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Item 1. Financial Statements

2024-05-03 compared with 2023-10-31 · 248 added, 419 removed, 522 unchanged (56% of the section changed)

FINANCIAL STATEMENTS

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

CONDENSED CONSOLIDATED STATEMENTS OF (LOSS) INCOME

(In millions, except per-share data)

Three months ended

September 30, Nine months ended

September 30,

2023 2022 2023 2022

Product sales $ 7,118 $ 5,846

10 unchanged sentences

Interest expense, net ( 824 ) ( 543 )

Other income (expense), net 685 100 2,431 ( 747 )

Income before income taxes 1,947 2,392 7,003 5,598

Other (expense) income, net ( 235 ) 2,064

(Loss) income before income taxes ( 68 ) 3,442

Provision for income taxes 45 601

Net income $ 1,730 $ 2,143 $ 5,950 $ 4,936

Earnings per share:

Net (loss) income $ ( 113 ) $ 2,841

(Loss) earnings per share:

Basic $ ( 0.21 ) $ 5.32

Diluted $ ( 0.21 ) $ 5.28

Shares used in calculation of earnings per share:

Shares used in calculation of (loss) earnings per share:

Basic 536 534

1 unchanged sentence

See accompanying notes.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

(In millions)

Three months ended

September 30, Nine months ended

September 30,

2023 2022 2023 2022

Net income $ 1,730 $ 2,143 $ 5,950 $ 4,936

Other comprehensive income, net of reclassification adjustments and taxes:

Net (loss) income $ ( 113 ) $ 2,841

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

Foreign currency translation ( 24 ) 28

1 unchanged sentence

Other ( 3 ) 21

Other comprehensive income, net of reclassification adjustments and taxes 154 20 105 144

Comprehensive income $ 1,884 $ 2,163 $ 6,055 $ 5,080

Other comprehensive income (loss), net of reclassification adjustments and taxes 99 ( 37 )

Comprehensive (loss) income $ ( 14 ) $ 2,804

See accompanying notes.

1 unchanged sentence

(In millions, except per-share data)

September 30, 2023 December 31, 2022

March 31, 2024 December 31, 2023

Current assets:

Cash and cash equivalents $ 9,708 $ 10,944

Marketable securities — 1,676

Trade receivables, net 6,776 7,268

14 unchanged sentences

Long-term debt 60,061 63,170

Long-term deferred tax liabilities 1,862 2,354

Long-term tax liabilities 3,964 4,680

19 unchanged sentences

535.4 $ 33,070 $ ( 26,549 ) $ ( 289 ) $ 6,232

Net income — — 2,841 — 2,841

Other comprehensive loss, net of taxes — — — ( 37 ) ( 37 )

Dividends declared on common stock

($ 2.13 per share)

— — ( 1,138 ) — ( 1,138 )

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

0.3 11 — — 11

Stock-based compensation expense — 47 — — 47

Tax impact related to employee stock-based compensation expense

— ( 37 ) — — ( 37 )

Balance as of March 31, 2023

534.3 32,535 ( 26,919 ) ( 268 ) 5,348

Net income — — 1,379 — 1,379

Other comprehensive loss, net of taxes — — — ( 12 ) ( 12 )

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

0.6 16 — — 16

Stock-based compensation expense — 119 — — 119

Tax impact related to employee stock-based compensation expense

— ( 69 ) — — ( 69 )

Balance as of June 30, 2023

534.9 32,601 ( 25,540 ) ( 280 ) 6,781

Net income — — 1,730 — 1,730

Net loss — — ( 113 ) — ( 113 )

Other comprehensive income, net of taxes — — — 99 99

6 unchanged sentences

— ( 125 ) — — ( 125 )

Balance as of September 30, 2023

Balance as of March 31, 2024

536.4 $ 33,082 $ ( 27,870 ) $ ( 190 ) $ 5,022

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (continued)

(In millions, except per-share data)

paid-in capital Accumulated

4 unchanged sentences

Net income — — 2,841 — 2,841

Other comprehensive income, net of taxes — — — 33 33

Other comprehensive loss, net of taxes — — — ( 37 ) ( 37 )

Dividends declared on common stock ($ 2.13 per share)

5 unchanged sentences

— ( 37 ) — — ( 37 )

Repurchases of common stock ( 24.6 ) ( 900 ) ( 5,410 ) — ( 6,310 )

Balance as of March 31, 2023

534.3 $ 32,535 $ ( 26,919 ) $ ( 268 ) $ 5,348

Net income — — 1,317 — 1,317

Other comprehensive income, net of taxes — — — 91 91

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

0.7 45 — — 45

Stock-based compensation expense — 120 — — 120

Tax impact related to employee stock-based compensation expense

— ( 69 ) — — ( 69 )

Other — — ( 1 ) — ( 1 )

Balance as of June 30, 2022

534.9 31,343 ( 28,252 ) ( 672 ) 2,419

Net income — — 2,143 — 2,143

Other comprehensive income, net of taxes — — — 20 20

Dividends declared on common stock ($ 1.94 per share)

— — ( 1,057 ) — ( 1,057 )

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

0.1 15 — — 15

Stock-based compensation expense — 121 — — 121

Tax impact related to employee stock-based compensation expense

— ( 8 ) — — ( 8 )

Repurchases of common stock ( 1.5 ) 900 ( 900 ) — —

Balance as of September 30, 2022

533.5 $ 32,371 $ ( 28,066 ) $ ( 652 ) $ 3,653

See accompanying notes.

1 unchanged sentence

(In millions)

Nine months ended

September 30,

Three months ended

Cash flows from operating activities:

Net income $ 5,950 $ 4,936

Net (loss) income $ ( 113 ) $ 2,841

Depreciation, amortization and other 1,399 900

Stock-based compensation expense 103 47

Deferred income taxes ( 401 ) ( 49 )

Adjustments for equity method investments ( 27 ) ( 31 )

Loss on divestiture — 565

(Gains) losses on equity securities ( 1,304 ) 113

Losses (gains) on equity securities 515 ( 1,830 )

Other items, net ( 95 ) ( 60 )

6 unchanged sentences

Long-term tax liabilities ( 715 ) 107

Accrued liabilities ( 1,054 ) ( 230 )

Accrued sales incentives and allowance ( 316 ) ( 402 )

Other liabilities ( 56 ) ( 78 )

1 unchanged sentence

Cash flows from investing activities:

Purchases of marketable securities ( 1 ) ( 2,363 )

Proceeds from sales of marketable securities — 1,124

1 unchanged sentence

Purchases of property, plant and equipment ( 230 ) ( 344 )

Other 74 ( 59 )

Net cash provided by (used in) investing activities 885 ( 2,571 )

Net cash (used in) provided by investing activities ( 217 ) 1,358

Cash flows from financing activities:

2 unchanged sentences

Repayment of debt — ( 704 )

Repurchases of common stock — ( 6,360 )

Dividends paid ( 1,208 ) ( 1,137 )

Other ( 90 ) ( 28 )

Net cash provided by (used in) financing activities 18,294 ( 2,988 )

Increase in cash and cash equivalents 27,112 1,513

Net cash (used in) provided by financing activities ( 1,708 ) 21,509

(Decrease) increase in cash and cash equivalents ( 1,236 ) 23,931

Cash and cash equivalents at beginning of period 10,944 7,629

2 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2023

March 31, 2024

Summary of significant accounting policies

3 unchanged sentences

Basis of presentation

The financial information for the three and nine months ended September 30, 2023 and 2022, is unaudited but includes all adjustments (consisting of only normal, recurring adjustments unless otherwise indicated), which Amgen considers necessary for a fair presentation of its condensed consolidated results of operations for those periods.

The financial information for the three months ended March 31, 2024 and 2023, is unaudited but includes all adjustments (consisting of only normal, recurring adjustments unless otherwise indicated), which Amgen considers necessary for a fair presentation of its condensed consolidated results of operations for those periods.

Interim results are not necessarily indicative of results for the full fiscal year.

The condensed consolidated financial statements should be read in conjunction with our consolidated financial statements and the notes thereto contained in our Annual Report on Form 10-K for the year ended December 31, 2022, and with our condensed consolidated financial statements and the notes thereto contained in our Quarterly Reports on Form 10-Q for the periods ended March 31, 2023 and June 30, 2023.

Principles of consolidation

3 unchanged sentences

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

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

Use of estimates

2 unchanged sentences

Property, plant and equipment, net

Property, plant and equipment is recorded at historical cost, net of accumulated depreciation and amortization, of $ 9.7 billion and $ 9.3 billion as of September 30, 2023 and December 31, 2022, respectively.

Property, plant and equipment is recorded at historical cost, net of accumulated depreciation and amortization, of $ 9.9 billion and $ 9.8 billion as of March 31, 2024 and December 31, 2023, respectively.

Recent accounting pronouncements

No new accounting pronouncements were issued or adopted for the nine months ended September 30, 2023, that materially impacted the Company.

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 now expect that we will incur $ 250 million to $ 350 million of pretax charges in 2023 in connection with our restructuring plan, including (i) separation and other headcount-related costs with respect to staff reductions and (ii) asset-related charges that consist primarily of asset impairments and other related costs resulting from rationalization of our geographic footprint.

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

Three months ended September 30, 2023

Separation costs Asset impairments and other charges Total

Cost of sales $ — $ 1 $ 1

Research and development — — —

Selling, general and administrative — 13 13

Other 16 1 17

Total $ 16 $ 15 $ 31

Nine months ended September 30, 2023

Separation costs Asset impairments and other charges Total

Cost of sales $ — $ 36 $ 36

Research and development — 17 17

Selling, general and administrative — 13 13

Other 182 4 186

Total $ 182 $ 70 $ 252

As of September 30, 2023, total restructuring liability decreased to $ 54 million primarily due to payments related to separation costs.

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

Acquisitions and divestitures

In November 2023, the Financial Accounting Standards Board (FASB) issued a new accounting standard that improves reportable segment disclosure requirements.

The new standard requires 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 public business entities 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 related disclosures.

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

The new standard requires 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 for annual periods beginning after December 15, 2024, and early adoption is permitted.

We are currently evaluating the impact of this new standard on our related disclosures.

Acquisition of Horizon Therapeutics plc

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

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.

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 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 inflammation portfolio by adding first-in-class, early-in-lifecycle medicines such as TEPEZZA ® (teprotumumab-trbw), KRYSTEXXA ® (pegloticase) and UPLIZNA ® (inebilizumab-cdon), which treat rare inflammatory diseases.

The accounting impact of this acquisition and the results of operations for Horizon will be included in our consolidated financial statements beginning in the fourth quarter of 2023.

The initial accounting for this acquisition is incomplete, pending identification and measurement of assets acquired and liabilities assumed.

In connection with our acquisition of Horizon, we entered into several debt and financing arrangements.

See Note 10, Financing arrangements.

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 nine months ended September 30, 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 nine months ended September 30, 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):

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.

Measurement period adjustments during the three months ended March 31, 2024, included changes to the purchase price allocation, resulting in a net decrease of approximately $ 49 million to goodwill.

The measurement period adjustments resulted primarily from adjustments to acquired assets and liabilities, including sales reserve and allowances as well as right-of-use assets and liabilities 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 three months ended March 31, 2024, 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 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 $ 681

Marketable securities 235

Inventories 5,025

Property, plant and equipment, net 318

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

Other liabilities, net ( 83 )

Deferred tax liability, net ( 502 )

Goodwill 3,062

Deferred tax asset 834

Deferred tax liability ( 2,492 )

Other assets and liabilities, net ( 245 )

Total assets acquired, net $ 27,833

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 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.

The developed-product-technology rights are being amortized on a straight-line basis over a weighted-average period of approximately 11 years using the straight-line method.

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

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

A net deferred tax liability of $ 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.

The excess of the acquisition date consideration over the fair values assigned to the assets acquired and the liabilities assumed of $ 649 million was recorded as goodwill, which is not deductible for tax purposes.

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

Divestiture of Gensenta İlaç Sanayi ve Ticaret A.Ş.

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

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

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

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 restricted stock unit (RSU) awards, and outstanding performance share unit (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.

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 from the acquisition date 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 from the acquisition date.

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.

Supplemental Pro Forma Financial Information

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

Three months ended

March 31, 2023

Total revenue $ 6,941

Net income $ 2,182

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;

and (iii) 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 condensed consolidated results of operations would have been had the acquisition been completed on January 1, 2022.

In addition, the unaudited supplemental 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.

We operate in one business segment:

4 unchanged sentences

Revenues were as follows (in millions):

Three months ended September 30,

Three months ended March 31,

ROW Total U.S.

2 unchanged sentences

XGEVA 366 195 561 384 152 536

Otezla 462 105 567 529 98 627

Repatha 273 244 517 197 191 388

Nplate 322 97 419 162 126 288

KYPROLIS 231 118 349 217 101 318

Aranesp 107 216 323 128 230 358

EVENITY 214 93 307 136 65 201

Other products (1)

419 5 424 — — —

Total product sales (2)

$ 4,691 $ 1,857 6,548 $ 4,466 $ 1,771 6,237

Other revenues 355 415

Total revenues $ 6,903 $ 6,652

Nine months ended September 30,

ROW Total U.S.

Prolia $ 1,987 $ 954 $ 2,941 $ 1,783 $ 853 $ 2,636

ENBREL 2,645 37 2,682 2,965 54 3,019

XGEVA 1,145 440 1,585 1,122 408 1,530

Otezla 293 101 394 294 98 392

Repatha 592 626 1,218 461 502 963

Nplate 744 347 1,091 474 364 838

KYPROLIS 234 142 376 234 124 358

1 unchanged sentence

EVENITY 236 106 342 164 90 254

Nplate 190 127 317 246 116 362

Vectibix 120 127 247 111 122 233

BLINCYTO 153 91 244 126 68 194

KRYSTEXXA (1)

235 — 235 — — —

173 — 173 96 — 96

Other products (3)

4 unchanged sentences

Total revenues $ 7,447 $ 6,105

(1) Consists of product sales of our non-principal products as well as sales in prior periods of our divested Bergamo and Gensenta subsidiaries.

(2) Hedging gains and losses, which are included in product sales, were not material for the three and nine months ended September 30, 2023 and 2022.

The effective tax rates for the three and nine months ended September 30, 2023, were 11.1 % and 15.0 %, respectively, compared with 10.4 % and 11.8 %, respectively, for the corresponding periods in the prior year.

The increase in our effective tax rate for the three months ended September 30, 2023, was primarily due to the 2022 Puerto Rico tax law change that replaced the excise tax with an income tax beginning in 2023, partially offset by a prior year nondeductible loss from the divestiture of Gensenta and net earnings mix including the tax benefit from a net impairment charge related to AMG 340.

See Note 9, Goodwill and other intangible assets.

The increase in our effective tax rate for the nine months ended September 30, 2023, was primarily due to the 2022 Puerto Rico tax law change that replaced the excise tax with an income tax beginning in 2023 and net change in earnings mix, partially offset by a prior year nondeductible loss from the divestiture of Gensenta.

The effective tax rates differ from the federal statutory rate primarily as a result of foreign earnings from the Company’s operations conducted in Puerto Rico, a territory of the United States treated as a foreign jurisdiction for U.S.

tax purposes, that are currently subject to a tax incentive grant through 2050.

In addition, the Company’s operations conducted in Singapore are subject to a tax incentive grant through 2036.

These foreign earnings are also subject to U.S.

(1) TEPEZZA and KRYSTEXXA were acquired from the acquisition of Horizon on October 6, 2023, and include product sales in the periods after the acquisition date.

(2) TEZSPIRE is marketed by our collaborator AstraZeneca outside the United States.

(3) Consists of product sales of our non-principal products.

(4) Hedging gains and losses, which are included in product sales, were not material for the three months ended March 31, 2024 and 2023.

The income tax provisions for the three months ended March 31, 2024 and 2023, were tax expenses of $ 45 million and $ 601 million, respectively, on a pretax loss of $ 68 million and a pretax income of $ 3,442 million, respectively.

The effective tax rates for the three months ended March 31, 2024 and 2023, were ( 66.2 )% and 17.5 %, respectively.

The decrease in our effective tax rate for the three months ended March 31, 2024, was primarily due to the earnings mix as a result of the inclusion of the Horizon business, amortization of Horizon acquired assets and the first quarter 2024 unrealized loss on our BeiGene investment.

See Note 6, Investments —BeiGene, Ltd .

The effective tax rates 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 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.

Our operations in Puerto Rico are subject to a tax incentive grant through 2050.

Additionally, the Company’s operations conducted in Singapore are subject to a tax incentive grant through 2036.

Our foreign earnings are also subject to U.S.

tax at a reduced rate of 10.5%.

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

Additionally, effective January 1, 2024, selected individual countries, including the United Kingdom and EU member countries, have enacted the global minimum tax agreement.

Our legal entities in such countries, along with their direct and indirect subsidiaries, are now subject to a 15% minimum tax rate on adjusted financial statement income.

Beginning on January 1, 2023, we were 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.

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.

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 the first half of 2023, and a foreign tax credit was not recognized with respect to the excise tax expense in 2023.

We do not have this excise tax exposure in 2024.

One or more of our legal entities file income tax returns in the U.S.

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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.

The trial is currently scheduled to begin on 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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however, due to the complexity of the provision for income taxes and uncertain resolution of these matters, the ultimate outcome of any tax matters may result in payments substantially greater than amounts accrued and could have a material adverse impact on our condensed consolidated financial statements.

We are no longer subject to U.S.

federal income tax examinations for years ended on or before December 31, 2009.

See our Annual Report on Form 10-K for the year ended December 31, 2022, Part I, Item 1A, Risk Factors— The adoption and interpretation of new tax legislation or exposure to additional tax liabilities could affect our profitability, for further discussion.

During the three and nine months ended September 30, 2023, the gross amounts of our UTBs increased by $ 50 million and $ 160 million, respectively, as a result of tax positions taken during the current year.

Substantially all of the UTBs as of September 30, 2023, if recognized, would affect our effective tax rate.

During the three months ended March 31, 2024, the gross amounts of our UTBs increased by $ 40 million as a result of tax positions taken during the current year.

Substantially all of the UTBs as of March 31, 2024, if recognized, would affect our effective tax rate.

Earnings per share

1 unchanged sentence

The computation of diluted EPS is based on the weighted-average number of our common shares outstanding and dilutive potential common shares, which primarily include shares that may be issued under our stock option, restricted stock and performance unit award programs (collectively, dilutive securities), as determined by using the treasury stock method.

The computations for basic and diluted EPS were as follows (in millions, except per-share data):

As the Company recorded a net loss for the three months ended March 31, 2024, 5 million shares of employee stock-based awards were excluded in the computation of diluted loss per share because the effect would have been antidilutive.

The computations for basic and diluted (loss) earnings per share were as follows (in millions, except per-share data):

Three months ended

September 30, Nine months ended

September 30,

2023 2022 2023 2022

Income (Numerator):

Net income for basic and diluted EPS $ 1,730 $ 2,143 $ 5,950 $ 4,936

Net (loss) income for basic and diluted (loss) earnings per share $ ( 113 ) $ 2,841

Shares (Denominator):

Weighted-average shares for basic EPS 535 535 535 539

Weighted-average shares for basic (loss) earnings per share 536 534

Effect of dilutive securities — 4

Weighted-average shares for diluted EPS 538 538 538 542

Basic EPS $ 3.23 $ 4.01 $ 11.12 $ 9.16

Diluted EPS $ 3.22 $ 3.98 $ 11.06 $ 9.11

For the three and nine months ended September 30, 2023 and 2022, the number of antidilutive employee stock-based awards excluded from the computation of diluted EPS was not significant.

Weighted-average shares for diluted (loss) earnings per share 536 538

Basic (loss) earnings per share $ ( 0.21 ) $ 5.32

Diluted (loss) earnings per share $ ( 0.21 ) $ 5.28

For the three months ended March 31, 2023, the number of antidilutive employee stock-based awards excluded from the computation of diluted EPS was not significant.

Available-for-sale investments

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

Types of securities as of September 30, 2023 Amortized

Treasury bills $ — $ — $ — $ —

Types of securities as of March 31, 2024 Amortized

Money market mutual funds $ 9,099 $ — $ — $ 9,099

Other short-term interest-bearing securities 138 — — 138

Total interest-bearing securities $ 9,237 $ — $ — $ 9,237

Types of securities as of December 31, 2023 Amortized

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

Money market mutual funds $ 10,266 $ — $ — $ 10,266

Other short-term interest-bearing securities 138 — — 138

Total interest-bearing securities $ 10,404 $ — $ — $ 10,404

The fair values of interest-bearing securities by location in the Condensed Consolidated Balance Sheets were as follows (in millions):

Condensed Consolidated Balance Sheets locations September 30, 2023 December 31, 2022

Condensed Consolidated Balance Sheets locations March 31, 2024 December 31, 2023

Cash and cash equivalents $ 9,237 $ 10,404

Marketable securities — 1,676

Total interest-bearing securities $ 9,237 $ 10,404

Cash and cash equivalents in the above table excludes bank account cash of $ 533 million and $ 4,970 million as of September 30, 2023 and December 31, 2022, respectively.

Cash and cash equivalents as of September 30, 2023, was $ 34.7 billion, a majority of which was used to acquire Horizon in October 2023.

See Note 3, Acquisitions and divestitures.

All interest-bearing securities as of September 30, 2023 and December 31, 2022, mature in one year or less.

For the three and nine months ended September 30, 2023 and 2022, realized gains and losses on interest-bearing securities were not material.

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

Cash and cash equivalents in the above table excludes bank account cash of $ 471 million and $ 540 million as of March 31, 2024 and December 31, 2023, respectively.

All interest-bearing securities as of March 31, 2024 and December 31, 2023, mature in one year or less.

For the three months ended March 31, 2024 and 2023, 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 Condensed Consolidated Statements of (Loss) Income.

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

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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.

See Note 11, Fair value measurement.

During the three and nine months ended September 30, 2023, we recognized unrealized gains of $ 30 million and $ 1.2 billion, respectively, recorded in Other income (expense), net, in our Condensed Consolidated Statements of Income.

As of September 30, 2023, the carrying and fair value of our investment in BeiGene was $ 3.4 billion and was included in Other noncurrent assets in the Condensed Consolidated Balance Sheets.

As of December 31, 2022, under the equity method of accounting, the carrying value of our investment in BeiGene was $ 2.2 billion and was included in Other noncurrent assets in the Condensed Consolidated Balance Sheets, and our ownership percentage was 18.2 %.

During the three and nine months ended September 30, 2022, under the equity method of accounting, our carrying value in BeiGene was adjusted by our share of BeiGene’s net losses of $ 104 million and $ 292 million, respectively, and amortization of the basis difference of $ 48 million and $ 143 million, respectively, recorded in Other income (expense), net, in our Condensed Consolidated Statements of Income.

During the three months ended March 31, 2024 and 2023, we recognized an unrealized loss of $ 454 million and an unrealized gain of $ 1.9 billion, respectively, recorded in Other (expense) income, net, in our Condensed Consolidated Statements of (Loss) Income.

As of March 31, 2024 and December 31, 2023, the carrying and fair values of our equity investment in BeiGene were $ 3.0 billion and $ 3.4 billion, respectively, and were included in Other noncurrent assets in the Condensed Consolidated Balance Sheets.

Subject to certain exceptions or otherwise agreed to by BeiGene, while Amgen holds at least 5.0 % of BeiGene’s outstanding common stock, (A) we may only sell our BeiGene equity investment via:

(i) a registered public offering, (ii) a sale under Rule 144 of the Securities Act of 1933 (the “Securities Act”) or (iii) a private sale exempt from registration requirements under the Securities Act, and (B) we may not sell more than 5.0 % of BeiGene’s outstanding common stock in any rolling 12-month period.

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 $ 344 million and $ 480 million as of September 30, 2023 and December 31, 2022, respectively, which are included in Other noncurrent assets in the Condensed Consolidated Balance Sheets.

During the three months ended September 30, 2023 and 2022, net unrealized losses and gains on these publicly traded securities were a net loss of $ 49 million and a net gain of $ 17 million, respectively.

During the nine months ended September 30, 2023 and 2022, net unrealized losses on these publicly traded securities were $ 41 million and $ 259 million, respectively.

Realized gains and losses on sales of publicly traded securities for the three and nine months ended September 30, 2023 and 2022, were not material.

We held investments of $ 293 million and $ 233 million in equity securities without readily determinable fair values as of September 30, 2023 and December 31, 2022, respectively, which are included in Other noncurrent assets in the Condensed Consolidated Balance Sheets.

During the three and nine months ended September 30, 2023, upward and downward adjustments on these securities were not material.

During the three and nine months ended September 30, 2022, downward adjustments on these securities were $ 55 million and $ 64 million, respectively, and upward adjustments for these periods were not material.

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 $ 536 million and $ 494 million as of March 31, 2024 and December 31, 2023, respectively, which are included in Other noncurrent assets in the Condensed Consolidated Balance Sheets.

During the three months ended March 31, 2024 and 2023, net unrealized gains on these publicly traded securities were $ 50 million and $ 5 million, respectively.

Realized gains and losses on sales of publicly traded securities for the three months ended March 31, 2024 and 2023, were not material.

We held investments of $ 333 million and $ 309 million in equity securities without readily determinable fair values as of March 31, 2024 and December 31, 2023, respectively, which are included in Other noncurrent assets in the Condensed Consolidated Balance Sheets.

During the three months ended March 31, 2024 and 2023, upward and downward adjustments on these securities were not material.

Adjustments were based on observable price transactions.

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Neumora Therapeutics, Inc.

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 Condensed Consolidated Balance Sheets, in exchange for a $ 100 million cash payment and $ 157 million in noncash consideration primarily related to future services.

During the three months ended September 30, 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 our Condensed Consolidated Statements of Income each reporting period.

As of March 31, 2024 and December 31, 2023, our ownership interests in Neumora were approximately 22.3 % and 23.2 %, respectively, and the fair values of our investment were $ 486 million and $ 603 million, respectively.

During the three months ended March 31, 2024 and 2023, we recognized net losses of $ 117 million and $ 47 million, respectively.

Although our equity investment 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 (expense) income, net, in our Condensed Consolidated Statements of (Loss) Income each reporting period.

See Note 11, Fair value measurement.

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

As of September 30, 2023 and December 31, 2022, our ownership interests in Neumora were approximately 23.2 % and 24.9 %, respectively, and the fair values of our investment were $ 499 million and $ 335 million, respectively.

During the three months ended September 30, 2023 and 2022, we recognized gains of $ 153 million and $ 240 million, respectively, and during the nine months ended September 30, 2023 and 2022, we recognized gains of $ 134 million and $ 152 million, respectively.

For information on determination of fair values, see Note 12, Fair value measurement.

We are contractually restricted from selling more than 5.0 % of Neumora’s outstanding common stock in any rolling 12-month period for as long as we hold at least 10.0 % of their outstanding common stock, subject to certain exceptions or otherwise agreed to by Neumora.

Limited partnerships

We held limited partnership investments of $ 238 million and $ 249 million as of September 30, 2023 and December 31, 2022, respectively, which are included in Other noncurrent assets in the Condensed Consolidated Balance Sheets.

We held limited partnership investments of $ 278 million and $ 251 million as of March 31, 2024 and December 31, 2023, respectively, which are included in Other noncurrent assets in the Condensed Consolidated Balance Sheets.

These investments, primarily investment funds of early-stage biotechnology companies, are accounted for by using the equity method of accounting and are measured by using our proportionate share of the net asset values of the underlying investments held by the limited partnerships as a practical expedient.

These investments are typically redeemable only through distributions upon liquidation of the underlying assets.

As of September 30, 2023, unfunded additional commitments to be made for these investments during the next several years amounted to $ 138 million.

For the three months ended September 30, 2023 and 2022, net unrealized gains and losses from our limited partnership investments were an unrealized gain of $ 14 million and an unrealized loss of $ 62 million, respectively.

For the nine months ended September 30, 2023 and 2022, net unrealized gains and losses from our limited partnership investments were an unrealized gain of $ 5 million and an unrealized loss of $ 282 million, respectively.

As of March 31, 2024, unfunded additional commitments to be made for these investments during the next several years amounted to $ 164 million.

For the three months ended March 31, 2024 and 2023, net unrealized gains from our limited partnership investments were $ 27 million and $ 20 million, respectively, recorded in Other (expense) income, net, in our Condensed Consolidated Statements of (Loss) Income.

Inventories consisted of the following (in millions):

September 30, 2023 December 31, 2022

March 31, 2024 December 31, 2023

Raw materials $ 928 $ 993

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The change in the carrying amount of goodwill was as follows (in millions):

Nine months ended

September 30, 2023

Three months ended

March 31, 2024

Beginning balance $ 18,629

Adjustments to goodwill resulting from acquisitions and divestitures, net ( 22 )

Adjustments to goodwill resulting from acquisitions (1)

Currency translation adjustment ( 10 )

Ending balance $ 18,570

(1) For the three months ended March 31, 2024, adjustments to goodwill consisted of a measurement period adjustment related to our Horizon acquisition.

See Note 2, Acquisitions.

Other intangible assets

Other intangible assets consisted of the following (in millions):

September 30, 2023 December 31, 2022

March 31, 2024 December 31, 2023

amounts Accumulated

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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 three months ended September 30, 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 Condensed Consolidated Statements of Income and included in Other items, net, in the Condensed Consolidated Statements of Cash Flows.

See Note 12, Fair value measurement, for the impact on the related contingent consideration liability.

During the three months ended September 30, 2023 and 2022, we recognized amortization associated with our finite-lived intangible assets of $ 693 million and $ 628 million, respectively.

During the nine months ended September 30, 2023 and 2022, we recognized amortization associated with our finite-lived intangible assets of $ 2.1 billion and $ 1.9 billion, respectively.

Amortization of intangible assets is primarily included in Cost of sales in the Condensed Consolidated Statements of Income.

As of September 30, 2023, the total estimated amortization of our finite-lived intangible assets for the remaining three months ending December 31, 2023, and the years ending December 31, 2024, 2025, 2026, 2027 and 2028, are $ 0.7 billion, $ 2.7 billion, $ 2.5 billion, $ 2.1 billion, $ 2.1 billion and $ 1.1 billion, respectively.

During the three months ended March 31, 2024 and 2023, we recognized amortization associated with our finite-lived intangible assets of $ 1.2 billion and $ 693 million, respectively.

Amortization of intangible assets is primarily included in Cost of sales in the Condensed Consolidated Statements of (Loss) Income.

As of March 31, 2024, the total estimated amortization of our finite-lived intangible assets for the remaining nine months ending December 31, 2024, and the years ending December 31, 2025, 2026, 2027, 2028 and 2029, are $ 3.6 billion, $ 4.5 billion, $ 3.9 billion, $ 3.9 billion, $ 2.9 billion and $ 2.2 billion, respectively.

Financing arrangements

Our borrowings consisted of the following (in millions):

September 30, 2023 December 31, 2022

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

2.25 % notes due 2023 ( 2.25 % 2023 Notes)

March 31, 2024 December 31, 2023

3.625 % notes due 2024 ( 3.625 % 2024 Notes)

$ 1,400 $ 1,400

1.90 % notes due 2025 ( 1.90 % 2025 Notes)

5.25 % notes due 2025 ( 5.25 % 2025 Notes)

Term loan due April 2025 2,000 2,000

3.125 % notes due 2025 ( 3.125 % 2025 Notes)

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2.60 % notes due 2026 ( 2.60 % 2026 Notes)

Term loan due October 2026 2,000 2,000

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

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4.40 % notes due 2062 ( 4.40 % 2062 Notes)

September 30, 2023 December 31, 2022

March 31, 2024 December 31, 2023

5.75 % notes due 2063 ( 5.75 % 2063 Notes)

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There are no material differences between the effective interest rates and coupon rates of any of our borrowings, except for the 4.563 % 2048 Notes, the 4.663 % 2051 Notes and the 2.77 % 2053 Notes, which have effective interest rates of 6.3 %, 5.6 % and 5.2 %, respectively.

Debt issuances and acquisition-related financing

During the three months ended March 31, 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 the event of a change-in-control triggering event, as defined by the terms of the notes, we may be required to purchase all or a portion of these notes at a price equal to 101 % of the principal amount of the notes plus accrued and unpaid interest.

In addition, these notes may be redeemed at any time at our option, in whole or in part, at the principal amount of the notes being redeemed plus accrued and unpaid interest and a make-whole amount, which are defined by the terms of the notes.

Except with respect to the 5.25 % 2025 Notes, the notes may be redeemed without payment of make-whole amounts if redemption occurs during a specified period of time immediately prior to the maturing of the notes.

Such time periods range from two months 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.

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 three months ended March 31, 2023, we recognized $ 98 million of financing cost associated with the bridge credit agreement, primarily in Other income (expense), net, in the Condensed 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.

No amounts under this agreement were outstanding as of September 30, 2023 and December 31, 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.

The Term loans have an interest rate of three-month SOFR plus 1.225 %.

Debt extinguishment

During the nine months ended September 30, 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 $ 550 million, which resulted in the recognition of a $ 182 million gain on extinguishment of debt recorded in Other income (expense), net, in the Condensed Consolidated Statements of Income.

Debt repayments

During the nine months ended September 30, 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.

Shelf registration statement and other facilities

In February 2023, we filed a shelf registration statement with the SEC that allows us to issue unspecified amounts of debt securities;

common stock;

preferred stock;

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

rights to purchase common stock or preferred stock;

securities purchase contracts;

securities purchase units;

and depositary shares.

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

This shelf registration statement expires in February 2026.

During the three months ended March 31, 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 .

This term may be extended for up to two additional one-year periods with the agreement of the banks.

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

Generally, we would be charged interest for any amounts borrowed under this facility, based on our current credit rating, at (i) 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 September 30, 2023 and December 31, 2022, no amounts were outstanding under this facility.

During the three months ended March 31, 2024, we repurchased portions of the 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 $ 410 million, which resulted in the recognition of a $ 133 million gain on extinguishment of debt recorded in Other (expense) income, net, in the Condensed Consolidated Statements of (Loss) Income.

Stockholders’ equity

Stock repurchase program

Activity under our stock repurchase program, on a trade date basis, was as follows (in millions):

Shares Dollars Shares Dollars

First quarter — $ — 24.6 $ 5,410

Second quarter — — — —

Third quarter — — 1.5 900

Total stock repurchases — $ — 26.1 $ 6,310

As of September 30, 2023, $ 7.0 billion of authorization remained available under our stock repurchase program.

In August 2023, March 2023 and December 2022, our Board of Directors declared quarterly cash dividends of $ 2.13 per share, which were paid in September 2023, June 2023 and March 2023, respectively.

In October 2023, our Board of Directors declared a quarterly cash dividend of $ 2.13 per share that will be paid in December 2023.

During the three months ended March 31, 2024 and 2023, we did not repurchase shares under our stock repurchase program.

As of March 31, 2024, $ 7.0 billion of authorization remained available under our stock repurchase program.

In March 2024, the Board of Directors declared a quarterly cash dividend of $ 2.25 per share, which will be paid in June 2024.

In December 2023, the Board of Directors declared a quarterly cash dividend of $ 2.25 per share, which was paid in March 2024.

Accumulated other comprehensive income (loss)

4 unchanged sentences

Foreign currency translation adjustments ( 24 ) — — ( 24 )

Unrealized losses — ( 71 ) — ( 71 )

Reclassification adjustments to income — ( 30 ) — ( 30 )

Other — — 21 21

Income taxes — 15 — 15

Balance as of March 31, 2023

( 320 ) 42 10 ( 268 )

Foreign currency translation adjustments 11 — — 11

Unrealized gains — 178 — 178

2 unchanged sentences

Income taxes — ( 32 ) — ( 32 )

Balance as of June 30, 2023

( 309 ) 20 9 ( 280 )

Foreign currency translation adjustments ( 44 ) — — ( 44 )

Unrealized gains — 177 — 177

Reclassification adjustments to income — 53 — 53

Other — — 17 17

Income taxes — ( 49 ) — ( 49 )

Balance as of September 30, 2023

Balance as of March 31, 2024

$ ( 322 ) $ 104 $ 28 $ ( 190 )

Reclassifications out of AOCI and into earnings, including related income tax expenses, were as follows (in millions):

Three months ended September 30,

Components of AOCI 2023 2022 Condensed Consolidated

Statements of Income locations

Cash flow hedges:

Foreign currency contract gains $ 33 $ 69 Product sales

Cross-currency swap contract losses ( 86 ) ( 198 ) Other income (expense), net

( 53 ) ( 129 ) Income before income taxes

11 28 Provision for income taxes

$ ( 42 ) $ ( 101 ) Net income

Nine months ended September 30,

Three months ended March 31,

Components of AOCI 2024 2023 Condensed Consolidated

Statements of Income locations

Statements of (Loss) Income locations

Cash flow hedges:

Foreign currency contract gains $ 51 $ 52 Product sales

Cross-currency swap contract losses ( 57 ) ( 461 ) Other income (expense), net

64 ( 312 ) Income before income taxes

Cross-currency swap contract losses ( 31 ) ( 22 ) Other (expense) income, net

20 30 (Loss) income before income taxes

( 4 ) ( 6 ) Provision for income taxes

$ 50 $ ( 245 ) Net income

$ 16 $ 24 Net (loss) income

Fair value measurement

17 unchanged sentences

(Level 2) Significant

Fair value measurement as of September 30, 2023, using:

Fair value measurement as of March 31, 2024, using:

Available-for-sale securities:

Treasury bills $ — $ — $ — $ —

Money market mutual funds $ 9,099 $ — $ — $ 9,099

Other investments — 136 — 136

Other short-term interest-bearing securities — 138 — 138

Equity securities 3,985 — — 3,985

Foreign currency forward contracts — 225 — 225

Cross-currency swap contracts — — — —

Total assets $ 13,084 $ 363 $ — $ 13,447

2 unchanged sentences

Interest rate swap contracts — 600 — 600

Forward interest rate contracts — — — —

Contingent consideration obligations

8 unchanged sentences

Available-for-sale securities:

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

Money market mutual funds $ 10,266 $ — $ — $ 10,266

Other investments — 130 — 130

Other short-term interest-bearing securities — 138 — 138

Equity securities 4,514 — — 4,514

Foreign currency forward contracts — 145 — 145

Cross-currency swap contracts — 54 — 54

Total assets $ 14,780 $ 283 $ — $ 15,063

2 unchanged sentences

Interest rate swap contracts — 571 — 571

Forward interest rate contracts — 5 — 5

Contingent consideration obligations

1 unchanged sentence

Interest-bearing and equity securities

The fair values of our U.S.

Treasury securities, money market mutual funds and equity investments in publicly traded securities, including our equity investments in BeiGene and Neumora, as of September 30, 2023, 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.

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 three months ended September 30, 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 September 30, 2023.

See Note 7, 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 7, Investments— BeiGene, Ltd.

The fair values of our money market mutual funds and equity investments in publicly traded securities, including our equity investments in BeiGene and Neumora, as of March 31, 2024 and December 31, 2023, are based on quoted market prices in active markets, with no valuation adjustment.

All of 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, SOFR, swap rates, obligor credit default swap rates and cross-currency basis swap spreads.

These inputs, as applicable, include foreign currency exchange rates, 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 12, Derivative instruments.

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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 Condensed Consolidated Statements of Income.

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

Changes in the carrying amounts of contingent consideration obligations were as follows (in millions):

Three months ended

September 30, Nine months ended

September 30,

2023 2022 2023 2022

Beginning balance $ 96 $ 270

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Ending balance $ 96 $ 273

As of September 30, 2023 and December 31, 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.

During the three months ended September 30, 2023, the development of AMG 340 was terminated, resulting in a decrease of the related contingent consideration liability.

The remeasurement of this liability of $ 147 million was recognized in Other operating expenses in the Condensed Consolidated Statements of Income and included in Other items, net, in the Condensed Consolidated Statements of Cash Flows.

See Note 9, Goodwill and other intangible assets, for the impact on the related IPR&D asset.

The remaining contingent consideration liability as of September 30, 2023, primarily relates to potential development and regulatory milestones for R&D programs acquired via the Teneobio acquisition that we continue to pursue.

As of March 31, 2024 and December 31, 2023, our contingent consideration obligations are primarily the result of our acquisition of Teneobio, Inc.

in October 2021, which obligates us to pay the former shareholders payments upon achieving separate development and regulatory milestones with regard to various R&D programs.

Summary of the fair values of other financial instruments

Cash equivalents

The fair values of cash equivalents approximate their carrying values due to the short-term nature of such financial instruments.

The fair values of cash equivalents are approximated at their carrying values due to the short-term nature of such financial instruments.

We estimated the fair values of our borrowings by using Level 2 inputs.

As of September 30, 2023 and December 31, 2022, the aggregate fair values of our borrowings were $ 56.4 billion and $ 35.0 billion, respectively, and the carrying values were $ 60.5 billion and $ 38.9 billion, respectively.

During the nine months ended September 30, 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 discussed in Note 9, 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.

As of March 31, 2024 and December 31, 2023, the aggregate fair values of our borrowings were $ 57.8 billion and $ 59.2 billion, respectively, and the carrying values were $ 64.0 billion and $ 64.6 billion, respectively.

During the three months ended March 31, 2024 and 2023, 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.

Derivative instruments

9 unchanged sentences

and at any given point in time, a higher percentage of nearer-term projected product sales is being hedged than in successive periods.

As of September 30, 2023 and December 31, 2022, we had outstanding foreign currency forward contracts with aggregate notional amounts of $ 6.3 billion and $ 6.0 billion, respectively.

As of both March 31, 2024 and December 31, 2023, we had outstanding foreign currency forward contracts with aggregate notional amounts of $ 6.6 billion.

We have designated these foreign currency forward contracts, which are primarily euro based, as cash flow hedges.

Accordingly, we report the unrealized gains and losses on these contracts in AOCI in the Condensed Consolidated Balance Sheets, and we reclassify them to Product sales in the Condensed Consolidated Statements of Income in the same periods during which the hedged transactions affect earnings.

Accordingly, we report the unrealized gains and losses on these contracts in AOCI in the Condensed Consolidated Balance Sheets, and we reclassify them to Product sales in the Condensed Consolidated Statements of (Loss) Income in the same periods during which the hedged transactions affect earnings.

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

Under the terms of such contracts, we paid euros, pounds sterling and Swiss francs and received U.S.

Under the terms of such contracts, we paid euros and pounds sterling and received U.S.

dollars for the notional amounts at the inception of the contracts;

and based on these notional amounts, we exchange interest payments at fixed rates over the lives of the contracts by paying U.S.

dollars and receiving euros, pounds sterling and Swiss francs.

dollars and receiving euros and pounds sterling.

In addition, we will pay U.S.

dollars to and receive euros, pounds sterling and Swiss francs from the counterparties at the maturities of the contracts for these same notional amounts.

The terms of these contracts correspond to the related hedged debt, thereby effectively converting the interest payments and principal repayment on the debt from euros, pounds sterling and Swiss francs to U.S.

dollars to and receive euros and pounds sterling from the counterparties at the maturities of the contracts for these same notional amounts.

The terms of these contracts correspond to the related hedged debt, thereby effectively converting the interest payments and principal repayment on the debt from euros and pounds sterling to U.S.

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 Condensed Consolidated Balance Sheets and reclassified to Other income (expense), net, in the Condensed 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 September 30, 2023, were as follows (notional amounts in millions):

Accordingly, the unrealized gains and losses on these contracts are reported in AOCI in the Condensed Consolidated Balance Sheets and reclassified to Other (expense) income, net, in the Condensed Consolidated Statements of (Loss) 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 March 31, 2024, were as follows (notional amounts in millions):

Foreign currency U.S.

6 unchanged sentences

£ 700 4.0 % $ 1,111 4.6 %

During the three months ended March 31, 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.

Treasury rate between the time we enter into these contracts and the time the related debt is issued.

Gains and losses on forward interest rate contracts, which are designated as cash flow hedges, are recognized in AOCI i n the Condensed Consolidated Balance Sheets and are amortized into Interest expense, net, in the Condensed Consolidated Statements of Income over the lives of the associated debt issuances.

Amounts recognized in connection with forward interest rate contracts during the nine months ended September 30, 2023, and amounts expected to be recognized during the subsequent 12 months are not material.

Ga ins and losses on forward interest rate contracts, which are designated as cash flow hedges, are recognized in AOCI i n the Condensed Consolidated Balance Sheets and are amortized into Interest expense, net, in the Condensed Consolidated Statements of (Loss) Income over the lives of the associated debt issuances.

Amounts recognized in connection with forward interest rate contracts during the three months ended March 31, 2024, and amounts expected to be recognized during the subsequent 12 months are not material.

Gains and losses recognized in AOCI for our derivative instruments designated as cash flow hedges were as follows (in millions):

Three months ended

September 30, Nine months ended

September 30,

Derivatives in cash flow hedging relationships 2024 2023

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Forward interest rate contracts — ( 31 )

Total unrealized gains $ 176 $ 45 $ 155 $ 168

Total unrealized gains (losses) $ 178 $ ( 71 )

Fair value hedges

1 unchanged sentence

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

As of both September 30, 2023 and December 31, 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.

For interest rate swap contracts that qualify for and are designated as fair value hedges, we recognize in Interest expense, net, in the Condensed Consolidated Statements of Income the unrealized gain or loss on the derivative resulting from the change in fair value during the period, as well as the offsetting unrealized loss or gain of the hedged item resulting from the change in fair value during the period attributable to the hedged risk.

As of both March 31, 2024 and December 31, 2023, we had interest rate swap contracts with aggregate notional amounts of $ 6.7 billion that hedge certain portions of our long-term debt issuances.

For interest rate swap contracts that qualify for and are designated as fair value hedges, we recognize in Interest expense, net, in the Condensed Consolidated Statements of (Loss) Income the unrealized gain or loss on the derivative resulting from the change in fair value during the period, as well as the offsetting unrealized loss or gain of the hedged item resulting from the change in fair value during the period attributable to the hedged risk.

If a hedging relationship involving an interest rate swap contract is terminated, the gain or loss realized on contract termination is recorded as an adjustment to the carrying value of the debt and amortized into Interest expense, net, over the remaining life of the previously hedged debt.

2 unchanged sentences

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

Condensed Consolidated Balance Sheets locations September 30, 2023 December 31, 2022 September 30, 2023 December 31, 2022

Condensed Consolidated Balance Sheets locations March 31, 2024 December 31, 2023 March 31, 2024 December 31, 2023

Current portion of long-term debt $ 1,454 $ 1,441 $ 54 $ 41

Long-term debt $ 4,728 $ 4,788 $ ( 417 ) $ ( 355 )

(1) Current portion of long-term debt includes $ 75 million and $ 82 million of carrying value with discontinued hedging relationships as of September 30, 2023 and December 31, 2022, respectively.

Long-term debt includes $ 303 million and $ 357 million of carrying value with discontinued hedging relationships as of September 30, 2023 and December 31, 2022, respectively.

(2) Current portion of long-term debt includes $ 75 million and $ 82 million of hedging adjustments on discontinued hedging relationships as of September 30, 2023 and December 31, 2022, respectively.

Long-term debt includes $ 203 million and $ 257 million of hedging adjustments on discontinued hedging relationships as of September 30, 2023 and December 31, 2022, respectively.

(1) Current portion of long-term debt includes $ 64 million and $ 69 million of carrying value with discontinued hedging relationships as of March 31, 2024 and December 31, 2023, respectively.

Long-term debt includes $ 273 million and $ 288 million of carrying value with discontinued hedging relationships as of March 31, 2024 and December 31, 2023, respectively.

(2) Current portion of long-term debt includes $ 64 million and $ 69 million of hedging adjustments on discontinued hedging relationships as of March 31, 2024 and December 31, 2023, respectively.

Long-term debt includes $ 173 million and $ 188 million of hedging adjustments on discontinued hedging relationships as of March 31, 2024 and December 31, 2023, respectively.

Impact of hedging transactions

The following tables summarize the amounts recorded in income and expense line items and the effects thereon from fair value and cash flow hedging, including discontinued hedging relationships (in millions):

Three months ended September 30, 2023 Nine months ended September 30, 2023

Product sales Other income (expense), 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 Condensed Consolidated Statements of Income $ 6,548 $ 685 $ ( 759 ) $ 19,077 $ 2,431 $ ( 2,054 )

Three months ended March 31, 2024

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

Total amounts recorded in income and (expense) line items presented in the Condensed Consolidated Statements of (Loss) Income

$ 7,118 $ ( 235 ) $ ( 824 )

The effects of cash flow and fair value hedging:

4 unchanged sentences

Hedged items (1)

$ — $ — $ 58 $ — $ — $ 63

Derivatives designated as hedging instruments $ — $ — $ ( 28 )

Three months ended September 30, 2022 Nine months ended September 30, 2022

Product sales Other income (expense), 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 Condensed Consolidated Statements of Income $ 6,237 $ 100 $ ( 368 ) $ 18,249 $ ( 747 ) $ ( 991 )

Three months ended March 31, 2023

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

Total amounts recorded in income and (expense) line items presented in the Condensed Consolidated Statements of (Loss) Income

$ 5,846 $ 2,064 $ ( 543 )

The effects of cash flow and fair value hedging:

2 unchanged sentences

Cross-currency swap contracts $ — $ ( 22 ) $ —

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)

3 unchanged sentences

No portions of our cash flow hedge contracts were excluded from the assessment of hedge effectiveness.

As of September 30, 2023, we expected to reclassify $ 200 million of net gains on our foreign currency and cross-currency swap contracts out of AOCI and into earnings during the next 12 months.

As of March 31, 2024, we expected to reclassify $ 97 million of net gains on our foreign currency and cross-currency swap contracts out of AOCI and into earnings during the next 12 months.

Derivatives not designated as hedges

1 unchanged sentence

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

As of September 30, 2023 and December 31, 2022, the total notional amounts of these foreign currency forward contracts were $ 521 million and $ 517 million, respectively.

Gains and losses recognized in earnings for our derivative instruments not designated as hedging instruments were not material for the three and nine months ended September 30, 2023 and 2022.

As of March 31, 2024 and December 31, 2023, the total notional amounts of these foreign currency forward contracts were $ 300 million and $ 457 million, respectively.

Gains and losses recognized in earnings for our derivative instruments not designated as hedging instruments were not material for the three months ended March 31, 2024 and 2023.

Fair values of derivatives

1 unchanged sentence

Derivative assets Derivative liabilities

September 30, 2023 Condensed Consolidated

March 31, 2024 Condensed Consolidated

Balance Sheets locations Fair values Condensed Consolidated

20 unchanged sentences

For additional information, see Note 11, Fair value measurement.

Our derivative contracts that were in liability positions as of September 30, 2023, contain certain credit-risk-related contingent provisions that would be triggered if (i) we were to undergo a change-in-control and (ii) our or the surviving entity’s creditworthiness deteriorates, which is generally defined as having either a credit rating that is below investment grade or a materially weaker creditworthiness after the change-in-control.

Our derivative contracts that were in liability positions as of March 31, 2024, contain certain credit-risk-related contingent provisions that would be triggered if (i) we were to undergo a change-in-control and (ii) our or the surviving entity’s creditworthiness deteriorates, which is generally defined as having either a credit rating that is below investment grade or a materially weaker creditworthiness after the change-in-control.

If these events were to occur, the counterparties would have the right, but not the obligation, to close the contracts under early-termination provisions.

1 unchanged sentence

In addition, our derivative contracts are not subject to any type of master netting arrangement, and amounts due either to or from a counterparty under the contracts may be offset against other amounts due either to or from the same counterparty only if an event of default or termination, as defined, were to occur.

The cash flow effects of our derivative contracts in the Condensed Consolidated Statements of Cash Flows are included in Net cash provided by operating activities, except for the settlement of notional amounts of cross-currency swaps, which are included in Net cash provided by (used in) financing activities.

Contingencies and commitments

5 unchanged sentences

and in Note 20, Contingencies and commitments, to the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2023.

and in Note 14, Contingencies and commitments, to the condensed consolidated financial statements in our Quarterly Reports on Form 10-Q for the periods ended March 31, 2023 and June 30, 2023.

We record accruals for loss contingencies to the extent that we conclude it is probable that a liability has been incurred and the amount of the related loss can be reasonably estimated.

2 unchanged sentences

In each of the matters described in this filing;

and in Note 19, Contingencies and commitments, to the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2022;

and in Note 14, Contingencies and commitments, to the condensed consolidated financial statements in our Quarterly Reports on Form 10-Q for the periods ended March 31, 2023 and June 30, 2023, in which we could incur a liability, our opponents seek an award of a not-yet-quantified amount of damages or an amount that is not material.

and in Note 20, Contingencies and commitments, to the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2023, in which we could incur a liability, our opponents seek an award of a not-yet-quantified amount of damages or an amount that is not material.

In addition, a number of the matters pending against us are at very early stages of the legal process, which in complex proceedings of the sort we face often extend for several years.

As a result, none of the matters described in this filing;

and in Note 19, Contingencies and commitments, to the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2022;

and in Note 14, Contingencies and commitments, to the condensed consolidated financial statements in our Quarterly Reports on Form 10-Q for the periods ended March 31, 2023 and June 30, 2023, in which we could incur a liability, have progressed sufficiently through discovery and/or the development of important factual information and legal issues to enable us to estimate a range of possible loss, if any, or such amounts are not material.

and in Note 20, Contingencies and commitments, to the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2023, in which we could incur a liability, have progressed sufficiently through discovery and/or the development of important factual information and legal issues to enable us to estimate a range of possible loss, if any, or such amounts are not material.

While it is not possible to accurately predict or determine the eventual outcomes of these matters, an adverse determination in one or more of these matters currently pending could have a material adverse effect on our consolidated results of operations, financial position or cash flows.

2 unchanged sentences

Patent Disputes in the International Region

On December 6, 2023, oral proceedings will commence before the Technical Board of Appeal of the European Patent Office in the appeal from Amgen’s opposition to European Patent No.

In Amgen’s lawsuit before the Unitary Patent Court against Sanofi-Aventis Deutschland GmbH, Sanofi-Aventis Groupe S.A., Sanofi Winthrop Industrie S.A.

(collectively, Sanofi) and Regeneron Pharmaceuticals, Inc.

(Regeneron), on August 25, 2023, the Central Division of the Unitary Patent Court in Germany rejected Amgen’s objections to the admissibility of Sanofi’s revocation action against Amgen’s European Patent No.

Accordingly, Amgen filed its Statement of Defense on September 12, 2023.

On September 15, 2023, the Japanese Supreme Court declined to hear Amgen’s appeal from the decision of the Japanese High Court finding Amgen’s patent claims invalid for lacking adequate support.

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

In Amgen’s lawsuit for patent infringement damages against Sanofi K.K., on September 27, 2023, the Tokyo District Court found Amgen’s patent claims invalid and dismissed Amgen’s lawsuit for damages.

On February 29, 2024, in Amgen’s Nullity Action before the German Federal Patent Court seeking invalidation of Regeneron Pharmaceuticals, Inc.’s (Regeneron) European Patent No.

2,756,004 (the EP’004 Patent), the Federal Patent Court issued a preliminary opinion that the EP’004 Patent is likely to be invalid and scheduled the main hearing for November 25, 2025.

European Patent Office

On November 16, 2023 and February 29, 2024, Sanofi-Aventis and Regeneron each filed a notice of opposition against Amgen’s European Patent No.

3,666,797 before the European Patent Office’s Opposition Division.

On February 29, 2024, Amgen filed a Notice of Opposition and Grounds of Opposition before the European Patent Office against Regeneron’s European Patent No.

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

Sandoz Inc., et al.

On August 23, 2023, the U.S.

District Court for the District of New Jersey (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.

Antitrust Actions

On April 29, 2024, the U.S.

District Court for the District of New Jersey (the New Jersey District Court) entered judgment in the lawsuit pending against Sandoz Inc.

based on Sandoz’s submission to the FDA of a Biologics License Application seeking approval to market and sell a biosimilar version of Amgen’s Prolia and XGEVA products (“Sandoz’s biosimilar denosumab products”).

The complaint asserted infringement of patents listed in the FDA’s Purple Book for Amgen’s Prolia and XGEVA products.

A preliminary injunction hearing, held between October 30 and December 21, 2023, focused on a composition of matter patent U.S.

7,364,736 (the ‘736 Patent) and two manufacturing patents.

The judgment entered by the New Jersey District Court found the asserted claims of Amgen’s ‘736 Patent valid, enforceable and infringed by Sandoz’s biosimilar denosumab products and included an injunction prohibiting Sandoz and third parties acting on behalf of or in active concert with Sandoz from making, using, selling, or offering to sell in the United States or importing into the United States Sandoz’s biosimilar denosumab products before the expiry of the ’736 Patent on February 19, 2025, except as specifically authorized by a confidential settlement agreement.

As a result of the settlement, the parties’ remaining claims and counterclaims related to the other asserted patents were dismissed with prejudice and Sandoz is permitted to launch the Sandoz biosimilar denosumab products in the United States on May 31, 2025, unless accelerated pursuant to the terms of a confidential settlement agreement, and subject to confidential financial terms stated therein.

ABP 938 (aflibercept) Patent Litigation

On April 11, 2024, the Judicial Panel on Multidistrict Litigation granted Regeneron’s motion to transfer Regeneron’s patent infringement lawsuit pending against Amgen in the U.S.

District Court for the Central District of California to the U.S.

District Court for the Northern District of West Virginia for coordinated and consolidated pretrial proceedings.

Antitrust Class Action

Sensipar Antitrust Class Actions

On October 17, 2023, Amgen submitted its initial brief in its appeal before the U.S.

Court of Appeals for the Third Circuit.

Regeneron Pharmaceuticals, Inc.

Antitrust Action

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.

On February 17, 2024, Amgen and the indirect purchasers filed a stipulation in the U.S.

District Court for the District of Delaware (the Delaware District Court) to dismiss the indirect purchasers’ claims.

On February 22, 2024, Amgen and the indirect purchasers filed a stipulation in the U.S.

Court of Appeals for the Third Circuit (the Third Circuit Court) dismissing the portion of the Third Circuit Court’s appeal relating to the claims of the indirect purchasers.

Amgen and the direct purchasers filed a stipulation on April 12, 2024 in the Delaware District Court, dismissing with prejudice the direct purchasers’ claims that were at issue in the appeal and seeking entry of final judgment in Amgen’s favor.

On April 15, 2024, the Delaware District Court entered an order pursuant to the stipulation and closed the case.

The direct purchasers retain a right to appeal the claims that were dismissed by the Delaware District Court on March 11, 2022.

Tax Litigation and Related Matters

2 unchanged sentences

See Note 4, Income taxes, for discussion of the IRS tax dispute and the Company’s petitions in the U.S.

Securities Class Action Litigation

On August 31, 2023, plaintiff filed an amended complaint.

Amgen’s motion to dismiss is due November 6, 2023.

Shareholder Derivative Litigation

On October 2, 2023, the U.S.

District Court for the Southern District 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.

ChemoCentryx, Inc.

Securities Class Action Litigation

The due date for our subsidiary ChemoCentryx to file its opposition to class certification is November 22, 2023.

FTC Litigation re the Horizon Therapeutics plc Acquisition

On September 1, 2023, the FTC, the six state plaintiffs and Amgen announced that they entered into a consent agreement that resolved the matter, and both the federal litigation and the FTC administrative case were dismissed.

Securities Matters

On March 6, 2024, the U.S.

District Court for the Northern District of California certified a class of all persons who purchased or otherwise acquired the common stock of ChemoCentryx between November 26, 2019 and May 6, 2021.

Trial is scheduled to begin on September 22, 2025.

On March 20, 2024, ChemoCentryx filed a petition with the U.S.

Court of Appeals for the Ninth Circuit, seeking permission to have the district court’s order on class certification heard on appeal.

The lead plaintiff’s response to ChemoCentryx’s petition was submitted on April 2, 2024.

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-Q

Item 1. Financial Statements