UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2019March 31, 2020
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number: 001-37702
Amgen Inc.
(Exact name of registrant as specified in its charter)
Delaware 95-3540776
(State or other jurisdiction of
incorporation or organization)
 
(I.R.S. Employer
Identification No.)
  
One Amgen Center Drive 91320-1799
Thousand Oaks 
California 
(Address of principal executive offices) (Zip Code)
(805) 447-1000
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common stock, $0.0001 par valueAMGNThe NASDAQ Global Select Market
1.250% Senior Notes Due 2022AMGN22New York Stock Exchange
2.00% Senior Notes Due 2026AMGN26New York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or Section 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  No 
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes  No 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filerNon-accelerated filer
Smaller reporting companyEmerging growth company  
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
No 

As of October 23, 2019,April 27, 2020, the registrant had 594,183,541588,247,399 shares of common stock, $0.0001 par value, outstanding.



AMGEN INC.
INDEX
  Page No.
Item 1.
 
 
 
 
 
 
Item 2.
Item 3.
Item 4.
Item 1.
Item 1A.
Item 2.
Item 6.

i


PART I — FINANCIAL INFORMATION 
Item 1.FINANCIAL STATEMENTS
AMGEN INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In millions, except per-share data)
(Unaudited)

Three months ended
September 30,
 Nine months ended
September 30,
Three months ended
March 31,
2019 2018 2019 20182020 2019
Revenues:          
Product sales$5,463
 $5,510
 $16,323
 $16,532
$5,894
 $5,286
Other revenues274
 394
 842
 985
267
 271
Total revenues5,737
 5,904
 17,165
 17,517
6,161
 5,557
          
Operating expenses:          
Cost of sales1,036
 1,037
 3,103
 3,005
1,513
 1,055
Research and development1,001
 926
 2,804
 2,555
952
 879
Selling, general and administrative1,223
 1,293
 3,637
 3,773
1,316
 1,154
Other1
 325
 (5) 303
25
 (3)
Total operating expenses3,261
 3,581
 9,539
 9,636
3,806
 3,085
          
Operating income2,476
 2,323
 7,626
 7,881
2,355
 2,472
          
Interest expense, net313
 355
 988
 1,040
346
 343
Interest and other income, net114
 126
 517
 519
11
 185
          
Income before income taxes2,277
 2,094
 7,155
 7,360
2,020
 2,314
          
Provision for income taxes309
 235
 1,016
 894
195
 322
          
Net income$1,968
 $1,859
 $6,139
 $6,466
$1,825
 $1,992
          
Earnings per share:          
Basic$3.29
 $2.88
 $10.08
 $9.67
$3.09
 $3.20
Diluted$3.27
 $2.86
 $10.01
 $9.61
$3.07
 $3.18
          
Shares used in calculation of earnings per share:          
Basic599
 645
 609
 669
590
 622
Diluted602
 649
 613
 673
594
 626

See accompanying notes.

AMGEN INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In millions)
(Unaudited)

Three months ended
September 30,
 Nine months ended
September 30,
Three months ended
March 31,
2019 2018 2019 20182020 2019
Net income$1,968
 $1,859
 $6,139
 $6,466
$1,825
 $1,992
Other comprehensive income (loss), net of reclassification adjustments and taxes:       
Other comprehensive (loss) income, net of reclassification adjustments and taxes:   
Losses on foreign currency translation(39) (71) (56) (153)(52) (13)
Gains on cash flow hedges86
 41
 27
 270
Gains (losses) on available-for-sale securities30
 97
 404
 (237)
(Losses) gains on cash flow hedges(61) 45
(Losses) gains on available-for-sale securities(19) 221
Other
 (3) 6
 (1)(2) 
Other comprehensive income (loss), net of taxes77
 64
 381
 (121)
Other comprehensive (loss) income, net of taxes(134) 253
Comprehensive income$2,045
 $1,923
 $6,520
 $6,345
$1,691
 $2,245

See accompanying notes.

AMGEN INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions, except per-share data)

September 30,
2019
 December 31,
2018
March 31,
2020
 December 31,
2019
(Unaudited)  (Unaudited)  
ASSETS
Current assets:      
Cash and cash equivalents$11,415
 $6,945
$7,687
 $6,037
Marketable securities9,438
 22,359
325
 2,874
Trade receivables, net3,606
 3,580
5,009
 4,057
Inventories3,243
 2,940
3,682
 3,584
Other current assets3,349
 1,794
2,110
 1,888
Total current assets31,051
 37,618
18,813
 18,440
      
Property, plant and equipment, net4,901
 4,958
4,879
 4,928
Intangible assets, net6,702
 7,443
18,653
 19,413
Goodwill14,705
 14,699
14,683
 14,703
Other assets2,176
 1,698
4,641
 2,223
Total assets$59,535
 $66,416
$61,669
 $59,707
      
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:      
Accounts payable$1,005
 $1,207
$1,338
 $1,371
Accrued liabilities7,683
 7,862
8,649
 8,511
Current portion of long-term debt2,049
 4,419
1,840
 2,953
Total current liabilities10,737
 13,488
11,827
 12,835
      
Long-term debt27,742
 29,510
30,008
 26,950
Long-term deferred tax liabilities665
 864
427
 606
Long-term tax liabilities7,921
 8,770
8,111
 8,037
Other noncurrent liabilities1,543
 1,284
1,811
 1,606
      
Contingencies and commitments

 


 

      
Stockholders’ equity:      
Common stock and additional paid-in capital; $0.0001 par value; 2,750.0 shares authorized; outstanding — 596.2 shares in 2019 and 629.6 shares in 201831,451
 31,246
Common stock and additional paid-in capital; $0.0001 par value; 2,750.0 shares authorized; outstanding — 588.0 shares in 2020 and 591.4 shares in 201931,525
 31,531
Accumulated deficit(20,136) (17,977)(21,378) (21,330)
Accumulated other comprehensive loss(388) (769)(662) (528)
Total stockholders’ equity10,927
 12,500
9,485
 9,673
Total liabilities and stockholders’ equity$59,535
 $66,416
$61,669
 $59,707

See accompanying notes.

AMGEN INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(In millions, except per-share data)
(Unaudited)

 
Number
of shares
of common
stock
 
Common
stock and
additional
paid-in capital
 
Accumulated
deficit
 
Accumulated
other
comprehensive
loss
 Total
Balance as of December 31, 2018629.6
 $31,246
 $(17,977) $(769) $12,500
Net income
 
 1,992
 
 1,992
Other comprehensive income, net of taxes
 
 
 253
 253
Dividends declared on common stock ($1.45 per share)
 
 (879) 
 (879)
Issuance of common stock in connection with the Company’s equity award programs0.7
 6
 
 
 6
Stock-based compensation expense
 64
 
 
 64
Tax impact related to employee stock-based compensation expense
 (73) 
 
 (73)
Repurchases of common stock(15.9) 
 (3,031) 
 (3,031)
Balance as of March 31, 2019614.4
 31,243
 (19,895) (516) 10,832
Net income
 
 2,179
 
 2,179
Other comprehensive income, net of taxes
 
 
 51
 51
Issuance of common stock in connection with the Company’s equity award programs0.8
 23
 
 
 23
Stock-based compensation expense
 97
 
 
 97
Tax impact related to employee stock-based compensation expense
 (50) 
 
 (50)
Repurchases of common stock(13.1) 
 (2,349) 
 (2,349)
Other
 
 11
 
 11
Balance as of June 30, 2019602.1
 31,313
 (20,054) (465) 10,794
Net income
 
 1,968
 
 1,968
Other comprehensive income, net of taxes
 
 
 77
 77
Dividends declared on common stock ($1.45 per share)
 
 (880) 
 (880)
Issuance of common stock in connection with the Company’s equity award programs0.3
 37
 
 
 37
Stock-based compensation expense
 108
 
 
 108
Tax impact related to employee stock-based compensation expense
 (7) 
 
 (7)
Repurchases of common stock(6.2) 
 (1,170) 
 (1,170)
Balance as of September 30, 2019596.2
 $31,451
 $(20,136) $(388) $10,927

See accompanying notes.




AMGEN INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(In millions, except per-share data)
(Unaudited)


 
Number
of shares
of common
stock
 
Common
stock and
additional
paid-in capital
 
Accumulated
deficit
 
Accumulated
other
comprehensive
loss
 Total
Balance as of December 31, 2019591.4
 $31,531
 $(21,330) $(528) $9,673
Cumulative effect of changes in accounting principles, net of tax
 
 (2) 
 (2)
Net income
 
 1,825
 
 1,825
Other comprehensive loss, net of taxes
 
 
 (134) (134)
Dividends declared on common stock ($1.60 per share)
 
 (938) 
 (938)
Issuance of common stock in connection with the Company’s equity award programs0.9
 10
 
 
 10
Stock-based compensation expense
 52
 
 
 52
Tax impact related to employee stock-based compensation expense
 (68) 
 
 (68)
Repurchases of common stock(4.3) 
 (933) 
 (933)
Balance as of March 31, 2020588.0
 $31,525
 $(21,378) $(662) $9,485
Number
of shares
of common
stock
 
Common
stock and
additional
paid-in capital
 
Accumulated
deficit
 
Accumulated
other
comprehensive
loss
 Total
Number
of shares
of common
stock
 
Common
stock and
additional
paid-in capital
 
Accumulated
deficit
 
Accumulated
other
comprehensive
loss
 Total
Balance as of December 31, 2017722.2
 $30,992
 $(5,072) $(679) $25,241
Cumulative effect of changes in accounting principles, net of taxes
 
 38
 (9) 29
Balance as of December 31, 2018629.6
 $31,246
 $(17,977) $(769) $12,500
Net income
 
 2,311
 
 2,311

 
 1,992
 
 1,992
Other comprehensive loss, net of taxes
 
 
 (306) (306)
Dividends declared on common stock ($1.32 per share)
 
 (877) 
 (877)
Other comprehensive income, net of taxes
 
 
 253
 253
Dividends declared on common stock ($1.45 per share)
 
 (879) 
 (879)
Issuance of common stock in connection with the Company’s equity award programs0.6
 5
 
 
 5
0.7
 6
 
 
 6
Stock-based compensation expense
 61
 
 
 61

 64
 
 
 64
Tax impact related to employee stock-based compensation expense
 (57) 
 
 (57)
 (73) 
 
 (73)
Repurchases of common stock(56.4) 
 (10,787) 
 (10,787)(15.9) 
 (3,031) 
 (3,031)
Balance as of March 31, 2018666.4
 31,001
 (14,387) (994) 15,620
Net income
 
 2,296
 
 2,296
Other comprehensive income, net of taxes
 
 
 121
 121
Issuance of common stock in connection with the Company’s equity award programs0.8
 19
 
 
 19
Stock-based compensation expense
 93
 
 
 93
Tax impact related to employee stock-based compensation expense
 (65) 
 
 (65)
Repurchases of common stock(18.2) 
 (3,190) 
 (3,190)
Other
 
 15
 
 15
Balance as of June 30, 2018649.0
 31,048
 (15,266) (873) 14,909
Net income
 
 1,859
 
 1,859
Other comprehensive income, net of taxes
 
 
 64
 64
Dividends declared on common stock ($1.32 per share)
 
 (867) 
 (867)
Issuance of common stock in connection with the Company’s equity award programs0.2
 13
 
 
 13
Stock-based compensation expense
 94
 
 
 94
Tax impact related to employee stock-based compensation expense
 (10) 
 
 (10)
Repurchases of common stock(8.7) 
 (1,713) 
 (1,713)
Balance as of September 30, 2018640.5
 $31,145
 $(15,987) $(809) $14,349
Balance as of March 31, 2019614.4
 $31,243
 $(19,895) $(516) $10,832

See accompanying notes.


AMGEN INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)

Nine months ended
September 30,
Three months ended
March 31,
2019 20182020 2019
Cash flows from operating activities:      
Net income$6,139
 $6,466
$1,825
 $1,992
Depreciation, amortization and other1,504
 1,456
897
 495
Deferred income taxes(172) (294)(84) (50)
Other items, net169
 636
107
 24
Changes in operating assets and liabilities, net of acquisitions:   
Changes in operating assets and liabilities, net of acquisition:   
Trade receivables, net(63) (234)(955) (207)
Inventories(101) (93)(113) (28)
Other assets(269) (110)319
 (249)
Accounts payable(196) (311)(25) (112)
Accrued income taxes, net(128) (384)137
 277
Long-term tax liabilities(262) 204
74
 100
Other liabilities15
 766
(48) (397)
Net cash provided by operating activities6,636
 8,102
2,134
 1,845
Cash flows from investing activities:      
Purchases of marketable securities(9,062) (12,617)(129) (6,898)
Proceeds from sales of marketable securities3,019
 28,059
2,574
 125
Proceeds from maturities of marketable securities18,441
 3,881
113
 10,455
Cash paid, net of cash acquired(177) 197
Purchases of property, plant and equipment(430) (513)(142) (116)
Purchases of equity method investments(2,645) (5)
Other(119) (31)(1) (6)
Net cash provided by investing activities11,672
 18,976
Net cash (used in) provided by investing activities(230) 3,555
Cash flows from financing activities:      
Net proceeds from issuance of debt4,963
 
Repayment of debt(4,514) (500)(3,250) (1,000)
Repurchases of common stock(6,608) (15,670)(961) (3,032)
Dividends paid(2,649) (2,667)(945) (901)
Other(67) (85)(61) (54)
Net cash used in financing activities(13,838) (18,922)(254) (4,987)
Increase in cash and cash equivalents4,470
 8,156
1,650
 413
Cash and cash equivalents at beginning of period6,945
 3,800
6,037
 6,945
Cash and cash equivalents at end of period$11,415
 $11,956
$7,687
 $7,358

See accompanying notes.

AMGEN INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2019March 31, 2020
(Unaudited)
1. Summary of significant accounting policies
Business
Amgen Inc. (including its subsidiaries, referred to as “Amgen,” “the Company,” “we,” “our” or “us”) is a global biotechnology pioneer that discovers, develops, manufactures and delivers innovative human therapeutics. We operate in 1 business segment: human therapeutics.
Basis of presentation
The financial information for the three and nine months ended September 30,March 31, 2020 and 2019, and 2018, 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, 2018, 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, 2019 and June 30, 2019.
Principles of consolidation
The condensed consolidated financial statements include the accounts of Amgen as well as its majority-owned subsidiaries. We do not have any significant interests in any variable interest entities. All material intercompany transactions and balances have been eliminated in consolidation.
Use of estimates
The preparation of condensed consolidated financial statements in conformity with U.S. generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results may differ from those estimates.
Property, plant and equipment, net
Property, plant and equipment is recorded at historical cost, net of accumulated depreciation and amortization of $8.2$8.5 billion and $7.8$8.4 billion as of September 30, 2019March 31, 2020 and December 31, 2018,2019, respectively.
LeasesEquity method investments
AdoptionThe equity method of new lease standardaccounting is used for equity investments that give us the ability to exert significant influence, but not control, over an investee based on such factors as our ownership percentage, voting and other shareholder rights, board of director representation and the existence of other collaborative or business relationships. The equity method of accounting requires us to allocate the difference between the fair value of securities acquired and our proportionate share of the carrying value of the underlying assets (the basis difference) to various items and amortize such differences over their useful lives. Our share of the investees’ earnings or losses and amortization of basis differences, if any, are recorded one quarter in arrears in Interest and other income, net, in the Condensed Consolidated Statements of Income.
We record impairment losses on our equity method investments if we deem the impairment to be other-than-temporary. We deem an impairment to be other-than-temporary based on various factors including, but not limited to, the length of time the fair value is below the carrying value, volatility of the security price and our intent and ability to retain the investment to allow for a recovery in fair value.
Recent accounting pronouncements
In FebruaryJune 2016, the Financial Accounting Standards Board (FASB) issued a new accounting standard that amends the guidance for the accounting and disclosure of leases. This new standard requires that lessees recognize the assets and liabilities that arise from leases on the balance sheet, including leases classified as operating leases, and that they disclose qualitative and quantitative information about leasing arrangements. The FASB subsequently issued additional amendments to address issues arising from the implementation of the new lease standard. We adopted this standard as of January 1, 2019, using the modified-retrospective method. This approach provides a method for recording existing leases at adoption. We used the adoption date as our date of initial application, and thus, comparative-period financial information is not presented for periods prior to the adoption date. In addition, we elected the package of practical expedients permitted under the transition guidance within the new standard, which, among other things, allowed us to carry forward the historical lease classification.
Adoption of the new standard resulted in total lease liabilities of $510 million and right-of-use (ROU) assets of $439 million as of January 1, 2019. The difference between the initial lease liabilities and the ROU assets is related primarily to previously existing lease liabilities. The standard did not materially impact our Condensed Consolidated Statements of Income and had no impact on our Condensed Consolidated Statements of Cash Flows. Our accounting policies under the new standard are described below. See Note 9, Leases.

Lease recognition
At inception of a contract, we determine whether an arrangement is or contains a lease. For all leases, we determine the classification as either operating or financing. Operating leases are included in Other assets, Accrued liabilities and Other noncurrent liabilities in our Condensed Consolidated Balance Sheets.
ROU assets represent our right to use an underlying asset for the lease term, and lease liabilities represent our obligation to make lease payments under the lease. Lease recognition occurs at the commencement date, and lease liability amounts are based on the present value of lease payments made during the lease term. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Because most of our leases do not provide information to determine an implicit interest rate, we use our incremental borrowing rate in determining the present value of lease payments. ROU assets also include any lease payments made prior to the commencement date and exclude lease incentives received. Operating lease expense is recognized on a straight-line basis over the lease term.
We have lease agreements with both lease and nonlease components, which are generally accounted for together as a single lease component. In addition, for certain vehicle and equipment leases, we apply a portfolio approach to determine the lease term and discount rate.
Other recent accounting pronouncements
In June 2016, the FASB issued a new accounting standard that amends the guidance for measuring and recording credit losses on financial assets measured at amortized cost by replacing the incurred-loss model with an expected-loss model. Accordingly, these financial assets will be presented at the net amount expected to be collected. This new standard also requires that credit losses related to available-for-sale debt securities be recorded as an allowance through net income rather than by reducing the carrying amount under the current, other-than-temporary-impairment model. The newWe adopted this standard is effective for interim and annual periods beginning onas of January 1, 2020. With certain exceptions, adjustments are to be applied2020, using a modified-retrospective approach by reflecting adjustments through a cumulative-effect impact on retained earnings asapproach. Adoption of the beginning of the fiscal year of adoption. Westandard did not have substantially completed our impact assessment and do not currently anticipate a material impact on our condensed consolidated financial statements.

2. Business combinations
Nuevolution AB
On July 15, 2019, we acquired allIn March 2020, the FASB issued a new accounting standard to ease the financial reporting burdens of the outstanding stockexpected market transition from the London Interbank Offered Rate (LIBOR) and other interbank offered rates to alternative reference rates, commonly referred to as reference rate reform. The new standard provides temporary optional expedients and exceptions to current GAAP guidance on contract modifications and hedge accounting. Specifically, a modification to transition to an alternative reference rate is treated as an event that does not require contract remeasurement or reassessment of Nuevolution AB (Nuevolution), a publicly traded, Denmark-based biotechnology company with a leading small-molecule-drug discovery platform,previous accounting treatment. Moreover, for total considerationall types of $183 million in cash.hedging relationships, an entity may change the reference rate without having to dedesignate the hedging relationship. The transaction, which was accountedstandard is generally effective for all contract modifications made and hedging relationships evaluated through December 31, 2022, as a business combination, expands our ability to discover novel small molecules against difficult-to-drug targets and with greater speed and efficiency. Nuevolution’s operations, whichresult of reference rate reform. We are not material,currently evaluating the impact that this new standard will have been included inon our condensed consolidated financial statements commencing on the acquisition date.
We allocated the consideration to acquire Nuevolution to finite-lived intangible assets of $150 million, comprised primarily of technology rights for a drug discovery platform with an estimated useful life of 10 years; goodwill of $26 million, which is not tax deductible; deferred tax liabilities of $22 million; and other net assets of $29 million.
The estimated fair values of intangible assets were determined primarily using a probability-weighted income approach, which discounts expected future cash flows to present value by using a discount rate that represents the estimated rate that market participants would use to value the intangible assets.
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, tax-related items and the residual impact on goodwill.
Otezla®
On August 25, 2019, we entered into an agreement with Celgene Corporation (Celgene) in connection with Celgene’s previously announced merger with Bristol-Myers Squibb Company (BMS) to acquire worldwide rights to Otezla® (apremilast), the only oral, nonbiologic treatment for psoriasis and psoriatic arthritis, and certain related assets and liabilities for $13.4 billion. We expect to fund the purchase price with cash. The transaction is expected to close by the end of 2019.statements.

3.2. Revenues
We operate in 1 business segment: human therapeutics. Therefore, results of our operations are reported on a consolidated basis for purposes of segment reporting, consistent with internal management reporting. Revenues by product and by geographic area, based on customers’ locations, are presented below. Rest-of-world (ROW) revenues relate to products that are sold primarily in Europe.
Revenues were as follows (in millions):
  Three months ended September 30,
  2019 2018
  US ROW Total US ROW Total
Enbrel® (etanercept)
 $1,323
 $43
 $1,366
 $1,242
 $50
 $1,292
Neulasta® (pegfilgrastim)
 619
 92
 711
 897
 154
 1,051
Prolia® (denosumab)
 425
 205
 630
 354
 178
 532
XGEVA® (denosumab)
 356
 120
 476
 323
 110
 433
Aranesp® (darbepoetin alfa)
 204
 248
 452
 248
 229
 477
KYPROLIS® (carfilzomib)
 163
 103
 266
 142
 90
 232
EPOGEN® (epoetin alfa)
 215
 
 215
 252
 
 252
Sensipar®/Mimpara® (cinacalcet)
 38
 71
 109
 330
 79
 409
Other products 686
 552
 1,238
 472
 360
 832
Total product sales(1)
 $4,029
 $1,434
 5,463
 $4,260
 $1,250
 5,510
Other revenues     274
     394
Total revenues     $5,737
     $5,904
  Nine months ended September 30,
  2019 2018
  US ROW Total US ROW Total
ENBREL $3,744
 $136
 $3,880
 $3,544
 $155
 $3,699
Neulasta®
 2,231
 325
 2,556
 2,854
 452
 3,306
Prolia®
 1,273
 647
 1,920
 1,070
 566
 1,636
XGEVA®
 1,091
 355
 1,446
 994
 336
 1,330
Aranesp®
 578
 724
 1,302
 714
 689
 1,403
KYPROLIS®
 483
 295
 778
 430
 287
 717
EPOGEN®
 657
 
 657
 746
 
 746
Sensipar®/Mimpara®
 216
 228
 444
 1,069
 257
 1,326
Other products 1,889
 1,451
 3,340
 1,353
 1,016
 2,369
Total product sales(1)
 $12,162
 $4,161
 16,323
 $12,774
 $3,758
 16,532
Other revenues     842
     985
Total revenues     $17,165
     $17,517
  Three months ended March 31,
  2020 2019
  US ROW Total US ROW Total
Enbrel® (etanercept)
 $1,117
 $36
 $1,153
 $1,106
 $45
 $1,151
Prolia® (denosumab)
 422
 232
 654
 390
 202
 592
Neulasta® (pegfilgrastim)
 534
 75
 609
 893
 128
 1,021
XGEVA® (denosumab)
 355
 126
 481
 356
 115
 471
Otezla® (apremilast)
 377
 102
 479
 
 
 
Aranesp® (darbepoetin alfa)
 175
 247
 422
 182
 232
 414
KYPROLIS® (carfilzomib)
 187
 93
 280
 154
 91
 245
Repatha® (evolocumab)
 124
 105
 229
 83
 58
 141
Other products 988
 599
 1,587
 827
 424
 1,251
Total product sales(1)
 $4,279
 $1,615
 5,894
 $3,991
 $1,295
 5,286
Other revenues     267
     271
Total revenues     $6,161
     $5,557
____________ 
(1) 
Hedging gains and losses, which are included in product sales, were not material for the three and nine months ended September 30, 2019March 31, 2020 and 2018.2019.

4.3. Income taxes
Effective tax rates for the three and nine months ended September 30, 2019, were 13.6% and 14.2%, respectively, compared with 11.2% and 12.1%, respectively, for the corresponding periods of the prior year.
The increases in our effective tax rates for the three and nine months ended September 30,March 31, 2020 and 2019, were 9.7% and 13.9%, respectively.
The decrease in our effective tax rate for the three months ended March 31, 2020, was due primarily to a prior-year tax benefit associated with intercompany sales under U.S. corporate tax reform.amortization related to the Otezla® acquisition, changes in jurisdictional mix of earnings and certain favorable items in the quarter. 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 that is treated as a foreign jurisdiction for U.S. tax purposes and that isare subject to tax incentive grants through 2035; these2035. In addition, the Company’s operations conducted in Singapore are subject to a tax incentive grant through 2034. These earnings are also subject to U.S. tax at a reduced rate of 10.5%.
The U.S. territory of Puerto Rico imposes an excise tax on the gross intercompany purchase price of goods and services from our manufacturer in Puerto Rico. The rate of 4% is effective through December 31, 2027. We account for the excise tax as a manufacturing cost that is capitalized in inventory and expensed in cost of sales when the related products are sold. For U.S. income tax purposes, the excise tax results in foreign tax credits that are generally recognized in our provision for income taxes when the excise tax is incurred.

One or more of our legal entities file income tax returns in the U.S. federal jurisdiction, various U.S. state jurisdictions and certain foreign jurisdictions. Our income tax returns are routinely examined by tax authorities in those jurisdictions. Significant disputes may arise with tax authorities involving issues ofregarding the timing and amount of deductions, the use of tax credits and allocations of income and expenses among various tax jurisdictions because of differing interpretations of tax laws, regulations and relevant facts. As previously disclosed, we received a Revenue Agent Report (RAR) from the Internal Revenue Service (IRS) for the years 2010, 2011 and 2012. The RAR proposes to make significant adjustments that relate primarily to the allocation of profits between certain of our entities in the United States and the U.S. territory of Puerto Rico. In November 2017, we received a modified RAR that revised the IRS’s calculationcalculations but continued to propose substantial adjustments. We disagree with the proposed adjustments and calculations and are pursuing resolution with the IRS administrative appeals office, which currently has jurisdiction over the matter. If we deem necessary, we will vigorously contest the proposed adjustments through the judicial process. In addition, in April, we received draft notice of proposed adjustments (NOPAs) from the IRS for the years 2013, 2014 and 2015, which are similar to the proposed adjustments for the years 2010, 2011 and 2012 that relate primarily to the allocation of profits between certain of our entities in the United States and the U.S. territory of Puerto Rico. We disagree with the proposed adjustments and calculations and intend to contest them. We are also currently under examination by a number of other state and foreign tax jurisdictions.
Final resolution of thisthese complex mattermatters is not likely within the next 12 months and could have a material impact on our condensed consolidated financial statements. We believe our accrual for income tax liabilities is appropriate based on past experience, interpretations of tax law and judgments about potential actions by tax authorities; however, due to the complexity of the provision for income taxes, the ultimate resolution of any tax matters may result in payments substantially greater or less than amounts accrued. We are no longer subject to U.S. federal income tax examinations for years ended on or before December 31, 2009. In addition, we are currently under examination by a number of other state and foreign tax jurisdictions.
During the three and nine months ended September 30, 2019,March 31, 2020, the gross amounts of our unrecognized tax benefits (UTBs) increased $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, 2019,March 31, 2020, if recognized, would affect our effective tax rate.
5.4. Earnings per share
The computation of basic earnings per share (EPS) is based on the weighted-average number of our common shares outstanding. The computation of diluted EPS is based on the weighted-average number of our common shares outstanding and dilutive potential common shares, which include primarily 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):
Three months ended
September 30,
 Nine months ended
September 30,
Three months ended
March 31,
2019 2018 2019 20182020 2019
Income (Numerator):          
Net income for basic and diluted EPS$1,968
 $1,859
 $6,139
 $6,466
$1,825
 $1,992
          
Shares (Denominator):          
Weighted-average shares for basic EPS599
 645
 609
 669
590
 622
Effect of dilutive securities3
 4
 4
 4
4
 4
Weighted-average shares for diluted EPS602
 649
 613
 673
594
 626
          
Basic EPS$3.29
 $2.88
 $10.08
 $9.67
$3.09
 $3.20
Diluted EPS$3.27
 $2.86
 $10.01
 $9.61
$3.07
 $3.18

For the three and nine months ended September 30,March 31, 2020 and 2019, and 2018, the number of antidilutive employee stock-based awards excluded from the computation of diluted EPS was not significant.

5. Collaborations
On January 2, 2020, we closed our strategic collaboration with BeiGene, Ltd. (BeiGene) to expand our oncology presence in China. Under the collaboration, BeiGene will commercialize XGEVA®, KYPROLIS® and BLINCYTO® (blinatumomab) in China, and Amgen will share profits and losses equally during the initial product-specific commercialization periods; thereafter, product rights may revert to Amgen, and Amgen will pay royalties to BeiGene on sales in China.
In addition, we will jointly develop a portion of our oncology portfolio with BeiGene sharing in global research and development (R&D) costs by providing cash and development services up to $1.25 billion. Upon regulatory approval, BeiGene will assume commercialization rights in China for a specified period, and Amgen and BeiGene will share profits equally until certain of these product rights revert to Amgen. Upon return of the product rights, Amgen will pay royalties to BeiGene on sales in China for a specified period. For product sales outside of China, Amgen will also pay BeiGene royalties.
For the three months ended March 31, 2020, costs recovered from BeiGene for oncology product candidates were $57 million and were recorded in R&D expense in the Condensed Consolidated Statements of Income. For the three months ended March 31, 2020, no profit share payments or product sales were recorded between Amgen and BeiGene. In connection with this collaboration, we acquired an ownership interest in BeiGene. See Note 6, Investments.
6. Investments
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, 2019 
Amortized
cost
 
Gross
unrealized
gains
 
Gross
unrealized
losses
 
Fair
values
Types of securities as of March 31, 2020 
Amortized
cost
 
Gross
unrealized
gains
 
Gross
unrealized
losses
 
Fair
values
U.S. Treasury notes $1,164
 $3
 $
 $1,167
 $173
 $3
 $
 $176
U.S. Treasury bills 2,494
 
 
 2,494
 900
 
 
 900
Other government-related debt securities:        
U.S. 
 
 
 
Foreign and other 896
 29
 
 925
Corporate debt securities:                
Financial 2,116
 24
 
 2,140
 12
 
 
 12
Industrial 2,002
 23
 
 2,025
 12
 
 
 12
Other 531
 6
 
 537
 
 
 
 
Residential-mortgage-backed securities 512
 4
 
 516
 
 
 
 
Other mortgage- and asset-backed securities 43
 
 
 43
Money market mutual funds 8,017
 
 
 8,017
 5,762
 
 
 5,762
Other short-term interest-bearing securities 2,363
 
 
 2,363
 432
 
 
 432
Total interest-bearing securities $20,138
 $89
 $
 $20,227
 $7,291
 $3
 $
 $7,294
Types of securities as of December 31, 2018 
Amortized
cost
 
Gross
unrealized
gains
 
Gross
unrealized
losses
 
Fair
values
Types of securities as of December 31, 2019 
Amortized
cost
 
Gross
unrealized
gains
 
Gross
unrealized
losses
 
Fair
values
U.S. Treasury notes $2,710
 $
 $(47) $2,663
 $359
 $1
 $
 $360
U.S. Treasury bills 8,191
 
 
 8,191
 
 
 
 
Other government-related debt securities:        
U.S. 112
 
 (2) 110
Foreign and other 972
 1
 (41) 932
Corporate debt securities:                
Financial 2,778
 
 (81) 2,697
 1,108
 13
 
 1,121
Industrial 2,603
 
 (99) 2,504
 824
 10
 
 834
Other 583
 
 (21) 562
 195
 3
 
 198
Residential-mortgage-backed securities 1,458
 
 (36) 1,422
 181
 1
 
 182
Other mortgage- and asset-backed securities 483
 
 (14) 469
Money market mutual funds 5,659
 
 
 5,659
 5,250
 
 
 5,250
Other short-term interest-bearing securities 3,515
 
 
 3,515
 289
 
 
 289
Total interest-bearing securities $29,064
 $1
 $(341) $28,724
 $8,206
 $28
 $
 $8,234


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,
2019
 December 31,
2018
 March 31,
2020
 December 31,
2019
Cash and cash equivalents $10,789
 $6,365
 $6,969
 $5,360
Marketable securities 9,438
 22,359
 325
 2,874
Total interest-bearing securities $20,227
 $28,724
 $7,294
 $8,234

Cash and cash equivalents in the above table excludes bank account cash of $626$718 million and $580$677 million as of September 30, 2019March 31, 2020 and December 31, 2018,2019, respectively.
The fair values of interest-bearing securities by contractual maturity, except for mortgage- and asset-backedresidential-mortgage-backed securities that do not have a single maturity date, were as follows (in millions):
Contractual maturities September 30,
2019
 December 31,
2018
 March 31,
2020
 December 31,
2019
Maturing in one year or less $12,941
 $17,424
 $7,165
 $5,629
Maturing after one year through three years 4,855
 3,356
 129
 2,304
Maturing after three years through five years 1,226
 5,168
 
 119
Maturing after five years through ten years 646
 885
Mortgage- and asset-backed securities 559
 1,891
Residential mortgage-backed securities 
 182
Total interest-bearing securities $20,227
 $28,724
 $7,294
 $8,234

For the three months ended September 30,March 31, 2020 and 2019, and 2018, realized gains on interest-bearing securities were $21$37 million and $5$1 million, respectively, and realized losses on interest-bearing securities were $24$4 million and $108 million, respectively. For the nine months ended September 30, 2019 and 2018, realized gains on interest-bearing securities were $23 million and $27 million, respectively, and realized losses on interest-bearing securities were $32 million and $379$5 million, respectively. Realized gains and losses on interest-bearing securities are recorded in Interest and other income, net, in the Condensed Consolidated Statements of Income. The cost of securities sold is based on the specific-identification method. As of September 30, 2019, we had $1.1 billion in receivables related to sales of securities, which were recorded in Other current assets in the Condensed Consolidated Balance Sheets. There were no receivables related to sales of securities as of December 31, 2018.


As of September 30, 2019, aggregate gross unrealized losses of interest-bearing securities were not material. As of December 31, 2018, the fair values and gross unrealized losses of interest-bearing securities in an unrealized loss position aggregated by type and length of time that the securities have been in a continuous loss position were as follows (in millions):
  Less than 12 months 12 months or more
Types of securities as of December 31, 2018 Fair values Unrealized losses Fair values Unrealized losses
U.S. Treasury notes $1,219
 $(21) $1,444
 $(26)
Other government-related debt securities:        
U.S. 
 
 110
 (2)
Foreign and other 631
 (31) 240
 (10)
Corporate debt securities:        
Financial 1,968
 (59) 718
 (22)
Industrial 1,898
 (81) 529
 (18)
Other 529
 (20) 28
 (1)
Residential-mortgage-backed securities 576
 (14) 840
 (22)
Other mortgage- and asset-backed securities 17
 
 451
 (14)
Total $6,838
 $(226) $4,360
 $(115)

The primary objective of our investment portfolio is to enhance overall returns in an efficient manner while maintainingmaintain safety of principal, prudent levels of liquidity and acceptable levels of risk. Our investment policy limits interest-bearing security investments to certain types of debt and money market instruments issued by institutions with primarily investment-grade credit ratings, and it places restrictions on maturities and concentration by asset class and issuer.
We review our available-for-sale investments for other-than-temporary declines in fair value below our cost basis each quarter and whenever events or changes in circumstances indicate that the cost basis of an asset may not be recoverable. The evaluation is based on a number of factors, including the length of time and the extent to which the fair value has been below our cost basis as well as adverse conditions related specifically to the security, such as any changes to the credit rating of the security and the intent to sell or whether we will more likely than not be required to sell the security before recovery of its amortized cost basis. Our assessment of whether a security is other-than-temporarily impaired could change in the future based on new developments or changes in assumptions related to that particular security. As of September 30, 2019March 31, 2020 and December 31, 2018, we believe the cost bases for our2019, aggregated gross unrealized losses of available-for-sale investments were recoverable in allnot material, respects.and accordingly, no allowance for credit losses was recorded as of March 31, 2020.
Equity securities
We held investments in equity securities with readily determinable fair values of $277$220 million and $176$303 million as of September 30, 2019March 31, 2020 and December 31, 2018,2019, respectively, which are included in Other assets in the Condensed Consolidated Balance Sheets. Gains and losses recognized on equity securities with readily determinable fair values, including gains and losses recognized on sales, were not material for the three and nine months ended September 30, 2019March 31, 2020 and 2018.2019.
As of September 30, 2019 and December 31, 2018, respectively, weWe held investments of $170$183 million and $222$176 million in equity securities without readily determinable fair values as of March 31, 2020 and December 31, 2019, respectively, which are included in Other assets in the Condensed Consolidated Balance Sheets. Adjustments to the carrying values of these securities were not material for the three and nine months ended September 30, 2019March 31, 2020 and 2018.2019.
Equity method investments
Limited partnership investmentspartnerships
We held limited partnership investments of $319$331 million and $285$320 million as of September 30, 2019March 31, 2020 and December 31, 2018,2019, respectively, which are included in Other 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 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, 2019,March 31, 2020, unfunded additional commitments to be made for these investments during the next several years for these investments were not material. Gains and losses recognized on our limited partnership investments were not material for the three and nine months ended September 30, 2019March 31, 2020 and 2018.2019.

BeiGene
On January 2, 2020, we acquired a 20.5% ownership interest in BeiGene for $2.8 billion, of which $2.6 billion was attributed to the fair value of equity securities upon closing, with the remainder attributed to prepaid R&D. Our equity investment in BeiGene is included in Other assets in the Condensed Consolidated Balance Sheets. The fair value of equity securities acquired exceeded our proportionate share of the carrying value of the underlying net assets of BeiGene by approximately $2.4 billion. This investment is accounted for by using the equity method of accounting, which requires us to identify and allocate amounts to the items that give rise to the basis difference and to amortize these items over their useful lives. This amortization, along with our share of the results of operations of BeiGene, will be recognized in Interest and other income, net, in our Condensed Consolidated Statements of Income. Recognition will occur one quarter in arrears, beginning in the second quarter of 2020. The basis difference was allocated to finite-lived intangible assets, indefinite-lived intangible assets, equity-method goodwill and related deferred taxes. The finite-lived intangible assets will be amortized over a period ranging from 8 to 15 years.
As of March 31, 2020, the carrying and fair values of our approximately 20.5% ownership interest in BeiGene totaled $2.6 billion and $2.0 billion, respectively. As of March 31, 2020, we believe the carrying value of our equity investment in BeiGene is fully recoverable. See Note 1, Summary of significant accounting policies, for factors considered in determining our conclusion. For information on a collaboration agreement we entered into with BeiGene in connection with this investment, see Note 5, Collaborations.

7. Inventories
Inventories consisted of the following (in millions):
September 30,
2019
 December 31,
2018
March 31,
2020
 December 31,
2019
Raw materials$324
 $257
$446
 $358
Work in process1,923
 1,660
2,192
 2,227
Finished goods996
 1,023
1,044
 999
Total inventories$3,243
 $2,940
$3,682
 $3,584

8. Goodwill and other intangible assets
Goodwill
The change in the carrying amount of goodwill was as follows (in millions):
Nine months ended
September 30, 2019
Three months ended
March 31, 2020
Beginning balance$14,699
$14,703
Addition from Nuevolution acquisition26
Currency translation adjustment(20)(20)
Ending balance$14,705
$14,683


Other intangible assets
Other intangible assets consisted of the following (in millions):
September 30, 2019 December 31, 2018March 31, 2020 December 31, 2019
Gross
carrying
amounts
 
Accumulated
amortization
 
Other intangible
assets, net
 
Gross
carrying
amounts
 
Accumulated
amortization
 
Other intangible
assets, net
Gross
carrying
amounts
 
Accumulated
amortization
 
Other intangible
assets, net
 
Gross
carrying
amounts
 
Accumulated
amortization
 
Other intangible
assets, net
Finite-lived intangible assets:                      
Developed-product-technology rights$12,548
 $(7,978) $4,570
 $12,573
 $(7,479) $5,094
$25,549
 $(8,876) $16,673
 $25,575
 $(8,322) $17,253
Licensing rights3,761
 (2,286) 1,475
 3,772
 (2,032) 1,740
3,746
 (2,494) 1,252
 3,761
 (2,398) 1,363
Marketing-related rights1,209
 (972) 237
 1,297
 (1,019) 278
1,375
 (979) 396
 1,382
 (965) 417
Research and development technology rights1,266
 (922) 344
 1,148
 (872) 276
1,269
 (967) 302
 1,273
 (947) 326
Total finite-lived intangible assets18,784
 (12,158) 6,626
 18,790
 (11,402) 7,388
31,939
 (13,316) 18,623
 31,991
 (12,632) 19,359
Indefinite-lived intangible assets:                      
In-process research and development76
 
 76
 55
 
 55
30
 
 30
 54
 
 54
Total other intangible assets$18,860
 $(12,158) $6,702
 $18,845
 $(11,402) $7,443
$31,969
 $(13,316) $18,653
 $32,045
 $(12,632) $19,413

Developed-product-technology rights consists of rights related to marketed products acquired in business combinations.products. Licensing rights consists primarily of contractual rights acquired in business combinations to receive future milestone, royalty and profit-sharing payments; capitalized payments to third parties for milestones related to regulatory approvals to commercialize products; and up-front payments associated with royalty obligations for marketed products. Marketing-related rights consists primarily of rights related to the sale and distribution of marketed products. Research and development (R&D)R&D technology rights pertains to technologytechnologies used in R&D that have alternative future uses. R&D technology rights include assets acquired with the Nuevolution acquisition in 2019. See Note 2, Business combinations.
In-process research and development (IPR&D) consists of R&D projects acquired in a business combination that are not complete at the time of acquisition due to remaining technological risks and/or lack of receipt of required regulatory approvals. 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,March 31, 2020 and 2019, and 2018, we recognized amortization associated with our finite-lived intangible assets of $318$709 million and $331 million, respectively. During the nine months ended September 30, 2019 and 2018, we recognized amortization associated with our finite-lived intangible assets of $948 million and $983$315 million, respectively. Amortization of intangible assets is included primarily in Cost of sales in the Condensed Consolidated Statements of Income. The total estimated amortization for our finite-lived intangible assets for the remaining threenine months ending December 31, 2019,2020, and the years ending December 31, 2020, 2021, 2022, 2023, 2024 and 2024,2025, are $0.3$2.1 billion, $1.2$2.6 billion, $1.0$2.5 billion, $0.9$2.4 billion, $0.9$2.4 billion and $0.9$2.2 billion, respectively.
9. Leases
On January 1, 2019, we adopted a new accounting standard that amends the guidance for the accounting and reporting of leases. Certain required disclosures have been made on a prospective basis in accordance with the guidance of the standard. See Note 1, Summary of significant accounting policies.
We lease certain facilities and equipment related primarily to administrative, R&D and sales and marketing activities. Leases with terms of 12 months or less are expensed on a straight-line basis over the term and are not recorded in the Condensed Consolidated Balance Sheets.
Most leases include one or more options to renew, with renewal terms that may extend the lease term up to seven years. The exercise of lease renewal options is at our sole discretion. In addition, some of our lease agreements include rental payments adjusted periodically for inflation. Our lease agreements neither contain residual value guarantees nor impose significant restrictions or covenants. We sublease certain real estate to third parties. Our sublease portfolio consists of operating leases from former R&D and administrative space.
The following table summarizes information related to our leases, all of which are classified as operating, included in our Condensed Consolidated Balance Sheets (in millions):
Condensed Consolidated Balance Sheets locations September 30, 2019
Assets:  
Other assets $422
Liabilities:  
Accrued liabilities $135
Other noncurrent liabilities 351
Total lease liabilities $486
The components of net lease costs were as follows (in millions):
Lease costs Three months ended September 30, 2019 Nine months ended
September 30, 2019
Operating(1)
 $50
 $149
Sublease income (8) (25)
Total net lease costs $42
 $124
____________
(1)
Includes short-term leases and variable lease costs, which were not material for the three and nine months ended September 30, 2019.

Maturities of lease liabilities as of September 30, 2019, were as follows (in millions):
Maturity dates Operating leases
Remaining three months ending December 31, 2019 $31
2020 157
2021 137
2022 77
2023 65
Thereafter 55
Total lease payments(1)
 522
Less imputed interest (36)
Present value of lease liabilities $486
____________
(1)
Includes future rental commitments for abandoned leases of $189 million. We expect to receive total future rental income of $149 million related to noncancelable subleases for abandoned facilities.
The weighted-average remaining lease term and weighted-average discount rate of our leases were four years and 3.31%, respectively, as of September 30, 2019.
Cash and noncash information related to our leases was as follows (in millions):
  Three months ended September 30, 2019 Nine months ended
September 30, 2019
Cash paid for amounts included in the measurement of lease liabilities: 
  
Operating cash flows for operating leases $42
 $115
ROU assets obtained in exchange for lease obligations:    
Operating leases $29
 $83


10.9. Financing arrangements
Our borrowings consisted of the following (in millions):
September 30,
2019
 December 31,
2018
March 31,
2020
 December 31,
2019
5.70% notes due 2019 (5.70% 2019 Notes)$
 $1,000
1.90% notes due 2019 (1.90% 2019 Notes)
 700
Floating Rate Notes due 2019
 550
2.20% notes due 2019 (2.20% 2019 Notes)
 1,400
2.125% €675 million notes due 2019 (2.125% 2019 euro Notes)
 774
4.50% notes due 2020 (4.50% 2020 Notes)300
 300
$
 $300
2.125% notes due 2020 (2.125% 2020 Notes)750
 750
750
 750
Floating Rate Notes due 2020300
 300
300
 300
2.20% notes due 2020 (2.20% 2020 Notes)700
 700
700
 700
3.45% notes due 2020 (3.45% 2020 Notes)900
 900

 900
4.10% notes due 2021 (4.10% 2021 Notes)1,000
 1,000

 1,000
1.85% notes due 2021 (1.85% 2021 Notes)750
 750

 750
3.875% notes due 2021 (3.875% 2021 Notes)1,750
 1,750
1,450
 1,750
1.25% €1,250 million notes due 2022 (1.25% 2022 euro Notes)1,362
 1,433
1,379
 1,402
2.70% notes due 2022 (2.70% 2022 Notes)500
 500
500
 500
2.65% notes due 2022 (2.65% 2022 Notes)1,500
 1,500
1,500
 1,500
3.625% notes due 2022 (3.625% 2022 Notes)750
 750
750
 750
0.41% CHF700 million bonds due 2023 (0.41% 2023 Swiss franc Bonds)702
 713
728
 725
2.25% notes due 2023 (2.25% 2023 Notes)750
 750
750
 750
3.625% notes due 2024 (3.625% 2024 Notes)1,400
 1,400
1,400
 1,400
1.90% notes due 2025 (1.90% 2025 Notes)500
 
3.125% notes due 2025 (3.125% 2025 Notes)1,000
 1,000
1,000
 1,000
2.00% €750 million notes due 2026 (2.00% 2026 euro Notes)817
 860
827
 841
2.60% notes due 2026 (2.60% 2026 Notes)1,250
 1,250
1,250
 1,250
5.50% £475 million notes due 2026 (5.50% 2026 pound sterling Notes)584
 606
590
 630
2.20% notes due 2027 (2.20% 2027 Notes)750
 
3.20% notes due 2027 (3.20% 2027 Notes)1,000
 1,000
1,000
 1,000
4.00% £700 million notes due 2029 (4.00% 2029 pound sterling Notes)860
 893
869
 928
2.45% notes due 2030 (2.45% 2030 Notes)1,250
 
6.375% notes due 2037 (6.375% 2037 Notes)552
 552
552
 552
6.90% notes due 2038 (6.90% 2038 Notes)291
 291
291
 291
6.40% notes due 2039 (6.40% 2039 Notes)466
 466
466
 466
3.15% notes due 2040 (3.15% 2040 Notes)1,250
 
5.75% notes due 2040 (5.75% 2040 Notes)412
 412
412
 412
4.95% notes due 2041 (4.95% 2041 Notes)600
 600
600
 600
5.15% notes due 2041 (5.15% 2041 Notes)974
 974
974
 974
5.65% notes due 2042 (5.65% 2042 Notes)487
 487
487
 487
5.375% notes due 2043 (5.375% 2043 Notes)261
 261
261
 261
4.40% notes due 2045 (4.40% 2045 Notes)2,250
 2,250
2,250
 2,250
4.563% notes due 2048 (4.563% 2048 Notes)1,415
 1,415
1,415
 1,415
3.375% notes due 2050 (3.375% 2050 Notes)1,250
 
4.663% notes due 2051 (4.663% 2051 Notes)3,541
 3,541
3,541
 3,541
Other notes due 2097100
 100
100
 100
Unamortized bond discounts, premiums and issuance costs, net(874) (896)(892) (868)
Fair value adjustments391
 (53)648
 296
Total carrying value of debt29,791
 33,929
31,848
 29,903
Less current portion(2,049) (4,419)(1,840) (2,953)
Total long-term debt$27,742
 $29,510
$30,008
 $26,950

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 and the 4.663% 2051 Notes, which have effective interest rates of 6.3% and 5.6%, respectively.

Debt issuances and repayments
During the three months ended March 31, 2020, we issued $5.0 billion of debt, consisting of the 1.90% 2025 Notes, the 2.20% 2027 Notes, the 2.45% 2030 Notes, the 3.15% 2040 Notes and the 3.375% 2050 Notes. In the event of a change-in-control triggering event, as defined in 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. The notes may be redeemed without payment of make-whole amounts if redemption occurs during specified periods of time immediately prior to the maturity of the notes. Such time periods range from one month to six months prior to maturity.
A portion of the proceeds from the issuance of these notes were used to redeem the 3.45% 2020 Notes, the 4.10% 2021 Notes, the 1.85% 2021 Notes and $300 million aggregate principal amount of our 3.875% 2021 Notes. In connection with the redemption of these notes, we paid a total of $50 million in make-whole amounts plus associated accrued and unpaid interest, all of which was recognized in Interest expense, net, in the Condensed Consolidated Statements of Income during the three months ended March 31, 2020. In addition to these redemptions, the 4.50% 2020 Notes matured and were repaid during the three months ended March 31, 2020.
Interest rate swaps
In connection with the redemption of certain of the notes discussed above, associated interest rate swap contracts with an aggregate notional value of $2.2 billion were terminated. Additionally, due to historically low interest rates, during the three months ended March 31, 2020, we terminated interest rate swaps with an aggregate notional amount of $5.2 billion that hedged the 3.625% 2024 Notes, 2.60% 2026 Notes, 4.663% 2051 Notes and portions of our 3.625% 2022 Notes and 3.125% 2025 Notes, which resulted in the receipt of $576 million of cash and reduced counterparty credit risk. Immediately following termination of these contracts, we entered into new interest rate swap agreements at then-current interest rates on the same $5.2 billion principal amount of notes. See Note 12, Derivative instruments.
The effective interest rates on notes for which we have entered into interest rate swap contracts and the related notional amounts of these contracts were as follows (dollar amounts in millions):
  March 31, 2020 December 31, 2019
Notes Notional amountsEffective interest rates Notional amountsEffective interest rates
3.45% 2020 Notes $
LIBOR + 1.1% $900
LIBOR + 1.1%
4.10% 2021 Notes 
LIBOR + 1.7% 1,000
LIBOR + 1.7%
3.875% 2021 Notes 1,450
LIBOR + 2.0% 1,750
LIBOR + 2.0%
3.625% 2022 Notes 750
LIBOR + 2.7% 750
LIBOR + 1.6%
3.625% 2024 Notes 1,400
LIBOR + 3.2% 1,400
LIBOR + 1.4%
3.125% 2025 Notes 1,000
LIBOR + 1.8% 1,000
LIBOR + 0.9%
2.60% 2026 Notes 1,250
LIBOR + 1.8% 1,250
LIBOR + 0.3%
4.663% 2051 Notes(1)
 1,500
LIBOR + 2.6% 1,500
LIBOR + 0.0%
Total notional amounts $7,350
  $9,550
 
____________
(1)
Excludes an additional 1.5% of interest for the difference between the coupon rate paid to note holders and the fixed rate received under the interest rate swap contracts.

11.10. Stockholders’ equity
Stock repurchase program
Activity under our stock repurchase program, on a trade date basis, was as follows (in millions):
 2019 2018
 Shares Dollars  Shares * Dollars
First quarter15.9
 $3,031
 56.4
 $10,787
Second quarter13.1
 2,349
 18.2
 3,190
Third quarter6.2
 1,170
 8.7
 1,713
Total stock repurchases35.2
 $6,550
 83.4
 $15,690
 2020 2019
 Shares Dollars  Shares Dollars
First quarter4.3
 $933
 15.9
 $3,031

* Total shares do not add due to rounding.
In MayDecember 2019, our Board of Directors increased the amount authorized under our stock repurchase program by an additional $5.0$4.0 billion. As of September 30, 2019, $3.6March 31, 2020, $5.5 billion of authorization remained available under our stock repurchase program.
Dividends
In August 2019, March 2019 and December 2018,2020, the Board of Directors declared a quarterly cash dividendsdividend of $1.45$1.60 per share, which werewill be paid in September 2019, June 2019 and March 2019, respectively.2020. In OctoberDecember 2019, the Board of Directors declared a quarterly cash dividend of $1.45$1.60 per share, which will bewas paid on December 6, 2019.in March 2020.
Accumulated other comprehensive income (loss)
The components of Accumulated other comprehensive income (loss) (AOCI) were as follows (in millions):
Foreign
currency
translation
 
Cash flow
hedges
 
Available-for-sale
securities
 Other AOCI
Foreign
currency
translation
 
Cash flow
hedges
 
Available-for-sale
securities
 Other AOCI
Balance as of December 31, 2018$(670) $241
 $(338) $(2) $(769)
Foreign currency translation adjustments(13) 
 
 
 (13)
Unrealized gains
 30
 218
 
 248
Reclassification adjustments to income
 28
 4
 
 32
Income taxes
 (13) (1) 
 (14)
Balance as of March 31, 2019(683) 286
 (117) (2) (516)
Balance as of December 31, 2019$(718) $175
 $22
 $(7) $(528)
Foreign currency translation adjustments(4) 
 
 
 (4)(52) 
 
 
 (52)
Unrealized (losses) gains
 (96) 161
 
 65

 (162) 8
 
 (154)
Reclassification adjustments to income
 (36) 2
 
 (34)
 84
 (33) 
 51
Other
 
 
 6
 6

 
 
 (2) (2)
Income taxes
 28
 (10) 
 18

 17
 6
 
 23
Balance as of June 30, 2019(687) 182
 36
 4
 (465)
Foreign currency translation adjustments(39) 
 
 
 (39)
Unrealized gains
 71
 35
 
 106
Reclassification adjustments to income
 38
 3
 
 41
Income taxes
 (23) (8) 
 (31)
Balance as of September 30, 2019$(726) $268
 $66
 $4
 $(388)
Balance as of March 31, 2020$(770) $114
 $3
 $(9) $(662)



Reclassifications out of AOCI and into earnings were as follows (in millions):
  Three months ended March 31,  
Components of AOCI 2020 2019 
Condensed Consolidated
Statements of Income locations
Cash flow hedges:      
Foreign currency contract gains $49
 $14
 Product sales
Cross-currency swap contract losses (133) (42) Interest and other income, net
  (84) (28) Income before income taxes
  18
 6
 Provision for income taxes
  $(66) $(22) Net income
Available-for-sale securities:      
Net realized gains (losses) $33
 $(4) Interest and other income, net
  (7) 
 Provision for income taxes
  $26
 $(4) Net income
  Three months ended September 30,  
Components of AOCI 2019 2018 
Condensed Consolidated
Statements of Income locations
Cash flow hedges:      
Foreign currency contract gains $26
 $3
 Product sales
Cross-currency swap contract losses (64) (36) Interest and other income, net
  (38) (33) Income before income taxes
  8
 7
 Provision for income taxes
  $(30) $(26) Net income
Available-for-sale securities:      
Net realized losses $(3) $(103) Interest and other income, net
  
 1
 Provision for income taxes
  $(3) $(102) Net income

  Nine months ended September 30,  
Components of AOCI 2019 2018 
Condensed Consolidated
Statements of Income locations
Cash flow hedges:      
Foreign currency contract gains (losses) $62
 $(51) Product sales
Cross-currency swap contract losses (92) (170) Interest and other income, net
  (30) (221) Income before income taxes
  6
 47
 Provision for income taxes
  $(24) $(174) Net income
Available-for-sale securities:      
Net realized losses $(9) $(352) Interest and other income, net
  
 3
 Provision for income taxes
  $(9) $(349) Net income
Three months ended March 31,

12.
11. Fair value measurement
To estimate the fair value of our financial assets and liabilities, we use valuation approaches within a hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing an asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the inputs that market participants would use in pricing an asset or liability and are developed based on the best information available in the circumstances. The fair value hierarchy is divided into three levels based on the source of inputs as follows:
Level 1Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access
Level 2Valuations for which all significant inputs are observable either directly or indirectly—other than Level 1 inputs
Level 3Valuations based on inputs that are unobservable and significant to the overall fair value measurement
The availability of observable inputs can vary among the various types of financial assets and liabilities. To the extent that the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. In certain cases, the inputs used for measuring fair value may fall into different levels of the fair value hierarchy. In such cases, for financial statement disclosure purposes, the level in the fair value hierarchy within which the fair value measurement is categorized is based on the lowest level of input used that is significant to the overall fair value measurement.

The fair values of each major class of the Company’s financial assets and liabilities measured at fair value on a recurring basis were as follows (in millions):
 Quoted prices in
active markets for
identical assets
(Level 1)
 
Significant
other observable
inputs
(Level 2)
 
Significant
unobservable
inputs
(Level 3)
   Quoted prices in
active markets for
identical assets
(Level 1)
 
Significant
other observable
inputs
(Level 2)
 
Significant
unobservable
inputs
(Level 3)
  
    
Fair value measurement as of September 30, 2019, using: Total
Fair value measurement as of March 31, 2020, using: Quoted prices in
active markets for
identical assets
(Level 1)
 
Significant
other observable
inputs
(Level 2)
 
Significant
unobservable
inputs
(Level 3)
 Total
Assets:          
Interest-bearing securities:        
Available-for-sale securities:        
U.S. Treasury notes $1,167
 $
 $
 $1,167
 $176
 $
 $
 $176
U.S. Treasury bills 2,494
 
 
 2,494
 900
 
 
 900
Other government-related debt securities:        
U.S. 
 
 
 
Foreign and other 
 925
 
 925
Corporate debt securities:                
Financial 
 2,140
 
 2,140
 
 12
 
 12
Industrial 
 2,025
 
 2,025
 
 12
 
 12
Other 
 537
 
 537
 
 
 
 
Residential-mortgage-backed securities 
 516
 
 516
 
 
 
 
Other mortgage- and asset-backed securities 
 43
 
 43
Money market mutual funds 8,017
 
 
 8,017
 5,762
 
 
 5,762
Other short-term interest-bearing securities 
 2,363
 
 2,363
 
 432
 
 432
Equity securities 277
 
 
 277
 220
 
 
 220
Derivatives:                
Foreign currency contracts 
 339
 
 339
 
 375
 
 375
Cross-currency swap contracts 
 12
 
 12
 
 10
 
 10
Interest rate swap contracts 
 354
 
 354
 
 89
 
 89
Total assets $11,955
 $9,254
 $
 $21,209
 $7,058
 $930
 $
 $7,988
                
Liabilities:                
Derivatives:                
Foreign currency contracts $
 $6
 $
 $6
 $
 $5
 $
 $5
Cross-currency swap contracts 
 478
 
 478
 
 657
 
 657
Interest rate swap contracts 
 23
 
 23
Contingent consideration obligations 
 
 62
 62
 
 
 60
 60
Total liabilities $
 $484
 $62
 $546
 $
 $685
 $60
 $745


 
Quoted prices in
active markets for
identical assets
(Level 1)
 
Significant
other observable
inputs
(Level 2)
 
Significant
unobservable
inputs
(Level 3)
   
Quoted prices in
active markets for
identical assets
(Level 1)
 
Significant
other observable
inputs
(Level 2)
 
Significant
unobservable
inputs
(Level 3)
  
    
Fair value measurement as of December 31, 2018, using: Total
Fair value measurement as of December 31, 2019, using: 
Quoted prices in
active markets for
identical assets
(Level 1)
 
Significant
other observable
inputs
(Level 2)
 
Significant
unobservable
inputs
(Level 3)
 Total
Assets:          
Interest-bearing securities:        
Available-for-sale securities:        
U.S. Treasury notes $2,663
 $
 $
 $2,663
 $360
 $
 $
 $360
U.S. Treasury bills 8,191
 
 
 8,191
 
 
 
 
Other government-related debt securities:        
U.S. 
 110
 
 110
Foreign and other 
 932
 
 932
Corporate debt securities:                
Financial 
 2,697
 
 2,697
 
 1,121
 
 1,121
Industrial 
 2,504
 
 2,504
 
 834
 
 834
Other 
 562
 
 562
 
 198
 
 198
Residential-mortgage-backed securities 
 1,422
 
 1,422
 
 182
 
 182
Other mortgage- and asset-backed securities 
 469
 
 469
Money market mutual funds 5,659
 
 
 5,659
 5,250
 
 
 5,250
Other short-term interest-bearing securities 
 3,515
 
 3,515
 
 289
 
 289
Equity securities 176
 
 
 176
 303
 
 
 303
Derivatives:                
Foreign currency contracts 
 182
 
 182
 
 224
 
 224
Cross-currency swap contracts 
 170
 
 170
 
 66
 
 66
Interest rate swap contracts 
 56
 
 56
 
 259
 
 259
Total assets $16,689
 $12,619
 $
 $29,308
 $5,913
 $3,173
 $
 $9,086
                
Liabilities:                
Derivatives:                
Foreign currency contracts $
 $26
 $
 $26
 $
 $31
 $
 $31
Cross-currency swap contracts 
 401
 
 401
 
 315
 
 315
Interest rate swap contracts 
 149
 
 149
 
 
 
 
Contingent consideration obligations 
 
 72
 72
 
 
 61
 61
Total liabilities $
 $576
 $72
 $648
 $
 $346
 $61
 $407

Interest-bearing and equity securities
The fair values of our U.S. Treasury securities, money market mutual funds and equity securities are based on quoted market prices in active markets, with no valuation adjustment.
MostAs of March 31, 2020, our other government-related and corporate debt securities are investment grade and have maturity dates of fivethree years or less from the balance sheet date. Our other government-relatedcorporate debt securities portfolio is composed of securities withhas weighted-average credit ratings of BBB+BBB or equivalent by Standard & Poor’s Financial Services LLC (S&P), BBB+ by Moody’s Investors Service, Inc. (Moody’s), or and A– by Fitch Ratings, Inc. (Fitch); and our corporate debt securities portfolio has weighted-average credit ratings of A– or equivalent by S&P, Moody’s or Fitch.. We estimate the fair values of these securities by taking into consideration valuations obtained from third-party pricing services. The pricing services use industry-standard valuation models, including both income- and market-based approaches, for which all significant inputs are observable either directly or indirectly to estimate fair value. The inputs include reported trades of and broker-dealer quotes on the same or similar securities; issuer credit spreads; benchmark securities; and other observable inputs.
Our residential-mortgage-, other-mortgage- and asset-backed-securities portfolio is composed entirely of senior tranches with credit ratings of AAA by S&P, Moody’s or Fitch. We estimate the fair values of these securities by taking into consideration valuations obtained from third-party pricing services. The pricing services use industry-standard valuation models, including both income- and market-based approaches, for which all significant inputs are observable either directly or indirectly to estimate fair value. The inputs include reported trades of and broker-dealer quotes on the same or similar securities; issuer credit spreads; benchmark securities; prepayment or default projections based on historical data; and other observable inputs.
We value our other short-term interest-bearing securities at amortized cost, which approximates fair value given their near-term maturity dates.

Derivatives
All of our foreign currency forward and option derivative contracts have maturities of three years or less, and all are with counterparties that have minimum credit ratings of A– or equivalent by S&P, Moody’s or Fitch. We estimate the fair values of these contracts by taking into consideration valuations obtained from a third-party valuation service that uses an income-based industry-standard valuation model for which all significant inputs are observable either directly or indirectly. These inputs include foreign currency exchange rates, the London Interbank Offered Rate (LIBOR),LIBOR, swap rates and obligor credit default swap rates. In addition, inputs for our foreign currency option contracts include implied volatility measures. These inputs, when applicable, are at commonly quoted intervals. See Note 13,12, Derivative instruments.

Our cross-currency swap contracts are with counterparties that have minimum credit ratings of A– or equivalent by S&P, Moody’s or Fitch. We estimate the fair values of these contracts by taking into consideration valuations obtained from a third-party valuation service that uses an income-based industry-standard valuation model for which all significant inputs are observable either directly or indirectly. These inputs include foreign currency exchange rates, LIBOR, swap rates, obligor credit default swap rates and cross-currency-basis swap spreads. See Note 13,12, Derivative instruments.
Our interest rate swap contracts are with counterparties that have minimum credit ratings of A– or equivalent by S&P, Moody’s or Fitch. We estimate the fair values of these contracts by using an income-based industry-standard valuation model for which all significant inputs are observable either directly or indirectly. These inputs include LIBOR, swap rates and obligor credit default swap rates. See Note 13,12, Derivative instruments.
Contingent consideration obligations
As a result of our business combinations, we have incurred contingent consideration obligations. The contingent consideration obligations are recorded at their fair values by using probability-adjusted discounted cash flows, and we revalue these obligations each reporting period until the related contingencies have been resolved. The fair value measurements of these obligations are based on significant unobservable inputs related to licensing rights and product candidates acquired in business combinations, and they are reviewed quarterly by management in our R&D and commercial sales organizations. 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 carrying amounts of contingent consideration obligations for the three and nine months ended September 30, 2019 and 2018, were not material.
During the three and nine months ended September 30,March 31, 2020 and 2019, and 2018, 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, except with respect to the 2018 discontinuance of the internal development of a nonkey program resulting in an impairment of an IPR&D asset of $330 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.basis.
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.
Borrowings
We estimated the fair values of our borrowings by using Level 2 inputs. As of September 30, 2019March 31, 2020 and December 31, 2018,2019, the aggregate fair values of our borrowings were $33.3$35.8 billion and $35.0$33.7 billion, respectively, and the carrying values were $29.8$31.8 billion and $33.9$29.9 billion, respectively.

13.12. Derivative instruments
The Company is exposed to foreign currency exchange rate and interest rate risks related to its business operations. To reduce our risks related to such exposures, we use or have used certain derivative instruments, including foreign currency forward, foreign currency option, cross-currency swap, forward interest rate and interest rate swap contracts. We do not use derivatives for speculative trading purposes.
Cash flow hedges
We are exposed to possible changes in the values of certain anticipated foreign currency cash flows resulting from changes in foreign currency exchange rates associated primarily with our euro-denominated international product sales. Increases and decreases in the cash flows associated with our international product sales due to movements in foreign currency exchange rates are offset partially by corresponding increases and decreases in the cash flows from our international operating expenses resulting from these foreign currency exchange rate movements. To further reduce our exposure to foreign currency exchange rate fluctuations with regard to our international product sales, we enter into foreign currency forward and option contracts to hedge a portion of our projected international product sales primarily over a three-year time horizon, with, at any given point in time, a higher percentage of nearer-term projected product sales being hedged than in successive periods.
As of September 30, 2019March 31, 2020 and December 31, 2018,2019, we had outstanding foreign currency forward contracts with aggregate notional amounts of $4.6$4.9 billion and $4.5$5.0 billion, respectively. As of December 31, 2018, we had outstanding foreign currency option contracts with an aggregate notional amount of $21 million and no such outstanding contracts as of September 30, 2019. We have designated these foreign currency forward and foreign currency option 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.
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. 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. 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. 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 Interest and other income, 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, 2019,March 31, 2020, were as follows (notional amounts in millions):
  Foreign currency U.S. dollars
Hedged notes Notional amounts Interest rates Notional amounts Interest rates
1.25% 2022 euro Notes 1,250
 1.3% $1,388
 3.2%
0.41% 2023 Swiss franc Bonds CHF700
 0.4% $704
 3.4%
2.00% 2026 euro Notes 750
 2.0% $833
 3.9%
5.50% 2026 pound sterling Notes £475
 5.5% $747
 6.0%
4.00% 2029 pound sterling Notes £700
 4.0% $1,111
 4.5%

During the three months ended September 30, 2019, our 2.125% 2019 euro Notes matured, and the related cross-currency swaps were settled.
In connection with the anticipated issuance of long-term fixed-rate debt, we occasionally enter into forward interest rate contracts in order to hedge the variability in cash flows due to changes in the applicable U.S. Treasury rate between the time we enter into these contracts and the time the related debt is issued. Gains and losses on forward interest rate contracts, which are designated as cash flow hedges, are recognized in AOCI in the 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 swaps during the ninethree months ended September 30, 2019,March 31, 2020, and amounts expected to be recognized during the subsequent 12 months are not material.

The unrealized gains and losses recognized in AOCI for our derivative instruments designated as cash flow hedges were as follows (in millions):
 Three months ended
September 30,
 Nine months ended
September 30,
 Three months ended
March 31,
Derivatives in cash flow hedging relationships 2019 2018 2019 2018 2020 2019
Foreign currency contracts $176
 $41
 $245
 $233
 $239
 $85
Cross-currency swap contracts (105) (22) (240) (99) (401) (55)
Total unrealized gains $71
 $19
 $5
 $134
Total unrealized (losses) gains $(162) $30

Fair value hedges
To achieve a desired mix of fixed-rate and floating-rate debt, we entered into interest rate swap contracts that qualified for and were designated as fair value hedges. These interest rate swap contracts effectively convert fixed-rate coupons to floating-rate LIBOR-based coupons over the terms of the related hedge contracts. As of September 30, 2019March 31, 2020 and December 31, 2018,2019, we had interest rate swap contracts with aggregate notional amounts of $9.55$7.4 billion and $10.95$9.6 billion, respectively, that hedge certain portions of our long-term debt issuances.
Interest rate swaps with an aggregate notional value of $2.2 billion were terminated during the three months ended March 31, 2020, in connection with the redemption of certain of our notes. The termination of these interest rate swaps resulted in a gain of $17 million recognized in Interest expense, net, in the Condensed Consolidated Statements of Income. Additionally, we terminated $5.2 billion aggregate notional amount of interest rate swaps, which resulted in the receipt of $576 million from the counterparties that was included in Net cash provided by operating activities in the Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2020. This amount will be recognized in Interest expense, net, in the Condensed Consolidated Statements of Income over the remaining life of the underlying notes. Immediately following the termination of these interest rate swap contracts, we entered into new interest rate swap agreements at then-current interest rates on the same $5.2 billion principal amount of notes. See Note 9, Financing arrangements, for information on our interest rate swaps.
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. 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.

The hedged liabilities and related cumulative-basis adjustments for fair value hedges of those liabilities were recorded in the Condensed Consolidated Balance Sheets as follows (in millions):
 
Carrying amounts of hedged liabilities(1)
 
Cumulative amounts of fair value hedging adjustments related to the carrying amounts of the hedged liabilities(2)
 
Carrying amounts of hedged liabilities(1)
 
Cumulative amounts of fair value hedging adjustments related to the carrying amounts of the hedged liabilities(2)
Condensed Consolidated Balance Sheets locations September 30, 2019 December 31, 2018 September 30, 2019 December 31, 2018 March 31, 2020 December 31, 2019 March 31, 2020 December 31, 2019
Current portion of long-term debt $
 $2,396
 $
 $(3) $90
 $903
 $90
 $4
Long-term debt $9,811
 $9,361
 $391
 $(50) $7,784
 $8,814
 $558
 $292
____________ 
(1)
Current portion of long-term debt includes $1.0 billion of carrying value with discontinued hedging relationships as of December 31, 2018. Long-term debt includes $136 million and $137$90 million of carrying value with discontinued hedging relationships as of September 30, 2019March 31, 2020. Long-term debt includes $592 million and $136 million of carrying value with discontinued hedging relationships as of March 31, 2020 and December 31, 2018,2019, respectively.
(2) 
Current portion of long-term debt includes $3$90 million of hedging adjustments on discontinued hedging relationships as of DecemberMarch 31, 2018.2020. Long-term debt includes $36$492 million and $37$36 million of hedging adjustments on discontinued hedging relationships as of September 30, 2019March 31, 2020 and December 31, 2018,2019, 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, 2019 Nine months ended September 30, 2019 Three months ended March 31, 2020
 Product sales Interest and other income, net Interest (expense), net Product sales Interest and other income, net Interest (expense), net Product sales Interest and other income, net Interest (expense), net
Total amounts recorded in income and (expense) line items presented in the Condensed Consolidated Statements of Income $5,463
 $114
 $(313) $16,323
 $517
 $(988) $5,894
 $11
 $(346)
The effects of cash flow and fair value hedging:                  
Gains (losses) on cash flow hedging relationships reclassified out of AOCI:                  
Foreign currency contracts $26
 $
 $
 $62
 $
 $
 $49
 $
 $
Cross-currency swap contracts $
 $(64) $
 $
 $(92) $
 $
 $(133) $
(Losses) gains on fair value hedging relationships—interest rate swap agreements:            
Gains (losses) on fair value hedging relationships—interest rate swap agreements:      
Hedged items(1)
 $
 $
 $(96) $
 $
 $(444) $
 $
 $210
Derivatives designated as hedging instruments $
 $
 $96
 $
 $
 $447
 $
 $
 $(190)
 Three months ended September 30, 2018 Nine months ended September 30, 2018 Three months ended March 31, 2019
 Product sales Interest and other income, net Interest (expense), net Product sales Interest and other income, net Interest (expense), net Product sales Interest and other income, net Interest (expense), net
Total amounts recorded in income and (expense) line items presented in the Condensed Consolidated Statements of Income $5,510
 $126
 $(355) $16,532
 $519
 $(1,040) $5,286
 $185
 $(343)
The effects of cash flow and fair value hedging:                  
Gains (losses) on cash flow hedging relationships reclassified out of AOCI:                  
Foreign currency contracts $3
 $
 $
 $(51) $
 $
 $14
 $
 $
Cross-currency swap contracts $
 $(36) $
 $
 $(170) $
 $
 $(42) $
Gains (losses) on fair value hedging relationships—interest rate swap agreements:            
(Losses) gains on fair value hedging relationships—interest rate swap agreements:      
Hedged items(1)
 $
 $
 $48
 $
 $
 $278
 $
 $
 $(130)
Derivatives designated as hedging instruments $
 $
 $(44) $
 $
 $(259) $
 $
 $133
__________ 
(1) 
Gains (losses) on hedged items do not completely offset gains (losses) gains on the related designated hedging instruments due to amortization of the cumulative amounts of fair value hedging adjustments included in the carrying amount of the hedged debt for discontinued hedging relationships.relationships and the recognition of gains on terminated hedges where the corresponding hedged item was paid down in the period.
No portions of our cash flow hedge contracts were excluded from the assessment of hedge effectiveness. As of September 30, 2019,March 31, 2020, we expected to reclassify $97$162 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
To reduce our exposure to foreign currency fluctuations in certain assets and liabilities denominated in foreign currencies, we enter into foreign currency forward contracts that are not designated as hedging transactions. Most of these exposures are hedged on a month-to-month basis. As of September 30, 2019March 31, 2020 and December 31, 2018,2019, the total notional amounts of these foreign currency forward contracts were $857 million$0.8 billion and $737 million,$1.2 billion, 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, 2019March 31, 2020 and 2018.2019.

The fair values of derivatives included in the Condensed Consolidated Balance Sheets were as follows (in millions):
 Derivative assets Derivative liabilities Derivative assets Derivative liabilities
September 30, 2019 Condensed Consolidated Balance Sheets locations Fair values Condensed Consolidated Balance Sheets locations Fair values
March 31, 2020 
Condensed Consolidated
Balance Sheets locations
 Fair values Condensed Consolidated
Balance Sheets locations
 Fair values
Derivatives designated as hedging instruments:        
Foreign currency contracts Other current assets/ Other assets $339
 Accrued liabilities/ Other noncurrent liabilities $6
 Other current assets/ Other assets $375
 Accrued liabilities/ Other noncurrent liabilities $5
Cross-currency swap contracts Other current assets/ Other assets 12
 Accrued liabilities/ Other noncurrent liabilities 478
 Other current assets/ Other assets 10
 Accrued liabilities/ Other noncurrent liabilities 657
Interest rate swap contracts Other current assets/ Other assets 354
 Accrued liabilities/ Other noncurrent liabilities 
 Other current assets/ Other assets 89
 Accrued liabilities/ Other noncurrent liabilities 23
Total derivatives designated as hedging instruments 705
 484
 474
 685
Derivatives not designated as hedging instruments:        
Foreign currency contracts Other current assets 
 Accrued liabilities 
 Other current assets 
 Accrued liabilities 
Total derivatives not designated as hedging instruments 
 
 
 
Total derivatives $705
 $484
 $474
 $685
 Derivative assets Derivative liabilities Derivative assets Derivative liabilities
December 31, 2018 Condensed Consolidated Balance Sheets locations Fair values Condensed Consolidated Balance Sheets locations Fair values
December 31, 2019 
Condensed Consolidated
Balance Sheets locations
 Fair values Condensed Consolidated
Balance Sheets locations
 Fair values
Derivatives designated as hedging instruments:        
Foreign currency contracts Other current assets/ Other assets $181
 Accrued liabilities/ Other noncurrent liabilities $26
 Other current assets/ Other assets $223
 Accrued liabilities/ Other noncurrent liabilities $31
Cross-currency swap contracts Other current assets/ Other assets 170
 Accrued liabilities/ Other noncurrent liabilities 401
 Other current assets/ Other assets 66
 Accrued liabilities/ Other noncurrent liabilities 315
Interest rate swap contracts Other current assets/ Other assets 56
 Accrued liabilities/ Other noncurrent liabilities 149
 Other current assets/ Other assets 259
 Accrued liabilities/ Other noncurrent liabilities 
Total derivatives designated as hedging instruments 407
 576
 548
 346
Derivatives not designated as hedging instruments:        
Foreign currency contracts Other current assets 1
 Accrued liabilities 
 Other current assets 1
 Accrued liabilities 
Total derivatives not designated as hedging instruments 1
 
 1
 
Total derivatives $408
 $576
 $549
 $346

Our derivative contracts that were in liability positions as of September 30, 2019,March 31, 2020, 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. In such circumstances, the counterparties could request immediate settlement of these contracts for amounts that approximate the then current fair values of the contracts. 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 used in financing activities.

14.13. Contingencies and commitments
Contingencies
In the ordinary course of business, we are involved in various legal proceedings, government investigations and other matters that are complex in nature and have outcomes that are difficult to predict. See our Annual Report on Form 10-K for the year ended December 31, 2018,2019, Part I, Item 1A. Risk Factors—Our business may be affected by litigation and government investigations. We describe our legal proceedings and other matters that are significant or that we believe could become significant in this footnote; 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, 2018; or in Note 13, Contingencies and commitments, to the condensed consolidated financial statements in our Quarterly Reports on Form 10-Q for the periods ended March 31, 2019 and June 30, 2019.footnote.
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. We evaluate, on a quarterly basis, developments in legal proceedings and other matters that could cause an increase or decrease in the amount of the liability that has been accrued previously.
Our legal proceedings involve various aspects of our business and a variety of claims, some of which present novel factual allegations and/or unique legal theories. In each of the matters described in this filing;filing, or in Note 20,19, Contingencies and commitments, to the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2018; or in Note 13, Contingencies and commitments, to the condensed consolidated financial statements in our Quarterly Reports on Form 10-Q for the periods ended March 31, 2019 and June 30, 2019, 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;filing, or in Note 20,19, Contingencies and commitments, to the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2018; or in Note 13, Contingencies and commitments, to the condensed consolidated financial statements in our Quarterly Reports on Form 10-Q for the periods ended March 31, 2019 and June 30, 2019, 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.
Certain recent developments concerning our legal proceedings and other matters are discussed below:
Novartis Breach of Contract ActionAbbreviated New Drug Application (ANDA) Patent Litigation
KYPROLIS® (carfilzomib) ANDA Patent Litigation
Onyx Therapeutics, Inc. v. Cipla Limited, et al.
On September 17, 2019 and October 8, 2019, Novartis Pharma AG and Amgen, respectively, each filed its motion for judgment on the pleadings.
Sensipar® (cinacalcet) Litigation
Cipla Ltd. v. Amgen Inc.
On October 15, 2019, Amgen moved to dismiss Cipla Limited and Cipla USA, Inc.’s (collectively, Cipla) antitrust and fraud claims brought inMarch 30, 2020, the U.S. District Court for the District of Delaware (the Delaware District Court) for lack of standingissued an order advising the parties in the litigation that, due to the recent and failure to state a claim.current challenges, the court does not anticipate issuing its post-trial opinion until approximately on or before May 8, 2020.
Abbreviated New Drug Application (ANDA)Otezla® (apremilast) ANDA Patent Litigation
Amgen Inc. v. Sandoz Inc., et al.
On February 14, 2020, the U.S. District Court for the District of New Jersey (the New Jersey District Court) granted the motion by Amgen and Celgene Corp. (Celgene) and issued an order substituting Amgen for Celgene as plaintiff in the consolidated action and all related actions, terminating Celgene as plaintiff in the consolidated action and all related actions, and amending the case caption in the consolidated action and all related actions to reflect Amgen as the sole plaintiff.
On March 25, 2020, based on a joint request by Amgen and Unichem Laboratories, Ltd. (Unichem), the New Jersey District Court entered a consent judgment and injunction prohibiting the making, using, selling, offering to sell, or importing of Unichem’s apremilast product during the term of the U.S. Patent Nos. 6,962,940 (the ’940 Patent); 7,427,638 (the ’638 Patent); 7,659,302 (the ’302 Patent); 7,893,101 (the ’101 Patent); 8,455,536 (the ’536 Patent); 9,018,243 (the ’243 Patent); 9,724,330 (the ’330 Patent); and 10,092,541 (the ’541 Patent), unless authorized pursuant to a confidential settlement agreement. On April 3, 2020, based on a joint request by Amgen and Annora Pharma Private Ltd. and Hetero USA Inc. (collectively, Hetero), the New Jersey District Court entered a consent judgment and injunction prohibiting the making, using, selling, offering to sell, or importing of Hetero’s apremilast product during the term of the ’940 Patent; U.S. Patent No. 7,208,516; the ’638 Patent; the ’302 Patent; the ’101 Patent; the ’536 Patent; U.S. Patent No. 8,802,717; the ’243 Patent; the ’330 Patent; U.S. Patent No. 9,872,854 and the ’541 Patent, unless authorized pursuant to a confidential settlement agreement. Trial in the consolidated action is scheduled to commence in May 2021.

Sensipar® (cinacalcet) ANDA Patent Litigation
Amgen Inc. v. Amneal Pharmaceuticals LLC, et al. (formerly, Amgen Inc. v. Aurobindo Pharma Ltd. et al.) Consolidated Case
As previously disclosed, (i)On February 13, 2020, Amgen appealed the Delaware District Court’s judgment of noninfringement of Amgen’s U.S. Patent No. 9,375,405 (the ’405 Patent) in favor of Amneal Pharmaceuticals LLC and Amneal Pharmaceuticals of New York, LLC (collectively, Amneal), and Piramal Healthcare UK Limited (Piramal), and (ii) Zydus Pharmaceuticals (USA) Inc. and Cadila Healthcare Ltd. (collectively, Zydus) appealed the Delaware District Court’s judgment of infringement by Zydus of Amgen’s ’405 Patent. On October 1, 2019, oral arguments for these appeals were held beforepetitioned the U.S. Court of Appeals for the Federal Circuit (the Federal Circuit Court).

- v. Cipla, et al.
As previously disclosed, Amgen filed a motion requesting to rehear Amgen’s appeal of the judgment of noninfringement with respect to Piramal Healthcare UK Limited, and Amneal Pharmaceuticals LLC and Amneal Pharmaceuticals of New York, LLC (collectively, Amneal) petitioned the Federal Circuit Court to vacatefor panel rehearing of the Delaware District Court’scourt’s opinion vacating and remanding the judgment of noninfringement of Amgen’s ’405 Patent with respect to Watson Laboratories, Inc. and Actavis Pharma, Inc. Cipla filed an opposition to this motion and moved to participate in the appeal as either an intervenor or as amicus curiae.Amneal. On September 13, 2019,April 15, 2020, the Federal Circuit Court denied Amgen’s motion, lifted the stay of the briefing schedule which had been stayed pending dispositioneach of Amgen’s motionand Amneal’s petitions. On April 22, 2020, the Federal Circuit Court issued a mandate returning the case to vacate, and granted Cipla permission to file a brief as amicus curiae.the Delaware District Court.
-ENBREL (etanercept) Patent Litigation
Immunex Corporation, et al. v. Sun Pharmaceutical Industries Ltd.Sandoz Inc., et al.
On September 18, 2019,March 4, 2020, the Delaware DistrictFederal Circuit Court deniedheard oral argument on the motion filedappeal by Sun Pharma Global FZE, Sun Pharmaceutical Industries, Ltd.Sandoz Inc., Sandoz International GmbH and Sun Pharmaceutical Industries, Inc. (collectively, Sun), rejecting Sun’s contention that its settlement agreement with Amgen permitted Sun’s generic cinacalcet to enterSandoz GmbH from final judgment upholding the market without liability.
Amgen Inc. v. The ACME Laboratories Ltd.
On September 11, 2019, Amgen filed a lawsuit in the Delaware District Court against The ACME Laboratories Ltd. for infringement of Amgen’s ’405 Patent.
Amgen Inc. v. Accord Healthcare, Inc.
On October 21, 2019, based on a joint request of the parties, the Delaware District Court entered judgment of infringement and validity of Amgen’s ’405U.S. Patent Nos. 8,063,182 and an injunction prohibiting the manufacture, use, sale, offer to sell, or importation into the United States of Accord Healthcare, Inc.’s cinacalcet product during the term of the ’405 Patent unless specifically authorized pursuant to the confidential settlement agreement.
Sensipar® Antitrust Class Actions
On July 31, 2019, the multidistrict litigation panel entered an order consolidating in the Delaware District Court the 4 class action lawsuits brought by plaintiffs on behalf of a putative class of direct or indirect purchasers of Sensipar® against Amgen and various entities affiliated with Teva Pharmaceutical Industries Ltd. On September 13, 2019, the plaintiffs filed amended complaints, and on October 15, 2019, Amgen filed its motion to dismiss both the direct purchaser plaintiffs’ consolidated class action complaint and the indirect purchaser end payor plaintiffs’ complaint.8,163,522.
Repatha® (evolocumab) Patent Litigation
Amgen Inc., et al. v. Sanofi, et al.
On August 28, 2019, the Delaware District Court ruled on the post-trial motions by Sanofi, Sanofi-Aventis U.S. LLC, Aventisub LLC (formerly doing business as Aventis Pharmaceuticals Inc.) and Regeneron Pharmaceuticals, Inc., denying their request for a new trial and their request to reverse the jury verdict that U.S. Patent Nos. 8,829,165 (the ’165 Patent) and 8,859,741 (the ’741 Patent) provide written description support for the claimed inventions. The Delaware District Court also ruled as a matter of law that claims 19 and 29 of the ’165 Patent and claim 7 of the ’741 Patent are invalid for failing to meet the enablement requirement, overturning the jury verdict. On October 23, 2019, Amgen filed a notice of appeal to the Federal Circuit Court.
Patent Disputes in the International Region
The European Patent Office’s decision on November 30, 2018 confirming the validity of Amgen’s European Patent No. 2,215,124 has been appealed toA two-day hearing before the Technical Board of Appeal and a two-day hearing isof the European Patent Office, which was scheduled to begin on March 24, 2020, has been rescheduled to begin on October 28, 2020.
WeAs previously disclosed, we are also involved in and expect future involvement in additional disputes regarding our proprotein convertase subtilisin/kexin type 9 (PCSK9) patents in other jurisdictions and regions, including matters filed against us and that we have filed in the United Kingdom, Germany, France and Japan.
ENBREL (etanercept) Patent Litigation
Immunex Corporation, et al. v. Samsung Bioepis Co., Ltd.
On August 5, 2019, defendant Samsung Bioepis Co., Ltd. respondedApril 24, 2020, the Supreme Court of Japan declined to hear Sanofi K.K.’s appeals making final the complaint by Immunex Corporation (Immunex, a wholly-owned subsidiary of Amgen Inc.), Amgen Manufacturing, Limited (AML) and Hoffmann-La Roche Inc., denying infringement and seeking judgmentJapanese High Court’s decisions that the patents-in-suit are invalid, unenforceable, and/or not infringed.

Immunex Corporation, et al. v. Sandoz Inc., et al.
On August 9, 2019, the U.S. District Court for the District of New Jersey (the New Jersey District Court) issued its decision upholding the validity of U.S. Patent Nos. 8,063,182 and 8,163,522. On October 8, 2019, by stipulation of Immunex and AML, and Sandoz Inc., Sandoz International GmbH and Sandoz GmbH (collectively, Sandoz), the New Jersey District Court entered final judgment and a permanent injunction prohibiting Sandoz from making, using, importing, selling or offering for sale Sandoz’s etanercept product, and, on the same day, Sandoz appealed the final judgment to the Federal Circuit Court.PRALUENT® infringes Amgen’s valid patent rights in Japan.
NEUPOGEN® (filgrastim)/Neulasta® (pegfilgrastim) Patent Litigation
Amgen Inc., et al. v. Apotex Inc., et al.PTAB Challenge
On August 27, 2019,March 24, 2020, the U.S. DistrictFederal Circuit Court forvacated the Southern Districtdecision by the Patent Trial and Appeal Board (PTAB) of Florida granted an unopposed motion to substitute Accord BioPharma in place of defendants Apotex Inc. and Apotex Corp.
In a separate challenge at the U.S. Patent and Trademark Office’s Patent TrialOffice and Appeal Board (PTAB), on October 4, 2019,remanded the case to the PTAB granted judgment adverse to Apotex Biologics, LLC, Apotex Inc., and Apotex Corp.for proceeding consistent with the Federal Circuit Court’s decision in post-grant review proceeding on Amgen’s U.S. Patent No. 9,856,287 (the ’287 Patent). The review proceedings continue with Kashiv Biosciences, LLC (Kashiv) as the sole petitioner.
Amgen Inc., et al. v. Kashiv Biosciences, LLC, et al.
On September 16, 2019, the New Jersey District Court entered Amgen and Kashiv’s stipulation to dismiss without prejudice the causes of action directed solely to U.S. Patent No. 8,952,138 (the ’138 Patent), in light of the PTAB’s May 20, 2019 amended final written decision finding that claim 18 of the ’138 Patent was obvious.
In a separate challenge by Kashiv at the PTAB, on September 11, 2019, the PTAB instituted the inter partesArthrex review (IPR) of Amgen’s U.S. Patent Nos. 8,940,878 and 9,643,997 (the ‘997 Patent)Inc. v. Smith & Nephew, Inc., 941 F.3d 1320 (Fed. Cir. 2019).
Amgen Inc., et al. v. MylanPfizer Inc., et al.
TheOn February 18, 2020, the Delaware District Court forentered an amended scheduling order moving the Western Districttrial on the infringement of Pennsylvania entered judgment of noninfringement of Amgen’sour U.S. Patent No. 8,273,7079,643,997 to May 17, 2021, to enable Amgen Inc. and its wholly owned subsidiary, Amgen Manufacturing, Limited (collectively Amgen), to seek additional discovery into the ’997 Patent on August 21, 2019,defenses of Pfizer Inc. (Pfizer) and September 17, 2019, respectively, based on a joint request of Amgen and MylanHospira Inc., Mylan Pharmaceuticals Inc., Mylan GmbH, and Mylan N.V., resolving the patent disputes that had been the subject of the lawsuit.
Amgen Inc., et al. v. Sandoz Inc., et al. (Hospira).
On September 3, 2019, the Federal Circuit Court denied Amgen’s petition for rehearing en bancApril 24, 2020, Amgen filed a separate lawsuit in the consolidated appealDelaware District Court against Hospira and reissued its opinion with amendment, but without disturbing its affirmancePfizer for infringement of grant of summary judgment of noninfringement in favor of SandozU.S. Patent No. 10,577,392 (the ’392 Patent) and seeks, among other remedies, damages and injunctive relief to prohibit Hospira and Pfizer from infringing the ’392 Patent by the manufacture, import and sale of Pfizer’s NIVESTYMTM biosimilar filgrastim product, which was launched in the U.S. District Court for the Northern District of California.in October 2018.
Amgen Inc., et al. v. Tanvex BioPharma USA,Hospira Inc., et al.
On September 23, 2019, defendants Tanvex BioPharma USA,March 4, 2020, Hospira and Pfizer filed a motion requesting the Delaware District Court to dismiss the complaint by Amgen Inc., Tanvex BioPharma, Inc., and Tanvex Biologics Corporation responded to Amgen’s complaint, denying infringement and seeking judgmentits wholly owned subsidiary, Amgen Manufacturing, Limited, alleging non-infringement of noninfringement and invalidity of Amgen’s ’287 Patent.U.S. Patent No. 8,273,707. The motion has been fully briefed.
Fresenius PTAB Challenge
On October 16, 2019,March 30, 2020, Amgen filed its preliminary response to a petition to institute inter partes review before the PTAB deniedto challenge the petitionpatentability of U.S. Patent No. 9,856,287 filed by Fresenius Kabi USA, LLC and Fresenius Kabi SwissBiosimSwissBioSim GmbH, and the PTAB will have 3 months to render a decision on whether to institute the IPR with respect to the patentability of Amgen’s ’287 Patent.trial proceedings.

Hospira EPOGEN® (epoetin alfa) Patent Litigation
Amgen Inc., et al. v. Hospira, Inc.
On September 30, 2019, theThe Federal Circuit Court heard argument on the appealdenied petition for rehearing en banc by Hospira Inc. (Hospira), a subsidiary of Pfizer, and issued the cross-appeal by Amgen and AML,mandate on March 23, 2020 affirming the final judgment of the Delaware District Court’s final judgmentCourt that Amgen’s U.S. Patent No. 5,856,298 is valid and infringed by Hospira, that Amgen’s U.S. Patent No. 5,756,349 is not infringed by Hospira, and awarding Amgen $70 million in damages for Hospira’s infringement.

On April 17, 2020, Amgen acknowledged satisfaction of judgment upon receipt of $83 million in damages, interest and cost.
Litigation relating to our Biosimilar Products
KANJINTITM*® (trastuzumab-anns) Patent Litigation
Genentech, Inc. v. Amgen Inc.
As previously disclosed, Genentech, Inc. (Genentech) appealedOn March 6, 2020, the DelawareFederal Circuit Court affirmed the District Court’s denial of Genentech’sGenentech Inc.’s (Genentech) motion for a preliminary injunction and requested the Federal Circuit Court to enter an injunction prohibiting Amgen from continuing with its launch of KANJINTITM until final resolution of the appeal.injunction. On August 7, 2019, the Federal Circuit Court denied Genentech’s motion for an injunction pending appeal.
On September 4, 2019, Genentech filed its third amended complaint adding a demand for a jury trial and an award of damages for infringement. On September 23, 2019,March 9, 2020, the Delaware District Court orderedentered a stipulated dismissal with prejudiceMarkman order construing a term of all claims for infringement of certain asserted patents, leaving 4 patents asserted by Genentech in the litigation.U.S. Patent No. 8,574,869 (the ’869 Patent). On September 24, 2019, Amgen filed its answer to Genentech’s third amended complaint denying infringement of any valid patent claim. On September 26, 2019,March 16, 2020, the Delaware District Court ordered thatsigned a 5-dayjoint stipulation and order vacating the April 20, 2020 trial date. On April 17, 2020, the Delaware District Court rescheduled the jury trial to begin on the patent issues commence on December 9, 2019, and the trial on damages (and therefore willfulness) be tried separately at a later date, if necessary.February 22, 2021.
MVASITM® (bevacizumab-awwb) Patent Litigation
Genentech, Inc. and City of Hope v. Amgen Inc.
On February 19, 2020, Genentech filed its second amended complaint in the Delaware District Court, adding additional claims for legal and declaratory relief with respect to patents already in suit. On March 4, 2020, Amgen filed its second amended affirmative answer and counterclaims, adding affirmative defenses and counterclaims that the ’869 Patent is unenforceable for inequitable conduct and unclean hands.On March 9, 2020, the Delaware District Court entered a Markman order construing a term of the ’869 Patent.
Genentech, Inc. and City of Hope v. Immunex Rhode Island Corp. and Amgen Inc.
On August 16, 2019,Argument before the Federal Circuit Court deniedon Genentech’s motion requestingappeal of the Federal Circuit Court enter an injunction prohibiting Amgen from marketing MVASITM until final resolutionDelaware District Court’s denial of Genentech’s appeal.motions for injunctive relief has been scheduled for June 3, 2020.
Genentech, Inc. and CityBreach of HopeContract Action
Cipla Ltd. et al. v. Amgen Inc.
On August 22, 2019 and October 29, 2019, by stipulationFebruary 6, 2020, Amgen’s motion was transferred to the U.S. Magistrate Judge for the District of Delaware for a recommendation. A hearing on the parties, the Delaware District Court entered judgment of noninfringement, in each instance, with respect to 1 of the patents asserted in the consolidated lawsuit, leaving a total of 6 remaining patents asserted by Genentech in the litigation.motion was held on April 28, 2020.
Humira® Biosimilar Antitrust Class ActionsNovartis Pharma AG v. Amgen Inc.
As previously disclosed, 12 purported class actions against Amgen, along with AbbVie Inc. and AbbVie Biotechnology Ltd. wereOn February 18, 2020, Novartis Pharma AG filed in the U.S. District Court for the NorthernSouthern District of Illinois (the Illinois Northern District Court). New York its answer and affirmative defenses to Amgen’s second amended counterclaims.
Antitrust Class Action
Sensipar® Antitrust Class Actions
On August 9, 2019,February 6, 2020, the plaintiffs filed their consolidated complaintmotions in the Illinois Northern District Court. On October 11, 2019, the defendants filed a joint motion to dismiss the consolidated complaint (as well as brief individual motions), challenging the legal sufficiency of the plaintiffs’ allegations to state any claim for relief under the law. No argument date has been setclass action lawsuits against Amgen and plaintiffs’ responsevarious entities affiliated with Teva Pharmaceutical Industries Limited were transferred to the U.S. Magistrate Judge for the District of Delaware for a recommendation. A hearing on the motions is duewas held on November 19, 2019.April 28, 2020.
* RegisteredThe multidistrict litigation panel certified its conditional transfer order on February 6, 2020 transferring the additional class action lawsuit brought in the U.S.

District Court for the Southern District of Florida, captioned MSP Recovery Claims v. Amgen Inc., et al.,to the Delaware District Court.

Item 2.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) is intended to assist the reader in understanding Amgen’s business. MD&A is provided as a supplement to and should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2018, and our Quarterly Reports on Form 10-Q for the periods ended March 31, 2019 and June 30, 2019. Our results of operations discussed in MD&A are presented in conformity with GAAP. Amgen operates in one business segment: human therapeutics. Therefore, our results of operations are discussed on a consolidated basis.
Forward-looking statements
This report and other documents we file with the Securities and Exchange Commission (SEC) contain forward-looking statements that are based on current expectations, estimates, forecasts and projections about us, our future performance, our business, our beliefs and our management’s assumptions. In addition, we, or others on our behalf, may make forward-looking statements in press releases, written statements or our communications and discussions with investors and analysts in the normal course of business through meetings, webcasts, phone calls and conference calls. Such words as “expect,” “anticipate,” “outlook,” “could,” “target,” “project,” “intend,” “plan,” “believe,” “seek,” “estimate,” “should,” “may,” “assume” and “continue” as well as variations of such words and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and they involve certain risks, uncertainties and assumptions that are difficult to predict. We describe our respective risks, uncertainties and assumptions that could affect the outcome or results of operations in Item 1A. Risk Factors in Part II herein.herein and in Part I, Item 1A. Risk Factors of our Annual Report on Form 10-K for the year ended December 31, 2019. We have based our forward-looking statements on our management’s beliefs and assumptions based on information available to our management at the time the statements are made. We caution you that actual outcomes and results may differ materially from what is expressed, implied or forecasted by our forward-looking statements. Reference is made in particular to forward-looking statements regarding product sales, regulatory activities, clinical trial results, reimbursement, expenses, EPS, liquidity and capital resources, trends, planned dividends, stock repurchases, collaborations and restructuring plans.effects of pandemics. Except as required under the federal securities laws and the rules and regulations of the SEC, we do not have any intention or obligation to update publicly any forward-looking statements after the distribution of this report, whether as a result of new information, future events, changes in assumptions or otherwise.
Overview
Amgen is a highly focused biotechnology company committed to unlocking the potential of biology for patients suffering from serious illness.illnesses. A biotechnology pioneer since 1980, Amgen has grown to be one of the world’s leading independent biotechnology companies, has reached millions of patients around the world and is developing a pipeline of medicines with breakaway potential. In 2020, we are celebrating our 40th anniversary, continuing our history of focusing on innovative medicines that have the potential to be first-in-class molecules and that have a large-effect size on serious diseases.
Our principal products—those with the most significant annual commercial sales—are ENBREL, NeulastaProlia®, ProliaNeulasta®, XGEVA®, Otezla®, Aranesp®, KYPROLIS®, EPOGEN®and Sensipar®/MimparaRepatha®. We also market a number of other products, including Nplate® (romiplostim), Vectibix® (panitumumab), RepathaParsabiv®(etelcalcetide), EPOGEN®,Sensipar®/Mimpara®, ParsabivKANJINTI® (etelcalcetide), MVASI®, EVENITY®(romosozumab-aqqg),BLINCYTO® (blinatumomab), AMGEVITATM (adalimumab),Aimovig® (erenumab-aooe), NEUPOGEN®, AMGEVITATM (adalimumab-atto), KANJINTITM, EVENITY® (romosozumab-aqqg), IMLYGIC® (talimogene laherparepvec), MVASITM and Corlanor® (ivabradine).
COVID-19 pandemic
A novel strain of coronavirus (COVID-19) was declared a global pandemic by the World Health Organization on March 11, 2020. We have been carefully monitoring the COVID-19 pandemic and its impact on our global operations. We have taken appropriate steps to minimize the risk to our employees. Our employees have been working remotely with the exception of certain essential staff that continue to report to Amgen locations. The essential staff are primarily at our manufacturing sites, working in accordance with applicable government health and safety protocols and guidance issued in response to the COVID-19 pandemic, and are being paid a labor premium during this period. To date, our remote working arrangements have not significantly impacted our ability to maintain critical business operations. Further, we currently do not expect disruptions or shortages of our supply of medicine.


Since the beginning of the COVID-19 pandemic, we have seen changes in demand trends for some of our products, including lower demand for certain products as continuing patient access to those products has been impacted by COVID-19. For example, near the end of March, we began to observe a decline in sales of Prolia®, as elderly patients vulnerable to COVID-19 avoided doctors’ offices. To respond to COVID-19, we are managing our clinical development on a case-by-case basis. Patients who are already enrolled in studies continue to receive study drug, including through direct-to-patient shipments. For those studies that have the potential for significant benefit in a serious or life-threatening condition and where site resources allow new patients to be enrolled safely and monitored closely, we are allowing enrollment to continue. For those clinical trials where there is uncertainty with regard to the trial sites’ ability to ensure subject safety or data integrity at the present time, we have temporarily paused enrollment. We remain focused on supporting our active clinical sites in providing care for these patients and providing investigational drug supply. In addition, our R&D organization is supporting efforts to combat the pandemic in a number of ways including: (i) conducting a population-based study by our subsidiary deCODE Genetics in partnership with the Icelandic government, (ii) entering into a collaboration with Adaptive Biotechnologies to discover and develop antibody therapies for prevention or treatment options and (iii) joining a public-private partnership between leading companies in our industry and U.S. government health agencies to develop a strategy for a coordinated research response to the COVID-19 pandemic. Further, we anticipate that Otezla® will be investigated as a potential immunomodulatory treatment in adult patients with COVID-19 in upcoming platform trials.
We continue to believe that existing funds, cash generated from operations and existing sources of and access to financing are adequate to satisfy our needs for working capital, capital expenditures and debt service requirements as well as to engage in the capital return and other business initiatives that we plan to strategically pursue. To respond to some of the challenges experienced in the healthcare community as a result of the pandemic, we recently extended credit terms with certain customers for a subset of our products globally. For a discussion of the risks presented by the COVID-19 pandemic to our results, see Risk Factors in Part II, Item 1A of this Form 10-Q.
Significant developments
Following is a summary of selected significant developments affecting our business that have occurred since the filing of our QuarterlyAnnual Report on Form 10-Q10-K for the periodyear ended June 30,December 31, 2019. For additional developments or for a more comprehensive discussion of certain developments discussed below, see our Annual Report on Form 10-K for the year ended December 31, 2018, and our Quarterly Reports on Form 10-Q for the periods ended March 31, 2019 and June 30, 2019.
Products/Pipeline
Oncology/Hematology
KYPROLIS®
In September 2019, we announced that the phase 3 CANDOR (Carfilzomib, Daratumumab and Dexamethasone for Patients With Relapsed and/or Refractory Multiple Myeloma) study evaluating KYPROLIS® in combination with dexamethasone and DARZALEX® (daratumumab) compared to KYPROLIS® and dexamethasone alone met its primary endpoint of progression-free survival.

Inflammation
ENBRELEstablishment of wholly-owned affiliate in Japan
In August 2019,April 2020, we announced that the U.S. District Court for the District of New Jersey ruled in Amgen’s favor on validitycompleted our purchase from Astellas of the two patents that describeremaining shares of Amgen Astellas BioPharma K.K. (AABP), a joint venture between Amgen and claim ENBRELAstellas established in 2013. AABP, now a wholly-owned Amgen affiliate in Japan and methodsrenamed Amgen K.K., has enabled us to build a strong presence in Japan as we continue to advance treatments for making it. See Note 14, Contingencies and commitments, to the condensed consolidated financial statements in our Quarterly Report on Form 10-Q for the period ended September 30, 2019.serious illnesses.
Bone health
EVENITY®
In October 2019, we and UCB announced that the Committee for Medicinal Products for Human Use of the European Medicines Agency (EMA) has adopted a positive opinion recommending Marketing Authorization for EVENITY® for the treatment of severe osteoporosis in postmenopausal women at high risk of fracture and with no history of myocardial infarction or stroke.
Biosimilars
ABP 798 (biosimilar rituximab)
In August 2019, we and Allergan plc announced positive top-line results from a comparative clinical study evaluating the efficacy and safety of ABP 798, a biosimilar candidate to Rituxan® (rituximab), compared to Rituxan® in patients with CD20-positive B-cell non-Hodgkin’s lymphoma. The primary endpoint, an assessment of overall response rate by week 28, was within the prespecified margin for ABP 798 compared to Rituxan®, showing clinical equivalence. Safety and immunogenicity of ABP 798 were comparable to Rituxan®.
Acquisition
In August 2019, we announced that we had entered into an agreement with Celgene in connection with Celgene’s previously announced merger with BMS to acquire worldwide rights to Otezla®, the only oral, nonbiologic treatment for psoriasis and psoriatic arthritis, and certain related assets and liabilities for $13.4 billion in cash. The transaction is expected to close by the end of 2019.
Selected financial information
The following is an overview of our results of operations (in millions, except percentages and per-share data):
Three months ended
September 30,
   Nine months ended
September 30,
  Three months ended
March 31,
  
2019 2018 Change 2019 2018 Change2020 2019 Change
Product sales                
U.S.$4,029
 $4,260
 (5)% $12,162
 $12,774
 (5)%$4,279
 $3,991
 7 %
ROW1,434
 1,250
 15 % 4,161
 3,758
 11 %1,615
 1,295
 25 %
Total product sales5,463
 5,510
 (1)% 16,323
 16,532
 (1)%5,894
 5,286
 12 %
Other revenues274
 394
 (30)% 842
 985
 (15)%267
 271
 (1)%
Total revenues$5,737
 $5,904
 (3)% $17,165
 $17,517
 (2)%$6,161
 $5,557
 11 %
Operating expenses$3,261
 $3,581
 (9)% $9,539
 $9,636
 (1)%$3,806
 $3,085
 23 %
Operating income$2,476
 $2,323
 7 % $7,626
 $7,881
 (3)%$2,355
 $2,472
 (5)%
Net income$1,968
 $1,859
 6 % $6,139
 $6,466
 (5)%$1,825
 $1,992
 (8)%
Diluted EPS$3.27
 $2.86
 14 % $10.01
 $9.61
 4 %$3.07
 $3.18
 (3)%
Diluted shares602
 649
 (7)% 613
 673
 (9)%594
 626
 (5)%

In the following discussion of changes in product sales, any reference to unit demand growth or decline refers to changes in the purchases of our products by healthcare providers (such as physicians or their clinics), dialysis centers, hospitals and pharmacies. In addition, any reference to increases or decreases in inventory refers to changes in inventory held by wholesaler customers and end users (such as pharmacies).

Total product sales decreasedincreased for the three and nine months ended September 30,March 31, 2020, driven primarily by sales from Otezla®, acquired in November 2019 driven primarilyand recently launched biosimilar products, offset partially by a decline in net selling price, offset partially by higher unit demand.price. For the remainder of 2019,2020, we continue to expect a lower net selling price comparedto continue to decline primarily on our legacy products. Further, since the beginning of the COVID-19 pandemic, we have seen changes in demand trends for some of our products, including lower demand for certain products as patient access to those products has been impacted by the pandemic. We expect this trend to continue to some extent through at least the duration of the pandemic. As discussed above, in response to the challenges being experienced by the healthcare community as a result of COVID-19, we have extended credit terms with 2018.certain customers for a subset of our products globally. In addition, a number of insurance plans (commercial and governmental) have been required to or have voluntarily covered 90-day prescription fills for a number of medicines including some of our products that are used in chronic conditions. As a result, there is increased uncertainty around the timing and magnitude of our sales during the COVID-19 pandemic.
Other revenues decreased slightly for the three and nine months ended September 30, 2019,March 31, 2020, driven primarily by lower milestoneprofit share payments, offset partially by higher royalties.
Operating expenses decreasedincreased for the three and nine months ended September 30, 2019 and 2018,March 31, 2020, driven primarily by acquisition related expenses and the favorable change resulting from an impairment charge associated with a nonkey IPR&D asset in the thirdfirst full quarter of 2018. The decrease incommercial-related support for Otezla®. For the nine months ended September 30, 2019, was offset partially by increasedremainder of 2020, we expect to continue to see the effects of our acquisition of Otezla® on our operating expenses, including increases to Cost of sales, R&D and Selling, general and administrative (SG&A) expenses.
Although changes in foreign currency exchange rates result in increases or decreases in our reported international product sales, the benefit or detriment that such movements have on our international product sales is offset partially by corresponding increases or decreases in our international operating expenses and our related foreign currency hedging activities. Our hedging activities seek to offset the impacts, both positive and negative, that foreign currency exchange rate changes may have on our net income by hedging our net foreign currency exposure, primarily with respect to product sales denominated in euros. The net impact from changes in foreign currency exchange rates was not material for the three and nine months ended September 30, 2019March 31, 2020 and 2018.2019.
Results of operations
Product sales
Worldwide product sales were as follows (dollar amounts in millions):
Three months ended
September 30,
   Nine months ended
September 30,
  Three months ended
March 31,
  
2019 2018 Change 2019 2018 Change2020 2019 Change
ENBREL$1,366
 $1,292
 6 % $3,880
 $3,699
 5 %$1,153
 $1,151
  %
Prolia®
654
 592
 10 %
Neulasta®
711
 1,051
 (32)% 2,556
 3,306
 (23)%609
 1,021
 (40)%
Prolia®
630
 532
 18 % 1,920
 1,636
 17 %
XGEVA®
476
 433
 10 % 1,446
 1,330
 9 %481
 471
 2 %
Otezla®
479
 
 *
Aranesp®
452
 477
 (5)% 1,302
 1,403
 (7)%422
 414
 2 %
KYPROLIS®
266
 232
 15 % 778
 717
 9 %280
 245
 14 %
EPOGEN®
215
 252
 (15)% 657
 746
 (12)%
Sensipar®/Mimpara®
109
 409
 (73)% 444
 1,326
 (67)%
Repatha®
229
 141
 62 %
Other products1,238
 832
 49 % 3,340
 2,369
 41 %1,587
 1,251
 27 %
Total product sales$5,463
 $5,510
 (1)% $16,323
 $16,532
 (1)%$5,894
 $5,286
 12 %
* Change in excess of 100%.
Future sales of our products will depend in part on the factors discussed below and in the following sections of our Annual Report on Form 10-K for the year ended December 31, 2018:2019: (i) Item 1. Business—Marketing, Distribution and Selected Marketed Products, (ii) Item 1A. Risk Factors and (iii) Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Overview, and Results of Operations—Product Sales, as well as in our Quarterly ReportsReport on Form 10-Q for the periodsperiod ended March 31, 2019 and June 30, 2019,2020, in (i) Part I, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations—Product Sales, and (ii) Part II, Item 1A. Risk Factors.

ENBREL
Total ENBREL sales by geographic region were as follows (dollar amounts in millions):
Three months ended
September 30,
   Nine months ended
September 30,
  Three months ended
March 31,
  
2019 2018 Change 2019 2018 Change2020 2019 Change
ENBREL — U.S.$1,323
 $1,242
 7 % $3,744
 $3,544
 6 %$1,117
 $1,106
 1 %
ENBREL — Canada43
 50
 (14)% 136
 155
 (12)%36
 45
 (20)%
Total ENBREL$1,366
 $1,292
 6 % $3,880
 $3,699
 5 %$1,153
 $1,151
  %
The slight increase in ENBREL sales for the three months ended September 30, 2019,March 31, 2020, was driven primarily by an increase in net selling price and favorable impacts from changes in accounting estimates of sales deductions, offset partially by lower unit demand. The increase in ENBREL sales for the nine months ended September 30, 2019, was driven primarily by favorable impacts from changes in accounting estimates ofto estimated sales deductions and an increase in net selling price,inventory, offset partially by lower unit demand and unfavorable changes in inventory. In 2019,net selling price. For the remainder of 2020, we continue to expect the trend of lower unit demand compared with 2018.to continue.
In April 2019, the U.S. Food and Drug Administration (FDA) approved a second biosimilar version of ENBREL, and we are involved in patent litigations with the two companies seeking to market their FDA-approved biosimilar versions of ENBREL. See Note 14,13, Contingencies and commitments, to the condensed consolidated financial statements in our Quarterly Report on Form 10-Q for the period ended September 30, 2019;and Note 20,19, Contingencies and commitments, to the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2018; and Note 13, Contingencies and commitments, to the condensed consolidated financial statements in our Quarterly Report on Form 10-Q for the period ended March 31, 2019. Other companies are also developing purposed biosimilar versions of ENBREL. Companies with approved biosimilar versions of ENBREL may seek to enter the U.S. market if we are not successful in our litigations, or even earlier.
Neulasta®
Total Neulasta® sales by geographic region were as follows (dollar amounts in millions):
 Three months ended
September 30,
   Nine months ended
September 30,
  
 2019 2018 Change 2019 2018 Change
Neulasta®— U.S.
$619
 $897
 (31)% $2,231
 $2,854
 (22)%
Neulasta®— ROW
92
 154
 (40)% 325
 452
 (28)%
Total Neulasta®
$711
 $1,051
 (32)% $2,556
 $3,306
 (23)%
The decreases in global Neulasta® sales for the three and nine months ended September 30, 2019, were driven by the impact of biosimilar competition on net selling price and unit demand. Neulasta® sales included a $98 million order from the U.S. government in the first quarter of 2019.
Biosimilar versions of Neulasta® have been approved and launched, and other biosimilar versions may also receive approval in the near future. Therefore, we face increased competition in the United States and Europe, which has had and will continue to have a material adverse impact on sales of Neulasta®. For a discussion of ongoing patent litigations related to these and other biosimilars, see Note 14, Contingencies and commitments, to the condensed consolidated financial statements in our Quarterly Report on Form 10-Q for the period ended September 30, 2019; Note 20, Contingencies and commitments, to the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2018; and Note 13, Contingencies and commitments, to the condensed consolidated financial statements in our Quarterly Reports on Form 10-Q for the periods ended March 31, 2019 and June 30, 2019.
Prolia® 
Total Prolia® sales by geographic region were as follows (dollar amounts in millions):
Three months ended
September 30,
   Nine months ended
September 30,
  Three months ended
March 31,
  
2019 2018 Change 2019 2018 Change2020 2019 Change
Prolia® — U.S.
$425
 $354
 20% $1,273
 $1,070
 19%$422
 $390
 8%
Prolia® — ROW
205
 178
 15% 647
 566
 14%232
 202
 15%
Total Prolia®
$630
 $532
 18% $1,920
 $1,636
 17%$654
 $592
 10%
The increasesincrease in global Prolia® sales for the three and nine months ended September 30, 2019, wereMarch 31, 2020, was driven by higher unit demand. Prolia®, which has a six-month dosing interval, has exhibited a historical sales pattern with the first and third quarters of a year representing lower sales than the second and fourth quarters of a year. However, disruptions in patient visits as a result of the COVID-19 pandemic have begun to impact near-term demand, which may result in changes to the historical sales pattern.
Neulasta®
Total Neulasta® sales by geographic region were as follows (dollar amounts in millions):
 Three months ended
March 31,
  
 2020 2019 Change
Neulasta®— U.S.
$534
 $893
 (40)%
Neulasta®— ROW
75
 128
 (41)%
Total Neulasta®
$609
 $1,021
 (40)%
The decrease in global Neulasta® sales for the three months ended March 31, 2020, was driven by the impact of biosimilar competition on unit demand and lower net selling price. Neulasta® sales included a $98 million order from the U.S. government in the first quarter of 2019.
We face increased competition in the United States and Europe as a result of launches of biosimilar versions of Neulasta®, which has had and will continue to have a material adverse impact on sales. We also expect other biosimilar versions to be approved in the near future. For a discussion of ongoing patent litigations related to these and other biosimilars, see Note 13, Contingencies and commitments, to the condensed consolidated financial statements and Note 19, Contingencies and commitments, to the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2019.

XGEVA®  
Total XGEVA® sales by geographic region were as follows (dollar amounts in millions):
Three months ended
September 30,
   Nine months ended
September 30,
  Three months ended
March 31,
  
2019 2018 Change 2019 2018 Change2020 2019 Change
XGEVA® — U.S.
$356
 $323
 10% $1,091
 $994
 10%$355
 $356
 %
XGEVA® — ROW
120
 110
 9% 355
 336
 6%126
 115
 10%
Total XGEVA®
$476
 $433
 10% $1,446
 $1,330
 9%$481
 $471
 2%
The increasesincrease in global XGEVA® sales for the three and nine months ended September 30, 2019, wereMarch 31, 2020, was driven primarily by higher unit demand.demand and net selling price, offset partially by unfavorable changes to estimated sales deductions and inventory.
Otezla®
Total Otezla® sales by geographic region were as follows (dollar amounts in millions):
 Three months ended
March 31,
  
 2020 2019 Change
Otezla® — U.S.
$377
 $
 *
Otezla® — ROW
102
 
 *
Total XGEVA®
$479
 $
 *
* Change in excess of 100%.
Otezla® was acquired on November 21, 2019 and generated $479 million in sales for the three months ended March 31, 2020.
Aranesp® 
Total Aranesp® sales by geographic region were as follows (dollar amounts in millions):
Three months ended
September 30,
   Nine months ended
September 30,

 Three months ended
March 31,
  
2019 2018 Change 2019
2018
Change2020 2019 Change
Aranesp® — U.S.
$204
 $248
 (18)% $578

$714

(19)%$175
 $182
 (4)%
Aranesp® — ROW
248
 229
 8 % 724

689

5 %247
 232
 6 %
Total Aranesp®
$452
 $477
 (5)% $1,302

$1,403

(7)%$422
 $414
 2 %
The decreasesincrease in global Aranesp® sales for the three and nine months ended September 30, 2019, wereMarch 31, 2020, was driven primarily by the impact of competition onhigher unit demand and favorable changes in the United States.inventory, offset by a decline in net selling price.
Aranesp® faces competition from a long-acting erythropoiesis-stimulating agent.agent (ESA). Aranesp® also faces competition from a biosimilar version of EPOGEN®. Other biosimilar versions of EPOGEN® may also receive approval in the future. In 2019, sales inFor the United States have declined, andremainder of 2020, we expect them to continuesales to decline at a faster rate than in 20182019 due to short- and long-acting competition.

KYPROLIS® 
Total KYPROLIS® sales by geographic region were as follows (dollar amounts in millions):
Three months ended
September 30, 2019
   Nine months ended
September 30,
  Three months ended
March 31, 2020
  
2019 2018 Change 2019 2018 Change2020 2019 Change
KYPROLIS® — U.S.
$163
 $142
 15% $483
 $430
 12%$187
 $154
 21%
KYPROLIS® — ROW
103
 90
 14% 295
 287
 3%93
 91
 2%
Total KYPROLIS®
$266
 $232
 15% $778
 $717
 9%$280
 $245
 14%
The increasesincrease in global KYPROLIS® sales for the three and nine months ended September 30, 2019, wereMarch 31, 2020, was driven primarily by higher unit demand.demand and to a lesser extent an increase in net selling price.
We are engaged in litigation with two related companies that are challenging our material patents related to KYPROLIS® and that are seeking to market generic carfilzomib products. Under the Hatch-Waxman Act, FDA approval of the ANDA at issue is stayed until at least January 20, 2020 (although the stay may be lifted in connection with a court order or in certain other instances permitted under the statute). Separately, we have entered into confidential settlement agreements with other companies developing generic carfilzomib products, and the court has entered consent judgments enjoining those companies from infringing certain of our patents, subject to terms of the confidential settlement agreements. See Note 20,13, Contingencies and commitments, to the condensed consolidated financial statements and Note 19, Contingencies and commitments, to the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2018, and Note 13, Contingencies and commitments, to the condensed consolidated financial statements in our Quarterly Reports on Form 10-Q for the periods ended March 31, 2019 and June 30, 2019. The FDA has reported that it has tentatively approved ANDAs filed by two companies for generic carfilzomib products. The date of final approval of those ANDAs is governed by the Hatch-Waxman Act and any applicable settlement agreements between the parties.

EPOGENRepatha® 
Total EPOGEN® sales were as follows (dollar amounts in millions):
 Three months ended
September 30,
   Nine months ended
September 30,
  
 2019 2018 Change 2019 2018 Change
EPOGEN® — U.S.
$215
 $252
 (15)% $657
 $746
 (12)%
The decreases in EPOGEN® sales for the three and nine months ended September 30, 2019, were driven primarily by a decline in net selling price due to our contract with DaVita Inc. (DaVita). In 2019, we continue to expect a lower net selling price compared with 2018 due to our contract with DaVita.
A biosimilar version of EPOGEN® has been approved and launched, and other biosimilar versions may also receive approval in the future. Therefore, we face increased competition in the United States, which has had and will continue to have a material adverse impact on sales of EPOGEN®. For a discussion of ongoing patent litigation related to one of these biosimilars, see Note 14, Contingencies and commitments, to the condensed consolidated financial statements in our Quarterly Report on Form 10-Q for the period ended September 30, 2019, and Note 20, Contingencies and commitments, to the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2018.
Sensipar®/Mimpara®
Total Sensipar®/MimparaRepatha® sales by geographic region were as follows (dollar amounts in millions):
 Three months ended
September 30,
   Nine months ended
September 30,
  
 2019 2018 Change 2019 2018 Change
Sensipar® — U.S.
$38
 $330
 (88)% $216
 $1,069
 (80)%
Sensipar®/Mimpara® — ROW
71
 79
 (10)% 228
 257
 (11)%
Total Sensipar®/Mimpara®
$109
 $409
 (73)% $444
 $1,326
 (67)%
 Three months ended
March 31, 2020
  
 2020 2019 Change
Repatha® — U.S.
$124
 $83
 49%
Repatha® — ROW
105
 58
 81%
Total Repatha®
$229
 $141
 62%
The decreasesincrease in global SensiparRepatha®/Mimpara®sales for the three and nine months ended September 30, 2019, were driven by the impact of at-risk launches by generic competitors on unit demand.
Our U.S. composition-of-matter patent related to Sensipar®, a small molecule, expired in March 2018. We are involved in litigation with a number of companies seeking to market generic cinacalcet products surrounding our U.S. formulation patent, which expires in September 2026. Separately, we have entered into confidential settlement agreements with other companies developing generic cinacalcet products, and the court has entered consent judgments enjoining those companies from infringing certain of our patents, subject to terms of the confidential settlement agreements. See Note 14, Contingencies and commitments, to the condensed consolidated financial statements in our Quarterly Report on Form 10-Q for the period ended September 30, 2019; Note 20, Contingencies and commitments, to the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2018; and Note 13, Contingencies and commitments, to the condensed consolidated financial statements in our Quarterly Reports on Form 10-Q for the periods ended March 31, 2019 and June 30, 2019. Certain companies manufacturing generics began2020, was driven primarily by higher unit demand, offset partially by lower net selling their generic cinacalcet products in the United States in late 2018 and 2019, and some of this generic product remains commercially available in the United States from third-party distributors. Sensipar® sales have been and we believe may continue to be adversely impacted as a result of generic-product sales in the U.S. market.price.

Other products
Other product sales by geographic region were as follows (dollar amounts in millions):
Three months ended
September 30,
   Nine months ended
September 30,
  Three months ended
March 31,
  
2019 2018 Change 2019 2018 Change2020 2019 Change
Nplate®— U.S.
$119
 $107
 11 % $355
 $326
 9 %$127
 $114
 11 %
Nplate®— ROW
76
 70
 9 % 230
 209
 10 %91
 75
 21 %
Vectibix®— U.S.
79
 71
 11 % 236
 214
 10 %80
 78
 3 %
Vectibix®— ROW
117
 110
 6 % 326
 309
 6 %122
 92
 33 %
Repatha®— U.S.
85
 72
 18 % 259
 254
 2 %
Repatha®— ROW
83
 48
 73 % 202
 137
 47 %
Parsabiv® — U.S.
137
 92
 49 % 394
 194
 *
146
 109
 34 %
Parsabiv® — ROW
20
 10
 100 % 57
 22
 *
29
 17
 71 %
Biosimilars — U.S.81
 
 *
 81
 
 *
Biosimilars — ROW92
 19
 *
 229
 21
 *
EPOGEN® — U.S.
155
 219
 (29)%
Sensipar® — U.S.
42
 135
 (69)%
Sensipar®/Mimpara® — ROW
81
 78
 4 %
KANJINTI®— U.S.
96
 
 *
KANJINTI®— ROW
23
 24
 (4)%
MVASI®— U.S.
108
 
 *
MVASI®— ROW
7
 
 *
EVENITY® — U.S.
37
 
 *
EVENITY®— ROW
63
 17
 *
BLINCYTO® — U.S.
47
 33
 42 % 126
 97
 30 %57
 40
 43 %
BLINCYTO® — ROW
38
 25
 52 % 106
 70
 51 %37
 29
 28 %
AMGEVITATM — ROW
86
 31
 *
Aimovig® — U.S.
66
 22
 *
 208
 24
 *
71
 59
 20 %
NEUPOGEN®— U.S.
32
 52
 (38)% 137
 180
 (24)%45
 50
 (10)%
NEUPOGEN®— ROW
22
 33
 (33)% 65
 110
 (41)%20
 23
 (13)%
EVENITY® — U.S.
12
 
 *
 15
 
 *
EVENITY®— ROW
47
 
 *
 89
 
 *
Other — U.S.28
 23
 22 % 78
 64
 22 %24
 23
 4 %
Other — ROW57
 45
 27 % 147
 138
 7 %40
 38
 5 %
Total other products$1,238
 $832
 49 % $3,340
 $2,369
 41 %$1,587
 $1,251
 27 %
Total U.S. — other products$686
 $472
 45 % $1,889
 $1,353
 40 %$988
 $827
 19 %
Total ROW — other products552
 360
 53 % 1,451
 1,016
 43 %599
 424
 41 %
Total other products$1,238
 $832
 49 % $3,340
 $2,369
 41 %$1,587
 $1,251
 27 %
* Change in excess of 100%.

Operating expenses
Operating expenses were as follows (dollar amounts in millions):
Three months ended
September 30,
   Nine months ended
September 30,
  Three months ended
March 31,
  
2019 2018 Change 2019 2018 Change2020 2019 Change
Operating expenses:                
Cost of sales$1,036
 $1,037
  % $3,103
 $3,005
 3 %$1,513
 $1,055
 43%
% of product sales19.0% 18.8%   19.0% 18.2%  25.7% 20.0%  
% of total revenues18.1% 17.6%   18.1% 17.2%  24.6% 19.0%  
Research and development$1,001
 $926
 8 % $2,804
 $2,555
 10 %$952
 $879
 8%
% of product sales18.3% 16.8%   17.2% 15.5%  16.2% 16.6%  
% of total revenues17.4% 15.7%   16.3% 14.6%  15.5% 15.8%  
Selling, general and administrative$1,223
 $1,293
 (5)% $3,637
 $3,773
 (4)%$1,316
 $1,154
 14%
% of product sales22.4% 23.5%   22.3% 22.8%  22.3% 21.8%  
% of total revenues21.3% 21.9%   21.2% 21.5%  21.4% 20.8%  
Other$1
 $325
 (100)% $(5) $303
 *
$25
 $(3) *
* Change in excess of 100%.
Cost of sales
Cost of sales increased to 18.1%24.6% of total revenues for the three months ended September 30, 2019,March 31, 2020, driven primarily by unfavorable product mix,the amortization of intangible assets as a result of our acquisition of Otezla® and an increase in milestone payments, offset partially by lower manufacturing costs.
Cost of sales increased to 18.1% of total revenues for the nine months ended September 30, 2019, driven primarily by unfavorable product mix, offset partially by lower royalties and by the benefit of Hurricane Maria insurance proceeds. In 2019, product mix will continue to negatively impact cost of sales.
Research and development
The increasesincrease in R&D expense for the three and nine months ended September 30, 2019, were driven by increased spending in research and early pipeline in support of our oncology programs, offset partially by decreased spending in support of marketed products.
Selling, general and administrative
The decrease in Selling, general and administrative expenses for the three months ended September 30, 2019,March 31, 2020, was driven by higher late-stage program support for our oncology programs, primarily AMG 510 (sotorasib), along with Otezla® and higher marketed-product support for Otezla®, offset partially by recoveries from our collaboration with BeiGene that reduced other expenses in late-stage program support and in research and early pipeline.
Selling, general and administrative
The increase in SG&A expenses for the three months ended March 31, 2020, was driven primarily by lower general and administrative expenses as well as the endfirst full quarter of certain amortization of intangible assets in 2018.
The decrease in Selling, general and administrative expenses for the nine months ended September 30, 2019, was driven primarily by lower general and administrative expenses, the end of certain amortization of intangible assets in 2018 and lower marketed product support, offset partially by investments in launch products.Otezla® commercial-related expenses.
Other
Other operating expenses for the three and nine months ended September 30,March 31, 2020, consisted of an impairment charge for an early-stage program. Other operating expenses for the three months ended March 31, 2019, and 2018, includeincluded changes in the fair valuesvalue of contingent consideration liabilitiesand certain net charges related to business combinations. Otherour restructuring plan.
See the Overview and Selected financial information sections above for discussion of impacts to operating expenses included an impairment charge of $330 million associated with a nonkey IPR&D asset infrom the third quarter of 2018.COVID-19 pandemic.

Nonoperating expense/income and income taxes
Nonoperating expense/income and income taxes were as follows (dollar amounts in millions):
Three months ended
September 30,
 Nine months ended
September 30,
Three months ended
March 31,
2019 2018 2019 20182020 2019
Interest expense, net$313
 $355
 $988
 $1,040
$346
 $343
Interest and other income, net$114
 $126
 $517
 $519
$11
 $185
Provision for income taxes$309
 $235
 $1,016
 $894
$195
 $322
Effective tax rate13.6% 11.2% 14.2% 12.1%9.7% 13.9%
Interest expense, net
The decreasesincrease in Interest expense, net, for the three and nine months ended September 30, 2019, wereMarch 31, 2020, was due primarily to early debt retirement costs, offset partially by realized gains upon the termination of associated interest rate swaps, a reduction in outstanding long-term debt as a result of maturities in the current year. The decrease in the year-to-date period was offset partially by higher average interestand lower LIBOR rates on variable-rate debt in the current year period compared with the prior year.floating-rate debt.
Interest and other income, net
The decreasesdecrease in Interest and other income, net, for the three and nine months ended September 30, 2019, wereMarch 31, 2020 was due primarily to reduced interest income as a result of lower average cash balances and lower gains on our strategic equity investments, offset partially by reduced net losses on sales of investmentsa decline in interest-bearing securities. In addition, the decrease for the nine-month period was further reduced by a gain recognized in connection with our acquisition of Kirin-Amgen, Inc., during the first quarter of 2018.interest yields.
Income taxes
The increasesdecrease in our effective tax ratesrate for the three and nine months ended September 30, 2019, wereMarch 31, 2020, was due primarily to amortization related to the Otezla® acquisition, changes in jurisdictional mix of earnings and certain favorable items in the quarter.
On March 27, 2020, in response to the COVID-19 pandemic, the president of the United States signed the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which provides additional economic stimulus to address the impact of the COVID-19 pandemic. We do not expect there to be any significant benefit to our income tax provision as a prior-year tax benefit associated with intercompany sales under U.S. corporate tax reform.result of the CARES Act, and we continue to closely monitor the impact of the COVID-19 pandemic, as well as any effects that may result from the CARES Act or future legislation.
As previously disclosed, we received an RAR from the IRS for the years 2010, 2011 and 2012. The RAR proposes to make significant adjustments that relate primarily to the allocation of profits between certain of our entities in the United States and the U.S. territory of Puerto Rico. In November 2017, we received a modified RAR that revised the IRS’s calculationcalculations but continued to propose substantial adjustments. We disagree with the proposed adjustments and calculations and are pursuing resolution with the IRS administrative appeals office, which currently has jurisdiction over the matter. If we deem necessary, we will vigorously contest the proposed adjustments through the judicial process. In addition, in April, we received draft NOPAs from the IRS for the years 2013, 2014 and 2015, which are similar to the proposed adjustments for the years 2010, 2011 and 2012 that relate primarily to the allocation of profits between certain of our entities in the United States and the U.S. territory of Puerto Rico. We disagree with the proposed adjustments and calculations and intend to contest them. Final resolution of thisthese complex mattermatters is not likely within the next 12 months and could have a material impact on our condensed consolidated financial statements. We believe our accrual for income tax liabilities is appropriate based on past experience, interpretations of tax law and judgments about potential actions by tax authorities; however, due to the complexity of the provision for income taxes, the ultimate resolution of any tax matters may result in payments substantially greater or less than amounts accrued.
See Note 4,3, Income taxes, to the condensed consolidated financial statements for further discussion.

Financial condition, liquidity and capital resources
Selected financial data was as follows (in millions):
September 30,
2019
 December 31,
2018
March 31,
2020
 December 31,
2019
Cash, cash equivalents and marketable securities$20,853
 $29,304
$8,012
 $8,911
Total assets$59,535
 $66,416
$61,669
 $59,707
Current portion of long-term debt$2,049
 $4,419
$1,840
 $2,953
Long-term debt$27,742
 $29,510
$30,008
 $26,950
Stockholders’ equity$10,927
 $12,500
$9,485
 $9,673
Cash, cash equivalents and marketable securities
We have global access to our $20.9$8.0 billion balance of cash, cash equivalents and marketable securities because we no longer reinvest the related undistributed foreign earnings indefinitely outside the United States. As a result of U.S. corporate tax reform in 2017, we recorded a repatriation tax liability on undistributed earnings generated from operations in foreign tax jurisdictions, which will be paid over eight years. The first two annual payments were made in April 2018 and April 2019, and the remaining scheduled payments total $6.2 billion. Further, the timing of settlement of the sales of certain of our securities reduced the balance of cash, cash equivalents and marketable securities as of September 30, 2019, as $1.1 billion of unsettled sales of securities were recorded in Other current assets in the Condensed Consolidated Balance Sheets. The change in composition of our portfolio to shorter duration investments during the third quarter of 2019 reflects our preparation to fund the cost of the anticipated acquisition of the worldwide rights to Otezla®(see Significant developments).
securities. The primary objective of our investment portfolio is to enhance overall returns in an efficient manner while maintainingmaintain safety of principal, prudent levels of liquidity and acceptable levels of risk. Our investment policy limits interest-bearing security investments to certain types of debt and money market instruments issued by institutions with primarily investment-grade credit ratings, and it places restrictions on maturities and concentration by asset class and issuer.
Capital allocation
Consistent with the objective to optimize our capital structure, we seek to deploy our accumulated cash balances in an efficienta strategic manner and we consider severala number of alternatives, such as payment of dividends, stock repurchases, repayment of debt andincluding strategic transactions (including those that expand our portfolio of products in areas of therapeutic interest.interest), repayment of debt, payment of dividends and stock repurchases.
We intend to continue to invest in our business while returning capital to stockholders through the payment of cash dividends and stock repurchases, thereby reflecting our confidence in the future cash flows of our business. The timing and amount of future dividends and stock repurchases will vary based on a number of factors, including future capital requirements for strategic transactions, availability of financing on acceptable terms, debt service requirements, our credit rating, changes to applicable tax laws or corporate laws, changes to our business model and periodic determination by our Board of Directors that cash dividends and/or stock repurchases are in the best interests of stockholders and are in compliance with applicable laws and the Company’s agreements. In addition, the timing and amount of stock repurchases may also be affected by our overall level of cash, stock price and blackout periods, during which we are restricted from repurchasing stock. The manner of stock repurchases may include private block purchases, tender offers and market transactions.
In August 2019, March 2019 and December 2018, the Board of Directors declared quarterly cash dividends of $1.45 per share of common stock, which were paid on September 6, 2019, June 7, 2019 and March 8, 2019, respectively, an increase of 10% over the quarterly cash dividend paid in each quarter of 2018. In October 2019, the Board of Directors declared a quarterly cash dividend of $1.45$1.60 per share of common stock, an increase of 10% from the cash dividend paid in each of the previous four quarters, which was paid on March 6, 2020. In March 2020, the Board of Directors declared a quarterly cash dividend of $1.60 per share of common stock, which will be paid on December 6, 2019.June 8, 2020.
We have also returned capital to stockholders through our stock repurchase program. During the ninethree months ended September 30, 2019,March 31, 2020, we repurchased $6.6 billionexecuted trades to repurchase $933 million of common stock. In May 2019, our Board of Directors increased the amount authorized under our stock repurchase program by an additional $5.0 billion. As of September 30, 2019, $3.6March 31, 2020, $5.5 billion of authorization remained available under our stock repurchase program.
As a result of stock repurchases and quarterly dividend payments, we have an accumulated deficit as of September 30, 2019March 31, 2020 and December 31, 2018.2019. Our accumulated deficit is not expected to affect our future ability to operate, repurchase stock, pay dividends or repay our debt given our continuing profitability and strong financial position.

We believe that existing funds, cash generated from operations and existing sources of and access to financing are adequate to satisfy our needs for working capital;capital, capital expenditure and debt service requirements;requirements, our plans to pay dividends and repurchase stock;stock and other business initiatives we plan to strategically pursue, including acquisitions and licensing activities. We anticipate that our liquidity needs can be met through a variety of sources, including cash provided by operating activities, sales of marketable securities, borrowings through commercial paper and/or syndicated credit facilities and access to other domestic and foreign debt markets and equity markets. See our Annual Report on Form 10-K for the year ended December 31, 2018,2019, Part I, Item 1A. Risk Factors—Global economic conditions may negatively affect us and may magnify certain risks that affect our business.
Certain of our financing arrangements contain nonfinancial covenants. In addition, our revolving credit agreement includes a financial covenant, which requires that we maintain a specified minimum interest coverage ratio of (i) the sum of consolidated net income, interest expense, provision for income taxes, depreciation expense, amortization expense, unusual or nonrecurring charges and other noncash items (Consolidated EBITDA) to (ii) Consolidated Interest Expense, each as defined and described in the credit agreement. We were in compliance with all applicable covenants under these arrangements as of September 30, 2019.March 31, 2020.

Cash flows
Our summarized cash flow activity was as follows (in millions):
Nine months ended
September 30,
Three months ended
March 31,
2019 20182020 2019
Net cash provided by operating activities$6,636
 $8,102
$2,134
 $1,845
Net cash provided by investing activities$11,672
 $18,976
Net cash (used in) provided by investing activities$(230) $3,555
Net cash used in financing activities$(13,838) $(18,922)$(254) $(4,987)
Operating
Cash provided by operating activities has been and is expected to continue to be our primary recurring source of funds. Cash provided by operating activities during the ninethree months ended September 30, 2019, decreasedMarch 31, 2020, increased compared with the same period in the prior year due primarily to lower Net income, adjusted for noncash items, timingmonetization of payments to corporate partners andinterest rate swap contracts, a decrease in sales deductions paid to customers.customers and lower corporate partner payments, offset partially due to timing of collections from customers as a result of our recent acquisition of Otezla®.
Investing
Cash used in investing activities during the three months ended March 31, 2020, was due primarily to our $2.6 billion equity investment in BeiGene, offset substantially by net cash inflows related to marketable securities of $2.6 billion. Cash provided by investing activities during the ninethree months ended September 30,March 31, 2019, and 2018, was due primarily to net cash inflows related to marketable securities of $12.4 billion and $19.3 billion, respectively. Higher cash inflows in the prior year reflect the cash to fund a $10.0 billion tender offer completed in 2018 to repurchase our common stock.$3.7 billion. Capital expenditures duringfor the ninethree months ended September 30,March 31, 2020 and 2019, and 2018, were $430$142 million and $513$116 million, respectively. We currentlynow estimate 2019reduced 2020 spending on capital projects of approximately $600 million versus our prior projection of $700 million due to be approximately $650 million.a change in timing from the COVID-19 pandemic.
Financing
Cash used in financing activities during the ninethree months ended September 30, 2019,March 31, 2020, was due primarily to repurchasesrepayment of debt of $3.3 billion, payments to repurchase our common stock of $6.6 billion, repayment of debt of $4.5 billion$961 million and payment of dividends of $2.6$945 million, offset by net proceeds from the issuance of debt of $5.0 billion. Cash used in financing activities during the ninethree months ended September 30, 2018,March 31, 2019, was due primarily to repurchases ofpayments to repurchase our common stock of $15.7$3.0 billion, repayment of debt of $500 million$1.0 billion and payment of dividends of $2.7 billion.$901 million. See Note 10,9, Financing arrangements, and Note 11,10, Stockholders’ equity, to the condensed consolidated financial statements for further discussion.

Critical accounting policies
The preparation of our condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and the notes to the financial statements. Some of those judgments can be subjective and complex, and therefore, actual results could differ materially from those estimates under different assumptions or conditions. A summary of our critical accounting policies is presented in Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations, of our Annual Report on Form 10-K for the year ended December 31, 2018. There were no material changes to2019.
During the three months ended March 31, 2020, our critical accounting policies duringwere changed to include our assessment of impairment of equity method investments. We review the nine months ended September 30, 2019.carrying value of our equity method investments whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. We record impairment losses on our equity method investments if we deem the impairment to be other-than-temporary. We deem an impairment to be other-than-temporary based on various factors, including but not limited to, the length of time and the extent to which the fair value is below the carrying value, volatility of the security price, the financial condition of the issuer, changes in technology that may impair the earnings potential of the investment and our intent and ability to retain the investment to allow for a recovery in fair value. We believe our judgments used in assessing impairment of equity method investments are based on reasonable assumptions given the facts and circumstances as of the related dates of the assessments.

Item 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Information about our market risk is disclosed in Part II, Item 7A. Quantitative and Qualitative Disclosures About Market Risk, of our Annual Report on Form 10-K for the year ended December 31, 2018,2019, and is incorporated herein by reference. ThereExcept as noted below, there have been no material changes during the ninethree months ended September 30, 2019,March 31, 2020, to the information provided in Part II, Item 7A. Quantitative and Qualitative Disclosures About Market Risk, of our Annual Report on Form 10-K for the year ended December 31, 2018.2019.
During the three months ended March 31, 2020, we issued $5.0 billion in long-term debt with a weighted-average maturity of approximately 17 years and redeemed/repaid approximately $3.3 billion of debt, all with maturities of less than two years. These changes increased the sensitivity of fluctuations in fair value of our outstanding long-term debt resulting from changes in market interest rates. A hypothetical 100 basis point decrease in interest rates relative to interest rates at March 31, 2020 and December 31, 2019, would have resulted in increases of $3.7 billion and $3.0 billion, respectively, in the aggregate fair values of our outstanding long-term debt on each of these dates. These amounts do not consider the impact that hypothetical changes in interest rates would have on our associated interest rate swap and cross-currency swap contracts.
During the three months ended March 31, 2020, we terminated interest rate swaps with an aggregate notional amount of $5.2 billion with respect to certain of our long-term debt, which resulted in the receipt of $576 million of cash and reduced counterparty credit risk. Immediately following termination of these contracts, we entered into new interest rate swap agreements at then-current interest rates on the same $5.2 billion principal amount of notes. See Note 9, Financing arrangements, and Note 12, Derivative instruments, to the condensed consolidated financial statements for further discussion.
Item 4.CONTROLS AND PROCEDURES
We maintain “disclosure controls and procedures,” as such term is defined under the Securities Exchange Act Rule 13a-15(e), that are designed to ensure that information required to be disclosed in Amgen’s Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to Amgen’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures. In designing and evaluating the disclosure controls and procedures, Amgen’s management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives and, in reaching a reasonable level of assurance, Amgen’s management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. We have carried out an evaluation under the supervision and with the participation of our management, including Amgen’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of Amgen’s disclosure controls and procedures. Based upon their evaluation and subject to the foregoing, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of September 30, 2019.March 31, 2020.
Management determined that, as of September 30, 2019,March 31, 2020, there were no changes in our internal control over financial reporting that occurred during the fiscal quarter then ended that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II — OTHER INFORMATION
Item 1.LEGAL PROCEEDINGS
See Note 14,13, Contingencies and commitments, to the condensed consolidated financial statements included in our Quarterly Report on Form 10-Q for the period ended September 30, 2019, and Note 13, Contingencies and commitments, to the condensed consolidated financial statements included in our Quarterly Reports on Form 10-Q for the periods ended March 31, 2019 and June 30, 2019,2020, for discussions that are limited to certain recent developments concerning our legal proceedings. Those discussions should be read in conjunction with Note 20,19, Contingencies and commitments, to the consolidated financial statements in Part IV of our Annual Report on Form 10-K for the year ended December 31, 2018.2019.
Item 1A.RISK FACTORS
This report and other documents we file with the SEC contain forward-looking statements that are based on current expectations, estimates, forecasts and projections about us, our future performance, our business, our beliefs and our management’s assumptions. These statements are not guarantees of future performance, and involve certain risks, uncertainties and assumptions that are difficult to predict. You should carefully consider the risks and uncertainties our business faces. TheWe have described in our Annual Report on Form 10-K for the year ended December 31, 2019, the primary risks described belowrelated to our business, and we periodically update those risks for material developments. Those risks are not the only ones we face. Our business is also subject to the risks that affect many other companies, such as employment relations, general economic conditions, geopolitical events, international operations and international operations.the effects of pandemics. Further, additional risks not currently known to us or that we currently believe are immaterial may in the future materially and adversely affect our business, operations, liquidity and stock price.
Below, we are providing, in supplemental form, the material changes to our risk factors that occurred during the past quarter. Our sales depend on coverage and reimbursement from third-party payers, and pricing and reimbursement pressures may affect our profitability.
Salesrisk factors disclosed in Part I, Item 1A, of our products depend on the availability and extent of coverage and reimbursement from third-party payers, including government healthcare programs and private insurance plans. Governments and private payers continue to pursue initiatives to contain costs and manage drug utilization. These payers are increasingly focused on the effectiveness, benefits and costs of similar treatments, which could result for our products in lower reimbursement rates or narrower populations for whom payers will reimburse. Continued intense public scrutiny of the price of drugs and other healthcare costs, together with payer dynamics, may limit our ability to set or adjust the price of our products based on their value, which could have a material adverse effect on our business. In the United States, the public discussions of drug pricing issues are likely to continue.
—Changing federal coverage and reimbursement policies and practices have impacted and may continue to impact access to and sales of our products
A substantial portion of our U.S. business relies on reimbursement from U.S. federal government healthcare programs and commercial insurance plans regulated by the U.S. federal and state governments. See our Annual Report, on Form 10-K for the year ended December 31, 2018, Part I, Item 1. Business—Reimbursement. Our business has2019, provide additional disclosure for these supplemental risks and willare incorporated herein by reference.
The COVID-19 pandemic, and the public and governmental effort to mitigate against the spread of the disease, have had, and are expected to continue to be impacted by legislative actions changing U.S. federal reimbursement policy. For example,have, an adverse effect, and may have a material adverse effect, on our clinical trials, operations, supply chains, distribution systems, product development, product sales, business and results of operations.
The novel coronavirus identified in February 2018,late 2019, SARS-CoV-2, which causes the U.S. Congress passed legislation requiring biopharmaceutical manufacturersdisease known as COVID-19, is an ongoing global pandemic that has resulted in public and governmental efforts to provide greater discounts beginning in 2019 on products dispensed to patients incontain or slow the coverage gap betweenspread of the initial coverage limitdisease, including widespread shelter-in-place orders, social distancing interventions, quarantines, travel restrictions and various forms of Medicare Part Doperational shutdowns. The COVID-19 pandemic and the program’s catastrophic-coverage threshold, which has and will continueresulting measures implemented in response to reduce our net product sales relating to such patients. Additional legislative proposals have been introduced by members of Congress to overhaul provisions of the Patient Protection and Affordable Care Act to allow commercial-level reimportation of prescription medications from Canada or other countries and to enable Medicare to negotiate drug prices with biopharmaceutical manufacturers. Congressional focus on drug pricing has increased since the U.S. House of Representatives changed party control following the November 2018 election, and our industrypandemic is currently under greater scrutiny by Congress. For example, in January 2019, the chair of the House Oversight and Reform Committee sent letters to twelve different biopharmaceutical manufacturers, including Amgen, seeking documents and detailed information about such companies’ drug pricing practices. A number of other Congressional committees have also held hearings and evaluated proposed legislation on drug pricing. For example, in July 2019, the bipartisan Senate Finance Committee advanced a bill that would, among other things, penalize pharmaceutical manufacturers for raising prices on drugs covered by Medicare Parts B and D faster than the rate of inflation, cap out-of-pocket expenses for Medicare Part D beneficiaries, and make a number of changes to how drugs are reimbursed in Medicare Part B. In September 2019, a new drug pricing bill, H.R. 3, was introduced in the House, which, if enacted, enables direct price negotiations by the federal government on certain drugs (with the maximum price paid by Medicare capped based on an international index) and requires manufacturers to offer these negotiated prices to other payers, and restricts manufacturers from raising prices on drugs covered by Medicare Parts B and D. We expect continued significant focus on health care and drug pricing legislation through the November 2020 U.S. presidential election and beyond.

Also, our business has beenadversely affecting, and is expected to continue to adversely affect, a number of our business activities (including our clinical trials, operations, supply chains, distribution systems, product development and sales) as well as our suppliers, customers, third-party payers and patients. Due to these measures and their effects, we have experienced, and expect to continue to experience, unpredictable reductions in demand for certain of our products, and, in some cases, have experienced, and could continue to experience, unpredictable increases in demand for certain of our products.
Our clinical trials have been, and are expected to continue to be, impactedadversely affected by changesthe COVID-19 pandemic. We have clinical work ongoing at investigational sites across around the globe. An increasing number of clinical trial sites have restricted site visits and have imposed restrictions on the initiation of new clinical trials and patient visits, to protect both site staff and patients from possible COVID-19 exposure. In response to the safety concerns related to COVID-19, we have suspended enrollment and screening in U.S. federal reimbursement policy resultingclinical trials where sites are unable to perform clinical trial work due to COVID-19 or there is uncertainty around the ability of sites to ensure subject safety or data integrity. Further, the COVID-19 pandemic is expected to adversely affect our ability to continue enrollment of certain required post-marketing studies, including pediatric studies. The disruption caused by the COVID-19 pandemic to our clinical trials and our clinical trial plans and timelines may have a significant adverse effect on our product development and launches, and, in turn, on future product sales, business and results of operations. For example, we reported a pause in enrollment of our AMG 510 (sotorasib) Phase 1 combination study with Keytruda and Phase 3 confirmatory study to ensure patient safety and that such pause may impact the timelines of these studies. Additionally, while we are investing in research and collaborations to potentially develop treatments for COVID-19, such activities may not result in therapeutic candidates, product approvals and/or significant commercial value being derived from executive actions, federal regulations,potential COVID-19-related medicines.

We anticipate that the COVID-19 pandemic may result in regulatory delays, including delays in receiving regulatory advice, reviews of applications, or federal demonstration projects.performance of inspections required for approvals. The pandemic may also result in greater regulatory uncertainty. For example, the FDA and the European Medicines Agency have issued guidance to provide biopharmaceutical manufacturers greater flexibility in certain regulatory areas, including protocol deviations and adverse event reporting. However, such flexibility may result in greater uncertainty regarding the expectations of such health authorities in relation to this guidance. Additionally, there may be delays in ongoing or new patent office or court patent proceedings in the U.S. presidential administration’s (the Administration) drug pricing “blueprint” releasedor internationally that may delay the outcome of such proceedings. Such delays and disruptions may have a significant adverse effect on our product development and launches, product sales, business and results of operations.
In response to COVID-19, we have activated our business continuity plans, including suspending all U.S. in-person meetings and interactions with the healthcare community and professionals, all international business travel and the majority of domestic travel within the U.S. and all U.S. employees who are able to work from home have been doing so since mid-March 2020. Our ability to perform critical functions and maintain operations could be adversely affected as a result of such workforce restrictions, and the COVID-19-related support programs we have put into place for our staff, suppliers and customers are increasing our operating expenses and reducing the efficiency of our operations. Additionally, disruptions in May 2018 contains an arraypublic and private infrastructure, including transportation and supply chains, have further adversely affected the efficiency of policy ideas intended to increase competition, improveour business operations. Also, the negotiating powertransition of the federal government, reduce drug prices and lower patient out-of-pocket costs with the potentialmajority of our workforce to significantly impact, whether individually or collectively, the biopharmaceutical industry. Such policy ideas include moving coverage and reimbursement for Medicare Part B drugs into Medicare Part D, instituting a competitive acquisition program for Part B drugsremote work environment in which competing third-party vendors take on the financial risk of acquiring drugs and billing Medicare, removing the safe harbor protection under the federal anti-kickback statute for drug rebates paidresponse to payers, and requiring the inclusion of drug price information in direct-to-consumer drug advertising.
Since the release of this blueprint, the president and/or federal agencies, including the Centers for Medicare & Medicaid Services (CMS),COVID-19, as have announced a number of demonstration projects, recommendationsour third-party service providers, may exacerbate certain risks to our business, including an increased demand for information technology resources, increased risk of social engineering and proposals to implement various elementsother cybersecurity attacks, and increased risk of the drug pricing blueprint. CMS is the federal agency responsible for administering Medicare and overseeing state Medicaid programs and Health Insurance Marketplaces, and has substantial power to implement policy changesunauthorized dissemination of sensitive personal information or demonstration projects that can quickly and significantly affect how drugs, includingproprietary or confidential information about us or our products, are covered and reimbursed.service providers or other third-parties. For example, in late 2018, CMS began evaluatingApril 2020, a pilot program referredvendor that provides information technology services to asus experienced a cybersecurity incident that required us to disconnect our systems from this vendor. While we do not believe this cybersecurity incident has had a significant adverse effect on our operations, an extended service outage, particularly where a vendor is the “International Price Index (IPI)” model to, among other things, initially cover fifty percent of Medicare Part B single source drugs at payment amounts more closely aligned with international drug prices, and in June 2019, Administration officials announced thatfrom which we obtain services, or where a cybersecurity incident significantly affects the Office of Management and Budget is reviewing a draft of a proposed rule to implement the IPI model. CMS has also issued guidance to allow certain Medicare plans offered by private insurance companies to require that patients receiving Medicare Part B drugs first try a drug preferred by the plan before covering another therapy (Step Therapy) and proposing lower reimbursement rates for new Part B drugs.
Separate from the drug pricing blueprint, CMS has undertaken other demonstration projects to test care models, such as the CMS Oncology Care Model, which provides participating physician practices with performance-based financial incentives that aim to manage or reduce Medicare costs without negatively impacting the efficacy of care. We believe the Oncology Care Model has reduced utilization of certainoperation of our oncology products by participating physician practices and expect it to continue to do so in the future. And in July 2019, CMS released a proposed rule creating a new mandatory payment model focused on encouraging greater use of home dialysis and kidney transplants for end-stage renal disease patients that, if finalized as proposed, could result in changes to treatment of such patients, including reduction of the use of our erythropoiesis-stimulating agents and calcimimetic products. CMS has also solicited suggestions regarding other potential care models.
In this dynamic environment, we are unable to predict which or how many of these various federal policy, legislative or regulatory changes may ultimately be enacted. However, to the extent that these or other federal government initiatives decrease or modify the coverage or reimbursement available for our products, limit our ability to offer co-pay payment assistance to commercial patients, require that we pay increased rebates or shift other costs to us, limit or impact our decisions regarding the pricing of biopharmaceutical products or otherwise reduce the use of our U.S. products, such actionssystems, could have a material adverse effect on our businessbusiness. We may experience significant adverse effects on our commercial and resultsclinical manufacturing activities, our operations, and our cybersecurity, and our suppliers and vendors may experience significant disruptions to their manufacturing activities and operations, and cybersecurity, as a result of operations.the COVID-19 pandemic.
WeFederal, state and local, and international governmental policies and initiatives designed to reduce the transmission of COVID-19 also face riskshave resulted in the cancellation of diagnostic, elective, specialty and other procedures and appointments to avoid non-essential patient exposure to medical environments and potential infection with COVID-19 and to focus limited resources and personnel capacity toward the treatment of COVID-19. These measures and challenges will likely continue for the duration of the pandemic, which is uncertain, and have significantly reduced patient access to and administration of certain of our drugs. For example, Prolia® is a product requiring administration by a healthcare provider in doctors’ offices or other healthcare settings that are affected by COVID-19. The U.S. label for Prolia® instructs healthcare professionals who discontinue Prolia® to transition the patient to an alternative antiresorptive, including oral treatments that do not require administration by a healthcare provider. Further, as a result of COVID-19, oncology patients, in consultation with their doctors, may be selecting less immunosuppressive therapies or therapies that do not require administration in a hospital setting, potentially adversely affecting certain of our products. Our general medicine products have benefited from 90-day supply availability for existing patients but new patients are less likely to be diagnosed and/or to start these therapeutics during the pandemic. Once the pandemic subsides, we anticipate there will be a substantial backlog of patients seeking appointments with physicians relating to the reportinga variety of pricing data that affects the reimbursementmedical conditions, and as a result, patients seeking treatment with certain of our products may have to navigate limited provider capacity and discounts provided for our products. Government price reporting regulations are complex and may require a manufacturer to update certain previously submitted data. If our submitted pricing data are incorrect, we may become subject to substantial fines and penalties or other government enforcement actions, whichthis limited provider capacity could have a materialcontinued adverse effect on our businesssales following the end of the pandemic. Further, the effects of the COVID-19 pandemic may result in long-term shifts in preferences among healthcare professionals and results of operations. In addition, as a result of restating previously reported price data, we also may be requiredpatients toward treatments that do not require administration by healthcare professionals or visits to pay additional rebatesmedical facilities.

The legislative and provide additional discounts.
—Changing reimbursementregulatory environment governing our businesses is dynamic and pricing actionschanging frequently in variousresponse to COVID-19. Several states may impacthave taken action to help patients maintain access to prescription drugs during the COVID-19 pandemic including requiring state-regulated commercial plans to cover 90-day fills and have impacted and may continue to impact sales of our products
emergency fills in certain circumstances. At the statefederal level, government actions or ballot initiatives can also affect how our products are covered and reimbursed and/or create additional pressure on our pricing decisions. A number of states have adopted, and many other states have discussed and debated and are considering, new pricing actions, including proposals designed to require biopharmaceutical manufacturers to publicly report proprietary pricing information, limit price increases or to place a maximum price ceiling or cap on biopharmaceutical products. Existing andlegislation has been proposed state pricing laws have added complexity to the pricing of drugs and may already be impacting industry pricing decisions. For example, in October 2017, California enacted a drug-pricing transparency bill that requires biopharmaceutical manufacturers to notify health insurers and government health plans at least 60 days before scheduled prescription drug price increases that exceed certain thresholds. Oregon and Washington passed similar laws in 2019. Other states are seeking to changeincentivize greater drug manufacturing in the way they pay for drugs for patients covered by state programs. For example,United States with the stated goal of improving supply reliability in August 2018 the Ohio Department of Medicaid ordered that all the state’s Medicaid managed care plans terminate and renegotiate contracts with Pharmacy Benefit Managers (PBMs) to eliminate PBMs billing the state more than treatments that they reimburse pharmacists for Medicaid patient prescriptions. In January 2019, California’s governor issued an executive order expanding state Medicaid coverage and directing its agencies and programs to consolidate drug purchases and to negotiate drug prices with manufacturers.

In addition, New York, Massachusetts, and Ohio have established Medicaid drug spending caps that require supplemental rebates for drugs that exceed specified spending thresholds. Additionally, some states, including Colorado, Florida, Maine and Vermont, have enacted laws, and several other states have proposed laws, to facilitate the importation of drugs from Canada. These state importation programs must first be approved byUnited States. One such legislative proposal would prohibit the U.S. Department of HealthVeterans Affairs from purchasing certain drugs that have active pharmaceutical ingredients manufactured outside the United States. While we perform a substantial majority of our commercial manufacturing activities in the U.S., including in the U.S. territory of Puerto Rico, and Human Services under a federal statute that excludes biologics, but state and federal legislatures and agenciessubstantial majority of our clinical manufacturing activities at our facility in Thousand Oaks, California, the passage of such legislation could result in foreign governments enacting retaliatory legislation or regulatory actions, which may seek ways to extend such measures to biologics. Other states could adopt similar approaches or could pursue different policy changes in a continuing effort to reduce their costs. Ultimately, as with U.S. federal government actions, existing or future state government actions or ballot initiatives may also have a materialan adverse effect on our product sales, business and results of operations.operations internationally. The COVID-19 pandemic has also resulted in increased interest in compulsory licenses, march-in rights or other governmental interventions, both in the U.S. and internationally, related to the procurement of drugs. Pursuant to the declaration of a national emergency in March 2020 under the Stafford Act, state and local governments may request access to discounted pricing for certain items related to the COVID-19 response. The CARES Act implements initiatives to provide advanced payments from Medicare to healthcare providers, clinics and physicians and to require Medicare plans to provide up to a 90-day supply of Part D drugs. However, despite such initiatives and government support, there may be adverse effects on the timing and collectability of our customer receivables as a result of the COVID-19 pandemic. The COVID-19 pandemic has also resulted in a significant increase in unemployment in the United States which may continue after the pandemic. Such a significant increase in unemployment is expected to lead to a substantial reduction in disposable income and access to health insurance which could adversely affect our product sales. Further, the substantial pressures placed on governmental and payor budgets as a result of the COVID-19 pandemic and the projected governmental budget shortfalls caused by significantly reduced economic activity during and potentially after the COVID-19 pandemic may result in greater and continued downward price pressure on biopharmaceutical products and increased intensity of stakeholder negotiations across the biopharmaceutical value chain.
—U.S.In recent weeks, the continued global spread of COVID-19 has also led to disruption and volatility in the global capital markets. We have certain assets, including equity investments, that are exposed to market fluctuations that could, in a sustained market disruption, result in impairments. Further, the economic downturn resulting from this global pandemic may be of an extended duration and precipitate a global recession.
If the pandemic continues and conditions worsen, we expect to experience additional adverse effects on our operational and commercial payer actions have impactedactivities, customer purchases and our collections of accounts receivable, which adverse effects may be material, and it remains uncertain the degree to which these adverse effects would impact our future operational and commercial activities, customer purchases and our collections even if conditions begin to improve. In addition to existing travel restrictions, jurisdictions may continue to impact accessclose borders, impose prolonged quarantines and further restrict travel and business activity, which could significantly affect our ability to support our operations and salescustomers and the ability of our products
Payers, including healthcare insurers, PBMs, integrated healthcare delivery systemsemployees to get to their workplaces to discover, study, develop and group purchasing organizations, increasingly seek ways to reduce their costs. With increasing frequency, payers are adopting benefit plan changes that shift a greater portionproduce our product candidates and products, and disrupt the movement of drug costs to patients. Such measures include more limited benefit plan designs, high deductible plans, higher patient co-pay or coinsurance obligations and more significant limitations on patients’ use of manufacturer commercial co-pay payment assistance programs (includingour products through co-pay accumulator adjustment or maximization programs). Payers have sought and have continued to seek price discounts or rebatesthe supply chain. Further, in connection with the placementglobal outbreak and spread of COVID-19 and in an effort to increase the wider availability of needed medical products, we or our suppliers may elect to, or governments may require us, or our suppliers to, allocate manufacturing capacity (for example pursuant to the U.S. Defense Production Act) in a way that adversely affects our regular operations, customer relationships, and financial results. In addition, unpredictable increases in demand for certain of our products on their formularies or those they manage, particularly in treatment areas where the payer has taken the position that multiple branded products are therapeutically comparable. Payers also control costs by imposing restrictions on accesscould exceed our capacity to or usagemeet such demand, which could adversely affect our financial results and customer relationships.
The rapid development and fluidity of our products, suchthis situation precludes any prediction as Step Therapy or requiring that patients receive the payer’s prior authorization before covering the product, or that patients use a mail-order pharmacy or a limited network of fully-owned specialty pharmacies; payers may also choose to exclude certain indications for which our products are approved or even choose to exclude coverage entirely. For example, the burdensome administrative processes required for physicians to demonstrate or document that the patients for whom Repatha® has been prescribed meet payer utilization management criteria has limited and may continue to limit patient access to Repatha® treatment. In an effort to reduce barriers to access, we reduced the net price of Repatha® by providing greater discounts and rebates to payers, including PBMs that administer Medicare Part D prescription drug plans. However, affordability of patient out-of-pocket co-pay cost has and may continue to limit patient use. For example, a very high percentage of Medicare patients have abandoned their Repatha® prescriptions rather than pay their co-pay payment. In late 2018 and early 2019, we introduced a set of new National Drug Codes (NDCs) to make Repatha® available at a lower list price to attempt to address affordability for patients, particularly those on Medicare. To allow payers time to make a smooth transition to the lower list price and avoid incentivizing PBMs to immediately switch patients to the other available PCSK9 inhibitor that offered them a higher overall rebate due to its higher list price, we also continued to offer Repatha® at the original list price for a periodultimate effect on us of time. Despite these net and list price reductions, some payers have and may continue to restrict patient access, change formulary coverage for Repatha®, seek further discounts or rebates or take other actions that could reduce our sales of Repatha®. Further, in the competitive PCSK9 inhibitor marketplace, many payers have not yet adopted the new NDCs we introduced for lower-list price Repatha®, including a number of PBMs that continue to cover Repatha® at the original list price in part becauseCOVID-19. The duration of the higher rebates they receive for it. These factors havemeasures being taken by the authorities to mitigate against the spread of COVID-19, and may continuethe extent to limit patient affordabilitywhich such measures are effective, if at all, remain highly uncertain. We believe the magnitude and use and to negatively impact our salesdegree of Repatha®.
Further, significant consolidation in the health insurance industry has resulted in a few large insurers and PBMs exerting greater pressure in pricing and usage negotiations with drug manufacturers, significantly increasing discounts and rebates required of manufacturers and limiting patient access and usage. For example, in the United States, in 2018, the top three PBMs oversaw greater than two-thirds of prescription claims as well as government and commercial covered lives. The consolidation among insurers, PBMs and other payers, including through integrated healthcare delivery systems and/or with specialty or mail-order pharmacies and pharmacy retailers, has increased the negotiating leverage such entities have over us and other drug manufacturers and has resulted in greater price discounts, rebates and fees for other services being realized by those payers. For example, during the fourth quarter of 2018, two of the nation’s largest PBMs, Express Scripts and CVS Health, completed their combinations with major insurance companies Cigna and Aetna, respectively. Additional consolidation would further increase the leverage of such entities. Ultimately, additional discounts, rebates, coverage or plan changes, restrictions or exclusions imposed by these commercial payers could have a materialCOVID-19’s adverse effect on our product development, product sales, businessbusinesses, operating results, cash flows and results of operations.
—Governmentfinancial condition will be driven by the severity and commercial payer actions outside the United States have impacted and will continue to impact access to and sales of our products
Outside the United States, we expect countries will continue to take actions to reduce their drug expenditures. See our Annual Report on Form 10-K for the year ended December 31, 2018, Part I, Item 1. Business—Reimbursement. International reference pricing (IRP) has been widely used by many countries outside the United States to control costs based on an external benchmark of a product’s price in other countries. IRP policies can quickly and frequently change and may not reflect differences in the burden of disease, indications, market structures, or affordability differences across countries or regions. In addition, countries may refuse to reimburse or may restrict the reimbursed population for a product when their national health technology assessments do not consider a medicine to demonstrate sufficient clinical benefit beyond existing therapies or that it does not meet certain cost

effectiveness thresholds. For example, despite the EMA’s May 2018 approval of Repatha® for the treatment of patients with established atherosclerotic disease, reimbursement for Repatha® in France and Germany has remained limited to narrower patient populations (such as those with homozygous familial hypercholesterolemia) following national health technology assessments in mid-2018. Some countries decide on reimbursement between potentially competing products through national or regional tenders that often result in one product receiving most or allduration of the sales in that country or region. Failure to obtain coverage and reimbursement for our products, a deterioration in their existing coverage and reimbursement, or a decline inpandemic, the timeliness or certainty of payment by payers to physicians and other providers has impacted and may further negatively impact the ability or willingness of healthcare providers to prescribe our products for their patients and otherwise negatively affect the use of our products or the prices we receive for them. Such changes can and have had a material adversepandemic’s effect on the U.S. and global economies and the timing, scope and effectiveness of federal, state, local and international governmental responses to the pandemic. However, if the spread continues on at or near, its current trajectory or mitigation continues to require similar levels of shelter-in-place and shut-down orders, such effect will grow and our product sales, business and results of operations.
Our efforts to acquire other companies or products and to integrate their operations may not be successful, and may result in unanticipated costs, delays or failures to realize the benefits of the transactions.
We seek innovation through significant investment in both internal R&D and external transactions including collaborations, partnering, alliances, licenses, joint ventures, mergers and acquisitions (acquisition activity). We have an ongoing process of evaluating such potential acquisition activity opportunities that we expect will contribute to our future growth and expand our geographic footprint,development, product offerings and/or our R&D pipeline. For example, in late August 2019, we announced that we entered into an agreement with Celgene to acquire worldwide rights to Otezla® and certain related assets and liabilities (see Part I, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Significant developments).
Acquisition activities may be subject to regulatory approvals or other requirements that are not within our control. For example, the merger between BMS and Celgene, including the required divestiture of Otezla®, is contingent upon and subject to approval by the Federal Trade Commission (FTC) via a divestiture order. Our role as the acquirer of Otezla® pursuant to that order is also subject to FTC approval. There can be no assurance that such regulatory or other approvals will be obtained or that all closing conditions required in connection with the Otezla® acquisition will be satisfied or waived, which could result in us being unable to complete the planned acquisition.
Acquisition activities are complex, time consuming and expensive, and may result in unanticipated costs, delays or other operational or financial problems related to integrating the acquired company and business with our company, which may divert our management’s attention from other business issues and opportunities and restrict the full realization of the anticipated benefits of such transactions within the expected timeframe or at all. We may pay substantial amounts of cash, incur debt or issue equity securities to pay for acquisition activities, which could adversely affect our liquidity or result in dilution to our stockholders, respectively. Further, failures or difficulties in integrating or retaining new personnel or in integrating the operations of the businesses, products or assets we acquire (including related technology, commercial operations, compliance programs, manufacturing, distribution and general business operations and procedures) may affect our ability to realize the benefits of the transaction and grow our business, and may result in us incurring asset impairment or restructuring charges. These and/or other challenges may arise in connection with our planned acquisition of Otezla® or other acquisition activities, which could have a material adverse effect on oursales, business, results of operations, cash flows and stock price.financial position could be materially adversely affected.

Item 2.UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
During the three months ended September 30, 2019,March 31, 2020, we had one outstanding stock repurchase program, under which the repurchase activity was as follows:
Period 
Total number
of shares
purchased
 
Average
price paid
per share (1)
 
Total number
of shares purchased
as part of publicly announced program
 
Maximum dollar
value that may
yet be purchased
under the program(2)
July 1 - 31 3,084,000
 $179.11
 3,084,000
 $4,181,496,250
August 1 - 31 1,750,900
 $194.47
 1,750,900
 $3,840,999,525
September 1 - 30 1,398,500
 $197.74
 1,398,500
 $3,564,457,656
Total 6,233,400
 $187.60
 6,233,400
  
Period 
Total number
of shares
purchased
 
Average
price paid
per share (1)
 
Total number
of shares purchased
as part of publicly announced program
 
Maximum dollar
value that may
yet be purchased
under the program(2)
January 1 - 31 1,362,200
 $233.67
 1,362,200
 $6,155,729,344
February 1 - 29 1,707,100
 $220.32
 1,707,100
 $5,779,612,845
March 1 - 31 1,184,327
 $201.66
 1,184,327
 $5,540,776,983
Total 4,253,627
 $219.40
 4,253,627
  
___________ 
(1) 
Average price paid per share includes related expenses.
(2) 
In MayDecember 2019, our Board of Directors increased the amount authorized under our stock repurchase program by an additional $5.0$4.0 billion.

Item 6. EXHIBITS
Reference is made to the Index to Exhibits included herein.

INDEX TO EXHIBITS
Exhibit No. Description
2.1 
Asset Purchase Agreement, dated August 25, 2019, by and between Amgen Inc. and Celgene CorporationCorporation.. (Filed as an exhibit to Form 8-K on August 26, 2019 and incorporated herein by reference.)
   
2.2 
Amendment No. 1 to the Asset Purchase Agreement, dated October 17, 2019, by and between Amgen Inc. and Celgene Corporation. (Filed as an exhibit to Form 8-K on October 17, 2019 and incorporated herein by reference.)
   
2.3 
Amendment No. 2 to the Asset Purchase Agreement, dated October 17, 2019, by and between Amgen Inc. and Celgene Corporation.(Filed as an exhibit to Form 10-K for the year ended December 31, 2019 on February 12, 2020 and incorporated herein by reference.)
2.4
Letter Agreement, dated November 21, 2019, by and between Amgen Inc. and the parties named therein re: Treatment of Certain Product Inventory in connection with Amgen’s acquisition of Otezla®. (Filed as an exhibit to Form 10-K for the year ended December 31, 2019 on February 12, 2020 and incorporated herein by reference.)
2.5
Irrevocable Guarantee, dated August 25, 2019, by and between Amgen Inc. and Bristol-Myers Squibb CompanyCompany.. (Filed as an exhibit to Form 8-K on August 26, 2019 and incorporated herein by reference.)
   
3.1 
Restated Certificate of Incorporation of Amgen Inc. (As Restated March 6, 2013.) (Filed as an exhibit to Form 10-Q for the quarter ended March 31, 2013 on May 3, 2013 and incorporated herein by reference.)
   
3.2 
Amended and Restated Bylaws of Amgen Inc. (As Amended and Restated February 15, 2016.) (Filed as an exhibit to Form 8-K on February 17, 2016 and incorporated herein by reference.)
   
4.1 
Form of stock certificate for the common stock, par value $.0001 of the Company. (Filed as an exhibit to Form 10-Q for the quarter ended March 31, 1997 on May 14, 1997 and incorporated herein by reference.)
   
4.2 Form of Indenture, dated January 1, 1992. (Filed as an exhibit to Form S-3 Registration Statement filed on December 19, 1991 and incorporated herein by reference.)
   
4.3 
Agreement of Resignation, Appointment and Acceptance dated February 15, 2008. (Filed as an exhibit to Form 10-K for the year ended December 31, 2007 on February 28, 2008 and incorporated herein by reference.)
   
4.4 
First Supplemental Indenture, dated February 26, 1997. (Filed as an exhibit to Form 8-K on March 14, 1997 and incorporated herein by reference.)
   
4.5 
8-1/8% Debentures due April 1, 2097. (Filed as an exhibit to Form 8-K on April 8, 1997 and incorporated herein by reference.)
   
4.6 
   
4.7 
Indenture, dated August 4, 2003. (Filed as an exhibit to Form S-3 Registration Statement on August 4, 2003 and incorporated herein by reference.)
   
4.8 
Corporate Commercial Paper - Master Note between and among Amgen Inc., as Issuer, Cede & Co., as Nominee of The Depository Trust Company, and Citibank, N.A., as Paying Agent. (Filed as an exhibit to Form 10-Q for the quarter ended March 31, 1998 on May 13, 1998 and incorporated herein by reference.)
   
4.9 
   
4.10 
   
4.11 
   
4.12 
   
4.13 
   

4.14 
   
4.15 
   
4.16 
   
4.17 
   
4.18 
   
4.19 
Indenture, dated May 22, 2014, between Amgen Inc. and The Bank of New York Mellon Trust Company, N.A., as Trustee. (Filed as an exhibit to Form 8-K on May 22, 2014 and incorporated herein by reference.)
   
4.20 
   
4.21 
   
4.22 
   
4.23 
Form of Permanent Global Certificate for the Company’s 0.410% bonds due 2023. (Filed as an exhibit on Form 8-K on March 8, 2016 and incorporated herein by reference.)
   
4.24 
Terms of the Bonds for the Company’s 0.410% bonds due 2023. (Filed as an exhibit on Form 8-K on March 8, 2016 and incorporated herein by reference.)
   
4.25 
   
4.26 
   
4.27 
   
4.28 
Officer’s Certificate of Amgen Inc., dated as of November 2, 2017, including in the form of the Company’s 3.200% Senior Notes due 2027. (Filed as an exhibit to Form 8-K on November 2, 2017 and incorporated herein by reference.)
4.29
   
10.1+ 
Amgen Inc. Amended and Restated 2009 Equity Incentive Plan. (Filed as Appendix C to the Definitive Proxy Statement on Schedule 14A on April 8, 2013 and incorporated herein by reference.)
   
10.2+ 
First Amendment to Amgen Inc. Amended and Restated 2009 Equity Incentive Plan, effective March 4, 2015. (Filed as an exhibit to Form 10-Q for the quarter ended March 31, 2015 on April 27, 2015 and incorporated herein by reference.)
   
10.3+ 
Second Amendment to Amgen Inc. Amended and Restated 2009 Equity Incentive Plan, effective March 2, 2016. (Filed as an exhibit to Form 10-Q for the quarter ended March 31, 2016 on May 2, 2016 and incorporated herein by reference.)
   

10.4+ 
Form of Grant of Stock Option Agreement for the Amgen Inc. Amended and Restated 2009 Equity Incentive Plan. (As Amended on December 7, 2018.10, 2019.) (Filed as an exhibit to Form 10-K for the year ended December 31, 20182019 on February 13, 201912, 2020 and incorporated herein by reference.)
   
10.5+ 
Form of Restricted Stock Unit Agreement for the Amgen Inc. Amended and Restated 2009 Equity Incentive Plan. (As Amended on December 7, 2018.10, 2019.) (Filed as an exhibit to Form 10-K for the year ended December 31, 20182019 on February 13, 201912, 2020 and incorporated herein by reference.)
   
10.6+ 
Amgen Inc. 2009 Performance Award Program. (As Amended on December 12, 2017.) (Filed as an exhibit to Form 10-K for the year ended December 31, 2017 on February 13, 2018 and incorporated herein by reference.)
   
10.7+ 
Form of Performance Unit Agreement for the Amgen Inc. 2009 Performance Award Program. (As Amended on December 7, 2018.10, 2019.) (Filed as an exhibit to Form 10-K for the year ended December 31, 20182019 on February 13, 201912, 2020 and incorporated herein by reference.)
   
10.8+ 
Amgen Inc. 2009 Director Equity Incentive Program. (As Amended on October 24, 2017.December 11, 2019.) (Filed as an exhibit to Form 10-K for the year ended December 31, 20172019 on February 13, 201812, 2020 and incorporated herein by reference.)
   
10.9+ 
Form of Grant of Non-Qualified Stock Option Agreement for the Amgen Inc. 2009 Director Equity Incentive Program. (Filed as an exhibit to Form 8-K on May 8, 2009 and incorporated herein by reference.)
   
10.10+ 
Form of Restricted Stock Unit Agreement for the Amgen Inc. 2009 Director Equity Incentive Program. (As Amended on October 24, 2017.December 11, 2019.) (Filed as an exhibit to Form 10-K for the year ended December 31, 20172019 on February 13, 201812, 2020 and incorporated herein by reference.)
   
10.11+ 
Form of Cash-Settled Restricted Stock Unit Agreement for the Amgen 2009 Director Equity Incentive Program. (As Amended on December 11, 2019.) (Filed as an exhibit to Form 10-K for the year ended December 31, 20172019 on February 13, 201812, 2020 and incorporated herein by reference.)
   
10.12+ 
Amgen Inc. Supplemental Retirement Plan. (As Amended and Restated effective October 16, 2013.) (Filed as an exhibit to Form 10-K for the year ended December 31, 2013 on February 24, 2014 and incorporated herein by reference.)
   
10.13+ 
First Amendment to the Amgen Inc. Supplemental Retirement Plan, effective October 14, 2016. (Filed as an exhibit to Form 10-Q for the quarter ended September 30, 2016 on October 28, 2016 and incorporated herein by reference.)
   
10.14+ 
Second Amendment to the Amgen Inc. Supplemental Retirement Plan (As Amended and Restated effective October 23, 2019.) (Filed as an exhibit to Form 10-K for the year ended December 31, 2019 on February 12, 2020 and incorporated herein by reference.)
10.15+
Amended and Restated Amgen Change of Control Severance Plan. (As Amended and Restated effective December 9, 2010 and subsequently amended effective March 2, 2011.) (Filed as an exhibit to Form 10-Q for the quarter ended March 31, 2011 on May 10, 2011 and incorporated herein by reference.)
   
10.15+10.16+ 
Amgen Inc. Executive Incentive Plan. (As Amended and Restated effective January 1, 2009.) (Filed as an exhibit to Form 10-Q for the quarter ended September 30, 2008 on November 7, 2008 and incorporated herein by reference.)
   
10.16+10.17+ 
First Amendment to the Amgen Inc. Executive Incentive Plan, effective December 13, 2012. (Filed as an exhibit to Form 10-K for the year ended December 31, 2012 on February 27, 2013 and incorporated herein by reference.)
   
10.17+10.18+ 
Second Amendment to the Amgen Inc. Executive Incentive Plan, effective January 1, 2017. (Filed as an exhibit to Form 10-Q for the quarter ended March 31, 2017 on April 27, 2017 and incorporated herein by reference.)
   
10.18+10.19+ 
Amgen Nonqualified Deferred Compensation Plan. (As Amended and Restated effective October 16, 2013.) (Filed as an exhibit to Form 10-K for the year ended December 31, 2013 on February 24, 2014 and incorporated herein by reference.)
   
10.19+10.20+ 
First Amendment to the Amgen Nonqualified Deferred Compensation Plan, effective October 14, 2016. (Filed as an exhibit to Form 10-Q for the quarter ended September 30, 2016 on October 28, 2016 and incorporated herein by reference.)
   
10.20+10.21+
Second Amendment to the Amgen Nonqualified Deferred Compensation Plan (As Amended and Restated effective January 1, 2020.) (Filed as an exhibit to Form 10-K for the year ended December 31, 2019 on February 12, 2020 and incorporated herein by reference.)
10.22+ 
Agreement between Amgen Inc. and David W. Meline, effective July 21, 2014. (Filed as an exhibit to Form 10-Q for the quarter ended September 30, 2014 on October 29, 2014 and incorporated herein by reference.)
   

10.21+
10.23+ 
Agreement between Amgen Inc. and Jonathan Graham, dated May 11, 2015. (Filed as an exhibit to Form 10-Q/A for the quarter ended June 30, 2015 on August 6, 2015 and incorporated herein by reference.)
   
10.22+
Agreement between Amgen Inc. and Lori Johnston, dated October 25, 2016. (Filed as an exhibit to Form 10-K for the year ended December 31, 2016 on February 14, 2017 and incorporated herein by reference.)
10.23+10.24+ 
Agreement between Amgen Inc. and Murdo Gordon, dated July 25, 2018. (Filed as an exhibit to Form 10-Q for the quarter ended September 30, 2018 on October 31, 2018 and incorporated herein by reference.)
   

10.2410.25+*† 
10.26
   
10.25
Amendment No. 1 to the Credit Agreement, dated March 9, 2018, among Amgen Inc., the Banks therein named, and Citibank, N.A., as administrative agent. (Filed as an exhibit to Form 10-Q for the quarter ended March 31, 2018 on April 25, 2018 and incorporated herein by reference.)
10.2610.27 
Collaboration and License Agreement between Amgen Inc. and Celltech R&D Limited dated May 10, 2002 (portions of the exhibit have been omitted pursuant to a request for confidential treatment) and Amendment No. 1, effective June 9, 2003, to Collaboration and License Agreement between Amgen Inc. and Celltech R&D Limited (portions of the exhibit have been omitted pursuant to a request for confidential treatment). (Filed as an exhibit to Form 10-K/A for the year ended December 31, 2012 on July 31, 2013 and incorporated herein by reference.)
   
10.2710.28 
Amendment No. 2 to Collaboration and License Agreement, effective November 14, 2016, between Amgen Inc. and Celltech R&D Limited (portions of the exhibit have been omitted pursuant to a request for confidential treatment). (Filed as an exhibit to Form 10-K for the year ended December 31, 2016 on February 14, 2017 and incorporated herein by reference.)
   
10.2810.29 
Letter Agreement, dated June 25, 2019, by and between Amgen Inc. and UCB Celltech (portions of the exhibit have been omitted because they are both (i) not material and (ii) would be competitively harmful if publicly disclosed). (Filed as an exhibit to Form 10-Q for the quarter ended June 30, 2019 on July 31, 2019 and incorporated herein by reference.)
   
10.2910.30 
Collaboration Agreement, dated April 22, 1994, by and between Bayer Corporation (formerly Miles, Inc.) and Onyx Pharmaceuticals, Inc. (Filed as an exhibit to Form 10-Q for the quarter ended March 31, 2011 by Onyx Pharmaceuticals, Inc. on May 10, 2011 and incorporated herein by reference.)
   
10.3010.31 
Amendment to Collaboration Agreement, dated April 24, 1996, by and between Bayer Corporation and Onyx Pharmaceuticals, Inc. (Filed as an exhibit to Form 10-Q for the quarter ended March 31, 2006 by Onyx Pharmaceuticals, Inc. on May 10, 2006 and incorporated herein by reference.)
   
10.3110.32 
Amendment to Collaboration Agreement, dated February 1, 1999, by and between Bayer Corporation and Onyx Pharmaceuticals, Inc. (Filed as an exhibit to Form 10-Q for the quarter ended March 31, 2006 by Onyx Pharmaceuticals, Inc. on May 10, 2006 and incorporated herein by reference.)
   
10.3210.33 
Settlement Agreement and Release, dated October 11, 2011, by and between Bayer Corporation, Bayer AG, Bayer HealthCare LLC and Bayer Pharma AG and Onyx Pharmaceuticals, Inc. (Filed as an exhibit to Form 10-K for the year ended December 31, 2011 by Onyx Pharmaceuticals, Inc. on February 27, 2012 and incorporated herein by reference.)
   
10.3310.34 
Fourth Amendment to Collaboration Agreement, dated October 11, 2011, by and between Bayer Corporation and Onyx Pharmaceuticals, Inc. (Filed as an exhibit to Form 10-K for the year ended December 31, 2011 by Onyx Pharmaceuticals, Inc. on February 27, 2012 and incorporated herein by reference.)
   
10.3410.35 
Side Letter Regarding Collaboration Agreement, dated May 29, 2015, by and between Bayer HealthCare LLC and Onyx Pharmaceuticals, Inc. (Filed as an exhibit to Form 10-Q for the quarter ended June 30, 2015 on August 5, 2015 and incorporated herein by reference.)
   
10.3510.36*
10.37 
Sourcing and Supply Agreement, dated January 6, 2017, by and between Amgen USA Inc., a wholly owned subsidiary of Amgen Inc., and DaVita Inc. (portions of the exhibit have been omitted pursuant to a request for confidential treatment). (Filed as an exhibit to Form 10-Q for the quarter ended March 31, 2017 on April 27, 2017 and incorporated herein by reference.)
   
10.3610.38 
Exclusive License and Collaboration Agreement, dated August 28, 2015, by and between Amgen Inc. and Novartis Pharma AG (portions of the exhibit have been omitted pursuant to a request for confidential treatment). (Filed as an exhibit to Form 10-Q for the quarter ended June 30, 2017 on July 26, 2017 and incorporated herein by reference.)
   

10.37
10.39 
Amendment No. 1 to the Exclusive License and Collaboration Agreement, dated April 21, 2017, by and between Amgen Inc. and Novartis Pharma AG (portions of the exhibit have been omitted pursuant to a request for confidential treatment). (Filed as an exhibit to Form 10-Q for the quarter ended June 30, 2017 on July 26, 2017 and incorporated herein by reference.)
   
10.3810.40 
Amendment No. 2 to the Exclusive License and Collaboration Agreement, dated April 21, 2017, by and between Amgen Inc. and Novartis Pharma AG (portions of the exhibit have been omitted pursuant to a request for confidential treatment). (Filed as an exhibit to Form 10-Q for the quarter ended June 30, 2017 on July 26, 2017 and incorporated herein by reference.)
   

10.3910.41 
Collaboration Agreement, dated April 21, 2017, by and between Amgen Inc. and Novartis Pharma AG (portions of the exhibit have been omitted pursuant to a request for confidential treatment). (Filed as an exhibit to Form 10-Q for the quarter ended June 30, 2017 on July 26, 2017 and incorporated herein by reference.)
   
10.4010.42 
Amendment No. 1 to the Collaboration Agreement, dated March 20, 2018, by and between Novartis Pharma AG and Amgen Inc. (portions of the exhibit have been omitted pursuant to a request for confidential treatment). (Filed as an exhibit to Form 10-Q for the quarter ended March 31, 2018 on April 25, 2018 and incorporated herein by reference.)
   
10.43
Collaboration Agreement, dated October 31, 2019, by and between Amgen Inc. and BeiGene Switzerland GmbH, a wholly-owned subsidiary of BeiGene, Ltd. (portions of the exhibit have been omitted because they are both (i) not material and (ii) would be competitively harmful if publicly disclosed). (Filed as an exhibit to Form 10-K for the year ended December 31, 2019 on February 12, 2020 and incorporated herein by reference.)
10.44
Guarantee, dated as of October 31, 2019, made by and among BeiGene, Ltd. and Amgen Inc. (Filed as an exhibit to Form 10-K for the year ended December 31, 2019 on February 12, 2020 and incorporated herein by reference.)
10.45
Share Purchase Agreement, dated October 31, 2019, by and between Amgen Inc. and BeiGene, Ltd. (portions of the exhibit have been omitted because they are both (i) not material and (ii) would be competitively harmful if publicly disclosed). (Filed as an exhibit to Schedule 13D on January 8, 2020 and incorporated herein by reference.)
10.46
Amendment No. 1 to Share Purchase Agreement, dated December 6, 2019, by and among BeiGene, Ltd. and Amgen Inc. (Filed as an exhibit to Schedule 13D on January 8, 2020 and incorporated herein by reference.)
10.47*
31* 
   
32** 
   
101.INS Inline XBRL Instance Document - theThe instance document does not appear in the interactive data file because its XBRL tags are embedded within the Inlineinline XBRL document.
   
101.SCH* Inline XBRL Taxonomy Extension Schema Document.
   
101.CAL* Inline XBRL Taxonomy Extension Calculation Linkbase Document.
   
101.DEF* Inline XBRL Taxonomy Extension Definition Linkbase Document.
   
101.LAB* Inline XBRL Taxonomy Extension Label Linkbase Document.
   
101.PRE* Inline XBRL Taxonomy Extension Presentation Linkbase Document.
   
104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).
____________________________
(* = filed herewith)
(** = furnished herewith and not “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended)
(+ = management contract or compensatory plan or arrangement)
(† = Peter Griffith became Executive Vice President and Chief Financial Officer of Amgen Inc. on January 1, 2020)


SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Quarterly Report to be signed on its behalf by the undersigned, thereunto duly authorized.
  Amgen Inc.
  (Registrant)
    
Date:October 29, 2019April 30, 2020By: 
/S/    DAVID W. MELINEPETER H. GRIFFITH
    David W. MelinePeter H. Griffith
    Executive Vice President and Chief Financial Officer
    (Principal Financial and Accounting Officer)


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