respectively, with weighted-average grant date fair values per unit of $ 251.41 and $ 250.27 per unit, respectively.

During the year ended December 31, 2023, 0.7 million performance units with a weighted-average grant date fair value per unit of $ 252.49 were granted, and 0.2 million performance units with a weighted-average grant date fair value per unit of $ 251.38 were forfeited.

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Fixed assets ( 140 ) ( 112 )

Fair value of acquired inventory

( 349 ) ( 5 )

Other ( 224 ) ( 249 )

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Total deferred income taxes, net $ 446 $ 943

The Company has determined that unremitted foreign earnings are not considered indefinitely reinvested to the extent foreign earnings can be distributed without a significant tax cost.

For the amount considered to be indefinitely reinvested, it is not practicable to determine the amount of the related deferred income tax liability due to the complexities of the tax laws and assumptions we would have to make.

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

The valuation allowance increased in 2023, primarily driven by the Company’s expectation that certain state R&D credits will expire unused as well as acquired state credits and state NOLs not expected to be realized.

As of December 31, 2023, we had $ 201 million of federal tax credit carryforwards available to reduce future federal income taxes and have provided a valuation allowance for $ 19 million of those federal tax credit carryforwards.

The federal tax credit carryforwards expire between 2024 and 2044.

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.

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;

We had $ 1.1 billion of state tax credit carryforwards available to reduce future state income taxes and have provided a valuation allowance for $ 971 million of those state tax credit carryforwards.

We had $ 84 million of tax credit carryforwards related to our foreign jurisdictions available to offset future foreign income taxes for which we have provided $ 59 million valuation allowance.

As of December 31, 2023, we had $ 869 million of federal NOL carryforwards available to reduce future federal income taxes and have provided no valuation allowance on those federal NOL carryforwards.

Additionally, $ 691 million of those federal NOL carryforwards have no expiration;

the remainder begin to expire between 2025 and 2037.

We had $ 536 million of state NOL carryforwards available to reduce future state income taxes and have provided a valuation allowance for $ 415 million of those state NOL carryforwards.

We had $ 872 million of state NOL carryforwards available to reduce future state income taxes and have provided a valuation allowance for

$ 738 million of those state NOL carryforwards.

We had $ 1.3 billion of foreign NOL carryforwards available to reduce future foreign income taxes and have provided a valuation allowance for $ 238 million of those foreign NOL carryforwards.

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Substantially all of the UTBs as of December 31, 2023, if recognized, would affect our effective tax rate .

During the year ended December 31, 2020, we effectively settled certain issues with the IRS.

As a result, we remeasured our UTBs accordingly.

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During the years ended December 31, 2023, 2022 and 2021, we recognized $ 287 million, $ 189 million and $ 98 million, respectively, of interest and penalties through the income tax provision in the Consolidated Statements of Income.

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 increase in interest expense for the year ended December 31, 2023, was primarily due to higher interest rates during 2023 and acquired positions.

As of December 31, 2023 and 2022, accrued interest and penalties associated with UTBs were $ 1.4 billion and $ 1.1 billion, 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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Acquisition IPR&D — % — % 4.9 %

Audit settlements — % — % ( 1.0 ) %

Other, net 0.5 % ( 0.4 ) % ( 0.6 ) %

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The effective tax rates for the years ended December 31, 2023, 2022 and 2021, differ from the federal statutory rate primarily due to impacts of the jurisdictional mix of income and expenses.

Substantially all of the benefit to our effective tax rate from foreign earnings results from the Company’s operations in Puerto Rico, a territory of the United States that is treated as a foreign jurisdiction for U.S.

Substantially all of the benefit to our effective tax rate from foreign earnings results from locations where the Company has significant manufacturing operations, including Singapore, Ireland and Puerto Rico, a territory of the United States that is treated as a foreign jurisdiction for U.S.

tax purposes.

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tax at a reduced rate of 10.5%.

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.

We are no longer subject to a 4% excise tax in the U.S.

territory of Puerto Rico on the gross intercompany purchase price of goods and services from our manufacturer in Puerto Rico.

As of January 1, 2023, we qualify for and are subject to the alternative income tax rate on industrial development income of our Puerto Rico affiliate.

In the United States, this income tax qualifies for foreign tax credits.

Both this income tax and the associated foreign tax credits are generally recognized in our provision for income taxes.

We accounted for the 2022 excise tax that was capitalized in Inventories as an expense in Cost of sales when the related products were sold in 2023, and a foreign tax credit was not recognized in 2023 with respect to the excise tax.

Income taxes paid during the years ended December 31, 2023, 2022 and 2021, were $ 3.4 billion, $ 2.4 billion and $ 1.9 billion, respectively.

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We are contesting the 2010–2012 and 2013–2015 Notices through the judicial process.

The two cases were consolidated in U.S.

The two cases were consolidated in the U.S.

Tax Court on December 19, 2022.

On February 10, 2023, the U.S.

Tax Court entered an order setting a trial date of November 4, 2024.

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.

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During the years ended December 31, 2023, 2022 and 2021, net costs recovered from BeiGene for oncology product candidates were $ 109 million, $ 199 million and $ 220 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.

During the years ended December 31, 2023, 2022 and 2021, product sales from Amgen to BeiGene under the collaboration were $ 125 million, $ 64 million and $ 72 million, respectively, and were recorded in Product sales in the Consolidated Statements of Income.

During the years ended December 31, 2023, 2022 and 2021, profit and loss share expenses related to the initial product-specific commercialization period were $ 40 million, $ 53 million and $ 64 million, respectively, and were recorded in SG&A expense in the Consolidated Statements of Income.

Amounts owed from BeiGene for product sales were $ 16 million and $ 6 million as of December 31, 2023 and 2022, respectively, which are included in Trade receivables, net, in the Consolidated Balance Sheets.

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.

Net amounts owed from BeiGene for cost recoveries and profit and loss

share payments were $ 44 million and $ 47 million as of December 31, 2023 and 2022, respectively, which are included in Other current assets in the Consolidated Balance Sheets.

AstraZeneca plc

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During the years ended December 31, 2023, 2022 and 2021, net costs due to AstraZeneca for global commercialization were $ 73 million, $ 60 million and $ 39 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.

During the years ended December 31, 2023 and 2022, global profit and loss share expenses were $ 310 million and $ 119 million, respectively, 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).

Under our collaboration, UCB has rights to lead commercialization for EVENITY in most countries in Europe.

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

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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.

During the years ended December 31, 2023, 2022 and 2021, global profit and loss share expenses were $ 396 million, $ 255 million and $ 186 million, respectively, and were recorded in Cost of sales in the Consolidated Statements of Income.

Net costs recovered from and due to UCB during the years ended December 31, 2023, 2022 and 2021, were not material.

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Amgen manufactures and supplies Aimovig worldwide.

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, 2023 and 2022, net costs recovered from Novartis for migraine products were $ 42 million and $ 53 million, respectively, and were recorded in R&D expense in the Consolidated Statements of Income.

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

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

During the years ended December 31, 2023, 2022 and 2021, 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 rocatinlimab, an anti-OX40 fully human monoclonal antibody, worldwide, except in Japan.

We are in a collaboration and licensing agreement with Kyowa Kirin 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 share equally the global development costs, except in Japan, and the U.S.

Kyowa Kirin 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 Kyowa Kirin that was recognized in R&D expense in the third quarter of 2021.

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

commercialization costs.

Outside the United States and Japan, any commercialization costs incurred by KKC will be reimbursed by Amgen.

Outside the United States and Japan, any commercialization costs incurred by Kyowa Kirin will be reimbursed by Amgen.

We may also be required to make milestone payments of up to $ 850 million contingent upon the achievement of certain regulatory events and commercial thresholds.

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

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

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

During the year ended December 31, 2023, net costs recovered from Kyowa Kirin were $ 93 million and were recorded in R&D expense in the Consolidated Statements of Income.

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

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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Types of securities as of December 31, 2023 Amortized

Treasury notes $ — $ — $ — $ —

Treasury bills $ — $ — $ — $ —

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Types of securities as of December 31, 2022 Amortized

Treasury notes $ 47 $ — $ — $ 47

Treasury bills $ 1,676 $ — $ — $ 1,676

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All interest-bearing securities as of December 31, 2023 and 2022, mature in one year or less.

For the years ended December 31, 2023, 2022 and 2021, interest income on these investments were $ 1.2 billion, $ 127 million and $ 11 million, respectively.

For the years ended December 31, 2023, 2022 and 2021, realized gains and losses on interest-bearing securities were not material.

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

Realized gains and losses on interest-bearing securities are recorded in Other income (expense), 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 (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.

BeiGene, Ltd.

On January 2, 2020, we acquired a 20.5 % ownership interest in BeiGene for $ 2.8 billion, of which $ 2.6 billion was attributed to the fair value of equity securities upon closing, with the remainder attributed to prepaid R&D.

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

The fair value of equity securities acquired exceeded our proportionate share of the carrying value of BeiGene’s underlying net assets by $ 2.4 billion, and we began amortizing the intangible assets that gave rise to this basis difference over their useful lives.

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.

As a result, in the first quarter of 2023, we began to account for our ownership interest as an equity security with a readily determinable fair value, with changes in fair value recorded in Other income (expense), net, in the Consolidated Statements of Income.

See Note 18, Fair value measurement.

During the year ended December 31, 2023, we recognized an unrealized gain of $ 1.2 billion recorded in Other income (expense), net, in the Consolidated Statements of Income.

As of December 31, 2023, the carrying and fair value of our investment in BeiGene was $ 3.4 billion and was included in Other noncurrent assets in the Consolidated Balance Sheets.

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

During the year ended December 31, 2021, we increased the carrying value by $ 50 million as a result of our purchase of additional shares of BeiGene;

we did not purchase additional shares of BeiGene during the years ended December 31, 2023 and 2022 .

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

As of December 31, 2022, the carrying and fair values of our investment in BeiGene were $ 2.2 billion and $ 4.2 billion, respectively, and our ownership percentage was 18.2 %.

For information on a collaboration agreement we entered into with BeiGene in connection with this investment, see Note 9, Collaborations.

Other equity securities

Excluding our equity investments in BeiGene and Neumora (discussed below), we held investments in other equity securities with readily determinable fair values (publicly traded securities) of $ 494 million and $ 480 million as of December 31, 2023 and 2022, respectively, which are included in Other noncurrent assets in the Consolidated Balance Sheets.

For the years ended December 31, 2023, 2022 and 2021, net unrealized gains and losses on publicly traded securities were a net gain of $ 98 million, a net loss of $ 165 million and a net gain of $ 161 million, respectively.

Realized gains and losses on publicly traded securities for the years ended December 31, 2023, 2022 and 2021, were not material.

We held investments of $ 309 million and $ 233 million in equity securities without readily determinable fair values as of December 31, 2023 and 2022, respectively, which are included in Other noncurrent ass ets in the Consolidated Balance Sheets.

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 years ended December 31, 2023 and 2022 , 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, 2023 and 2021 , downward adjustments were not material.

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

Adjustments were based on observable price transactions.

Equity Method Investments

BeiGene, Ltd.

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

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.

The fair value of equity securities acquired exceeded our proportionate share of the carrying value of the underlying net as sets of BeiGene by approximately $ 2.4 billion.

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 (expense) income, net, in our Consolidated Statements of Income.

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

The basis difference was allocated to finite-lived intangible assets, indefinite-lived intangible assets, equity-method goodwill and related deferred taxes.

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

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.

As of December 31, 2022 and 2021, the carrying value of our investment in BeiGene was $ 2.2 billion and $ 2.8 billion, respectively.

As of December 31, 2022 and 2021, the fair value of our investment in BeiGene was $ 4.2 billion and $ 5.1 billion, respectively.

We believe that as of December 31, 2022, the carrying value of our equity investment in BeiGene is fully recoverable.

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.

On September 30, 2021, we acquired an approximately 25.9 % ownership interest in Neumora, a privately held company, for $ 257 million, which is included in Other noncurrent assets in the Consolidated Balance Sheets, in exchange for a $ 100 million cash payment and $ 157 million in noncash consideration primarily related to future services.

Although our equity investment provides us with the ability to exercise significant influence over Neumora, we have elected the fair value option to account for our equity investment.

Under the fair value option, changes in the fair value of the investment are recognized through earnings each reporting period.

On September 30, 2021, we acquired an approximately 25.9 % ownership interest in Neumora, a then privately held company, for $ 257 million, which is included in Other noncurrent assets in the Consolidated Balance Sheets, in exchange for a $ 100 million cash payment and $ 157 million in noncash consideration primarily related to future services.

During the third quarter of 2023, we made an additional $ 30 million equity investment in Neumora in connection with their initial public stock offering, and consequently, our investment now has a readily determinable fair value.

Although our equity investment provides

us with the ability to exercise significant influence over Neumora and therefore qualifies us for the equity method of accounting, we have elected the fair value option to account for our investment.

Under the fair value option, changes in the fair value of the investment are recognized through earnings in Other income (expense), net, in the Consolidated Statements of Income each reporting period.

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

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.

As of December 31, 2023 and 2022, our ownership interests in Neumora were approximately 23.2 % and 24.9 %, respectively, and the fair values of our investment were $ 603 million and $ 335 million, respectively.

During the years ended December 31, 2023, 2022 and 2021 , we recognized gains of $ 238 million and $ 105 million and a loss of $ 37 million, respectively, for the change in fair values in Other income (expense), net, in the Consolidated Statements of Income.

For information on determination of fair values, see Note 18, Fair value measurement.

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As of December 31, 2023, unfunded additional commitments to be made for these investments during the next several years were $ 159 million.

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.

For the years ended December 31, 2023, 2022 and 2021, net gains and losses recognized from our limited partnership investments were net losses of $ 14 million and $ 284 million and a net gain of $ 143 million, respectively.

Inventories consisted of the following (in millions):

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Total inventories (1)

$ 9,518 $ 4,930

(1) The increase to Inventories was primarily due to the estimated fair value of the acquired inventory from the Horizon acquisition.

See Note 3, Acquisitions and divestitures.

Property, plant and equipment

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Ending balance $ 18,629 $ 15,529

(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.

(1) For 2023, the increase to Goodwill was primarily due to goodwill resulting from the acquisition of Horizon.

For 2022, the increase to goodwill was due to 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 3, Acquisitions and divestitures.

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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.

Developed-product-technology rights include assets acquired with the Horizon and ChemoCentryx acquisitions.

IPR&D includes assets acquired with the Horizon and Teneobio acquisitions.

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

See Note 3, Acquisitions and divestitures.

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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 third quarter of 2023, the development of AMG 340 acquired in connection with our Teneobio acquisition was terminated, resulting in an impairment charge of $ 783 million, which was recognized in Other operating expenses in the Consolidated Statements of Income and included in Other items, net, in the Consolidated Statements of Cash Flows.

See Note 18, Fair value measurement, for the impact on the related contingent consideration liability.

During the years ended December 31, 2023, 2022 and 2021, we recognized amortization associated with our finite-lived intangible assets of $ 3.2 billion, $ 2.6 billion and $ 2.6 billion, respectively.

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(1) Includes future rental commitments for abandoned leases of $ 67 million.

We expect to receive total future rental income of $ 76 million related to noncancelable subleases for abandoned facilities.

We expect to receive total future rental income of $ 70 million related to noncancellable subleases for abandoned facilities.

The weighted-average remaining lease terms and weighted-average discount rates were as follows:

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Operating leases $ 245 $ 191 $ 340

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

As of December 31, 2023, there were no future lease payments for leases that have not yet commenced.

Other current assets and accrued liabilities

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Income taxes payable 1,664 1,195

Dividends payable 1,137 1,083

Employee compensation and benefits 1,381 1,099

Sales returns reserve 548 542

Dividends payable 1,205 1,137

Accrued interest payable 936 470

Other 2,902 2,637

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5.25 % notes due 2025 ( 5.25 % 2025 Notes)

Term loan due April 2025 2,000 —

3.125 % notes due 2025 ( 3.125 % 2025 Notes)

2.00 % € 750 million notes due 2026 ( 2.00 % 2026 euro Notes)

5.507 % notes due 2026 ( 5.507 % 2026 Notes)

2.60 % notes due 2026 ( 2.60 % 2026 Notes)

Term loan due October 2026 2,000 —

5.50 % £ 475 million notes due 2026 ( 5.50 % 2026 pound sterling Notes)

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3.20 % notes due 2027 ( 3.20 % 2027 Notes)

5.15 % notes due 2028 ( 5.15 % 2028 Notes)

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

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4.20 % notes due 2052 ( 4.20 % 2052 Notes)

4.875 % notes due 2053 ( 4.875 % 2053 Notes)

5.65 % notes due 2053 ( 5.65 % 2053 Notes)

2.77 % notes due 2053 ( 2.77 % 2053 Notes)

4.40 % notes due 2062 ( 4.40 % 2062 Notes)

5.75 % notes due 2063 ( 5.75 % 2063 Notes)

Other notes due 2097 100 100

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Under the terms of all of our outstanding notes, except our Other notes due 2097, in the event of a change-in-control triggering event we may be required to purchase all or a portion of these debt securities at prices equal to 101 % of the principal amounts of the notes plus accrued and unpaid interest.

In addition, all of our outstanding notes—except our 0.41 % 2023 Swiss franc Bonds and Other notes due 2097—may be redeemed at any time at our option—in whole or in part—at the principal amounts of the notes being redeemed plus accrued and unpaid interest and make-whole amounts, which are defined by the terms of the notes.

In addition, all of our outstanding notes—except our Other notes due 2097—may be redeemed at any time at our option—in whole or in part—at the principal amounts of the notes being redeemed plus accrued and unpaid interest and make-whole amounts, which are defined by the terms of the notes.

Certain of the redeemable notes do not require the payment of make-whole amounts if redeemed during a specified period of time immediately prior to the maturity of the notes.

Such time periods range from one month to six months prior to maturity.

Debt issuances

Such time periods range from one month to six months prior to maturity, except for the 5.507 % 2026 Notes, which may be redeemed without payment of the make-whole amount if redemption occurs after two years prior to maturity.

Debt issuances and acquisition-related financing

In March 2023, in connection with the acquisition of Horizon (see Note 3, Acquisitions and divestitures —Acquisition of Horizon Therapeutics plc ), we issued the following series of notes (in millions):

Principal Amount

5.25 % 2025 Notes

5.507 % 2026 Notes

5.15 % 2028 Notes

5.25 % 2030 Notes

5.25 % 2033 Notes

5.60 % 2043 Notes

5.65 % 2053 Notes

5.75 % 2063 Notes

Total $ 24,000

In December 2022, in connection with the acquisition of Horizon, we entered into a bridge credit agreement, which provided for borrowings with an aggregate principal amount of $ 24.5 billion as of December 31, 2022.

Subsequent to our March 2023 debt issuance described above, we terminated the bridge credit agreement.

Accordingly, during the first quarter of 2023, we recognized $ 98 million of financing cost associated with the bridge credit agreement, primarily in Other income (expense), net, in the Consolidated Statements of Income.

Also in connection with the acquisition of Horizon, we entered into a $ 4.0 billion term loan credit agreement in December 2022.

In October 2023, in connection with the completion of the acquisition of Horizon, we borrowed $ 4.0 billion under the term loan credit agreement with an interest rate of three-month SOFR plus 1.225 %, of which $ 2.0 billion is due in April 2025 and $ 2.0 billion is due in October 2026.

No amounts under this agreement were outstanding as of December 31, 2022.

During the years ended December 31, 2022 and 2021, 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.

The 3.00 % 2029 Notes were issued and used to finance eligible projects that met 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.

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.

In 2023, we repurchased portions of the 2.00 % 2032 Notes, 3.15 % 2040 Notes, 2.80 % 2041 Notes, 3.375 % 2050 Notes, 3.00 % 2052 Notes, 4.20 % 2052 Notes and 4.40 % 2062 Notes for an aggregate cost of $ 647 million, which resulted in the recognition of a $ 225 million gain on extinguishment of debt recorded in Other income (expense), net, in the Consolidated Statements of Income.

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 income (expense), net, in the Consolidated Statements of Income.

Debt repayments/redemptions

We made debt repayments/redemptions during the years ended December 31, 2023, 2022 and 2021, as follows:

• In 2023, we repaid $ 750 million aggregate principal amount of the 2.25 % 2023 Notes as well as the CHF 700 million aggregate principal amount ($ 704 million upon settlement of the related cross-currency swap) of the 0.41 % 2023 Swiss franc Bonds.

• In 2022, no debt was repaid/redeemed.

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In connection with the redemption of these notes, we paid a total of $ 24 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 2020, we repaid/redeemed $ 6.5 billion of debt, including the repayment at maturity of the $ 300 million aggregate principal amount of the 4.50 % 2020 Notes, the $ 750 million aggregate principal amount of the 2.125 % 2020 Notes, the $ 300 million Floating Rate Notes due 2020 and the $ 700 million aggregate principal amount of the 2.20 % 2020 Notes.

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.

Interest rate swaps

To achieve a desired mix of fixed-rate and floating-rate debt, we entered into interest rate swap contracts that effectively converted fixed-rate interest coupons for certain of our debt issuances to floating LIBOR-based coupons over the lives of the respective notes.

To achieve a desired mix of fixed-rate and floating-rate debt, we entered into interest rate swap contracts that effectively converted fixed-rate interest coupons for certain of our debt issuances to floating SOFR-based coupons over the lives of the respective notes.

These interest rate swap contracts qualified and are designated as fair value hedges.

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In connection with the redemption of the 3.625 % 2022 Notes, discussed above, associated interest rate swap contracts with an aggregate notional amount of $ 750 million were terminated.

In connection with the redemption of certain of the notes during the year ended December 31, 2020, discussed above, associated interest rate swap contracts with an aggregate notional value of $ 3.65 billion were terminated.

In addition, because of historically low interest rates, during the year ended December 31, 2020, we terminated interest rate swaps with an aggregate notional amount of $ 5.2 billion that hedged the 3.625 % 2024 Notes, the 2.60 % 2026 Notes, the 4.663 % 2051 Notes and portions of the 3.625 % 2022 Notes and the 3.125 % 2025 Notes, which resulted in the receipt of $ 576 million of cash and reduced counterparty credit risk.

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

See Note 18, Derivative instruments.

As of December 31, 2023 and 2022, 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):

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3.625 % 2024 Notes

$ 1,400 LIBOR + 3.2 %

$ 1,400 SOFR + 3.4 %

3.125 % 2025 Notes

1,000 LIBOR + 1.8 %

1,000 SOFR + 2.1 %

2.60 % 2026 Notes

1,250 LIBOR + 1.8 %

1,250 SOFR + 2.1 %

2.45 % 2030 Notes

1,000 LIBOR + 1.0 %

1,000 SOFR + 1.3 %

2.30 % 2031 Notes

500 LIBOR + 0.8 %

500 SOFR + 1.1 %

4.663 % 2051 Notes

1,500 LIBOR + 4.1 %

1,500 SOFR + 4.3 %

Total notional amounts $ 6,650

Debt exchange

In 2020, we completed a private offering to exchange portions of certain outstanding senior notes due 2037 through 2043 (collectively, Old Notes), listed below, for the $ 940 million principal amount of the newly issued 2.77 % 2053 Notes (the Exchange Offer).

The following principal amounts of each series of Old Notes were validly tendered and subsequently canceled in connection with the Exchange Offer (in millions):

Principal amount exchanged

6.375 % 2037 Notes

6.90 % 2038 Notes

6.40 % 2039 Notes

5.75 % 2040 Notes

5.15 % 2041 Notes

5.65 % 2042 Notes

5.375 % 2043 Notes

The 2.77 % 2053 Notes bear interest at a lower fixed coupon rate while requiring higher principal repayment at a later maturity date as compared to those of the Old Notes that were exchanged.

There were no other significant changes to the terms between the Old Notes and the 2.77 % 2053 Notes.

In connection with the Exchange Offer, $ 85 million was paid to holders of the Old Notes (the cash consideration).

The Exchange Offer was accounted for as a debt modification, and accordingly, deferred financing costs and discounts associated with the Old Notes, the cash consideration and the $ 264 million discount associated with the 2.77 % 2053 Notes are being accreted over the term of these newly issued notes and recorded as Interest expense, net, in the Consolidated Statements of Income.

Cross-currency swaps

To hedge our exposure to foreign currency exchange rate risk associated with certain of our long-term notes denominated in foreign currencies, we entered into cross-currency swap contracts.

The terms of these contracts effectively convert the interest payments and principal repayments on our 0.41 % 2023 Swiss franc Bonds, 2.00 % 2026 euro Notes, 5.50 % 2026 pound sterling Notes and 4.00 % 2029 pound sterling Notes from euros, pounds sterling and Swiss francs to U.S.

The terms of these contracts outstanding as of December 31, 2023, effectively convert the interest payments and principal repayments on our 2.00 % 2026 euro Notes, 5.50 % 2026 pound sterling Notes and 4.00 % 2029 pound sterling Notes from euros and pounds sterling to U.S.

These cross-currency swap contracts have been designated as cash flow hedges.

For information regarding the terms of these contracts, see Note 19, Derivative instruments.

In connection with the redemption of the 1.25 % 2022 euro Notes, discussed above, associated cross-currency swap contracts with an aggregate notional amount of € 1.25 billion were terminated.

Cross-currency swap contracts associated with other foreign denominated debt previously outstanding were settled in connection with the repayment/redemption of such debt, as discussed above.

Shelf registration statement and other facilities

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As of December 31, 2023 and 2022, we had no amounts outstanding under our commercial paper program.

In 2019, we amended and restated our $ 2.5 billion syndicated, unsecured, revolving credit agreement, which is available for general corporate purposes or as a liquidity backstop to our commercial paper program.

The commitments under the revolving credit agreement may be increased by up to $ 750 million with the agreement of the banks.

In the first quarter of 2023, we amended and restated our syndicated, unsecured, revolving credit agreement, under which we may borrow up to $ 4.0 billion (increased from $ 2.5 billion prior to the amendment) for general corporate purposes, including as a liquidity backstop for our commercial paper program.

The commitments under the revolving credit agreement may be increased by up to $ 1.25 billion with the agreement of the banks (increased from $ 750 million prior to the amendment).

Each bank that is a party to the agreement has an initial commitment term of five years .

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Annual commitment fees for this agreement are 0.09 % of the unused portion of the facility based on our current credit rating.

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 %.

Generally, we would be charged interest for any amounts borrowed under this facility, based on our current credit rating, at (i) SOFR plus 1.01 % or (ii) the highest of (A) the administrative 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, 2023 and 2022, no amounts were outstanding under this facility.

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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, 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.

This shelf registration statement expires in February 2026.

Certain of our financing arrangements contain nonfinancial covenants.

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.

In addition, our revolving 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, 2023.

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Interest costs capitalized for the years ended December 31, 2023, 2022 and 2021, were not material.

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.

Interest paid, including the ongoing impact of interest rate and cross-currency swap contracts, during the year ended December 31, 2023 was $ 2.4 billion, and for each of the years ended December 31, 2022 and 2021 was $ 1.2 billion.

Stockholders’ equity

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Total stock repurchases — $ — 26.1 $ 6,310 21.7 $ 4,987

During the year ended December 31, 2023, we did not repurchase shares of our common stock.

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.

during the third quarter of 2023, the ASR agreements were settled.

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, 2023, $ 7.0 billion remained available under our stock repurchase program.

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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 )

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, 2023 $ ( 298 ) $ ( 22 ) $ — $ 31 $ ( 289 )

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.

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, 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 $ 6 million expense and a $ 50 million benefit in 2023, a $ 19 million expense and a $ 0 million expense in 2022 and a $ 33 million expense and a $ 55 million expense in 2021, respectively.

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

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Foreign currency contract gains (losses) $ 180 $ 231 $ ( 8 ) Product sales

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

Cross-currency swap contract gains (losses) 42 ( 233 ) ( 245 ) Other income (expense), net

222 ( 2 ) ( 253 ) Income before income taxes

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$ 172 $ ( 2 ) $ ( 198 ) Net income

Available-for-sale securities:

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

— — ( 7 ) Provision for income taxes

$ — $ — $ 26 Net income

In addition to common stock, our authorized capital includes 5 million shares of preferred stock, $ 0.0001 par value.

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Observable inputs are inputs that market participants would use in pricing an asset or liability based on market data obtained from sources independent of the Company.

Unobservable inputs are inputs that reflect the Company’s assumptions about the inputs that market participants would use in pricing an asset or liability and are developed based on the best information available in the circumstances.

Unobservable inputs are inputs that reflect the Company’s assumptions about the inputs that market participants would use in pricing an asset or liability and are developed based on the

best information available in the circumstances.

The fair value hierarchy is divided into three levels based on the source of inputs as follows:

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Available-for-sale securities:

Treasury notes $ — $ — $ — $ —

Treasury bills $ — $ — $ — $ —

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Available-for-sale securities:

Treasury notes $ 47 $ — $ — $ 47

Treasury bills $ 1,676 $ — $ — $ 1,676

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Cross-currency swap contracts — 54 — 54

Interest rate swap contracts — 16 — 16

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

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The fair values of our U.S.

Treasury securities, money market mutual funds and equity investments in publicly traded securities are based on quoted market prices in active markets, with no valuation adjustment.

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.

Treasury securities, money market mutual funds and equity investments in publicly traded securities, including our equity investments in BeiGene and Neumora, as of December 31, 2023, are based on quoted market prices in active markets, with no valuation adjustment.

Previously, the fair value of our equity investment in Neumora did not have a readily determinable fair value and was initially valued at the acquisition 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.

During the third quarter of 2023, Neumora became a publicly traded company, and its equity securities now have a readily determinable fair value.

Accordingly, the fair value inputs of our equity investment in Neumora changed from using Level 3 inputs as of December 31, 2022, to using a Level 1 input as of December 31, 2023.

See Note 10, Investments— Neumora Therapeutics, Inc.

As of the first quarter of 2023, we no longer account for our equity investment in BeiGene under the equity method of accounting.

As of December 31, 2022, the fair value and carrying value were $ 4.2 billion and $ 2.2 billion, respectively, with the fair value estimated by using a Level 1 input.

See Note 10, Investments— BeiGene, Ltd.

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.

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

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

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

Starting in the third quarter of 2023, terms under our existing derivative contracts reference the SOFR benchmark consistent with the ISDA protocol.

See Note 19, 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 to these inputs would result in corresponding increases or decreases in the fair values of the obligations, as applicable.

Significant changes that increase or decrease the probabilities of achieving the related development, regulatory and commercial events or that shorten or lengthen the time required to achieve such events or that increase or decrease estimated annual sales would result in corresponding increases or decreases in the fair values of the obligations, as applicable.

Changes in the fair values of contingent consideration obligations are recognized in Other operating expenses in the Consolidated Statements of Income.

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Ending balance $ 96 $ 270 $ 342

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.

As of December 31, 2023 and 2022, our contingent consideration obligations are primarily the result of our acquisition of Teneobio in October 2021, which obligated us to pay the former shareholders up to $ 1.6 billion upon achieving separate development and regulatory milestones with regard to various R&D programs.

See Note 3, 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.

in 2011, we were obligated to pay its former shareholders upon achieving separate sales-related milestones with regard to IMLYGIC if certain sales thresholds were met.

During the year ended December 31, 2020, we determined that the likelihood of achieving these milestones was no longer probable, and accordingly, the obligations were written off.

During the third quarter of 2023, the development of AMG 340 was terminated, resulting in a decrease of the related contingent consideration liability.

The remeasurement of this liability of $ 165 million was recognized in Other operating expenses in the Consolidated Statements of Income and included in Other items, net, in the Consolidated Statements of Cash Flows.

See Note 13, Goodwill and other intangible assets, for the impact on the related IPR&D asset.

The remaining contingent consideration liability as of December 31, 2023, primarily relates to potential development and regulatory milestones for R&D programs acquired via the Teneobio acquisition that we continue to pursue.

Summary of the fair values of other financial instruments

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As of December 31, 2023 and 2022, the aggregate fair values of our borrowings were $ 59.2 billion and $ 35.0 billion, respectively, and the carrying values were $ 64.6 billion and $ 38.9 billion, respectively.

Investment in BeiGene

We estimated the fair value of our investment in BeiGene by using Level 1 inputs.

As of December 31, 2022 and 2021, the fair values were $ 4.2 billion and $ 5.1 billion, and the carrying values were $ 2.2 billion and $ 2.8 billion, respectively.

During the years ended December 31, 2022 and 2021, there were no transfers of assets or liabilities between fair value measurement levels, and there were no material remeasurements to the fair values of assets and liabilities that are not measured at fair value on a recurring basis.

During the years ended December 31, 2023 and 2022, there were no transfers of assets or liabilities between fair value measurement levels, and except with respect to the impairment of AMG 340 disclosed in Note 13, Goodwill and other

intangible assets, there were no material remeasurements to the fair values of assets and liabilities that are not measured at fair value on a recurring basis.

Derivative instruments

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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.

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.

The foreign currency exchange rate fluctuation exposure associated with cash inflows from our international product sales is 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;

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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 (expense) 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 income (expense), 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, 2023, were as follows (notional amounts in millions):

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Hedged notes Notional amounts Interest rates Notional amounts Interest rates

0.41% 2023 Swiss franc Bonds CHF 700 0.4 % $ 704 3.4 %

2.00 % 2026 euro Notes

€ 750 2.0 % $ 833 3.9 %

5.50 % 2026 pound sterling Notes

£ 475 5.5 % $ 747 6.0 %

4.00 % 2029 pound sterling Notes

£ 700 4.0 % $ 1,111 4.6 %

During the first quarter of 2023, our 0.41 % 2023 Swiss franc Bonds 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 in order to hedge the variability in cash flows due to changes in the applicable U.S.

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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.

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.

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Forward interest rate contracts ( 31 ) ( 5 ) —

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

Total unrealized gains $ 28 $ 84 $ 159

Fair value hedges

To achieve a desired mix of fixed-rate and floating-rate debt, we entered into interest rate swap contracts that qualified for and were designated as fair value hedges.

These interest rate swap contracts effectively convert fixed-rate coupons to floating-rate LIBOR-based coupons over the terms of the related hedge contracts.

These interest rate swap contracts effectively convert fixed-rate coupons to floating-rate SOFR-based coupons over the terms of the related hedge contracts.

As of both December 31, 2023 and 2022, we had interest rate swap contracts with aggregate notional amounts of $ 6.7 billion that hedge certain portions of our long-term debt issuances.

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The hedged liabilities and related cumulative-basis adjustments for fair value hedges of those liabilities were recorded in the Consolidated Balance Sheets as follows (in millions):

Carrying amounts of

hedged liabilities (1)

Carrying amounts of hedged liabilities (1)

Cumulative amounts of fair value hedging adjustments related to the carrying amounts of the hedged liabilities (2)

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Year ended December 31, 2023

Product sales Other (expense) income, net Interest expense, net

Product sales Other income (expense), net Interest expense, net

Total amounts recorded in income and (expense) line items presented in the Consolidated Statements of Income $ 26,910 $ 2,833 $ ( 2,875 )

The effects of cash flow and fair value hedging:

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

Gains on cash flow hedging relationships reclassified out of AOCI:

Foreign currency forward contracts $ 180 $ — $ —

Cross-currency swap contracts $ — $ 42 $ —

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

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

Hedged items (1)

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Year ended December 31, 2022

Product sales Other (expense) income, net Interest expense, net

Product sales Other income (expense), 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:

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

Foreign currency forward contracts $ 231 $ — $ —

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Year ended December 31, 2021

Product sales Other (expense) income, net Interest expense, net

Product sales Other income (expense), 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:

Losses on cash flow hedging relationships reclassified out of AOCI:

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

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

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.

As of December 31, 2023, 2022 and 2021, the total notional amounts of these foreign currency forward contracts were $ 457 million, $ 517 million and $ 680 million, respectively.

Gains and losses recognized in earnings for our derivative instruments not designated as hedging instruments were not material for the years ended December 31, 2023, 2022 and 2021.

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Certain recent developments concerning our legal proceedings and other matters are discussed below.

ANDA Patent Litigation

Otezla ANDA Patent Litigation

Sandoz Inc., et al.

Beginning in June 2018, Celgene filed 19 separate lawsuits in the U.S.

District Court for the District of New Jersey (the New Jersey District Court) against Alkem Laboratories Ltd.

Amneal Pharmaceuticals LLC (Amneal);

Annora Pharma Private Ltd.

and Hetero USA Inc.

(collectively, Hetero);

Aurobindo Pharma Ltd.

and Aurobindo Pharma USA Inc.

(collectively, Aurobindo);

Cipla Limited (Cipla Ltd);

Emcure Pharmaceuticals Ltd.

and Heritage Pharmaceuticals Inc.

(collectively, Emcure);

Glenmark Pharmaceuticals Ltd.

Macleods Pharmaceuticals Ltd.

Mankind Pharma Ltd.

MSN Laboratories Private Limited (MSN);

Pharmascience Inc.

(Pharmascience);

Prinston Pharmaceutical Inc.

Shilpa Medicare Ltd.

Teva Pharmaceuticals USA, Inc.

and Actavis LLC (collectively, Actavis);

Torrent Pharmaceuticals Ltd.

Unichem Laboratories, Ltd.

and Zydus Pharmaceuticals (USA) Inc.

(Zydus), each for infringement of one or more of the following patents:

6,962,940 (the ’940 Patent), 7,208,516 (the ’516 Patent), 7,427,638 (the ’638 Patent), 7,659,302 (the ’302 Patent), 7,893,101 (the ’101 Patent), 8,455,536 (the ’536 Patent), 8,802,717 (the ’717 Patent), 9,018,243 (the ’243 Patent) and 9,872,854 (the ’854 Patent), which are listed in the Orange Book for Otezla.

Each of these lawsuits was based on each defendant’s submission of an ANDA seeking FDA approval to market a generic version of Otezla.

The New Jersey District Court consolidated these 19 lawsuits for discovery and case management purposes into a single case, Celgene Corp.

Sandoz Inc., et al.

Each lawsuit seeks an order of the New Jersey District Court making any FDA approval of the respective defendant’s ANDA effective no earlier than the expiration of the applicable patents.

In August 2018, Celgene filed amended complaints against Alkem, Amneal, Aurobindo, Cipla Ltd, DRL, Glenmark, Pharmascience, Sandoz, Actavis, Unichem and Zydus additionally asserting U.S.

9,724,330 (the ’330 Patent), which is listed in the Orange Book for Otezla.

Between October 15 and November 27, 2018, Celgene filed amended complaints against Alkem, Amneal, Hetero, Aurobindo, Cipla Ltd, DRL, Emcure, Glenmark, Macleods, Mankind, MSN, Pharmascience, Prinston, Sandoz, Actavis, Torrent, Unichem and Zydus additionally asserting U.S.

10,092,541 (the ’541 Patent), which is listed in the Orange Book for Otezla.

Between March 1 and April 4, 2019, Celgene filed amended complaints against Hetero, MSN and Emcure for infringement of one or more of the above-listed patents.

On October 1, 2019, Celgene filed an amended complaint against Mankind for infringement of the ’940, ’302, ’536, ’243 and ’330 Patents.

On October 8, 2019, Celgene filed a separate lawsuit against Zydus in the New Jersey District Court for infringement of U.S.

8,093,283 (the ’283 Patent) and 8,629,173, which are not listed in the Orange Book for Otezla.

On December 19, 2019, the New Jersey District Court consolidated this lawsuit for discovery and case management purposes into the existing consolidated case, Celgene Corp.

Sandoz Inc., et al .

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.

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.

Following Amgen’s acquisition of the patents-in-suit and the new drug application for Otezla, on February 14, 2020, the New Jersey District Court issued an order substituting Amgen for Celgene as plaintiff in the consolidated action and all related actions, terminating Celgene as plaintiff in the consolidated action and all related actions, and amending the case caption in the consolidated action and all related actions to reflect Amgen as the sole plaintiff.

On March 25, 2020, based on a joint request by Amgen and Unichem, the New Jersey District Court entered a consent judgment and injunction prohibiting the making, using, selling, offering to sell, or importing of Unichem’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.

On April 3, 2020, based on a joint request by Amgen and Hetero, the New Jersey District Court entered a consent judgment and injunction prohibiting the making, using, selling, offering to sell, or importing of Hetero’s apremilast product during the term of the ’940, ’516, ’638, ’302, ’101, ’536, ’717, ’243, ’330, ’854 and ’541 Patents, unless authorized pursuant to a confidential settlement agreement.

On May 28, 2020, based on a joint request by Amgen and Emcure, the New Jersey District Court entered a consent judgment and injunction prohibiting the making, using, selling, offering to sell, or importing of Emcure’s apremilast product during the term of the ’638, ’101, ’854 and ’541 Patents unless authorized pursuant to a confidential settlement agreement.

On July 7, 2020, the New Jersey District Court ordered a stipulated dismissal without prejudice of all claims, counterclaims, and affirmative defenses between Amgen and Sandoz with respect to the ’717, ’516 and ’854 Patents, leaving the ’940, ’302, ’536, ’243, ’330, ’638, ’101 and ’541 Patents asserted by Amgen against Sandoz in the litigation.

On August 6, 2020, based on a joint request by Amgen and Mankind, the New Jersey District Court entered a consent judgment and injunction prohibiting the making, using, selling, offering to sell, or importing of Mankind’s apremilast product during the term of the ’940, ’302, ’536, ’243, ’330, ’638, ’101 and ’541 Patents, unless authorized pursuant to a confidential settlement agreement.

On August 14, 2020, based on a joint request by Amgen and Macleods, the New Jersey District Court entered a consent judgment and injunction prohibiting the making, using, selling, offering to sell, or importing of Macleods’ apremilast product during the term of the ’638 and ’541 Patents, unless authorized pursuant to a confidential settlement agreement.

On October 7, 2020, based on a joint request by Amgen and Amneal, the New Jersey District Court entered a consent judgment and injunction prohibiting the making, using, selling, offering to sell, or importing of Amneal’s apremilast product during the term of the ’101, ’940, ’638, ’302, ’536, ’243, ’330 and ’541 Patents, unless authorized pursuant to a confidential settlement agreement.

On December 30, 2020, based on a joint request by Amgen and Shilpa, the New Jersey District Court entered a consent judgment and injunction prohibiting the making, using, selling, offering to sell, or importing of Shilpa’s apremilast product during the term of the ’638, ’101 and ’854 Patents, unless authorized pursuant to a confidential settlement agreement.

On January 26, 2021, based on a joint request by Amgen and Actavis, the New Jersey District Court entered a consent judgment and injunction prohibiting the making, using, selling, offering to sell, or importing of Actavis’ apremilast product during the term of the ’940, ’516, ’638, ’302, ’536, ’717, ’330, ’854 and ’541 Patents, unless authorized pursuant to a confidential settlement agreement.

On March 24, 2021, based on a joint request by Amgen and Prinston, the New Jersey District Court entered a consent judgment and injunction prohibiting the making, using, selling, offering to sell, or importing of Prinston’s apremilast product during the term of the ’638 and ’541 Patents, unless authorized pursuant to a confidential settlement agreement.

On April 6, 2021, based on a joint request by Amgen and Aurobindo, the New Jersey District Court entered a consent judgment and injunction prohibiting the making, using, selling, offering to sell, or importing of Aurobindo’s apremilast product during the term of the ’940, ’516, ’638, ’302, ’101, ’536, ’717, ’243, ’330, ’854 and ’541 Patents, unless authorized pursuant to a confidential settlement agreement.

On May 5, 2021, based on a joint request by Amgen and Cipla, the New Jersey District Court entered a consent judgment and injunction prohibiting the making, using, selling, offering to sell, or importing of Cipla’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 May 14, 2021, based on a joint request by Amgen and Torrent, the New Jersey District Court entered a consent judgment and injunction prohibiting the making, using, selling, offering to sell, or importing of Torrent’s apremilast product during the term of the ’101, ’638, ’854 and ’541 Patents, unless authorized pursuant to a confidential settlement agreement.

On May 19, 2021, based on a joint request by Amgen and Alkem, the New Jersey District Court entered a consent judgment and injunction prohibiting the making, using, selling, offering to sell, or importing of Alkem’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 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 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.

Trial on the consolidated patent infringement action against Sandoz and Zydus was held at the New Jersey District Court from June 14 to 25, 2021, with closing arguments on July 28, 2021.

On September 28, 2021, consistent with its September 20, 2021 opinion and order, the New Jersey District Court entered final judgment in favor of Amgen and against Zydus with respect to claims 3 and 6 of the ’638 Patent, claim 6 of the ’536 Patent and claims 2 and 27 of the ’283 Patent;

and final judgment in favor of Zydus and against Amgen with respect to claims 1 and 15 of the ’101 Patent and claims 2, 19 and 21 of the ’541 Patent.

The final judgment ordered that the effective date of any final approval by the FDA of Zydus’s ANDA must be after expiration of the three infringed patents (the ’638, ’536 and ’283 Patents) and any regulatory exclusivity to which Amgen may become entitled.

The final judgment also includes an injunction prohibiting Zydus from making, using, offering to sell, or selling in the United States, or importing into the United States, Zydus’s generic apremilast products during the term of the three infringed patents.

On October 27, 2021, Zydus filed a notice of appeal to the Federal Circuit Court with respect to the ’638 Patent.

On October 28, 2021, Amgen filed a notice of appeal to the Federal Circuit Court.

On October 12, 2021, the New Jersey District Court also entered final judgment in favor of Amgen and against Sandoz with respect to claims 3 and 6 of the ’638 Patent, claim 6 of the ’536 Patent and claims 1 and 15 of the ’101 Patent;

and final judgment in favor of Sandoz and against Amgen with respect to claims 2, 19 and 21 of the ’541 Patent.

The final judgment ordered that the effective date of any final approval by the FDA of Sandoz’s ANDA must be after expiration of the three infringed patents (the ’638, ’536 and ’101 Patents) and any regulatory exclusivity to which Amgen may become entitled.

The final judgment also includes an injunction prohibiting Sandoz from making, using, offering to sell, or selling in the United States, or importing into the United States, Sandoz’s generic apremilast products during the term of the three infringed patents.

On November 9, 2021, Sandoz filed a notice of appeal to the Federal Circuit Court with respect to the ’638 and ’101 Patents.

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

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

Amgen Inc., et al.

Sanofi, et al.

In October 2014, Amgen initiated a series of lawsuits that were consolidated by the U.S.

District Court for the District of Delaware (Delaware District Court) in December 2014 into a single case against Sanofi, Sanofi-Aventis U.S.

LLC and Aventisub LLC, formerly doing business as Aventis Pharmaceuticals Inc.

(collectively, Sanofi) and Regeneron Pharmaceuticals, Inc.

(Regeneron), addressing seven of our patents:

8,829,165 (the ’165 Patent);

8,859,741 (the ’741 Patent);

and 8,889,834.

These patents describe and claim monoclonal antibodies to PCSK9.

By its complaints, Amgen seeks an injunction to prevent the infringing manufacture, use and sale of Sanofi and Regeneron’s alirocumab, a monoclonal antibody targeting PCSK9.

In January 2016, the Delaware District Court granted Amgen’s motion to amend the complaint to add its affiliates, Amgen Manufacturing, Limited and Amgen USA Inc., as plaintiffs and to add the allegation that Sanofi and Regeneron’s infringement of Amgen’s patents is willful.

In February 2016, the Delaware District Court entered a stipulated order finding alirocumab and the drug product containing it, PRALUENT infringe certain of Amgen’s patents, including claims 2, 7, 9, 15, 19 and 29 of the ’165 Patent and claim 7 of the ’741 Patent.

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 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.

In February 2017, following a motion by Sanofi and Regeneron, the Federal Circuit Court entered a stay of the permanent injunction during the pendency of the appeal.

In October 2017, the Federal Circuit Court reversed in part the judgment of the Delaware District Court and remanded for a new trial two of the patent validity defenses (lack of written description and enablement of the claimed inventions), and affirmed the Delaware District Court’s judgment of infringement of claims 2, 7, 9, 15, 19 and 29 of the ’165 Patent and claim 7 of the ’741 Patent and the third patent validity defense (finding that the claimed inventions were not obvious to a person of ordinary skill in the field of the patents).

In March 2018, the Federal Circuit Court issued a mandate returning the case to the Delaware District Court for a new trial on two of Sanofi and Regeneron’s challenges to the validity of our patents (lack of written description and enablement of the claimed inventions) and for further consideration of a permanent injunction.

In July 2018, Amgen filed a petition for certiorari with the U.S.

Supreme Court seeking review of the Federal Circuit Court’s conclusion that the judgment affirming the validity of Amgen’s patents was based, in part, on an erroneous application of the law of written description.

On January 7, 2019, the U.S.

Supreme Court denied Amgen’s petition for certiorari.

On remand, the Delaware District Court scheduled a new trial on Sanofi and Regeneron’s challenges to the validity of our patents based on lack of written description and enablement of the claimed inventions.

The Delaware District Court also entered judgment on the pleadings for Sanofi and Regeneron on Amgen’s claim of willful infringement.

On February 25, 2019, a jury of the Delaware District Court again unanimously upheld the validity of claims 19 and 29 of the ’165 Patent and claim 7 of the ’741 Patent.

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 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.

On October 23, 2019, Amgen filed a notice of appeal to the Federal Circuit Court and based on the subsequent hearing, on February 11, 2021 the Federal Circuit Court issued a decision affirming the Delaware District Court’s ruling.

Amgen filed a petition for rehearing en banc which was denied on June 21, 2021.

On November 18, 2021, Amgen filed a petition for writ of certiorari with the U.S.

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 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

We are involved in and expect future involvement in additional disputes regarding our PCSK9 patents in other jurisdictions and regions.

This includes matters filed against us and that we have filed in Germany, Spain and Japan.

This includes matters filed against us and that we have filed in Germany and Japan.

In February 2016, the European Patent Office (EPO) granted European Patent No.

2,215,124 (EP 2,215,124) to Amgen.

2,215,124 (the EP’124 Patent) to Amgen.

This patent describes and claims monoclonal antibodies to PCSK9 and methods of treatment and Sanofi filed an opposition to the patent in the EPO seeking to invalidate it.

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and Sanofi Winthrop Industrie S.A.

filed a joint opposition against Amgen’s patent, and each of Lilly, Regeneron and Strawman Ltd.

filed a joint opposition against Amgen’s patent, and each of Lilly, Regeneron Pharmaceuticals, Inc.

(Regeneron) and Strawman Ltd.

also filed oppositions to Amgen’s patent.

In November 2018, the EPO confirmed the validity of Amgen’s EP 2,215,124, which was appealed to the Technical Board of Appeal (TBA).

In November 2018, the EPO confirmed the validity of Amgen’s EP’124 Patent, which was appealed to the Technical Board of Appeal (TBA).

On October 29, 2020, the TBA upheld the validity of certain claims, including claims that protect Repatha, but ruled that broader claims encompassing PRALUENT were invalid.

As a result of the TBA’s decision, national litigations regarding PRALUENT in Europe are in the process of being resolved.

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.

As a result of the TBA’s decision, national litigations regarding PRALUENT in Germany are in the process of being resolved.

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

Amgen filed counterclaims alleging that PRALUENT infringes Amgen’s European Patent No.

2,641,917 (the EP’917 Patent).

On November 29, 2023, the Regional Court of Munich ruled that PRALUENT does not infringe the EP’917 Patent.

A hearing has been

scheduled for February 28, 2024 in the Munich Regional Court on Sanofi-Aventis Deutschland GmbH’s and Regeneron’s action for damages.

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.

2,756,004 (the EP’004 Patent), which Sanofi Biotechnology SAS licensed from Regeneron.

Sanofi Biotechnology SAS is seeking infringement damages and injunctive relief.

The court scheduled a hearing on this infringement action for May 28, 2024.

On August 3, 2023, Amgen GmbH filed a Nullity Action before the German Federal Patent Court seeking invalidation of Regeneron’s EP’004 Patent.

Regeneron filed a Statement of Defense on November 20, 2023.

On January 22, 2024, Amgen filed its brief in reply.

Amgen and an anonymous third party opposed the EP’004 Patent in the EPO, but on December 6, 2023 the patent was finally upheld by the TBA as granted.

Unified Patent Court of the European Union

On June 1, 2023, Amgen filed an action before the Local Division of the Unified Patent Court in Munich against Sanofi-Aventis Deutschland GmbH, Sanofi-Aventis Groupe S.A., Sanofi Winthrop Industrie S.A.

(collectively, Sanofi-Aventis), and Regeneron alleging that the importation, marketing, sale and use of PRALUENT infringes European Patent 3,666,797 (the EP’797 Patent) seeking an injunction and damages for past infringement.

Regeneron filed counterclaims for revocation, but on February 5, 2024, the court transferred the counterclaims to the Central Division of the Unified Patent Court that is presiding over Sanofi’s revocation action.

The Local Division scheduled the hearing on our EP’797 Patent infringement action to begin on October 16, 2024.

On June 29, 2023, the Central Division of the Unified Patent Court in Munich served Amgen with an action that was filed by Sanofi-Aventis that seeks revocation of the EP’797 Patent.

The Central Division scheduled a hearing on the revocation action to begin on June 4, 2024.

On January 10, 2024, Sanofi Biotechnologies SAS and Regeneron filed an action against Amgen Inc., Amgen Europe B.V., Amgen N.V., Amgen GmbH, Amgen B.V., Amgen SAS, and Amgen S.R.L before the Unified Patent Court, alleging infringement of EP 3,536,712, which Sanofi Biotechnology SAS licensed from Regeneron.

Sanofi and Regeneron are seeking an injunction against the sale, marketing, use, importation, or storage of Repatha for certain specified uses in Belgium, France, Germany, Italy and the Netherlands.

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.

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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.

On March 13, 2023, Amgen appealed to the Japanese Supreme Court the High Court’s decision that Amgen’s Japanese patent claims relating to PCSK9 were invalid for lacking adequate support.

On September 15, 2023, the Japanese Supreme Court declined to hear Amgen’s appeal.

The case will be remanded to the Japan Patent Office for further proceedings.

Damages proceedings against Sanofi K.K.

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has initiated new validity challenges to Amgen patents in Japan.

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.

On September 27, 2023, the Tokyo District Court found Amgen’s patent claims invalid and dismissed Amgen’s lawsuit for damages.

Amgen appealed the District Court’s decision to the IP High Court on December 28, 2023.

Prolia/XGEVA Biologics Price Competition and Innovation Act (BPCIA) Litigation

Sandoz Inc., et al.

On May 1, 2023, Amgen Inc.

and Amgen Manufacturing Limited filed a lawsuit in the U.S.

District Court for the District of New Jersey (New Jersey District Court) against Sandoz Inc., Sandoz GmbH, Lek Pharmaceuticals d.d., Novartis Pharmaceutical Productions d.o.o., and Novartis AG (collectively, Defendants) based on the submission to the FDA of a BLA seeking approval to market and sell a biosimilar version of Amgen’s Prolia and XGEVA products.

The complaint asserts infringement of the following 21 patents, which are listed in the FDA’s Purple Book for Amgen’s Prolia and XGEVA products:

and 11,434,514 (collectively, the Asserted Patents).

Amgen seeks a judgment from the New Jersey District Court that Defendants have infringed or will infringe one or more claims of each of the Asserted Patents and based on that judgment, a permanent injunction prohibiting the commercial manufacture, use, offer to sell, or sale within the United States or importation into the United States of Defendants’ proposed denosumab biosimilar before expiration of each of the Asserted Patents found to infringe.

Amgen also seeks monetary remedies for any past acts of infringement.

On June 16, 2023, Amgen filed an amended and supplemental complaint to include additional information regarding the completion of the BPCIA information exchange after the filing of the original complaint.

(Sandoz) responded to the amended and supplemental complaint on July 7, 2023, denying infringement and asserting counterclaims seeking a declaratory judgment that asserted patents are invalid and/or unenforceable.

On July 28, 2023, Amgen responded, seeking a denial and dismissal of Sandoz’s counterclaims.

On August 23, 2023, the New Jersey District Court entered a stipulation and order dismissing without prejudice Sandoz GmbH, Lek Pharmaceuticals d.d., Novartis Pharmaceutical Productions d.o.o., and Novartis AG (collectively, Foreign Defendants) from the action.

Pursuant to the stipulation entered by the New Jersey District Court, the Foreign Defendants agreed to be bound by any judgment order or decision in the matter (including appeals) as if the Foreign Defendants were named as defendants and parties to the judgment order or decision.

Sandoz is now the sole named Defendant in the action.

On October 30, 2023, the New Jersey District Court commenced a hearing on Amgen’s motion for a preliminary injunction to prohibit Sandoz from engaging in the commercial manufacture, use, offer for sell or sale within the United States, or importation into the United States of its proposed denosumab biosimilar until judgment is entered after trial on the merits.

Closing arguments on Amgen’s motion for the preliminary injunction were held on December 21, 2023.

ABP 938 (aflibercept) Patent Litigation

On January 10, 2024, Regeneron filed a lawsuit in the U.S.

District Court for the Central District of California (the California Central District Court) against Amgen alleging infringement of 32 patents listed by Regeneron in the BPCIA exchange.

The lawsuit stems from Amgen’s submission of an application under the BPCIA for FDA licensure of ABP 938 as biosimilar to Regeneron’s EYLEA.

By its complaint, Regeneron seeks, among other remedies, an injunction prohibiting the commercial manufacture, use, offer for sale or sale in the United States or import into the United States of ABP 938 before the expiration of each of the patents found to be infringed.

On January 11, 2024, Regeneron filed a motion with the Judicial Panel on Multidistrict Litigation to transfer this case from the California Central District Court to the U.S.

District Court for the Northern District of West Virginia for coordinated pretrial proceedings with the five other cases involving EYLEA biosimilars pending in that district.

A hearing on Regeneron’s motion to transfer has been scheduled for March 28, 2024.

Amgen responded to Regeneron’s complaint on February 2, 2024, denying infringement and asserting counterclaims seeking a declaratory judgment that the asserted patents are not infringed, invalid, and/or unenforceable.

Antitrust Class Action

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(Teva) alleging anticompetitive conduct in connection with settlements between Amgen and manufacturers of generic cinacalcet product.

two of those actions were brought in the Delaware District Court, captioned UFCW Local 1500 Welfare Fund v.

Two of those actions were brought in the U.S.

District Court for the District of Delaware (the Delaware District Court), captioned UFCW Local 1500 Welfare Fund v.

Amgen Inc., et al.

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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 payer 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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On August 19, 2020, Amgen filed a response to the plaintiffs’ objections.

On November 30, 2020, the District Court adopted the Magistrate Judge’s recommendation in part and denied it in part, denying Amgen’s motion to dismiss on the grounds that plaintiffs adequately alleged reverse payment claims but granted Amgen’s motion to dismiss with respect to the other Federal antitrust claims.

On November 30, 2020, the Delaware District Court adopted the Magistrate Judge’s recommendation in part and denied it in part, denying Amgen’s motion to dismiss on the grounds that plaintiffs adequately alleged reverse payment claims but granted Amgen’s motion to dismiss with respect to the other Federal antitrust claims.

On December 23, 2020, Teva, Watson and Actavis filed a motion for interlocutory appeal and for a stay pending appeal and Amgen filed its joinder (the 1292 Motion).

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Amgen filed its opposition to plaintiffs’ motion on June 10, 2022, and reply briefs were filed on June 24, 2022.

On February 16, 2023, the Delaware District Court denied Amgen’s motion for interlocutory appeal.

On March 2, 2023, Amgen filed a motion for reargument, which the Delaware District Court denied while also certifying a question regarding whether the current judge has the authority to certify a question decided by a predecessor judge.

On April 17, 2023, Amgen filed a petition with the U.S.

Court of Appeals for the Third Circuit (the Third Circuit Court), seeking a grant of our request for interlocutory appeal of the certified question as well as the Delaware District Court’s denial of our motion to dismiss the reverse payment claim.

Amgen’s response to the class action complaints is due 30 days after resolution or denial of the interlocutory appeal.

On June 26, 2023, the Third Circuit Court entered an order granting defendants’ (including Amgen’s) petition for interlocutory appeal and denying plaintiffs’ cross-petition.

The questions certified are whether (1) the statute for interlocutory decisions authorizes a district court judge to certify for interlocutory appeal an order issued in the same case by a predecessor district court judge;

and (2) the settlement of a patent infringement claim that involves the forgiveness of damages associated with that patent’s alleged infringement, on its own or combined with an acceleration clause, constitutes a reverse payment.

On July 3, 2023, Amgen and Teva Pharmaceuticals USA, Inc.

filed a notice of appeal, and on October 17, 2023, Amgen submitted its initial brief in its appeal before the Third Circuit Court.

On January 12, 2024, Amgen reached an agreement in principle to settle with the putative class of indirect purchasers of Sensipar.

The action with respect to the putative class of direct purchasers of Sensipar will proceed with the pending appeal before the Third Circuit Court.

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.

On May 27, 2022, 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:

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

Tax Litigation.

On February 10, 2023, the Delaware District Court denied Amgen’s motion to stay this action, and on March 21, 2023, the Delaware District Court denied Amgen’s motion to dismiss the complaint.

On August 28, 2023, Regeneron filed its amended complaint, and on September 20, 2023, Amgen filed a counterclaim, alleging Regeneron’s own anticompetitive conduct with respect to formulary position for Regeneron’s drug, PRALUENT, at CVS.

Trial is scheduled to begin on November 12, 2024.

Tax Litigation and Related Matters

& Subsidiaries v.

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See Note 7, Income taxes, for discussion of the IRS tax dispute and the Company’s petitions in the U.S.

Securities Class Action Litigation

On March 13, 2023, Roofers Local No.

149 Pension Fund filed a purported class action against Amgen, Robert Bradway and Peter Griffith.

The action was brought on behalf of an alleged class of Amgen shareholders who owned stock between July 29, 2020 and April 27, 2022 (the alleged class period).

Plaintiffs allege that the defendants made a series of materially false and misleading statements and omissions during the alleged class period regarding the failure to timely disclose the potential tax liability claimed by the IRS.

Plaintiffs further allege that they and other purported class members suffered losses and damages resulting from declines in the market value of Amgen’s common stock after the potential tax liability claimed by the IRS was disclosed.

On August 31, 2023, plaintiff filed an amended complaint and Amgen filed its motion to dismiss on November 6, 2023.

Plaintiff’s response was filed on January 12, 2024 and Amgen’s reply is due February 26, 2024.

Shareholder Derivative Litigation (Martin)

On August 2, 2023, Leon Martin filed a derivative action (the Martin Derivative Action) captioned Leon Martin v.

Bradway, et al., No.

1:23-cv-06754 (S.D.N.Y.

2, 2023), purportedly on behalf of Amgen, against Amgen, Robert Bradway, Peter Griffith and Amgen’s independent Board members.

The action was filed in the U.S.

District Court for the Southern District of New York (Southern District Court of New York) as related to the pending federal securities class action filed by Roofers Local No.

149 Pension Fund on March 13, 2023 (the Roofers securities class action).

The complaint in this matter alleges claims for violations of the Securities Exchange Act of 1934, breach of fiduciary duty, aiding and abetting breach of fiduciary duty, unjust enrichment and waste of corporate assets.

The factual allegations that form the basis for these claims are essentially the same as the allegations asserted in the Roofers securities class action regarding purportedly false and misleading statements and omissions made from July 29, 2020 through April 27, 2022 relating to Amgen’s tax liabilities, business and finances, and the adequacy and maintenance of its internal controls.

On October 2, 2023, the Southern District Court of New York granted a stay of the matter pending an outcome on the motion to dismiss in the federal securities class action filed by plaintiff.

On December 7, 2023, Plaintiff filed a Notice of Voluntary Dismissal as to Board member Michael Drake.

Shareholder Derivative Litigation (Clearwater)

On December 1, 2023, a second derivative action (the Clearwater Derivative Action) was filed, captioned Cheri Clearwater v.

Bradway, et al., No.

1:23-cv-10538 (S.D.N.Y.

1, 2023), in the same court as the earlier-filed Martin Derivative Action.

The second action is largely duplicative of the Martin Derivative Action, asserting the same claims purportedly on behalf of the Company against the individual directors that sat on Amgen’s Board during the relevant time period (July 29, 2020 through April 27, 2022).

The complaint asserts claims for breach of fiduciary duty, unjust enrichment, waste of corporate assets, abuse of control, gross mismanagement, and violations of Section 10(b) of the Exchange Act arising out of Amgen’s disclosures with respect to its transfer pricing dispute with the IRS.

However, the Clearwater Derivative Action complaint adds (1) two additional claims for violations of Sections 14(a) and 20(a) of the Exchange Act;

(2) allegations that Amgen repurchased its own stock at artificially inflated prices during the relevant period;

and (3) more detailed allegations as to why first making a demand on the Board would have been futile.

On January 16, 2024, the Southern District Court of New York consolidated the Martin Derivative Action and Clearwater Derivative Action (the Consolidated Action).

The stay entered in the Martin Derivative Action also applies to the Consolidated Action.

ChemoCentryx, Inc.

6 unchanged sentences

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.

On February 23, 2023, the Northern District Court of California substantially denied ChemoCentryx’s motion to dismiss the matter in its entirety, while granting the motion to dismiss with respect to certain allegations of the plaintiffs.

On April 4, 2023, the parties submitted a case management statement to the Northern District Court of California, and on April 10, 2023, the Northern District Court of California entered an order setting dates for amendment of pleadings and briefing on class certification.

On April 27, 2023, ChemoCentryx submitted its answer to the complaint.

On August 25, 2023, the lead plaintiff moved to certify a class composed of all purchasers of ChemoCentryx stock between November 25, 2019 and May 6, 2021.

ChemoCentryx filed its opposition on November 22, 2023.

Lead plaintiff filed its reply brief in support of class certification on January 23, 2024.

A hearing on class certification is set for February 15, 2024.

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