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~~June 30, ~~2021~~2022


☐			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 class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, $0.0001 par value	AMGN	~~The Nasdaq Stock Market LLC~~
~~1.250% Senior Notes due 2022~~	~~AMGN22~~	The Nasdaq Stock Market LLC
2.00% Senior Notes due 2026	AMGN26	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 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, a 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 filer

☑

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging 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 28, 2021,~~August 1, 2022, the registrant had ~~563,265,902~~534,930,850 shares of common stock, $0.0001 par value, outstanding.

AMGEN INC.

INDEX

Defined Terms and Products

Defined terms

We use several terms in this Form 10-Q, including but not limited to those that are finance, regulation and disease-state related as well as names of other companies, which are given below.

Term

Description

2017 Tax Act

Tax Cuts and Jobs Act of 2017

ANDA

Abbreviated New Drug Application

AOCI

accumulated other comprehensive income (loss)

ASR

accelerated share repurchase

BeiGene

BeiGene, Ltd.

Bergamo

Laboratorio Quimico Farmaceutico Bergamo Ltda

ChemoCentryx

ChemoCentryx, Inc.

CMS

Centers for Medicare & Medicaid Services

COVID-19

coronavirus disease 2019

Eczacıbaşı

EIS Eczacıbaşı İlaç, Sınai ve Finansal Yatırımlar Sanayi ve Ticaret A.Ş.

EMA

European Medicines Agency

EPS

earnings per share

FASB

Financial Accounting Standards Board

FDA

U.S. Food and Drug Administration

Fitch

Fitch Ratings, Inc.

Five Prime

Five Prime Therapeutics, Inc.

FTC

Federal Trade Commission

GAAP

U.S. generally accepted accounting principles

Gensenta

Gensenta İlaç Sanayi ve Ticaret A.Ş.

HHS

U.S. Department of Health & Human Services

IPR&D

in-process research and development

IRP

international reference pricing

IRS

Internal Revenue Service

LIBOR

London Interbank Offered Rate

Lp(a)

lipoprotein(a)

MD&A

management’s discussion and analysis

MFN

most-favored nation

Moody’s

Moody’s Investors Service, Inc.

Neumora

Neumora Therapeutics, Inc.

OECD

Organisation for Economic Co-operation and Development

PBM

pharmacy benefit manager

PTAB

Patent Trial and Appeal Board

R&D

research and development

RAR

Revenue Agent Report

ROW

rest of world

S&P

Standard & Poor’s Financial Services LLC

SEC

U.S. Securities and Exchange Commission

SG&A

selling, general and administrative

Teneobio

Teneobio, Inc.

U.S. Treasury

U.S. Department of Treasury

USPTO

U.S. Patent and Trademark Office

UTB

unrecognized tax benefit

Products

The brand names of our products, our delivery devices and certain of our product candidates and their associated generic names are given below.


Term						Description
Aimovig						Aimovig® (erenumab-aooe)
AMGEVITA						AMGEVITA™ (adalimumab)
Aranesp						Aranesp® (darbepoetin alfa)
AVSOLA						AVSOLA® (infliximab-axxq)
BLINCYTO						BLINCYTO® (blinatumomab)
Corlanor						Corlanor® (ivabradine)
ENBREL						Enbrel® (etanercept)
EPOGEN						EPOGEN® (epoetin alfa)
EVENITY						EVENITY® (romosozumab-aqqg)
IMLYGIC						IMLYGIC® (talimogene laherparepvec)
KANJINTI						KANJINTI® (trastuzumab-anns)
KYPROLIS						KYPROLIS® (carfilzomib)
LUMAKRAS/LUMYKRAS						LUMAKRAS® / LUMYKRAS™ (sotorasib)
MVASI						MVASI® (bevacizumab-awwb)
Neulasta						Neulasta® (pegfilgrastim)
NEUPOGEN						NEUPOGEN® (filgrastim)
Nplate						Nplate® (romiplostim)
Olpasiran						Olpasiran (formerly AMG 890)
Onpro						Onpro®
Otezla						Otezla® (apremilast)
Parsabiv						Parsabiv® (etelcalcetide)
Prolia						Prolia® (denosumab)
Repatha						Repatha® (evolocumab)
RIABNI						RIABNI™ (rituximab-arrx)
Sensipar/Mimpara						Sensipar®/Mimpara™ (cinacalcet)
TEZSPIRE						TEZSPIRE® (tezepelumab-ekko)
Vectibix						Vectibix® (panitumumab)
XGEVA						XGEVA® (denosumab)

iii

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 June 30,				Six months ended June 30,
		2021		2020		2021		2020			2022		2021		2022		2021
Revenues:	Revenues:									Revenues:
Product sales	Product sales	$	6,320	$	6,104	$	18,026	$	17,906	Product sales	$	6,281	$	6,114	$	12,012	$	11,706
Other revenues	Other revenues	386		319		1,107		884		Other revenues	313		412		820		721
Total revenues	Total revenues	6,706		6,423		19,133		18,790		Total revenues	6,594		6,526		12,832		12,427

Operating expenses:	Operating expenses:									Operating expenses:
Cost of sales	Cost of sales	1,609		1,561		4,736		4,562		Cost of sales	1,510		1,637		3,071		3,127
Research and development	Research and development	1,422		1,062		3,471		2,978		Research and development	1,039		1,082		1,998		2,049
Acquired in-process research and development	Acquired in-process research and development	—		—		1,505		—		Acquired in-process research and development	—		1,505		—		1,505
Selling, general and administrative	Selling, general and administrative	1,305		1,346		3,943		3,957		Selling, general and administrative	1,327		1,384		2,555		2,638
Other	Other	(8)		1		143		162		Other	542		90		532		151
Total operating expenses	Total operating expenses	4,328		3,970		13,798		11,659		Total operating expenses	4,418		5,698		8,156		9,470

Operating income	Operating income	2,378		2,453		5,335		7,131		Operating income	2,176		828		4,676		2,957

Other income (expense):	Other income (expense):									Other income (expense):
Interest expense, net	Interest expense, net	(296)		(302)		(862)		(944)		Interest expense, net	(328)		(281)		(623)		(566)
Other income, net		73		55		97		69
Other (expense) income, net										Other (expense) income, net	(317)		11		(847)		24

Income before income taxes	Income before income taxes	2,155		2,206		4,570		6,256		Income before income taxes	1,531		558		3,206		2,415

Provision for income taxes	Provision for income taxes	271		185		576		607		Provision for income taxes	214		94		413		305

Net income	Net income	$	1,884	$	2,021	$	3,994	$	5,649	Net income	$	1,317	$	464	$	2,793	$	2,110

Earnings per share:	Earnings per share:									Earnings per share:
Basic	Basic	$	3.32	$	3.45	$	6.98	$	9.61	Basic	$	2.46	$	0.81	$	5.16	$	3.67
Diluted	Diluted	$	3.31	$	3.43	$	6.93	$	9.54	Diluted	$	2.45	$	0.81	$	5.13	$	3.65

Shares used in calculation of earnings per share:	Shares used in calculation of earnings per share:									Shares used in calculation of earnings per share:
Basic	Basic	567		585		572		588		Basic	535		573		541		575
Diluted	Diluted	570		589		576		592		Diluted	537		576		544		578

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 June 30,				Six months ended June 30,
		2021		2020		2021		2020			2022		2021		2022		2021
Net income	Net income	$	1,884	$	2,021	$	3,994	$	5,649	Net income	$	1,317	$	464	$	2,793	$	2,110
Other comprehensive income (loss), net of reclassification adjustments and taxes:	Other comprehensive income (loss), net of reclassification adjustments and taxes:									Other comprehensive income (loss), net of reclassification adjustments and taxes:
(Losses) gains on foreign currency translation		(35)		14		(60)		(41)
Gains (losses) on cash flow hedges		99		(128)		241		(305)
(Losses) gains on available-for-sale securities		(1)		1		(1)		(20)
Foreign currency translation										Foreign currency translation	(65)		14		(116)		(25)
Cash flow hedges										Cash flow hedges	156		(48)		240		142

Other	Other	(3)		(7)		(3)		(9)		Other	—		(1)		—		—
Other comprehensive income (loss), net of taxes		60		(120)		177		(375)
Other comprehensive income (loss), net of reclassification adjustments and taxes										Other comprehensive income (loss), net of reclassification adjustments and taxes	91		(35)		124		117
Comprehensive income	Comprehensive income	$	1,944	$	1,901	$	4,171	$	5,274	Comprehensive income	$	1,408	$	429	$	2,917	$	2,227

See accompanying notes.

AMGEN INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions, except per-share data)


		September 30, 2021		December 31, 2020			June 30, 2022		December 31, 2021
		(Unaudited)					(Unaudited)
ASSETS	ASSETS					ASSETS
Current assets:	Current assets:					Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	11,969	$	6,266	Cash and cash equivalents	$	5,203	$	7,989
Marketable securities	Marketable securities	952		4,381		Marketable securities	1,980		48
Trade receivables, net	Trade receivables, net	4,765		4,525		Trade receivables, net	5,327		4,895
Inventories	Inventories	4,152		3,893		Inventories	4,554		4,086
Other current assets	Other current assets	2,542		2,079		Other current assets	2,258		2,367
Total current assets	Total current assets	24,380		21,144		Total current assets	19,322		19,385

Property, plant and equipment, net	Property, plant and equipment, net	4,982		4,889		Property, plant and equipment, net	5,158		5,184
Intangible assets, net	Intangible assets, net	14,659		16,587		Intangible assets, net	13,927		15,182
Goodwill	Goodwill	14,665		14,689		Goodwill	14,865		14,890
Other noncurrent assets	Other noncurrent assets	6,307		5,639		Other noncurrent assets	6,022		6,524
Total assets	Total assets	$	64,993	$	62,948	Total assets	$	59,294	$	61,165

LIABILITIES AND STOCKHOLDERS’ EQUITY	LIABILITIES AND STOCKHOLDERS’ EQUITY					LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:	Current liabilities:					Current liabilities:
Accounts payable	Accounts payable	$	1,171	$	1,421	Accounts payable	$	1,256	$	1,366
Accrued liabilities	Accrued liabilities	9,383		10,141		Accrued liabilities	10,545		10,731
Current portion of long-term debt	Current portion of long-term debt	4,288		91		Current portion of long-term debt	817		87
Total current liabilities	Total current liabilities	14,842		11,653		Total current liabilities	12,618		12,184

Long-term debt	Long-term debt	33,291		32,895		Long-term debt	35,705		33,222
Long-term tax liabilities	Long-term tax liabilities	6,483		6,968		Long-term tax liabilities	5,603		6,594
Other noncurrent liabilities	Other noncurrent liabilities	2,160		2,023		Other noncurrent liabilities	2,949		2,465

Contingencies and commitments	Contingencies and commitments	0		0		Contingencies and commitments	0		0

Stockholders’ equity:	Stockholders’ equity:					Stockholders’ equity:
Common stock and additional paid-in capital; $0.0001 par value; 2,750.0 shares authorized; outstanding—565.0 shares in 2021 and 578.3 shares in 2020		31,989		31,802
Common stock and additional paid-in capital; $0.0001 par value; 2,750.0 shares authorized; outstanding—534.9 shares in 2022 and 558.3 shares in 2021						Common stock and additional paid-in capital; $0.0001 par value; 2,750.0 shares authorized; outstanding—534.9 shares in 2022 and 558.3 shares in 2021	31,343		32,096
Accumulated deficit	Accumulated deficit	(22,964)		(21,408)		Accumulated deficit	(28,252)		(24,600)
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(808)		(985)		Accumulated other comprehensive loss	(672)		(796)
Total stockholders’ equity	Total stockholders’ equity	8,217		9,409		Total stockholders’ equity	2,419		6,700
Total liabilities and stockholders’ equity	Total liabilities and stockholders’ equity	$	64,993	$	62,948	Total liabilities and stockholders’ equity	$	59,294	$	61,165

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			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, 2020		578.3	$	31,802	$	(21,408)	$	(985)	$	9,409
Balance as of December 31, 2021											Balance as of December 31, 2021	558.3	$	32,096	$	(24,600)	$	(796)	$	6,700

Net income	Net income	—	—		1,646		—		1,646		Net income	—	—		1,476		—		1,476
Other comprehensive income, net of taxes	Other comprehensive income, net of taxes	—	—		—		152		152		Other comprehensive income, net of taxes	—	—		—		33		33
Dividends declared on common stock ($1.76 per share)		—	—		(1,012)		—		(1,012)
Dividends declared on common stock ($1.94 per share)											Dividends declared on common stock ($1.94 per share)	—	—		(1,034)		—		(1,034)
Issuance of common stock in connection with the Company’s equity award programs	Issuance of common stock in connection with the Company’s equity award programs	0.7	6		—		—		6		Issuance of common stock in connection with the Company’s equity award programs	0.5	18		—		—		18
Stock-based compensation expense	Stock-based compensation expense	—	57		—		—		57		Stock-based compensation expense	—	78		—		—		78
Tax impact related to employee stock-based compensation expense	Tax impact related to employee stock-based compensation expense	—	(59)		—		—		(59)		Tax impact related to employee stock-based compensation expense	—	(45)		—		—		(45)
Repurchases of common stock		(3.7)	—		(865)		—		(865)
Balance as of March 31, 2021		575.3	31,806		(21,639)		(833)		9,334
Repurchases of common stock (Note 10)											Repurchases of common stock (Note 10)	(24.6)	(900)		(5,410)		—		(6,310)
Balance as of March 31, 2022											Balance as of March 31, 2022	534.2	31,247		(29,568)		(763)		916

Net income	Net income	—	—		464		—		464		Net income	—	—		1,317		—		1,317
Other comprehensive loss, net of taxes		—	—		—		(35)		(35)
Other comprehensive income, net of taxes											Other comprehensive income, net of taxes	—	—		—		91		91
Issuance of common stock in connection with the Company’s equity award programs	Issuance of common stock in connection with the Company’s equity award programs	0.8	47		—		—		47		Issuance of common stock in connection with the Company’s equity award programs	0.7	45		—		—		45
Stock-based compensation expense	Stock-based compensation expense	—	100		—		—		100		Stock-based compensation expense	—	120		—		—		120
Tax impact related to employee stock-based compensation expense	Tax impact related to employee stock-based compensation expense	—	(76)		—		—		(76)		Tax impact related to employee stock-based compensation expense	—	(69)		—		—		(69)
Repurchases of common stock		(6.5)	—		(1,592)		—		(1,592)

Other	Other	—	—		5		—		5		Other	—	—		(1)		—		(1)
Balance as of June 30, 2021		569.6	31,877		(22,762)		(868)		8,247
Balance as of June 30, 2022											Balance as of June 30, 2022	534.9	$	31,343	$	(28,252)	$	(672)	$	2,419

Net income		—	—		1,884		—		1,884
Other comprehensive income, net of taxes		—	—		—		60		60
Dividends declared on common stock ($1.76 per share)		—	—		(1,017)		—		(1,017)
Issuance of common stock in connection with the Company’s equity award programs		—	9		—		—		9
Stock-based compensation expense		—	111		—		—		111
Tax impact related to employee stock-based compensation expense		—	(8)		—		—		(8)
Repurchases of common stock		(4.6)	—		(1,069)		—		(1,069)

Balance as of September 30, 2021		565.0	$	31,989	$	(22,964)	$	(808)	$	8,217

AMGEN INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (continued)

(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			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, 2019		591.4	$	31,531	$	(21,330)	$	(528)	$	9,673
Cumulative effect of changes in accounting principles, net of taxes		—	—		(2)		—		(2)
Balance as of December 31, 2020											Balance as of December 31, 2020	578.3	$	31,802	$	(21,408)	$	(985)	$	9,409

Net income	Net income	—	—		1,825		—		1,825		Net income	—	—		1,646		—		1,646
Other comprehensive loss, net of taxes		—	—		—		(134)		(134)
Dividends declared on common stock ($1.60 per share)		—	—		(938)		—		(938)
Other comprehensive income, net of taxes											Other comprehensive income, net of taxes	—	—		—		152		152
Dividends declared on common stock ($1.76 per share)											Dividends declared on common stock ($1.76 per share)	—	—		(1,012)		—		(1,012)
Issuance of common stock in connection with the Company’s equity award programs	Issuance of common stock in connection with the Company’s equity award programs	0.9	10		—		—		10		Issuance of common stock in connection with the Company’s equity award programs	0.7	6		—		—		6
Stock-based compensation expense	Stock-based compensation expense	—	52		—		—		52		Stock-based compensation expense	—	57		—		—		57
Tax impact related to employee stock-based compensation expense	Tax impact related to employee stock-based compensation expense	—	(68)		—		—		(68)		Tax impact related to employee stock-based compensation expense	—	(59)		—		—		(59)
Repurchases of common stock	Repurchases of common stock	(4.3)	—		(933)		—		(933)		Repurchases of common stock	(3.7)	—		(865)		—		(865)
Balance as of March 31, 2020		588.0	31,525		(21,378)		(662)		9,485
Balance as of March 31, 2021											Balance as of March 31, 2021	575.3	31,806		(21,639)		(833)		9,334

Net income	Net income	—	—		1,803		—		1,803		Net income	—	—		464		—		464
Other comprehensive loss, net of taxes	Other comprehensive loss, net of taxes	—	—		—		(121)		(121)		Other comprehensive loss, net of taxes	—	—		—		(35)		(35)

Issuance of common stock in connection with the Company’s equity award programs	Issuance of common stock in connection with the Company’s equity award programs	1.0	65		—		—		65		Issuance of common stock in connection with the Company’s equity award programs	0.8	47		—		—		47
Stock-based compensation expense	Stock-based compensation expense	—	101		—		—		101		Stock-based compensation expense	—	100		—		—		100
Tax impact related to employee stock-based compensation expense	Tax impact related to employee stock-based compensation expense	—	(81)		—		—		(81)		Tax impact related to employee stock-based compensation expense	—	(76)		—		—		(76)
Repurchases of common stock	Repurchases of common stock	(2.6)	—		(591)		—		(591)		Repurchases of common stock	(6.5)	—		(1,592)		—		(1,592)
Other	Other	—	—		(2)		—		(2)		Other	—	—		5		—		5
Balance as of June 30, 2020		586.4	31,610		(20,168)		(783)		10,659
Net income		—	—		2,021		—		2,021
Other comprehensive loss, net of taxes		—	—		—		(120)		(120)
Dividends declared on common stock ($1.60 per share)		—	—		(952)		—		(952)
Issuance of common stock in connection with the Company’s equity award programs		0.1	5		—		—		5
Stock-based compensation expense		—	109		—		—		109
Tax impact related to employee stock-based compensation expense		—	(11)		—		—		(11)
Repurchases of common stock		(3.0)	—		(752)		—		(752)
Balance as of September 30, 2020		583.5	$	31,713	$	(19,851)	$	(903)	$	10,959
Balance as of June 30, 2021											Balance as of June 30, 2021	569.6	$	31,877	$	(22,762)	$	(868)	$	8,247

See accompanying notes.

AMGEN INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

(Unaudited)


		Nine months ended September 30,					Six months ended June 30,
		2021		2020			2022		2021
Cash flows from operating activities:	Cash flows from operating activities:					Cash flows from operating activities:
Net income	Net income	$	3,994	$	5,649	Net income	$	2,793	$	2,110
Depreciation, amortization and other	Depreciation, amortization and other	2,546		2,728		Depreciation, amortization and other	1,669		1,696
Deferred income taxes	Deferred income taxes	(264)		(339)		Deferred income taxes	(514)		(137)
Acquired in-process research and development	Acquired in-process research and development	1,505		—		Acquired in-process research and development	—		1,505
Adjustments for equity method investments						Adjustments for equity method investments	497		(36)
Loss on divestiture						Loss on divestiture	560		—
Other items, net	Other items, net	187		270		Other items, net	436		206
Changes in operating assets and liabilities, net of acquisitions:	Changes in operating assets and liabilities, net of acquisitions:					Changes in operating assets and liabilities, net of acquisitions:
Trade receivables, net	Trade receivables, net	(269)		(31)		Trade receivables, net	(504)		35
Inventories	Inventories	(215)		(316)		Inventories	(410)		(167)
Other assets	Other assets	(373)		64		Other assets	198		(258)
Accounts payable	Accounts payable	(260)		(202)		Accounts payable	(98)		(156)
Accrued income taxes, net	Accrued income taxes, net	(719)		(301)		Accrued income taxes, net	(685)		(930)
Long-term tax liabilities	Long-term tax liabilities	102		110		Long-term tax liabilities	108		47
Other liabilities	Other liabilities	219		712		Other liabilities	44		120
Net cash provided by operating activities	Net cash provided by operating activities	6,453		8,344		Net cash provided by operating activities	4,094		4,035
Cash flows from investing activities:	Cash flows from investing activities:					Cash flows from investing activities:
Cash paid for acquisitions, net of cash acquired		(1,639)		—
Purchases of marketable securities	Purchases of marketable securities	(8,901)		(5,329)		Purchases of marketable securities	(1,976)		(8,000)
Proceeds from sales of marketable securities	Proceeds from sales of marketable securities	4,403		2,597		Proceeds from sales of marketable securities	—		4,404
Proceeds from maturities of marketable securities	Proceeds from maturities of marketable securities	7,927		2,338		Proceeds from maturities of marketable securities	47		6,528
Purchases of property, plant and equipment						Purchases of property, plant and equipment	(436)		(351)

Purchases of property, plant and equipment		(593)		(435)
Purchases of equity method investments		(154)		(3,154)
Cash paid for acquisitions, net of cash acquired						Cash paid for acquisitions, net of cash acquired	—		(1,626)
Other	Other	(80)		(34)		Other	61		(65)
Net cash provided by (used in) investing activities		963		(4,017)
Net cash (used in) provided by investing activities						Net cash (used in) provided by investing activities	(2,304)		890
Cash flows from financing activities:	Cash flows from financing activities:					Cash flows from financing activities:
Net proceeds from issuance of debt	Net proceeds from issuance of debt	4,946		8,914		Net proceeds from issuance of debt	3,954		—
Repayment of debt		—		(5,000)

Repurchases of common stock		(3,532)		(2,281)

Repurchases of common stock (Note 10)						Repurchases of common stock (Note 10)	(6,360)		(2,452)
Dividends paid	Dividends paid	(3,023)		(2,823)		Dividends paid	(2,118)		(2,024)

Other	Other	(104)		(87)		Other	(52)		(85)
Net cash used in financing activities	Net cash used in financing activities	(1,713)		(1,277)		Net cash used in financing activities	(4,576)		(4,561)
Increase in cash and cash equivalents		5,703		3,050
(Decrease) increase in cash and cash equivalents						(Decrease) increase in cash and cash equivalents	(2,786)		364
Cash and cash equivalents at beginning of period	Cash and cash equivalents at beginning of period	6,266		6,037		Cash and cash equivalents at beginning of period	7,989		6,266
Cash and cash equivalents at end of period	Cash and cash equivalents at end of period	$	11,969	$	9,087	Cash and cash equivalents at end of period	$	5,203	$	6,630

See accompanying notes.

AMGEN INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~September~~June 30, ~~2021~~2022

(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~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020,~~2021, 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, ~~2020,~~2021, and with our condensed consolidated financial statements and the notes thereto contained in our Quarterly ~~Reports~~Report on Form 10-Q for the ~~periods~~period ended March 31, ~~2021 and June 30, 2021.~~2022.

Principles of consolidation

The condensed consolidated financial statements include the accounts of Amgen as well as its majority-owned subsidiaries. In determining whether we are the primary beneficiary of a variable interest entity, we consider whether we have both the power to direct activities of the entity that most significantly impact the entity’s economic performance and the obligation to absorb losses of or the right to receive benefits from the entity that could potentially be significant to that entity. We do not have any significant interests in any variable interest ~~entities.~~entities of which we are the primary beneficiary. 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)~~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 ~~$9.2~~$9.0 billion and ~~$9.0~~$8.8 billion as of ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively.

Recent accounting pronouncements

In March 2020, the ~~Financial Accounting Standards Board (FASB)~~FASB issued a new accounting standard to ease the financial reporting burdens caused by the expected market transition from ~~the London Interbank Offered Rate (LIBOR)~~LIBOR and other interbank offered rates to alternative reference rates, commonly referred to as reference rate reform. The new standard provides temporary optional expedients and exceptions to current GAAP guidance on contract modifications and hedge accounting. Specifically, a modification to transition to an alternative reference rate is treated as an event that does not require contract remeasurement or reassessment of a previous accounting treatment. Moreover, for all types of hedging relationships, an entity is permitted to change the reference rate without having to dedesignate the hedging relationship. The standard is generally effective for all contract modifications made and hedging relationships evaluated through December 31, 2022. In January 2021, the FASB issued a new accounting standard ~~to expand on~~that expanded the scope of the original March 2020 standard to include derivative instruments on discounting transactions. We ~~are currently evaluating the impacts that~~do not expect the two standards ~~will~~to have a material impact on our condensed consolidated financial statements.

In November 2021, the FASB issued a new accounting standard around the recognition and measurement of contract assets and contract liabilities from revenue contracts with customers acquired in a business combination. The new standard clarifies that contract assets and contract liabilities acquired in a business combination from an acquiree should initially be recognized by applying revenue recognition principles and not at fair value. The standard is effective for interim and annual periods beginning on January 1, 2023, and early adoption is permitted. The impact of this standard will depend on the facts and circumstances of future transactions.

2. Acquisitions and divestitures

Acquisition of Teneobio, Inc.

On October 19, 2021, we acquired all of the outstanding stock of Teneobio, a privately held, clinical-stage biotechnology company developing a new class of biologics called human heavy-chain antibodies, which are single-chain antibodies composed of the human heavy-chain domain. The transaction, which was accounted for as a business combination, includes Teneobio’s proprietary bispecific and multispecific antibody technologies, which complement Amgen’s existing antibody capabilities and bispecific T-cell engager (BiTE®) platform and will enable significant acceleration and efficiency in the discovery and development of new molecules to treat diseases across Amgen’s core therapeutic areas. Upon its acquisition, Teneobio became a wholly owned subsidiary of Amgen, and its operations have been included in our condensed consolidated financial statements commencing on the acquisition date.

Measurement period adjustments for the six months ended June 30, 2022, included changes to the purchase price allocation and total consideration, resulting in a net increase of $22 million to goodwill. The measurement period adjustments resulted primarily from valuation inputs pertaining to certain acquired assets based on facts and circumstances that existed as of the acquisition date and did not result from events subsequent to the acquisition date. These adjustments did not have a significant impact on Amgen’s results of operations during the six months ended June 30, 2022, and would not have had a significant impact on prior-period results if these adjustments had been made as of the acquisition date. The following table summarizes the total consideration and allocated acquisition date fair values of assets acquired and liabilities assumed, inclusive of measurement period adjustments (in millions):


	Amounts
Cash purchase price	$	993
Contingent consideration	299
Total consideration	$	1,292

Cash and cash equivalents	$	100
In-process research and development	991
Finite-lived intangible asset – research and development technology rights	115
Finite-lived intangible assets – licensing rights	41
Goodwill	273
Other assets, net	16
Deferred tax liability	(244)
Total assets acquired, net	$	1,292

Consideration for this transaction comprised (i) an upfront cash payment of $993 million, which included a working-capital adjustment, and (ii) future contingent milestone payments to Teneobio’s former equity holders of up to $1.6 billion in cash, based on the achievement of various development and regulatory milestones with regard to the leading asset (AMG 340, formerly TNB-585) and to various development milestones for other drug candidates. The estimated fair values of the contingent consideration obligations aggregated $299 million as of the acquisition date and were determined using a probability-weighted expected return methodology. The assumptions in this method include the probability of achieving the milestones and the expected payment dates, with such amounts discounted to present value based on our pretax cost of debt. See Note 11, Fair value measurement, for information regarding the estimated fair value of these obligations as of June 30, 2022.

The estimated fair values of acquired IPR&D assets totaled $991 million, of which $784 million relates to AMG 340, that is in a phase 1 clinical trial for the treatment of metastatic castration-resistant prostate cancer (mCRPC), and the balance relates to four separate preclinical oncology programs. The R&D technology rights of $115 million relate to Teneobio’s proprietary bispecific and multispecific antibody technologies; the amount is being amortized over 10 years by using the straight-line method. Teneobio has also licensed its technology and certain identified targets to various third parties, representing contractual agreements valued at $41 million. The estimated fair values for these intangible assets were determined using a multi-period excess earnings income approach that discounts expected future cash flows to present value by applying a discount rate that represents the estimated rate that market participants would use to value the intangible assets. The projected cash flows were based on certain assumptions attributable to the respective intangible asset, including estimates of future revenues and expenses, the time and resources needed to complete development and the probabilities of obtaining marketing approval from the FDA and other regulatory agencies.

A deferred tax liability of $244 million was recognized on temporary differences related to the book bases and tax bases of the acquired identifiable assets and assumed liabilities, primarily driven by the intangible assets acquired.

The excess of the acquisition date consideration over the fair values assigned to the assets acquired and the liabilities assumed of $273 million was recorded as goodwill, which is not deductible for tax purposes. The goodwill value represents expected synergies from both AMG 340 and the technologies acquired.

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

Acquisition of Five Prime Therapeutics, Inc.

On April 16, 2021, Amgen completed its acquisition of Five Prime ~~Therapeutics, Inc. (Five Prime)~~ for a total cash consideration of $1.6 billion, net of cash acquired. The purchase price was funded with cash on hand. This transaction was accounted for as an asset acquisition because substantially all the value of the assets acquired was concentrated in the intellectual property rights of bemarituzumab, a phase 3 trial-ready, first-in-class program for gastric cancer. Five Prime’s operations have been included in our condensed consolidated financial statements commencing after the acquisition date.

We allocated the consideration to acquire Five Prime to: the bemarituzumab ~~in-process research and development (IPR&D)~~IPR&D program of $1.5 billion, which was expensed immediately in Acquired IPR&D expense in the Condensed Consolidated Statements of Income; deferred tax assets of $177 million; and other net liabilities of $47 million. The ~~acquired~~Acquired IPR&D expense was not tax deductible.

Divestiture of Gensenta İlaç Sanayi ve Ticaret A.Ş.

On June 28, 2022, we entered into a share purchase agreement with Eczacıbaşı under which Eczacıbaşı will acquire all of our shares in Gensenta—a subsidiary in Turkey. Net assets related to Gensenta of $80 million met the criteria to be classified as held-for-sale and did not meet the criteria to be classified as discontinued operations. Upon closing of the transaction, we expect to receive $135 million in cash. The transaction is expected to close in the third quarter of 2022 upon approval by the Turkish Competition Authority.

As of June 30, 2022, held-for-sale assets and liabilities of $100 million and $20 million were included in Other current assets and Accrued liabilities, respectively, in the Condensed Consolidated Balance Sheets. During the three months ended June 30, 2022, we recognized a loss of $560 million recorded to Other operating expenses in the Condensed Consolidated Statements of Income, primarily due to the impact of the cumulative foreign currency translation loss, with valuation allowances to Other current assets and Accrued liabilities in the Condensed Consolidated Balance Sheets.

3. 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. The majority of ~~rest-of-world (ROW)~~ROW revenues relates to products sold in Europe.

Revenues were as follows (in millions):

Three months ended September 30,
2021 2020
U.S. ROW Total U.S. ROW Total
Enbrel® (etanercept)
$ 1,263 $ 26 $ 1,289 $ 1,289 $ 36 $ 1,325
Prolia® (denosumab)
530 273 803 478 223 701
Otezla® (apremilast)
495 114 609 439 99 538
XGEVA® (denosumab)
372 145 517 363 118 481
Neulasta® (pegfilgrastim)
360 55 415 484 71 555
Aranesp® (darbepoetin alfa)
149 247 396 158 226 384
Repatha® (evolocumab)
139 133 272 92 113 205
KYPROLIS® (carfilzomib)
198 95 293 173 87 260
Other products 1,052 674 1,726 1,142 513 1,655
Total product sales(1)
$ 4,558 $ 1,762 6,320 $ 4,618 $ 1,486 6,104
Other revenues 386 319
Total revenues $ 6,706 $ 6,423
Nine months ended September 30,
2021 2020
U.S. ROW Total U.S. ROW Total
ENBREL $ 3,270 $ 87 $ 3,357 $ 3,619 $ 105 $ 3,724
Prolia®
1,569 806 2,375 1,341 673 2,014
Otezla®
1,284 335 1,619 1,280 298 1,578
XGEVA®
1,061 412 1,473 1,036 361 1,397
Neulasta®
1,215 168 1,383 1,538 219 1,757
Aranesp®
409 709 1,118 489 704 1,193
Repatha®
421 423 844 331 303 634
KYPROLIS®
547 277 824 527 266 793
Other products 3,059 1,974 5,033 3,164 1,652 4,816
Total product sales(1)
$ 12,835 $ 5,191 18,026 $ 13,325 $ 4,581 17,906
Other revenues 1,107 884
Total revenues $ 19,133 $ 18,790


	Three months ended June 30,
	2022						2021
	U.S.		ROW		Total		U.S.		ROW		Total
ENBREL	$	1,036	$	15	$	1,051	$	1,113	$	31	$	1,144
Prolia	611		311		922		538		276		814
Otezla	487		107		594		423		111		534
XGEVA	391		142		533		355		133		488
Aranesp	132		225		357		135		232		367
Neulasta	263		47		310		434		52		486
Repatha	154		171		325		143		143		286
KYPROLIS	213		104		317		190		90		280
Nplate	156		128		284		136		109		245
Other products	1,003		585		1,588		907		563		1,470
Total product sales(1)	$	4,446	$	1,835	6,281		$	4,374	$	1,740	6,114
Other revenues					313						412
Total revenues					$	6,594					$	6,526

	Six months ended June 30,
	2022						2021
	U.S.		ROW		Total		U.S.		ROW		Total
ENBREL	$	1,879	$	34	$	1,913	$	2,007	$	61	$	2,068
Prolia	1,193		581		1,774		1,039		533		1,572
Otezla	837		208		1,045		789		221		1,010
XGEVA	759		276		1,035		689		267		956
Aranesp	269		446		715		260		462		722
Neulasta	567		91		658		855		113		968
Repatha	319		335		654		282		290		572
KYPROLIS	409		195		604		349		182		531
Nplate	312		238		550		248		224		472
Other products	1,939		1,125		3,064		1,759		1,076		2,835
Total product sales(1)	$	8,483	$	3,529	12,012		$	8,277	$	3,429	11,706
Other revenues					820						721
Total revenues					$	12,832					$	12,427

____________

(1) Hedging gains and losses, which are included in product sales, were not material for the three and ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020.~~2021.

910

4. Income taxes

The effective tax ~~rate~~rates for the three and ~~nine~~six months ended ~~September~~June 30, ~~2021, was 12.6% for both periods,~~2022, were 14.0% and 12.9%, respectively, compared with ~~rates of 8.4%~~16.8% and ~~9.7%~~12.6%, respectively, for the corresponding periods of the prior year.

The decrease in our effective tax rate for the three months ended June 30, 2022, was primarily due to the prior year nondeductible IPR&D expense arising from the acquisition of Five Prime, partially offset by current year unfavorable items including a loss on a nonstrategic divestiture. The increase in our effective tax rate for the ~~three and nine~~six months ended ~~September~~June 30, ~~2021,~~2022, was primarily due to current year unfavorable items compared to last year including a loss on a nonstrategic divestiture, partially offset by the ~~non-deductible~~prior year nondeductible IPR&D expense arising from the acquisition of Five Prime and ~~prior year favorable items partially offset by a change~~changes in earnings mix. The effective tax rates differ from the federal statutory rate primarily as a result of foreign earnings from the Company’s operations conducted in Puerto Rico, a territory of the United States treated as a foreign jurisdiction for U.S. tax purposes, that are currently subject to a tax incentive grant through 2035. In addition, the Company’s operations conducted in Singapore are subject to a tax incentive grant through 2034. These foreign earnings are also subject to U.S. tax at a reduced rate of 10.5%. See Note 2, Acquisitions and divestitures.

The U.S. territory of Puerto Rico imposes ana 4% 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~~Inventories and expensed in ~~cost~~Cost of sales when the related products are sold. For U.S. income tax purposes, in 2022, the excise tax results in foreign tax credits that are generally recognized in our provision for income taxes when the excise tax is incurred.

In 2017, we received ~~a Revenue Agent Report (RAR)~~an RAR and a modified RAR from the ~~Internal Revenue Service (IRS)~~IRS for the years ~~2010, 2011 and~~ 2010–2012, proposing significant adjustments that primarily relate to the allocation of profits between certain of our entities in the United States and the U.S. territory of Puerto Rico. We disagreed with the proposed adjustments and calculations and pursued ~~a resolution with the IRS administrative appeals office. As previously reported, we were unable to reach~~ resolution with the IRS appeals ~~office.~~office but were unable to reach resolution. In July 2021, we filed a petition in the U.S. Tax Court to contest two duplicate Statutory Notices of Deficiency (Notices) for ~~2010, 2011 and~~ the years 2010–2012 that we received in May and July ~~2021. The duplicate Notices~~2021, which seek to increase our U.S. taxable income for the years 2010–2012 by an amount that would result in additional federal tax of approximately $3.6 billion plus interest. Any additional tax that could be imposed for the years 2010–2012 would be reduced by up to approximately $900 million of repatriation tax previously accrued on our foreign earnings. ~~In any event, we firmly believe that the IRS’s positions in the Notices are without merit, and we will vigorously contest the Notices through the judicial process.~~

In ~~addition, in~~ 2020, we received an RAR and a modified RAR from the IRS for the years ~~2013, 2014 and~~ 2013–2015, also proposing significant adjustments that primarily relate to the allocation of profits between certain of our entities in the United States and the U.S. territory of Puerto Rico similar to those proposed for the years ~~2010, 2011 and~~ 2010–2012. We ~~disagree~~disagreed with the proposed adjustments and calculations and ~~have been pursuing~~pursued resolution with the IRS ~~administrative~~ appeals ~~office. As~~office but were unable to reach resolution.In July 2022, we filed a ~~consequence~~petition in the U.S. Tax Court to contest a Notice for the years 2013–2015 that we previously reported receiving in April 2022 that seeks to increase our U.S. taxable income for the years 2013–2015 by an amount that would result in additional federal tax of approximately $5.1 billion, plus interest. In addition, the Notice asserts penalties of approximately $2.0 billion. Any additional tax that could be imposed for the years 2013–2015 would be reduced by up to approximately $2.2 billion of repatriation tax previously accrued on our foreign earnings.

We firmly believe that the IRS positions set forth in the 2010–2012 and 2013–2015 Notices are without merit. We are contesting the 2010–2012 and 2013–2015 Notices through the judicial process, and we will seek consolidation of the Tax Court litigation for the 2010-2012 period, the IRS administrative appeals office recently informed us that it does not plan to engage in discussions at this time regarding the allocation of profits between our entitiestwo periods into one case in the ~~United States and the~~ U.S. ~~territory of Puerto Rico for the 2013-2015 period.~~ Tax Court.

We are currently under examination by the IRS for the years ~~2016, 2017 and 2018. We are also currently under examination~~2016–2018 with respect to issues similar to those for the 2010 through 2015 period. In addition, we have examinations by a number of ~~other~~ state and foreign tax jurisdictions.

Final resolution of these complex matters is not likely within the next 12 months. We believe our accrual for income tax liabilities is appropriate based on past experience, interpretations of tax law, application of the tax law to our facts and judgments about potential actions by tax authorities; however, due to the complexity of the provision for income taxes and uncertain resolution of these matters, the ultimate outcome of any tax matters may result in payments substantially greater than amounts accrued and could have a material adverse impact on our condensed consolidated financial statements.

We are no longer subject to U.S. federal income tax examinations for ~~the~~ years ended on or before December 31, 2009.

See Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations, Income Taxes, for further discussion and Part II, Item 1A, Risk Factors—The adoption and interpretation of new tax legislation or exposure to additional tax liabilities could affect our profitability.

During the three and ~~nine~~six months ended ~~September~~June 30, ~~2021,~~2022, the gross amounts of our ~~unrecognized tax benefits (UTBs)~~UTBs increased ~~$70~~by $50 million and ~~$180~~$95 million, respectively, as a result of tax positions taken during the current year. Substantially all of the UTBs as of ~~September~~June 30, ~~2021,~~2022, if recognized, would affect our effective tax rate.

5. Earnings per share

The computation of basic ~~earnings per share (EPS)~~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 primarily include shares that may be issued under our stock option, restricted stock and performance unit award programs (collectively, dilutive securities), as determined by using the treasury stock method.

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


		Three months ended September 30,				Nine months ended September 30,					Three months ended June 30,				Six months ended June 30,
		2021		2020		2021		2020			2022		2021		2022		2021
Income (Numerator):	Income (Numerator):									Income (Numerator):
Net income for basic and diluted EPS	Net income for basic and diluted EPS	$	1,884	$	2,021	$	3,994	$	5,649	Net income for basic and diluted EPS	$	1,317	$	464	$	2,793	$	2,110

Shares (Denominator):	Shares (Denominator):									Shares (Denominator):
Weighted-average shares for basic EPS	Weighted-average shares for basic EPS	567		585		572		588		Weighted-average shares for basic EPS	535		573		541		575
Effect of dilutive securities	Effect of dilutive securities	3		4		4		4		Effect of dilutive securities	2		3		3		3
Weighted-average shares for diluted EPS	Weighted-average shares for diluted EPS	570		589		576		592		Weighted-average shares for diluted EPS	537		576		544		578

Basic EPS	Basic EPS	$	3.32	$	3.45	$	6.98	$	9.61	Basic EPS	$	2.46	$	0.81	$	5.16	$	3.67
Diluted EPS	Diluted EPS	$	3.31	$	3.43	$	6.93	$	9.54	Diluted EPS	$	2.45	$	0.81	$	5.13	$	3.65

For the three and ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020,~~2021, the number of antidilutive employee stock-based awards excluded from the computation of diluted EPS was not significant.

~~6. Collaborations~~

On July 30, 2021, we closed our collaboration and licensing agreement with Kyowa Kirin Co., Ltd. (KKC) to jointly develop and commercialize an anti-OX40 fully human monoclonal antibody (AMG 451) worldwide, except in Japan. AMG 451 is for the treatment of atopic dermatitis, with potential in other autoimmune diseases.

Under the terms of the agreement, we will lead the global development, manufacturing and commercialization of AMG 451, except in Japan. KKC will co-promote AMG 451 with Amgen in the United States and have opt-in rights to co-promote AMG 451 in various other markets outside the United States, including in Europe and Asia.

We made an upfront payment of $400 million to KKC that was recognized in Research and development (R&D) expense in the third quarter of 2021. Amgen and KKC will share equally the global development costs, except in Japan, and the U.S. commercialization costs. Outside of the United States and Japan, any commercialization costs incurred by KKC will be reimbursed by Amgen. We may also be required to make milestone payments of up to $850 million contingent upon the achievement of certain regulatory events and commercial thresholds. We will also pay KKC significant double-digit royalties on global sales, except in Japan.

1112

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, 2021		Amortized cost		Gross unrealized gains		Gross unrealized losses		Fair values
Types of securities as of June 30, 2022										Types of securities as of June 30, 2022	Amortized cost		Gross unrealized gains		Gross unrealized losses		Fair values
U.S. Treasury notes	U.S. Treasury notes	$	51	$	—	$	—	$	51	U.S. Treasury notes	$	—	$	—	$	—	$	—
U.S. Treasury bills	U.S. Treasury bills	3,900		—		—		3,900		U.S. Treasury bills	1,980		—		—		1,980

Money market mutual funds	Money market mutual funds	8,323		—		—		8,323		Money market mutual funds	4,433		—		—		4,433
Other short-term interest-bearing securities	Other short-term interest-bearing securities	1		—		—		1		Other short-term interest-bearing securities	—		—		—		—

Total interest-bearing securities	Total interest-bearing securities	$	12,275	$	—	$	—	$	12,275	Total interest-bearing securities	$	6,413	$	—	$	—	$	6,413


Types of securities as of December 31, 2020		Amortized cost		Gross unrealized gains		Gross unrealized losses		Fair values
Types of securities as of December 31, 2021										Types of securities as of December 31, 2021	Amortized cost		Gross unrealized gains		Gross unrealized losses		Fair values
U.S. Treasury notes	U.S. Treasury notes	$	129	$	1	$	—	$	130	U.S. Treasury notes	$	47	$	—	$	—	$	47
U.S. Treasury bills	U.S. Treasury bills	4,948		—		—		4,948		U.S. Treasury bills	1,400		—		—		1,400

Money market mutual funds	Money market mutual funds	4,765		—		—		4,765		Money market mutual funds	5,856		—		—		5,856
Other short-term interest-bearing securities	Other short-term interest-bearing securities	2		—		—		2		Other short-term interest-bearing securities	1		—		—		1
Total interest-bearing securities	Total interest-bearing securities	$	9,844	$	1	$	—	$	9,845	Total interest-bearing securities	$	7,304	$	—	$	—	$	7,304

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	Condensed Consolidated Balance Sheets locations	September 30, 2021		December 31, 2020		Condensed Consolidated Balance Sheets locations	June 30, 2022		December 31, 2021
Cash and cash equivalents	Cash and cash equivalents	$	11,323	$	5,464	Cash and cash equivalents	$	4,433	$	7,256
Marketable securities	Marketable securities	952		4,381		Marketable securities	1,980		48
Total interest-bearing securities	Total interest-bearing securities	$	12,275	$	9,845	Total interest-bearing securities	$	6,413	$	7,304

Cash and cash equivalents in the above table excludes bank account cash of ~~$646~~$770 million and ~~$802~~$733 million as of ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively.

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

Contractual maturities September 30, 2021 December 31, 2020
Maturing in one year or less $ 12,275 $ 9,795
Maturing after one year through three years — 50
Total available-for-sale investments $ 12,275 $ 9,845
June 30, 2022 and December 31, 2021, mature in one year or less.

For the three and ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020,~~2021, realized gains and losses on interest-bearing securities were not material. Realized gains and losses on interest-bearing securities are recorded in Other (expense) income, net, in the Condensed Consolidated Statements of Income. The cost of securities sold is based on the specific-identification method.

The primary objective of our investment portfolio is to maintain 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 investment-grade credit ratings, and it places restrictions on maturities and concentration by asset class and issuer.

Equity securities

We held investments in equity securities with readily determinable fair values (publicly traded securities) of ~~$608~~$361 million and ~~$477~~$611 million as of ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively, which are included in Other noncurrent assets in the Condensed Consolidated Balance Sheets. ~~For~~During the three months ended ~~September~~June 30, ~~2021~~2022 and ~~2020,~~2021, net unrealized gains and losses on publicly traded securities were ~~$135~~a $106 million net loss and ~~$60~~a $25 million net gain, respectively. ~~For~~During the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020,~~2021, net unrealized ~~gains~~losses on publicly traded securities were ~~$104~~$276 million and ~~$65~~$31 million, respectively. Realized gains and losses on sales of publicly traded securities for the three and ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020~~2021, were not material.

We held investments of ~~$255~~$280 million and ~~$203~~$262 million in equity securities without readily determinable fair values as of ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively, which are included in Other noncurrent assets in the Condensed Consolidated Balance Sheets. ~~For~~During the three and six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020, gains due to~~2021, upward adjustments ~~on these securities were $94 million~~ and ~~$12 million, respectively. For the nine months ended September 30, 2021 and 2020, gains due to upward adjustments on these securities were $129 million and $20 million, respectively. Downward~~downward adjustments on these securities were not material. Adjustments were based on observable price transactions.

Equity method investments

BeiGene, Ltd.

As of ~~September~~June 30, 2022 and December 31, 2021, we had an ownership interest in BeiGene of approximately ~~20.3% in BeiGene, Ltd. (BeiGene)~~18.2% and 18.4%, respectively, which is included in Other noncurrent assets in the Condensed Consolidated Balance Sheets and accounted for under the equity method of accounting. We amortize the difference between the fair value of equity securities acquired and our proportionate share of the carrying value of the underlying net assets of BeiGene over the useful lives of the assets that gave rise to this basis difference. This amortization and our share of the results of operations of BeiGene are included in Other (expense) income, net, in the Condensed Consolidated Statements of Income one quarter in ~~arrears, which began in the second quarter of 2020.~~arrears.

During the three ~~and nine~~ months ended ~~September~~June 30, 2022 and 2021, the carrying value of our equity investment was adjusted by our share of BeiGene’s net loss of ~~$98~~$80 million and ~~$181~~net income of $14 million, respectively, and amortization of the basis difference of ~~$44~~$48 million and ~~$128~~$42 million, respectively. During the ~~three and nine~~six months ended ~~September~~June 30, 2022 and 2021, the carrying value ~~increased~~of our equity investment was adjusted by ~~$18~~our share of BeiGene’s net losses of $188 million and ~~$56~~$83 million, respectively, ~~from~~and amortization of the ~~impact~~basis difference of ~~BeiGene ownership transactions. In addition, during the three~~$95 million and ~~nine months ended September 30, 2021, we increased the carrying value by $50~~$84 million, ~~as a result of our purchase of additional shares directly from BeiGene.~~respectively. As of ~~September~~June 30, 2022 and December 31, 2021, the carrying ~~value and fair value~~values of our investment in BeiGene totaled ~~$2.7~~$2.5 billion and ~~$6.9~~$2.8 billion, respectively, and the fair values of our investment totaled $3.1 billion and $5.1 billion, respectively. As of ~~September~~June 30, ~~2021,~~2022, we believe the carrying value of our equity investment in BeiGene is fully recoverable.

Neumora Therapeutics, Inc.

On September 30, 2021, we acquired an approximately 25.9% ownership interest in Neumora, ~~Therapeutics, Inc. (Neumora),~~ a privately held company, for $257 million, which is included in Other noncurrent assets in the Condensed Consolidated Balance Sheets, in exchange for a $100 million cash payment and $157 million in noncash consideration primarily related to future services. Although our equity investment provides us with the ability to exercise significant influence over Neumora, we have elected the fair value option to account for our equity investment. Under the fair value option, changes in the fair value of the investment are recognized through earnings each reporting period. We believe the fair value option best reflects the economics of the underlying transaction. As of June 30, 2022 and December 31, 2021, our ownership interest in Neumora was approximately 25.7% and 25.9%, respectively, and the fair values of our investment were $131 million and $220 million, respectively. Accordingly, for the reduction in fair value of our investment during the three and six months ended June 30, 2022, we recognized a loss of $39 million and $89 million, respectively, for the reduction in fair value of our investment in Other (expense) income, net, in the Condensed Consolidated Statements of Income. For information on determination of fair values, see Note 11, Fair value measurement.

Limited partnerships

We held limited partnership investments of ~~$556~~$338 million and ~~$496~~$573 million as of ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively, which are included in Other noncurrent assets in the Condensed Consolidated Balance Sheets. These investments, primarily investment funds of early-stage biotechnology companies, are accounted for by using the equity method of accounting and are measured by using our proportionate share of the net asset values of the underlying investments held by the limited partnerships as a practical expedient. These investments are typically redeemable only through distributions upon liquidation of the underlying assets. As of ~~September~~June 30, ~~2021,~~2022, unfunded additional commitments to be made for these investments during the next several years were ~~not material.~~$209 million. For the three months ended ~~September~~June 30, 2022 and 2021, net unrealized losses from our limited partnership investments were $60 million and ~~2020,~~$43 million, respectively. For the six months ended June 30, 2022 and 2021, net unrealized gains and losses onfrom our limited partnership investments were a $220 million net loss ~~of $43 million~~ and a $165 million net gain, ~~of $63 million, respectively. For the nine months ended September 30, 2021 and 2020, net unrealized gains from our limited partnership investments were $122 million and $73 million,~~ respectively.

1314

7. Inventories

Inventories consisted of the following (in millions):


		September 30, 2021		December 31, 2020			June 30, 2022		December 31, 2021
Raw materials	Raw materials	$	667	$	486	Raw materials	$	779	$	647
Work in process	Work in process	2,313		2,437		Work in process	2,763		2,367
Finished goods	Finished goods	1,172		970		Finished goods	1,012		1,072
Total inventories	Total inventories	$	4,152	$	3,893	Total inventories	$	4,554	$	4,086

9.8. Goodwill and other intangible assets

Goodwill

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


	~~Nine~~Six months ended ~~September~~June 30, ~~2021~~2022
Beginning balance	$	~~14,689~~14,890
Adjustments to goodwill resulting from acquisitions and divestitures, net(1)	7
Currency translation adjustment	~~(24)~~(32)
Ending balance	$	~~14,665~~14,865

____________

(1) Composed of adjustments to goodwill resulting from changes to the acquisition date fair values of net assets acquired in the acquisition of Teneobio and the nonstrategic Gensenta divestiture. See Note 2, Acquisitions and divestitures.

Other intangible assets

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


		September 30, 2021						December 31, 2020							June 30, 2022						December 31, 2021
		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:	Finite-lived intangible assets:													Finite-lived intangible assets:
Developed-product-technology rights	Developed-product-technology rights	$	25,575	$	(12,222)	$	13,353	$	25,591	$	(10,564)	$	15,027	Developed-product-technology rights	$	25,537	$	(13,863)	$	11,674	$	25,561	$	(12,769)	$	12,792
Licensing rights	Licensing rights	3,766		(2,931)		835		3,743		(2,791)		952		Licensing rights	3,864		(3,050)		814		3,807		(2,973)		834
Marketing-related rights	Marketing-related rights	1,362		(1,099)		263		1,367		(1,041)		326		Marketing-related rights	1,326		(1,125)		201		1,354		(1,112)		242
Research and development technology rights	Research and development technology rights	1,298		(1,120)		178		1,317		(1,065)		252		Research and development technology rights	1,371		(1,153)		218		1,377		(1,133)		244
Total finite-lived intangible assets	Total finite-lived intangible assets	32,001		(17,372)		14,629		32,018		(15,461)		16,557		Total finite-lived intangible assets	32,098		(19,191)		12,907		32,099		(17,987)		14,112
Indefinite-lived intangible assets:	Indefinite-lived intangible assets:													Indefinite-lived intangible assets:
In-process research and development	In-process research and development	30		—		30		30		—		30		In-process research and development	1,020		—		1,020		1,070		—		1,070
Total other intangible assets	Total other intangible assets	$	32,031	$	(17,372)	$	14,659	$	32,048	$	(15,461)	$	16,587	Total other intangible assets	$	33,118	$	(19,191)	$	13,927	$	33,169	$	(17,987)	$	15,182

Developed-product-technology rights consists of rights related to marketed products. Licensing rights primarily consists of contractual rights to receive future milestone, royalty and profit-sharing payments; capitalized payments to third parties for milestones related to regulatory approvals to commercialize products; and upfront payments associated with royalty obligations for marketed products. Marketing-related rights primarily consists of rights related to the sale and distribution of marketed products. R&D technology rights pertains to technologies used in R&D that have alternative future uses.

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~~June 30, ~~2021~~2022 and ~~2020,~~2021, we recognized amortization associated with our finite-lived intangible assets of ~~$642~~$629 million and ~~$708~~$652 million, respectively. During the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020,~~2021, we recognized amortization associated with our finite-lived intangible assets of ~~$1.9~~$1.3 billion ~~and $2.1 billion, respectively.~~in both periods. Amortization of intangible assets is primarily included in Cost of sales in the Condensed Consolidated Statements of Income. The total estimated amortization for our finite-lived intangible assets for the remaining ~~three~~six months ending December 31, ~~2021,~~2022, and the years ending December 31, ~~2022,~~ 2023, 2024, 2025, 2026 and ~~2026,~~2027, are ~~$0.6~~$1.3 billion, $2.5 billion, $2.5 billion, $2.4 billion, ~~$2.4 billion, $2.2~~$1.7 billion and $1.8 billion, respectively.

1516

~~10.~~

9. Financing arrangements

Our borrowings consisted of the following (in millions):


		September 30, 2021		December 31, 2020			June 30, 2022		December 31, 2021
1.25% €1,250 million notes due 2022 (1.25% 2022 euro Notes)		$	1,448	$	1,527
2.70% notes due 2022 (2.70% 2022 Notes)		500		500
2.65% notes due 2022 (2.65% 2022 Notes)		1,500		1,500
3.625% notes due 2022 (3.625% 2022 Notes)		750		750
0.41% CHF700 million bonds due 2023 (0.41% 2023 Swiss franc Bonds)	0.41% CHF700 million bonds due 2023 (0.41% 2023 Swiss franc Bonds)	751		791		0.41% CHF700 million bonds due 2023 (0.41% 2023 Swiss franc Bonds)	$	733	$	767
2.25% notes due 2023 (2.25% 2023 Notes)	2.25% notes due 2023 (2.25% 2023 Notes)	750		750		2.25% notes due 2023 (2.25% 2023 Notes)	750		750
3.625% notes due 2024 (3.625% 2024 Notes)	3.625% notes due 2024 (3.625% 2024 Notes)	1,400		1,400		3.625% notes due 2024 (3.625% 2024 Notes)	1,400		1,400
1.90% notes due 2025 (1.90% 2025 Notes)	1.90% notes due 2025 (1.90% 2025 Notes)	500		500		1.90% notes due 2025 (1.90% 2025 Notes)	500		500
3.125% notes due 2025 (3.125% 2025 Notes)	3.125% notes due 2025 (3.125% 2025 Notes)	1,000		1,000		3.125% notes due 2025 (3.125% 2025 Notes)	1,000		1,000
2.00% €750 million notes due 2026 (2.00% 2026 euro Notes)	2.00% €750 million notes due 2026 (2.00% 2026 euro Notes)	869		916		2.00% €750 million notes due 2026 (2.00% 2026 euro Notes)	786		853
2.60% notes due 2026 (2.60% 2026 Notes)	2.60% notes due 2026 (2.60% 2026 Notes)	1,250		1,250		2.60% notes due 2026 (2.60% 2026 Notes)	1,250		1,250
5.50% £475 million notes due 2026 (5.50% 2026 pound sterling Notes)	5.50% £475 million notes due 2026 (5.50% 2026 pound sterling Notes)	640		649		5.50% £475 million notes due 2026 (5.50% 2026 pound sterling Notes)	579		643
2.20% notes due 2027 (2.20% 2027 Notes)	2.20% notes due 2027 (2.20% 2027 Notes)	1,750		1,750		2.20% notes due 2027 (2.20% 2027 Notes)	1,750		1,750
3.20% notes due 2027 (3.20% 2027 Notes)	3.20% notes due 2027 (3.20% 2027 Notes)	1,000		1,000		3.20% notes due 2027 (3.20% 2027 Notes)	1,000		1,000
1.65% note due 2028 (1.65% 2028 Notes)		1,250		—
1.65% notes due 2028 (1.65% 2028 Notes)						1.65% notes due 2028 (1.65% 2028 Notes)	1,250		1,250
3.00% notes due 2029 (3.00% 2029 Notes)						3.00% notes due 2029 (3.00% 2029 Notes)	750		—
4.00% £700 million notes due 2029 (4.00% 2029 pound sterling Notes)	4.00% £700 million notes due 2029 (4.00% 2029 pound sterling Notes)	943		957		4.00% £700 million notes due 2029 (4.00% 2029 pound sterling Notes)	853		947
2.45% notes due 2030 (2.45% 2030 Notes)	2.45% notes due 2030 (2.45% 2030 Notes)	1,250		1,250		2.45% notes due 2030 (2.45% 2030 Notes)	1,250		1,250
2.30% notes due 2031 (2.30% 2031 Notes)	2.30% notes due 2031 (2.30% 2031 Notes)	1,250		1,250		2.30% notes due 2031 (2.30% 2031 Notes)	1,250		1,250
2.00% notes due 2032 (2.00% 2032 Notes)	2.00% notes due 2032 (2.00% 2032 Notes)	1,250		—		2.00% notes due 2032 (2.00% 2032 Notes)	1,250		1,250
3.35% notes due 2032 (3.35% 2032 Notes)						3.35% notes due 2032 (3.35% 2032 Notes)	1,000		—
6.375% notes due 2037 (6.375% 2037 Notes)	6.375% notes due 2037 (6.375% 2037 Notes)	478		478		6.375% notes due 2037 (6.375% 2037 Notes)	478		478
6.90% notes due 2038 (6.90% 2038 Notes)	6.90% notes due 2038 (6.90% 2038 Notes)	254		254		6.90% notes due 2038 (6.90% 2038 Notes)	254		254
6.40% notes due 2039 (6.40% 2039 Notes)	6.40% notes due 2039 (6.40% 2039 Notes)	333		333		6.40% notes due 2039 (6.40% 2039 Notes)	333		333
3.15% notes due 2040 (3.15% 2040 Notes)	3.15% notes due 2040 (3.15% 2040 Notes)	2,000		2,000		3.15% notes due 2040 (3.15% 2040 Notes)	2,000		2,000
5.75% notes due 2040 (5.75% 2040 Notes)	5.75% notes due 2040 (5.75% 2040 Notes)	373		373		5.75% notes due 2040 (5.75% 2040 Notes)	373		373
2.80% note due 2041 (2.80% 2041 Notes)		1,150		—
2.80% notes due 2041 (2.80% 2041 Notes)						2.80% notes due 2041 (2.80% 2041 Notes)	1,150		1,150
4.95% notes due 2041 (4.95% 2041 Notes)	4.95% notes due 2041 (4.95% 2041 Notes)	600		600		4.95% notes due 2041 (4.95% 2041 Notes)	600		600
5.15% notes due 2041 (5.15% 2041 Notes)	5.15% notes due 2041 (5.15% 2041 Notes)	729		729		5.15% notes due 2041 (5.15% 2041 Notes)	729		729
5.65% notes due 2042 (5.65% 2042 Notes)	5.65% notes due 2042 (5.65% 2042 Notes)	415		415		5.65% notes due 2042 (5.65% 2042 Notes)	415		415
5.375% notes due 2043 (5.375% 2043 Notes)	5.375% notes due 2043 (5.375% 2043 Notes)	185		185		5.375% notes due 2043 (5.375% 2043 Notes)	185		185
4.40% notes due 2045 (4.40% 2045 Notes)	4.40% notes due 2045 (4.40% 2045 Notes)	2,250		2,250		4.40% notes due 2045 (4.40% 2045 Notes)	2,250		2,250
4.563% notes due 2048 (4.563% 2048 Notes)	4.563% notes due 2048 (4.563% 2048 Notes)	1,415		1,415		4.563% notes due 2048 (4.563% 2048 Notes)	1,415		1,415
3.375% notes due 2050 (3.375% 2050 Notes)	3.375% notes due 2050 (3.375% 2050 Notes)	2,250		2,250		3.375% notes due 2050 (3.375% 2050 Notes)	2,250		2,250
4.663% notes due 2051 (4.663% 2051 Notes)	4.663% notes due 2051 (4.663% 2051 Notes)	3,541		3,541		4.663% notes due 2051 (4.663% 2051 Notes)	3,541		3,541
3.00% notes due 2052 (3.00% 2052 Notes)	3.00% notes due 2052 (3.00% 2052 Notes)	1,350		—		3.00% notes due 2052 (3.00% 2052 Notes)	1,350		1,350
4.20% notes due 2052 (4.20% 2052 Notes)						4.20% notes due 2052 (4.20% 2052 Notes)	1,000		—
2.77% notes due 2053 (2.77% 2053 Notes)	2.77% notes due 2053 (2.77% 2053 Notes)	940		940		2.77% notes due 2053 (2.77% 2053 Notes)	940		940
4.40% notes due 2062 (4.40% 2062 Notes)						4.40% notes due 2062 (4.40% 2062 Notes)	1,250		—
Other notes due 2097	Other notes due 2097	100		100		Other notes due 2097	100		100
Unamortized bond discounts, premiums and issuance costs, net	Unamortized bond discounts, premiums and issuance costs, net	(1,221)		(1,188)		Unamortized bond discounts, premiums and issuance costs, net	(1,245)		(1,213)
Fair value adjustments	Fair value adjustments	371		566		Fair value adjustments	(210)		284
Other	Other	15		5		Other	13		15
Total carrying value of debt	Total carrying value of debt	37,579		32,986		Total carrying value of debt	36,522		33,309
Less current portion	Less current portion	(4,288)		(91)		Less current portion	(817)		(87)
Total long-term debt	Total long-term debt	$	33,291	$	32,895	Total long-term debt	$	35,705	$	33,222

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

1617

During the three months ended ~~September 30, 2021,~~March 31, 2022, we issued ~~$5.0~~$4.0 billion of debt consisting of $750 million of the 3.00% 2029 Notes, $1.0 billion of the 3.35% 2032 Notes, $1.0 billion of the 4.20% 2052 Notes and $1.25 billion of the ~~1.65% 2028~~4.40% 2062 Notes. The 3.00% 2029 Notes ~~$1.25 billion of~~were issued to finance eligible projects that meet specified criteria to benefit the ~~2.00% 2032 Notes, $1.15 billion of the 2.80% 2041 Notes and $1.35 billion of the 3.00% 2052 Notes.~~environment. 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 a specified period of time immediately prior to the maturing of the notes. Such time periods range from two months to six months prior to maturity.

During the three months ended June 30, 2021, we entered into the following interest rate swap contracts: (i) $1.0 billion notional amount with respect to the 2.45% 2030 Notes, resulting in an effective interest rate of three-month LIBOR plus 1.0% for that portion of the notes, and (ii) $500 million notional amount with respect to the 2.30% 2031 Notes, resulting in an effective interest rate of three-month LIBOR plus 0.8% for that portion of the notes.

~~11.~~10. Stockholders’ equity

Stock repurchase program

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


		2021			2020				2022			2021
		Shares	Dollars		Shares	Dollars			Shares	Dollars		Shares	Dollars
First quarter	First quarter	3.7	$	865	4.3	$	933	First quarter	24.6	$	5,410	3.7	$	865
Second quarter	Second quarter	6.5	1,592		2.6	591		Second quarter	—	—		6.5	1,592
Third quarter		4.6	1,069		3.0	752

Total stock repurchases	Total stock repurchases	14.8	$	3,526	9.9	$	2,276	Total stock repurchases	24.6	$	5,410	10.2	$	2,457

On February 24, 2022, the Company entered into ASR agreements with 3 third-party financial institutions (Dealers). Under the ASR agreements, the Company made payments in an aggregate amount of $6.0 billion on February 25, 2022, to the Dealers and received and retired an initial 23.3 million shares of the Company’s common stock from the Dealers. The payments were recorded as reductions to shareholders’ equity, consisting of a $5.1 billion increase to accumulated deficit, which reflects the value of the initial shares received, and a $0.9 billion decrease in additional paid-in capital, which reflects the value of the stock that remains to be delivered by the Dealers pending final settlement. The final number of shares to be repurchased by the Company will be based on the daily volume-weighted average stock price of the Company’s common stock during the terms of the ASR agreements, less a discount and subject to adjustments pursuant to the terms and conditions of the ASR agreements. At settlement, under certain circumstances, one or more of the Dealers may be required to deliver additional shares of common stock to the Company, or under certain circumstances, the Company may be required to deliver shares of common stock or to make a cash payment, at its election, to a Dealer. The final settlement under the ASR agreements is scheduled to occur in the third quarter of 2022, subject to an earlier termination under certain limited circumstances, as set forth in the ASR agreements. In ~~March 2021, our Board~~total, we repurchased 24.6 million shares of ~~Directors increased~~common stock in the ~~amount authorized~~first quarter of 2022, including shares received under ~~our stock repurchase program by an additional $3.4 billion.~~ the ASR agreements.

As of ~~September~~June 30, ~~2021, $2.9~~2022, $4.6 billion of ~~authorization~~authorization remained available under our stock repurchase program.

~~In October 2021, the Board of Directors increased the amount authorized under our stock repurchase program by an additional $4.5 billion.~~

Dividends

In ~~July 2021,~~ March ~~2021~~2022 and December ~~2020, the Board of Directors declared a quarterly cash dividend of $1.76 per share, which were paid in September 2021, June 2021 and March 2021, respectively. In October~~ 2021, the Board of Directors declared a quarterly cash dividend of ~~$1.76~~$1.94 per share, which were paid in June 2022 and March 2022, respectively. In August 2022, the Board of Directors declared a quarterly cash dividend of $1.94 per share, which will be paid on ~~December~~September 8, ~~2021.~~2022.

Accumulated other comprehensive income (loss)

The components of ~~Accumulated other comprehensive income (loss) (AOCI)~~AOCI were as follows (in millions):

Foreign
currency
translation Cash flow
hedges Available-for-sale
securities Other AOCI
Balance as of December 31, 2020 $ (709) $ (263) $ 1 $ (14) $ (985)
Foreign currency translation adjustments (39) — — — (39)
Unrealized gains — 108 — — 108
Reclassification adjustments to income — 133 — — 133
Other — — — 1 1
Income taxes — (51) — — (51)
Balance as of March 31, 2021 (748) (73) 1 (13) (833)
Foreign currency translation adjustments 14 — — — 14
Unrealized losses — (31) — — (31)
Reclassification adjustments to income — (28) — — (28)
Other — — — (1) (1)
Income taxes — 11 — — 11
Balance as of June 30, 2021 (734) (121) 1 (14) (868)
Foreign currency translation adjustments (35) — — — (35)
Unrealized gains (losses) — 16 (1) — 15
Reclassification adjustments to income — 109 — — 109
Other — — — (3) (3)
Income taxes — (26) — — (26)
Balance as of September 30, 2021 $ (769) $ (22) $ — $ (17) $ (808)


	Foreign currency translation		Cash flow hedges		Available-for-sale securities		Other		AOCI
Balance as of December 31, 2021	$	(844)	$	61	$	—	$	(13)	$	(796)

Foreign currency translation adjustments	(51)		—		—		—		(51)
Unrealized gains	—		56		—		—		56
Reclassification adjustments to income	—		51		—		—		51

Income taxes	—		(23)		—		—		(23)
Balance as of March 31, 2022	(895)		145		—		(13)		(763)

Foreign currency translation adjustments	(65)		—		—		—		(65)
Unrealized gains	—		67		—		—		67
Reclassification adjustments to income	—		132		—		—		132

Income taxes	—		(43)		—		—		(43)
Balance as of June 30, 2022	$	(960)	$	301	$	—	$	(13)	$	(672)

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


		Three months ended September 30,						Three months ended June 30,
Components of AOCI	Components of AOCI	2021		2020		Condensed Consolidated Statements of Income locations	Components of AOCI	2022		2021		Condensed Consolidated Statements of Income locations
Cash flow hedges:	Cash flow hedges:						Cash flow hedges:
Foreign currency contract (losses) gains		$	(5)	$	41	Product sales
Foreign currency contract gains (losses)							Foreign currency contract gains (losses)	$	53	$	(18)	Product sales
Cross-currency swap contract (losses) gains	Cross-currency swap contract (losses) gains	(104)		183		Other income, net	Cross-currency swap contract (losses) gains	(185)		46		Other (expense) income, net

		(109)		224		Income before income taxes		(132)		28		Income before income taxes
		23		(49)		Provision for income taxes		28		(6)		Provision for income taxes
		$	(86)	$	175	Net income		$	(104)	$	22	Net income
Available-for-sale securities:
Net realized gains		$	—	$	—	Other income, net

		—		—		Provision for income taxes
		$	—	$	—	Net income

		Nine months ended September 30,						Six months ended June 30,
Components of AOCI	Components of AOCI	2021		2020		Condensed Consolidated Statements of Income locations	Components of AOCI	2022		2021		Condensed Consolidated Statements of Income locations
Cash flow hedges:	Cash flow hedges:						Cash flow hedges:
Foreign currency contract (losses) gains		$	(24)	$	158	Product sales
Cross-currency swap contract (losses) gains		(190)		101		Other income, net
Foreign currency contract gains (losses)							Foreign currency contract gains (losses)	$	80	$	(19)	Product sales
Cross-currency swap contract losses							Cross-currency swap contract losses	(263)		(86)		Other (expense) income, net

		(214)		259		Income before income taxes		(183)		(105)		Income before income taxes
		45		(57)		Provision for income taxes		39		22		Provision for income taxes
		$	(169)	$	202	Net income		$	(144)	$	(83)	Net income
Available-for-sale securities:
Net realized gains		$	—	$	33	Other income, net
		—		(7)		Provision for income taxes
		$	—	$	26	Net income

~~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 1	—	Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access
Level 2	—	Valuations for which all significant inputs are observable either directly or indirectly—other than Level 1 inputs
Level 3	—	Valuations based on inputs that are unobservable and significant to the overall fair value measurement

The availability of observable inputs can vary among different 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, 2021, using:								Total
Fair value measurement as of June 30, 2022, using:													Fair value measurement as of June 30, 2022, using:						Quoted prices in active markets for identical assets (Level 1)			Significant other observable inputs (Level 2)			Significant unobservable inputs (Level 3)			Total
Assets:	Assets:																						Assets:
Available-for-sale securities:	Available-for-sale securities:												Available-for-sale securities:
U.S. Treasury notes	U.S. Treasury notes			$	51				$	—	$	—		$	51			U.S. Treasury notes					$	—				$	—	$	—	$	—
U.S. Treasury bills	U.S. Treasury bills	3,900				—			—		3,900		U.S. Treasury bills			1,980					—			—			1,980

Money market mutual funds	Money market mutual funds	8,323				—			—		8,323		Money market mutual funds			4,433				—			—			4,433
Other short-term interest-bearing securities	Other short-term interest-bearing securities	—				1			—		1		Other short-term interest-bearing securities			—				—			—			—
Equity securities	Equity securities	608				—			257		865		Equity securities			361				—			131			492
Derivatives:	Derivatives:												Derivatives:
Foreign currency contracts	Foreign currency contracts	—				127			—		127		Foreign currency contracts			—				413			—			413
Cross-currency swap contracts	Cross-currency swap contracts	—				119			—		119		Cross-currency swap contracts			—				29			—			29
Interest rate swap contracts	Interest rate swap contracts	—				29			—		29		Interest rate swap contracts			—				—			—			—

Total assets	Total assets	$	12,882			$	276		$	257	$	13,415	Total assets			$	6,774			$	442		$	131		$	7,347

Liabilities:	Liabilities:												Liabilities:
Derivatives:	Derivatives:												Derivatives:
Foreign currency contracts	Foreign currency contracts	$	—			$	54		$	—	$	54	Foreign currency contracts			$	—			$	30		$	—		$	30
Cross-currency swap contracts	Cross-currency swap contracts	—				360			—		360		Cross-currency swap contracts			—				503			—			503
Interest rate swap contracts	Interest rate swap contracts	—				105			—		105		Interest rate swap contracts			—				591			—			591
Contingent consideration obligations	Contingent consideration obligations	—				—			35		35		Contingent consideration obligations			—				—			310			310
Total liabilities	Total liabilities	$	—			$	519		$	35	$	554	Total liabilities			$	—			$	1,124		$	310		$	1,434

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, 2020, using: Total
Assets:
Available-for-sale securities:
U.S. Treasury notes $ 130 $ — $ — $ 130
U.S. Treasury bills 4,948 — — 4,948
Money market mutual funds 4,765 — — 4,765
Other short-term interest-bearing securities — 2 — 2
Equity securities 477 — — 477
Derivatives:
Foreign currency contracts — 28 — 28
Cross-currency swap contracts — 255 — 255
Interest rate swap contracts — 66 — 66
Total assets $ 10,320 $ 351 $ — $ 10,671
Liabilities:
Derivatives:
Foreign currency contracts $ — $ 237 $ — $ 237
Cross-currency swap contracts — 318 — 318
Interest rate swap contracts — 15 — 15
Contingent consideration obligations — — 33 33
Total liabilities $ — $ 570 $ 33 $ 603


	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, 2021, using:							Total
Assets:
Available-for-sale securities:
U.S. Treasury notes	$	47	$	—	$	—	$	47
U.S. Treasury bills	1,400		—		—		1,400









Money market mutual funds	5,856		—		—		5,856
Other short-term interest-bearing securities	—		1		—		1
Equity securities	611		—		220		831
Derivatives:
Foreign currency contracts	—		183		—		183
Cross-currency swap contracts	—		66		—		66
Interest rate swap contracts	—		16		—		16
Total assets	$	7,914	$	266	$	220	$	8,400

Liabilities:
Derivatives:
Foreign currency contracts	$	—	$	39	$	—	$	39
Cross-currency swap contracts	—		339		—		339
Interest rate swap contracts	—		156		—		156
Contingent consideration obligations	—		—		342		342
Total liabilities	$	—	$	534	$	342	$	876

Interest-bearing and equity securities

The fair values of our U.S. Treasury securities, money market mutual funds and equity investments in publicly traded securities are based on quoted market prices in active markets, with no valuation adjustment. The fair value of equity securities without readily determinable fair values are initially valued at the transaction price and subsequently valued based ~~upon~~on a combination of ~~entity-specific financial information~~market performance and publicly available market information for similar companies that have actively traded equity securities.

Derivatives

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

~~During~~

Contingent consideration obligations

As a result of our business acquisitions, we have incurred contingent consideration obligations as discussed below. 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 ~~three~~related contingencies have been resolved. The fair value measurements of these obligations are based on significant unobservable inputs related to licensing rights and ~~nine months ended September 30, 2021~~product candidates acquired in business combinations, and ~~2020, there were no material remeasurements~~they are reviewed quarterly by management in our R&D and commercial sales organizations. The inputs include, as applicable, estimated probabilities and the timing of achieving specified development, regulatory and commercial milestones as well as estimated annual sales. Significant changes that increase or decrease the probabilities of achieving the related development, regulatory and commercial events or that shorten or lengthen the time required to achieve such events or that increase or decrease estimated annual sales would result in corresponding increases or decreases in the fair values of ~~assets~~the obligations, as applicable. Changes in the fair values of contingent consideration obligations are recognized in Other operating expenses in the Condensed Consolidated Statements of Income.

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


	Three months ended June 30,				Six months ended June 30,
	2022		2021		2022		2021
Beginning balance	$	330	$	39	$	342	$	33

Payments	(1)		(2)		(3)		(3)
Net changes in valuations	(19)		11		(29)		18
Ending balance	$	310	$	48	$	310	$	48

As of June 30, 2022 and ~~liabilities that~~December 31, 2021, our contingent consideration obligations are ~~not measured at fair value on a recurring basis.~~primarily the result of our acquisition of Teneobio in October 2021, which obligates us to pay the former shareholders up to $1.6 billion upon achieving separate development and regulatory milestones with regard to various R&D programs. See Note 2, Acquisitions and divestitures.

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~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, the aggregate fair values of our borrowings were ~~$42.2~~$34.4 billion and ~~$39.4~~$37.9 billion, respectively, and the carrying values were ~~$37.6~~$36.5 billion and ~~$33.0~~$33.3 billion, respectively.

Investment in BeiGene, Ltd.

We estimated the fair value of our investment in BeiGene by using Level 1 inputs. As of June 30, 2022 and December 31, 2021, the fair values were $3.1 billion and $5.1 billion, and the carrying values were $2.5 billion and $2.8 billion, respectively.

During the three and six months ended June 30, 2022 and 2021, there were no transfers of assets or liabilities between fair value measurement levels, and there were no material remeasurements to the fair values of assets and liabilities that are not measured at fair value on a recurring basis, except with respect to the impairment of net assets in connection with the nonstrategic Gensenta divestiture. See Note 2, Acquisitions and divestitures.

~~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, 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 primarily associated with our euro-denominated international product sales. Increases and decreases in the cash flows associated with our international product sales due to movements in foreign currency exchange rates are partially offset by corresponding increases and decreases in the cash flows from our international operating expenses resulting from these foreign currency exchange rate movements. To further reduce our exposure to foreign currency exchange rate fluctuations with regard to our international product sales, we enter into foreign currency forward contracts to hedge a portion of our projected international product sales up to a maximum of three years into the future; and at any given point in time, a higher percentage of nearer-term projected product sales are being hedged than in successive periods.

As of ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, we had outstanding foreign currency forward contracts with aggregate notional amounts of ~~$5.7~~$5.6 billion and ~~$5.1~~$5.7 billion, respectively. We have designated these foreign currency forward contracts, which are primarily euro based, as cash flow hedges. Accordingly, we report the unrealized gains and losses on these contracts in AOCI in the Condensed Consolidated Balance Sheets, and we reclassify them to Product sales in the Condensed Consolidated Statements of Income in the same periods during which the hedged transactions affect earnings.

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 Other (expense) 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~~June 30, ~~2021,~~2022, were as follows (notional amounts in millions):


		Foreign currency				U.S. dollars					Foreign currency				U.S. dollars
Hedged notes	Hedged notes	Notional amounts		Interest rates		Notional amounts		Interest rates		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	0.41% 2023 Swiss franc Bonds	CHF	700	0.4	%	$	704	3.4	%	0.41% 2023 Swiss franc Bonds	CHF	700	0.4	%	$	704	3.4	%
2.00% 2026 euro Notes	2.00% 2026 euro Notes	€	750	2.0	%	$	833	3.9	%	2.00% 2026 euro Notes	€	750	2.0	%	$	833	3.9	%
5.50% 2026 pound sterling Notes	5.50% 2026 pound sterling Notes	£	475	5.5	%	$	747	6.0	%	5.50% 2026 pound sterling Notes	£	475	5.5	%	$	747	6.0	%
4.00% 2029 pound sterling Notes	4.00% 2029 pound sterling Notes	£	700	4.0	%	$	1,111	4.5	%	4.00% 2029 pound sterling Notes	£	700	4.0	%	$	1,111	4.5	%

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 ~~nine~~six months ended ~~September~~June 30, ~~2021,~~2022, 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 June 30,				Six months ended June 30,
Derivatives in cash flow hedging relationships	Derivatives in cash flow hedging relationships	2021		2020		2021		2020		Derivatives in cash flow hedging relationships	2022		2021		2022		2021
Foreign currency contracts	Foreign currency contracts	$	136	$	(163)	$	273	$	(25)	Foreign currency contracts	$	252	$	(46)	$	330	$	137
Cross-currency swap contracts	Cross-currency swap contracts	(120)		223		(180)		(107)		Cross-currency swap contracts	(185)		15		(207)		(60)

Total unrealized gains (losses)	Total unrealized gains (losses)	$	16	$	60	$	93	$	(132)	Total unrealized gains (losses)	$	67	$	(31)	$	123	$	77

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~~both June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, we had interest rate swap contracts with aggregate notional amounts of ~~$7.4~~$6.7 billion ~~and $5.9 billion, respectively,~~ that hedge certain portions of our long-term debt issuances. During the three months ended June 30, 2021, we entered into $1.5 billion of interest rate swap contracts to hedge portions of our 2.45% 2030 Notes and 2.30% 2031 Notes (see Note 10, Financing arrangements).

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	Condensed Consolidated Balance Sheets locations	September 30, 2021		December 31, 2020		September 30, 2021		December 31, 2020		Condensed Consolidated Balance Sheets locations	June 30, 2022		December 31, 2021		June 30, 2022		December 31, 2021
Current portion of long-term debt	Current portion of long-term debt	$	840	$	89	$	90	$	89	Current portion of long-term debt	$	82	$	85	$	82	$	85
Long-term debt	Long-term debt	$	6,809	$	6,258	$	281	$	477	Long-term debt	$	6,241	$	6,729	$	(292)	$	199

____________

(1) Current portion of long-term debt includes ~~$87~~$82 million and ~~$89~~$85 million of carrying value with discontinued hedging relationships as of ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively. Long-term debt includes ~~$460~~$399 million and ~~$525~~$440 million of carrying value with discontinued hedging relationships as of ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively.

(2) Current portion of long-term debt includes ~~$87~~$82 million and ~~$89~~$85 million of hedging adjustments on discontinued hedging relationships as of ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively. Long-term debt includes ~~$360~~$299 million and ~~$425~~$340 million of hedging adjustments on discontinued hedging relationships as of ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, 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, 2021						Nine months ended September 30, 2021							Three months ended June 30, 2022						Six months ended June 30, 2022
		Product sales		Other income, net		Interest expense, net		Product sales		Other income, net		Interest expense, net			Product sales		Other (expense) income, net		Interest expense, net		Product sales		Other (expense) income, net		Interest expense, net
Total amounts recorded in income and (expense) line items presented in the Condensed Consolidated Statements of Income	Total amounts recorded in income and (expense) line items presented in the Condensed Consolidated Statements of Income	$	6,320	$	73	$	(296)	$	18,026	$	97	$	(862)	Total amounts recorded in income and (expense) line items presented in the Condensed Consolidated Statements of Income	$	6,281	$	(317)	$	(328)	$	12,012	$	(847)	$	(623)
The effects of cash flow and fair value hedging:	The effects of cash flow and fair value hedging:													The effects of cash flow and fair value hedging:
Losses on cash flow hedging relationships reclassified out of AOCI:
Gains (losses) on cash flow hedging relationships reclassified out of AOCI:														Gains (losses) on cash flow hedging relationships reclassified out of AOCI:
Foreign currency contracts	Foreign currency contracts	$	(5)	$	—	$	—	$	(24)	$	—	$	—	Foreign currency contracts	$	53	$	—	$	—	$	80	$	—	$	—
Cross-currency swap contracts	Cross-currency swap contracts	$	—	$	(104)	$	—	$	—	$	(190)	$	—	Cross-currency swap contracts	$	—	$	(185)	$	—	$	—	$	(263)	$	—

Gains (losses) on fair value hedging relationships—interest rate swap agreements:	Gains (losses) on fair value hedging relationships—interest rate swap agreements:													Gains (losses) on fair value hedging relationships—interest rate swap agreements:
Hedged items(1)	Hedged items(1)	$	—	$	—	$	54	$	—	$	—	$	195	Hedged items(1)	$	—	$	—	$	157	$	—	$	—	$	494
Derivatives designated as hedging instruments	Derivatives designated as hedging instruments	$	—	$	—	$	(31)	$	—	$	—	$	(128)	Derivatives designated as hedging instruments	$	—	$	—	$	(135)	$	—	$	—	$	(450)


		Three months ended September 30, 2020						Nine months ended September 30, 2020							Three months ended June 30, 2021						Six months ended June 30, 2021
		Product sales		Other income, net		Interest expense, net		Product sales		Other income, net		Interest expense, net			Product sales		Other (expense) income, net		Interest expense, net		Product sales		Other (expense) income, net		Interest expense, net
Total amounts recorded in income and (expense) line items presented in the Condensed Consolidated Statements of Income	Total amounts recorded in income and (expense) line items presented in the Condensed Consolidated Statements of Income	$	6,104	$	55	$	(302)	$	17,906	$	69	$	(944)	Total amounts recorded in income and (expense) line items presented in the Condensed Consolidated Statements of Income	$	6,114	$	11	$	(281)	$	11,706	$	24	$	(566)
The effects of cash flow and fair value hedging:	The effects of cash flow and fair value hedging:													The effects of cash flow and fair value hedging:
Gains on cash flow hedging relationships reclassified out of AOCI:
(Losses) gains on cash flow hedging relationships reclassified out of AOCI:														(Losses) gains on cash flow hedging relationships reclassified out of AOCI:
Foreign currency contracts	Foreign currency contracts	$	41	$	—	$	—	$	158	$	—	$	—	Foreign currency contracts	$	(18)	$	—	$	—	$	(19)	$	—	$	—
Cross-currency swap contracts	Cross-currency swap contracts	$	—	$	183	$	—	$	—	$	101	$	—	Cross-currency swap contracts	$	—	$	46	$	—	$	—	$	(86)	$	—

Gains (losses) on fair value hedging relationships—interest rate swap agreements:
(Losses) gains on fair value hedging relationships—interest rate swap agreements:														(Losses) gains on fair value hedging relationships—interest rate swap agreements:
Hedged items(1)	Hedged items(1)	$	—	$	—	$	35	$	—	$	—	$	215	Hedged items(1)	$	—	$	—	$	(34)	$	—	$	—	$	141
Derivatives designated as hedging instruments	Derivatives designated as hedging instruments	$	—	$	—	$	(13)	$	—	$	—	$	(150)	Derivatives designated as hedging instruments	$	—	$	—	$	55	$	—	$	—	$	(97)

__________

(1) Gains on hedged items do not exactly offset losses 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 and the recognition of gains on terminated hedges when 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~~June 30, ~~2021, the net gains~~2022, we expected to ~~be reclassified~~reclassify $179 million of net gains on our foreign currency and cross-currency swap contracts out of AOCI and into earnings during the next 12 ~~months are not material.~~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~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, the total notional amounts of these foreign currency forward contracts were ~~$0.7 billion~~$550 million and ~~$1.0 billion,~~$680 million, respectively. Gains and losses recognized in earnings for our derivative instruments not designated as hedging instruments were not material for the three and ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020.~~2021.

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, 2021

Condensed Consolidated
Balance Sheets locations

Fair values

Condensed Consolidated
Balance Sheets locations

Fair values

June 30, 2022

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 noncurrent assets

127

Accrued liabilities/ Other noncurrent liabilities

Foreign currency contracts

Other current assets/ Other noncurrent assets

413

Accrued liabilities/ Other noncurrent liabilities

Cross-currency swap contracts

Other current assets/ Other noncurrent assets

119

Accrued liabilities/ Other noncurrent liabilities

360

Cross-currency swap contracts

Other current assets/ Other noncurrent assets

Accrued liabilities/ Other noncurrent liabilities

503

Interest rate swap contracts

Other current assets/ Other noncurrent assets

Accrued liabilities/ Other noncurrent liabilities

105

Interest rate swap contracts

Other current assets/ Other noncurrent assets

—

Accrued liabilities/ Other noncurrent liabilities

591

Total derivatives designated as hedging instruments

275

519

Total derivatives designated as hedging instruments

442

1,124

Derivative assets

Derivative liabilities

Derivative assets

Derivative liabilities

December 31, 2020

Condensed Consolidated
Balance Sheets locations

Fair values

Condensed Consolidated
Balance Sheets locations

Fair values

December 31, 2021

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 noncurrent assets

Accrued liabilities/ Other noncurrent liabilities

237

Foreign currency contracts

Other current assets/ Other noncurrent assets

183

Accrued liabilities/ Other noncurrent liabilities

Cross-currency swap contracts

Other current assets/ Other noncurrent assets

255

Accrued liabilities/ Other noncurrent liabilities

318

Cross-currency swap contracts

Other current assets/ Other noncurrent assets

Accrued liabilities/ Other noncurrent liabilities

339

Interest rate swap contracts

Other current assets/ Other noncurrent assets

Accrued liabilities/ Other noncurrent liabilities

Interest rate swap contracts

Other current assets/ Other noncurrent assets

Accrued liabilities/ Other noncurrent liabilities

156

Total derivatives designated as hedging instruments

349

570

Total derivatives designated as hedging instruments

265

534

Our derivative contracts that were in liability positions as of ~~September~~June 30, ~~2021,~~2022, contain certain credit-risk-related contingent provisions that would be triggered if (i) we were to undergo a change in control and (ii) our or the surviving entity’s creditworthiness deteriorates, which is generally defined as having either a credit rating that is below investment grade or a materially weaker creditworthiness after the change in control. 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, ~~2020,~~2021, Part I, Item 1A. Risk Factors—Our business may be affected by litigation and government ~~investigations.~~ investigations. We describe our legal proceedings and other matters that are significant or that we believe could become significant in this footnote; in Note 19, Contingencies and commitments, to the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, ~~2020; in Note 12, Contingencies and commitments, to the condensed consolidated financial statements in our Quarterly Report on Form 10-Q for the period ended March 31,~~ 2021; and in Note 13, Contingencies and commitments, to the condensed consolidated financial statements in our Quarterly Report on Form 10-Q for the period ended ~~June 30, 2021.~~March 31, 2022.

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; in Note 19, Contingencies and commitments, to the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, ~~2020; in Note 12, Contingencies~~2021; and ~~commitments, to the condensed consolidated financial statements in our Quarterly Report on Form 10-Q for the period ended March 31, 2021; or~~ in Note 13, Contingencies and commitments, to the condensed consolidated financial statements in our Quarterly Report on Form 10-Q for the period ended ~~June 30, 2021,~~March 31, 2022, 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; in Note 19, Contingencies and commitments, to the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, ~~2020; in Note 12, Contingencies~~2021; and ~~commitments, to the condensed consolidated financial statements in our Quarterly Report on Form 10-Q for the period ended March 31, 2021; or~~ in Note 13, Contingencies and commitments, to the condensed consolidated financial statements in our Quarterly Report on Form 10-Q for the period ended ~~June 30, 2021,~~March 31, 2022, 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~~Although 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:

~~Abbreviated New Drug Application (ANDA)~~ANDA Patent Litigation

Otezla® ANDA Patent Litigation

Amgen Inc. v. ~~Sandoz~~Apotex Inc.~~, et al.~~

On ~~September 28, 2021, consistent with its September 20, 2021 opinion and order,~~June 14, 2022, Amgen filed a lawsuit in the U.S. District Court for the District of New Jersey (the New Jersey District Court) ~~entered final judgment in favor of Amgen and~~ against ~~Zydus Pharmaceuticals (USA)~~Apotex Inc. ~~(Zydus) with respect to claims 3 and 6~~(Apotex) for infringement of U.S. Patent ~~No.~~Nos. 7,427,638, ~~(the ’638 Patent), claim 6~~9,872,854 and 10,092,541, which are listed in the Orange Book for Otezla. This lawsuit was based on Apotex’s submission of ~~U.S. Patent No. 8,455,536 (the ’536 Patent)~~an ANDA seeking FDA approval to market a generic version of Otezla and ~~claims 2 and 27~~seeks an order of ~~U.S. Patent No. 8,093,283 (the ‘283 Patent); and final judgment in favor~~the New Jersey District Court making any FDA approval of Zydus and against Amgen with respect to claims 1 and 15 of U.S. Patent No. 7,893,101 (the ‘101 Patent) and claims 2, 19 and 21 of U.S. Patent No. 10,092,541 (the ’541 Patent). The final judgment ordered thatApotex’s ANDA effective no earlier than the ~~effective date of any final approval by the U.S. Food and Drug Administration (FDA) of Zydus’s ANDA must be after~~ expiration of the 3 infringed patents (the ’638, ’536 and ’283 Patents) and any regulatory exclusivity to which Amgen may become entitled. The final judgment also includes an injunction prohibiting Zydus from making, using, offering to sell, or sellingapplicable patents.

Repatha Patent Litigation

Patent Disputes in the ~~United States, or importing into~~International Region

On July 21, 2022, Sanofi Biotechnology SAS filed an action against Amgen GmbH and Amgen (Europe) B.V. before the ~~United States, Zydus’s generic apremilast products during~~Regional Court of Dusseldorf alleging that the ~~term~~marketing and sale of Repatha infringes European Patent No. 2,756,004 (the EP’004 Patent), seeking infringement damages and injunctive relief. The EP’004 Patent is currently in opposition proceedings, initiated by Amgen and an anonymous third party, before the European Patent Office (EPO). A hearing before the Opposition Division of the ~~three infringed patents.~~EPO was held on June 8 and 9, 2022, and the Opposition Division upheld the validity of the claims at issue with narrowing amendments. The parties are awaiting the Opposition Division’s written opinion. Amgen filed a Notice of Appeal on July 6, 2022.

Antitrust Actions

Sensipar Antitrust Class Actions

On ~~October 12, 2021,~~May 11, 2022, the ~~New Jersey District Court also entered final judgment in favor~~parties filed motions asking permission to seek interlocutory appeal of Amgen and against Sandoz Inc. (Sandoz) with respect to claims 3 and 6 of the ’638 Patent, claim 6 of the ’536 Patent and claims 1 and 15 of the ’101 Patent; and final judgment in favor of Sandoz and against Amgen with respect to claims 2, 19 and 21 of the ’541 Patent. The final judgment ordered that the effective date of any final approval by the FDA of Sandoz’s ANDA must be after expiration of the 3 infringed patents (the ’638, ’536 and ’101 Patents) and any regulatory exclusivity to which Amgen may become entitled. The final judgment also includes an injunction prohibiting Sandoz from making, using, offering to sell, or selling in the United States, or importing into the United States, Sandoz’s generic apremilast products during the term of the 3 infringed patents.

~~Zydus and Amgen filed notices of appeal to the U.S. Court of Appeals for the Federal Circuit (the Federal Circuit Court) on October 27, 2021 and October 28, 2021, respectively.~~

~~Sensipar~~® ~~(cinacalcet) ANDA Patent Litigation~~

~~Amgen Inc. v. Amneal Pharmaceuticals LLC, et al. (formerly, Amgen Inc. v. Aurobindo Pharma Ltd. et al.)~~

~~On October 20, 2021,~~ the U.S. District Court for the District of ~~Delaware~~Delaware’s (the Delaware District ~~Court) issued final judgment in favor of Piramal Healthcare UK Limited and Slate Run Pharmaceuticals LLC.~~

~~ENBREL Patent Litigation~~

~~Immunex Corporation, et al. v. Samsung Bioepis Co., Ltd.~~

~~On November 2, 2021, Amgen and Samsung Bioepis Co., Ltd. (Bioepis),~~Court’s) March 11, 2022 order denying Amgen’s Motion to Dismiss solely with ~~the consent of Hoffmann-La Roche Inc. (Roche), jointly submitted~~respect to the ~~New Jersey District Court a confidential stipulation~~reverse payment claim and ~~a form of final judgment~~the various state law claims. The plaintiffs did not oppose Amgen’s motion and ~~order of permanent injunction resolving the dispute between the parties~~instead argued all issues should be appealed at this time. Amgen filed its opposition to plaintiffs’ motion on June 10, 2022, and ~~enjoining Bioepis from making, using, offering to sell, or selling within the United States, or importing into the United States, any product containing etanercept until the April~~reply briefs were filed on June 24, ~~2029 expiry of Roche’s U.S. Patent No. 8,163,522.~~2022.

~~Repatha~~HUMIRA® ~~Patent Litigation~~

~~Patent Disputes in the International Region~~

National litigations in the United Kingdom, France, the Netherlands and Italy have been settled. In Germany, Sanofi-Aventis Deutschland GmbH and Regeneron Pharmaceuticals, Inc. have filed actions claiming they are entitled to damages arising from the provisional enforcement of an injunction against PRALUENT® ~~that was lifted after the European Patent Office Technical Board of Appeal’s October 29, 2020 ruling that certain claims encompassing PRALUENT~~® ~~in Amgen’s European Patent No. 2,215,124 were invalid.~~Biosimilar Antitrust Actions

~~NEUPOGEN~~® ~~(filgrastim)/Neulasta~~® ~~Patent Litigation~~

~~Amgen Inc., et al. v. Pfizer Inc. et al.~~

On ~~September 8, 2021, pursuant to joint stipulation, the Delaware District Court dismissed the lawsuits regarding U.S. Patent Nos. 9,643,997 and 10,577,392.~~

~~Patent Trial and Appeal Board (PTAB) Challenge~~

~~Apotex PTAB Challenge~~

On September 2, 2021, the Federal Circuit Court issued a remand to permit Amgen to request rehearing of the PTAB’s final written decision holding that all claims of U.S. Patent No. 8.952,138 as unpatentable.

~~Pfizer PTAB Challenge~~

~~On February 10, 2021, Hospira, Inc. and Pfizer Inc. (collectively, Pfizer) filed a petition to institute inter partes review (IPR) proceeding at~~August 1, 2022, the U.S. ~~Patent and Trademark Office (USPTO)~~Court of ~~U.S. Patent No. 8,273,707 (the ’707 Patent), challenging claims of the ’707 Patent as unpatentable. Amgen’s preliminary response was filed on May 18, 2021.~~

~~On August 17, 2021, the PTAB of the USPTO granted Pfizer’s petition to institute IPR of the ’707 Patent. On August 23, 2021, the PTAB issued the schedule~~Appeals for the ~~proceeding, including oral argument (if requested) on May 18, 2022.~~

~~Breach of Contract Action~~

~~Novartis Pharma AG v. Amgen Inc.~~

~~On October 26, 2021,~~Seventh Circuit issued an opinion affirming the June 30, 2020 dismissal with prejudice by the U.S. District Court for the ~~Southern~~Northern District of ~~New York held~~Illinois of a ~~status conference~~consolidated complaint against Amgen along with AbbVie Inc., AbbVie Biotechnology Ltd., Samsung Bioepis Co. andSandoz Inc.

Regeneron Pharmaceuticals, Inc. Antitrust Action

On May 27, 2022, Regeneron Pharmaceuticals, Inc. (Regeneron) filed suit against Amgen in the ~~parties~~Delaware District Court for federal and ~~set~~state antitrust and unfair competition violations and tortious interference with prospective business relations. Regeneron alleges that Amgen’s sales contracting practices for Repatha, ENBREL and Otezla with key insurers, third-party payors and PBMs have harmed the ~~dates for Novartis Pharma AG’s (Novartis) opening brief for~~sales of its ~~motion for partial summary judgment~~product PRALUENT® and focuses on 2 ~~claims, fraudulent inducement~~primary arguments: that Amgen improperly bundled sales of Repatha with ENBREL, Otezla and ~~negligent misrepresentation, to be due~~potentially other products and sought exclusive or de facto exclusive formulary positioning for Repatha. Amgen’s initial responsive pleading was filed on ~~January 14, 2022, Amgen’s opposition to be due on February 14, 2022 and Novartis’ reply to be due on March 10,~~August 1, 2022. ~~This motion, if granted, will not dispose of the entire case as other claims related to breach of contract remain pending.~~

U.S. Tax Litigation

Amgen Inc. & Subsidiaries v. Commissioner of Internal Revenue

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

~~15. Subsequent event~~

On October 19, 2021, Amgen completed its acquisition of Teneobio, Inc. (Teneobio), a privately held, clinical-stage biotechnology company developing a new class of biologics called heavy-chain only antibodies (HCAbs). Amgen acquired all outstanding shares in exchange for a $900 million upfront payment, as well as future contingent milestone payments potentially worth up to an additional $1.6 billion in cash upon the achievement of certain development and regulatory events.

The accounting impact of this acquisition and the results of operations for Teneobio will be included in our consolidated financial statements beginning in the fourth quarter of 2021. The initial accounting for this acquisition is incomplete, pending identification and measurement of the assets acquired and liabilities assumed.

2928


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)~~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, ~~2020,~~2021, and our Quarterly ~~Reports~~Report on Form 10-Q for the ~~periods~~period ended March 31, ~~2021 and June 30, 2021.~~2022. 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)~~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 and in Part I, Item 1A. Risk Factors of our Annual Report on Form 10-K for the year ended December 31, ~~2020,~~2021, and in Part II, Item 1A. Risk Factors of our Quarterly ~~Reports~~Report on Form 10-Q for the ~~periods~~period ended March 31, ~~2021 and June 30, 2021.~~2022. 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 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 biotechnology company committed to unlocking the potential of biology for patients suffering from serious 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.

Our principal ~~products—those with the most significant annual commercial sales—~~products are ENBREL, Prolia,®, Otezla,®, XGEVA,®, Aranesp, Neulasta,®~~, Aranesp~~®, Repatha,® KYPROLIS and ~~KYPROLIS~~®.Nplate. We also market a number of other products, including MVASI,® ~~(bevacizumab-awwb), Nplate~~® ~~(romiplostim),~~ Vectibix,® ~~(panitumumab),~~ EVENITY, BLINCYTO, EPOGEN, AMGEVITA, Aimovig, Parsabiv, KANJINTI,® ~~(trastuzumab-anns), EPOGEN~~® ~~(epoetin alfa), EVENITY~~® ~~(romosozumab-aqqg), BLINCYTO~~® ~~(blinatumomab), AMGEVITA~~™ ~~(adalimumab), Aimovig~~® ~~(erenumab-aooe), Parsabiv~~® ~~(etelcalcetide),~~ LUMAKRAS/LUMYKRAS, NEUPOGEN,®~~, Sensipar~~®/ Sensipar/Mimpara™ ~~(cinacalcet)~~ and ~~LUMAKRAS~~®~~/LUMYKRAS~~™ ~~(sotorasib).~~TEZSPIRE.

COVID-19 pandemic

A novel strain of coronavirus (SARS-CoV-2, or severe acute respiratory syndrome coronavirus 2, causing coronavirus disease 19, or COVID-19) was declared a global pandemic by the World Health Organization on March 11, 2020. Since the onset of the pandemic in 2020, we have been closely monitoring the pandemic’s effects on our global operations. We continue to take appropriate steps to minimize risks to our employees, a significant number of whom have continued to work virtually. ~~Employee access to company facilities has been in accordance with applicable government health and safety protocols and guidance issued in response to the COVID-19 pandemic.~~ To date, our remote working arrangements have not significantly affected our ability to maintain critical business operations, and we have not experienced disruptions to or shortages of our supply of medicines.

~~Since~~Over the ~~beginning~~course of the ~~COVID-19~~ pandemic we have ~~seen~~experienced changes in demand for some of our products ~~driven by changes~~as fluctuations in the frequency of patient visits to doctors’ offices ~~that has~~have impacted ~~providing~~the provision of treatments to existing patients and reduced diagnoses in new patients. ~~Through the third quarter,~~During 2021, there ~~has been~~was a gradual recovery in both patient visits and ~~diagnoses, although overall these remain below pre-COVID-19~~diagnosis rates that approached pre-pandemic levels. ~~The cumulative decrease in diagnoses over the course of~~In 2022, the pandemic has ~~suppressed~~continued to impact the ~~volume~~healthcare sector, and our business, to varying degrees across our markets. To date in 2022, in most of ~~new patients starting treatment, which~~our major markets, with the exception of the Asia Pacific region that has been affected by sustained lockdowns, we ~~expect to~~have seen greater stability in patient visits and demand patterns even in areas facing surges in the virus. Given the evolution of COVID-19 since its onset, including the proliferation of variants, we cannot predict the impact of future virus surges on our business and will continue to closely monitor the impact of COVID-19 on our business ~~during the remainder of the year. We are closely monitoring the effects of emerging COVID-19 variants on patient behavior~~ and ~~access.~~

Since early 2021, global vaccination efforts have been underway to control the pandemic. However, uncertainty remains as to the length of time required for vaccination of a meaningful portion of the population and as to the efficacy of such vaccinations on the trajectory of the pandemic. Challenges to vaccination efforts, new variants and other causes of virus spread may require governments to issue additional restrictions and/or shutdowns in various geographies. As a result, we expect to see continued volatility for at least the duration of the pandemic as governments respond to current local conditions.healthcare sector more generally.

With respect to our drug development activities, we ~~are continuously monitoring COVID-19 infection rates, including changes from new variants, and working~~continue to work to mitigate COVID-19 effects on future study enrollment in our clinical trials ~~and evaluating~~around the ~~impact in all countries where clinical trials occur.~~world. We remain focused on effectively supporting the delivery of care and investigational drug supply to patients enrolled in our active clinical ~~sites in their providing care for patients and in our providing investigational drug supply.~~sites.

Despite the ongoing pandemic and business impacts noted above, 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 expenditures and debt service requirements as well as to engage in ~~the~~ capital-return and other business initiatives that we plan to pursue. For a discussion of ~~the~~ risks the COVID-19 pandemic presents to our results, see Risk Factors ~~in Item 1A. Risk Factors in Part II herein and~~ in Part I, Item 1A. Risk Factors of our Annual Report on Form 10-K for the year ended December 31, ~~2020,~~2021, and in Part II, Item 1A. Risk Factors of our Quarterly ~~Reports~~Report on Form 10-Q for the ~~periods~~period ended March 31, ~~2021 and June 30, 2021.~~2022.

Significant developments

Following is a summary of selected significant developments affecting our business that occurred since the filing of our Quarterly Report on Form 10-Q for the ~~period~~quarter ended ~~June 30, 2021.~~March 31, 2022. 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, ~~2020,~~2021, and our Quarterly ~~Reports~~Report on Form 10-Q for the ~~periods~~period ended March 31, ~~2021~~2022.

Products/Pipeline

General Medicine

Olpasiran

•In May 2022, we announced positive topline data from the Phase 2 OCEAN(a)-DOSE clinical study, evaluating olpasiran (formerly AMG 890) in adult patients with lipoprotein(a), or Lp(a), levels over 150 nmol/L and ~~June 30, 2021.~~evidence of atherosclerotic cardiovascular disease (ASCVD). Olpasiran is a small interfering RNA (siRNA) designed to lower the body’s production of apolipoprotein(a), a key component of Lp(a) that has been associated with an increased risk of cardiovascular events. In the double-blind placebo-controlled treatment period, olpasiran was administered up to 225 mg subcutaneously every 12 weeks to patients with a median baseline Lp(a) of approximately 260 nmol/L. These data demonstrated a significant reduction from baseline in Lp(a) of up to or greater than 90 percent at week 36 (primary endpoint) and week 48 (end of treatment period) for the majority of doses. No new safety concerns were identified during this treatment period.

Inflammation

TEZSPIRE

•In July 2022, our partner AstraZeneca plc announced that the Committee for Medicinal Products for Human Use of the EMA has recommended TEZSPIRE for marketing authorization in the European Union as an add-on therapy in patients 12 years and older with severe asthma who are inadequately controlled with high dose inhaled corticosteroids plus another medicinal product for maintenance treatment.

Business ~~Development~~development

~~Acquisition~~

~~Teneobio~~Proposed acquisition of ChemoCentryx, Inc.

•On ~~October 19, 2021,~~August 4, 2022, Amgen ~~completed~~announced its proposed acquisition of ~~Teneobio,~~ChemoCentryx for $52.00per share in cash, for a ~~privately held, clinical-stage biotechnology~~total transaction price of approximately $4.0 billion. ChemoCentryx is a biopharmaceutical company focused on orally-administered therapeutics to treat autoimmune diseases, inflammatory disorders and cancer. In the United States, ChemoCentryxmarkets TAVNEOS®, the first approved orally administered inhibitor of the complement 5a receptor as an adjunctive treatment for ~~$900 million as well as future contingent milestone payments potentially worth up~~adult patients with severe active anti-neutrophil cytoplasmic autoantibody-associated vasculitis (ANCA vasculitis).The transaction is expected to ~~an additional $1.6 billion upon~~close in the ~~achievement~~fourth quarter of ~~certain development and regulatory events.~~2022.

3130

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 June 30,						Six months ended June 30,
		2021		2020		Change		2021		2020		Change			2022		2021		Change		2022		2021		Change
Product sales	Product sales													Product sales
U.S.	U.S.	$	4,558	$	4,618	(1)	%	$	12,835	$	13,325	(4)	%	U.S.	$	4,446	$	4,374	2	%	$	8,483	$	8,277	2	%
ROW	ROW	1,762		1,486		19	%	5,191		4,581		13	%	ROW	1,835		1,740		5	%	3,529		3,429		3	%
Total product sales	Total product sales	6,320		6,104		4	%	18,026		17,906		1	%	Total product sales	6,281		6,114		3	%	12,012		11,706		3	%
Other revenues	Other revenues	386		319		21	%	1,107		884		25	%	Other revenues	313		412		(24)	%	820		721		14	%
Total revenues	Total revenues	$	6,706	$	6,423	4	%	$	19,133	$	18,790	2	%	Total revenues	$	6,594	$	6,526	1	%	$	12,832	$	12,427	3	%
Operating expenses	Operating expenses	$	4,328	$	3,970	9	%	$	13,798	$	11,659	18	%	Operating expenses	$	4,418	$	5,698	(22)	%	$	8,156	$	9,470	(14)	%
Operating income	Operating income	$	2,378	$	2,453	(3)	%	$	5,335	$	7,131	(25)	%	Operating income	$	2,176	$	828	*		$	4,676	$	2,957	58	%
Net income	Net income	$	1,884	$	2,021	(7)	%	$	3,994	$	5,649	(29)	%	Net income	$	1,317	$	464	*		$	2,793	$	2,110	32	%
Diluted EPS	Diluted EPS	$	3.31	$	3.43	(3)	%	$	6.93	$	9.54	(27)	%	Diluted EPS	$	2.45	$	0.81	*		$	5.13	$	3.65	41	%
Diluted shares	Diluted shares	570		589		(3)	%	576		592		(3)	%	Diluted shares	537		576		(7)	%	544		578		(6)	%

* Change in excess of 100%

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 increased for the three months ended ~~September~~June 30, ~~2021,~~2022, primarily driven by higher unit demand for certain brands including Repatha, Prolia,®~~, Repatha~~® EVENITY, LUMAKRAS/LUMYKRAS and KYPROLIS, partially offset by declines in the net selling prices of certain products and unfavorable changes in foreign currency exchange rates. Total product sales increased for the six months ended June 30, 2022, primarily driven by higher unit demand for certain brands, including Repatha, Prolia, EVENITY,®, LUMAKRAS/LUMYKRAS and KYPROLIS, and by favorable changes to estimated sales deductions, partially offset by declines in the net selling prices of certain ~~products. Total product sales increased for~~products and unfavorable changes in foreign currency exchange rates. For the ~~nine months ended September 30, 2021, primarily driven by higher unit demand for certain brands, including Prolia~~®~~, Repatha~~® ~~and MVASI~~®~~, partially offset by declines in the net selling prices~~remainder of ~~certain products. We expect the trend of net selling price declines to continue to affect our business. Going forward,~~2022, we expect that net selling ~~price declines~~prices will becontinue to decline at a portfolio level, driven by ~~ENBREL, Neulasta~~®~~, Repatha~~® ~~and some~~increased competition.

Over the course of ~~our biosimilar products. There was gradual recovery through~~ the ~~third quarter of 2021 in patients resuming their treatments and in new patient starts, although overall, both numbers remain below pre-COVID-19 levels.~~

~~Throughout the~~COVID-19 pandemic we experienced changes in demand for some of our ~~products. The pandemic has interrupted many physician–~~products as fluctuations in the frequency of patient ~~interactions, which has led~~visits to ~~delays~~doctors’ offices have impacted the provision of treatments to existing patients and reduced diagnoses in ~~diagnoses and treatments, with varying degrees of impact across our portfolio.~~new patients. In general, declines in the sales of our products that were impacted by the dynamics of the pandemic were most significant in the early months of the pandemic, with product demand beginning to show some recovery in late 2020. ~~Through~~During 2021, there was a gradual recovery in both patient visits and diagnosis rates that approached pre-pandemic levels; however, variants (including Omicron) began to impact the ~~third~~healthcare sector and our business in late 2021 and early 2022. This led to diminished capacity in the healthcare sector and reduced working days for our own sales force. For the second quarter ~~of 2021, demand continued to gradually recover from~~2022, we have seen the impact of these variants recede in most markets, with the ~~pandemic~~exception of some markets in the Asia Pacific region, which has allowed us to engage in increased field-facing activities. Provider and ~~there was improvement~~patient activity has also increased, leading to improvements in ~~patient visits and diagnoses. Healthcare provider activity also stabilized during the third quarter after having improved during the first half of 2021.~~demand for our products to pre-pandemic levels. However, the cumulative decrease in diagnoses over the course of the pandemic has suppressed the volume of new patients starting treatment, which ~~we expect to continue~~continues to impact our ~~business for the remainder of the year.~~business. Given the unpredictable nature of the pandemic, ~~we expect~~ there could be ~~ongoing~~ intermittent disruptions in physician–patient interactions, and as a result, we ~~continue to expect~~may experience quarter-to-quarter variability. In addition, other changes in the healthcare ecosystem have the potential to introduce variability into product sales trends. For example, ~~we expect~~ changes in U.S. employment ~~to lead~~have led to changes to the insured population. Growth in numbers of Medicaid enrollees and uninsured individuals may have a negative impact on product demand and sales. Overall, uncertainty remains around the timing and magnitude of our sales during the COVID-19 pandemic. See ~~Risk Factors in Part II, Item 1A. of this Form 10-Q and~~ Part I, Item 1A. Risk Factors of our Annual Report on Form 10-K for the year ended December 31, ~~2020,~~2021, and in Part II, Item 1A. Risk Factors of our Quarterly ~~Reports~~Report on Form 10-Q for the ~~periods~~period ended March 31, ~~2021 and June 30, 2021.~~2022.

Other revenues ~~increased for the three and nine months ended September 30, 2021, primarily driven by the sale of COVID-19 antibody material.~~

~~Operating expenses increased~~decreased for the three months ended ~~September~~June 30, ~~2021,~~2022, driven by lower revenue from COVID-19 antibody material and increased for the six months ended June 30, 2022, primarily driven by ~~an upfront payment associated with the KKC licensing agreement.~~ higher revenue from COVID-19 antibody material.

Operating expenses ~~increased~~decreased for the ~~nine~~three and six months ended ~~September~~June 30, ~~2021,~~2022, primarily ~~driven by~~due to the Acquired IPR&D expense related to the ~~bemarituzumab program acquired as part of the~~ Five Prime acquisition in 2021, partially offset by a loss on a nonstrategic divestiture in 2022. See Note 2, Acquisitions and ~~by an upfront payment associated with the KKC licensing agreement.~~

divestitures.

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 partially offset by corresponding increases or decreases in our international operating expenses and our related foreign currency hedging activities. ~~Our~~Further, while not designed to completely address foreign currency changes, our hedging activities seek to offset, in part, the ~~impacts, both positive and negative, that~~effects of foreign currency exchange rate changes, ~~may have~~both favorable and unfavorable, 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~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020.~~2021.

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,
2021 2020 Change 2021 2020 Change
ENBREL $ 1,289 $ 1,325 (3) % $ 3,357 $ 3,724 (10) %
Prolia®
803 701 15 % 2,375 2,014 18 %
Otezla®
609 538 13 % 1,619 1,578 3 %
XGEVA®
517 481 7 % 1,473 1,397 5 %
Neulasta®
415 555 (25) % 1,383 1,757 (21) %
Aranesp®
396 384 3 % 1,118 1,193 (6) %
Repatha®
272 205 33 % 844 634 33 %
KYPROLIS®
293 260 13 % 824 793 4 %
Other products 1,726 1,655 4 % 5,033 4,816 5 %
Total product sales $ 6,320 $ 6,104 4 % $ 18,026 $ 17,906 1 %


	Three months ended June 30,						Six months ended June 30,
	2022		2021		Change		2022		2021		Change
ENBREL	$	1,051	$	1,144	(8)	%	$	1,913	$	2,068	(7)	%
Prolia	922		814		13	%	1,774		1,572		13	%
Otezla	594		534		11	%	1,045		1,010		3	%
XGEVA	533		488		9	%	1,035		956		8	%
Aranesp	357		367		(3)	%	715		722		(1)	%
Neulasta	310		486		(36)	%	658		968		(32)	%
Repatha	325		286		14	%	654		572		14	%
KYPROLIS	317		280		13	%	604		531		14	%
Nplate	284		245		16	%	550		472		17	%
Other products	1,588		1,470		8	%	3,064		2,835		8	%
Total product sales	$	6,281	$	6,114	3	%	$	12,012	$	11,706	3	%

Future sales of our products will depend in part on the factors discussed below and in the following sections of this report: (i) Part I, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Overview, and Selected Financial Information; and (ii) Part II, Item 1A. Risk ~~Factors;~~Factors, and in the following sections of our Annual Report on Form 10-K for the year ended December 31, ~~2020:~~2021: (i) Part I, Item 1. Business—Marketing, Distribution and Selected Marketed ~~Products,~~Products; (ii) Part I, Item 1A. Risk ~~Factors~~Factors; and (iii) Part II, 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 ~~Reports~~Report on Form 10-Q for the ~~periods~~period ended March 31, ~~2021 and June 30, 2021, in~~2022: (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 June 30,						Six months ended June 30,
		2021		2020		Change		2021		2020		Change			2022		2021		Change		2022		2021		Change
ENBREL — U.S.	ENBREL — U.S.	$	1,263	$	1,289	(2)	%	$	3,270	$	3,619	(10)	%	ENBREL — U.S.	$	1,036	$	1,113	(7)	%	$	1,879	$	2,007	(6)	%
ENBREL — Canada	ENBREL — Canada	26		36		(28)	%	87		105		(17)	%	ENBREL — Canada	15		31		(52)	%	34		61		(44)	%
Total ENBREL	Total ENBREL	$	1,289	$	1,325	(3)	%	$	3,357	$	3,724	(10)	%	Total ENBREL	$	1,051	$	1,144	(8)	%	$	1,913	$	2,068	(7)	%

The decrease in ENBREL sales for the three and six months ended ~~September~~June 30, ~~2021,~~2022, was primarily driven by ~~a decline in unit demand, unfavorable changes in inventory and~~ lower net selling price ~~partially offset~~and lower unit demand.

For the remainder of 2022, we expect that net selling price will continue to decline driven by increased competition.

Prolia

Total Prolia sales by geographic region were as follows (dollar amounts in millions):


	Three months ended June 30,						Six months ended June 30,
	2022		2021		Change		2022		2021		Change
Prolia — U.S.	$	611	$	538	14	%	$	1,193	$	1,039	15	%
Prolia — ROW	311		276		13	%	581		533		9	%
Total Prolia	$	922	$	814	13	%	$	1,774	$	1,572	13	%

The increase in global Proliasales for the three and six months ended June 30, 2022, was primarily driven by higher unit demand.

Otezla

Total Otezla sales by geographic region were as follows (dollar amounts in millions):


	Three months ended June 30,						Six months ended June 30,
	2022		2021		Change		2022		2021		Change
Otezla — U.S.	$	487	$	423	15	%	$	837	$	789	6	%
Otezla — ROW	107		111		(4)	%	208		221		(6)	%
Total Otezla	$	594	$	534	11	%	$	1,045	$	1,010	3	%

The increase in global Otezla sales for the three months ended June 30, 2022, was driven by higher unit demand and favorable changes to estimated sales ~~deductions.~~ deductions, partially offset by lower net selling price.

The ~~decrease~~increase in ~~ENBREL~~global Otezla sales for the ~~nine~~six months ended ~~September~~June 30, ~~2021,~~2022, was primarily driven by ~~declines in~~higher unit demand and favorable changes to estimated sales deductions, partially offset by lower net selling price and ~~unit demand.~~ unfavorable changes to inventory.

For ~~the remainder~~a discussion of ~~2021, we expect the trend of net selling price declines~~litigation related to ~~continue compared with the prior year.~~

~~We are involved in patent litigation with a company seeking to market its FDA-approved biosimilar version of ENBREL. See~~ Otezla, see Part IV—Note 19, Contingencies and commitments, to the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, ~~2020,~~2021, and Note 13, Contingencies and commitments, to the condensed consolidated financial statements in ~~our~~this Quarterly ~~Report on Form 10-Q~~Report.

XGEVA

Total XGEVA sales by geographic region were as follows (dollar amounts in millions):


	Three months ended June 30,						Six months ended June 30,
	2022		2021		Change		2022		2021		Change
XGEVA — U.S.	$	391	$	355	10	%	$	759	$	689	10	%
XGEVA — ROW	142		133		7	%	276		267		3	%
Total XGEVA	$	533	$	488	9	%	$	1,035	$	956	8	%

The increase in global XGEVAsales for the ~~period~~three and six months ended June 30, ~~2021. Companies with approved~~2022, was primarily driven by higher net selling price and favorable changes to estimated sales deductions.

Aranesp

Total Aranesp sales by geographic region were as follows (dollar amounts in millions):


	Three months ended June 30,						Six months ended June 30,
	2022		2021		Change		2022		2021		Change
Aranesp — U.S.	$	132	$	135	(2)	%	$	269	$	260	3	%
Aranesp — ROW	225		232		(3)	%	446		462		(3)	%
Total Aranesp	$	357	$	367	(3)	%	$	715	$	722	(1)	%

The decrease in global Aranesp sales for the three months ended June 30, 2022, was primarily driven by lower net selling price.

The decrease in global Aranesp sales for the six months ended June 30, 2022, was driven by lower net selling price and unfavorable changes in foreign currency exchange rates, partially offset by favorable changes to estimated sales deductions and higher unit demand.

Aranesp continues to face competition from a long-acting erythropoiesis-stimulating agent (ESA) andalso faces competition from biosimilar versions of ~~ENBREL may seek~~EPOGEN, which will continue to ~~enter~~impact sales in the ~~U.S. market if we are not ultimately successful in our litigations, or even earlier. Other companies are also developing proposed biosimilar versions of ENBREL.~~future.

~~Prolia~~®Neulasta

Total ~~Prolia~~®Neulasta sales by geographic region were as follows (dollar amounts in millions):

Three months ended
September 30, Nine months ended
September 30,
2021 2020 Change 2021 2020 Change
Prolia® — U.S.
$ 530 $ 478 11 % $ 1,569 $ 1,341 17 %
Prolia® — ROW
273 223 22 % 806 673 20 %
Total Prolia®
$ 803 $ 701 15 % $ 2,375 $ 2,014 18 %


	Three months ended June 30,						Six months ended June 30,
	2022		2021		Change		2022		2021		Change
Neulasta — U.S.	$	263	$	434	(39)	%	$	567	$	855	(34)	%
Neulasta — ROW	47		52		(10)	%	91		113		(19)	%
Total Neulasta	$	310	$	486	(36)	%	$	658	$	968	(32)	%

The ~~increase~~decrease in global ~~Prolia~~Neulasta® sales for the three and ~~nine~~six months ended ~~September~~June 30, ~~2021,~~2022, was primarily driven by ~~higher~~lower net selling price and unit demand.

~~Otezla~~®Increased competition as a result of biosimilar versions of Neulasta has had and will continue to have a significant adverse impact on brand sales, including accelerating net price erosion and lower unit demand. We also expect other biosimilar versions, including biosimilars that will use an on-body injector that would compete with our Onpro injector, to be approved in the future.

~~Total Otezla~~® ~~sales by geographic region were as follows (dollar amounts in millions):~~

Three months ended
September 30, Nine months ended
September 30,
2021 2020 Change 2021 2020 Change
Otezla® — U.S.
$ 495 $ 439 13 % $ 1,284 $ 1,280 — %
Otezla® — ROW
114 99 15 % 335 298 12 %
Total Otezla®
$ 609 $ 538 13 % $ 1,619 $ 1,578 3 %

~~The increase in global Otezla~~® sales for the three months ended September 30, 2021, was primarily driven by higher unit demand and favorable changes to estimated sales deductions, partially offset by lower net selling price. The increase in global Otezla® ~~sales for the nine months ended September 30, 2021, was driven by higher unit demand, partially offset by lower net selling price.~~

For a discussion of ~~litigation~~ongoing patent litigations related to ~~Otezla~~®,these and other biosimilars, see Part IV—Note 19, Contingencies and commitments, to the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, ~~2020; Notes 12~~2021, and Part I—Note 13, Contingencies and commitments, to the condensed consolidated financial statements in our Quarterly ~~Reports~~Report on Form 10-Q for the ~~periods~~period ended March 31, ~~2021 and June 30, 2021, respectively; and Note 14, Contingencies and commitments, to the condensed consolidated financial statements in this Quarterly Report.~~2022.

~~XGEVA~~®

Repatha

Total ~~XGEVA~~®Repatha sales by geographic region were as follows (dollar amounts in millions):

Three months ended
September 30, Nine months ended
September 30,
2021 2020 Change 2021 2020 Change
XGEVA® — U.S.
$ 372 $ 363 2 % $ 1,061 $ 1,036 2 %
XGEVA® — ROW
145 118 23 % 412 361 14 %
Total XGEVA®
$ 517 $ 481 7 % $ 1,473 $ 1,397 5 %


	Three months ended June 30,						Six months ended June 30,
	2022		2021		Change		2022		2021		Change
Repatha — U.S.	$	154	$	143	8	%	$	319	$	282	13	%
Repatha — ROW	171		143		20	%	335		290		16	%
Total Repatha	$	325	$	286	14	%	$	654	$	572	14	%

The increase in global ~~XGEVA~~® Repatha sales for the three and ~~nine~~six months ended ~~September~~June 30, ~~2021,~~2022, was driven by higher unit demand, partially offset by lower net selling price.

~~Neulasta~~®

~~Total Neulasta~~® ~~sales by geographic region were~~ Contracting changes to support and expand Medicare Part D and commercial patient access and the inclusion of Repatha on China’s National Reimbursement Drug List as ~~follows (dollar amounts~~of January 1, 2022, resulted in ~~millions):~~

Three months ended
September 30, Nine months ended
September 30,
2021 2020 Change 2021 2020 Change
Neulasta® — U.S.
$ 360 $ 484 (26) % $ 1,215 $ 1,538 (21) %
Neulasta® — ROW
55 71 (23) % 168 219 (23) %
Total Neulasta®
$ 415 $ 555 (25) % $ 1,383 $ 1,757 (21) %

~~The~~the decrease ~~in global Neulasta~~® ~~sales for the three months ended September 30, 2021, was primarily driven by the impact of biosimilar competition on~~to net selling price ~~and unit demand. The decrease~~ in ~~global Neulasta~~® sales for the nine months ended September 30, 2021, was driven by the impact of biosimilar competition on net selling price and unit demand, partially offset by favorable changes to estimated sales deductions. Increased competition in the United States and Europe as a result of biosimilar versions of Neulasta® has had and will continue to have a significant adverse impact on brand sales, including additional net price erosion and lower unit demand. We also expect other biosimilar versions to be approved in the future.2022.

For a discussion of ongoing ~~patent litigations~~litigation related to ~~biosimilars,~~Repatha, see Part IV—Note 19, Contingencies and commitments, to the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, ~~2020; Notes 12 and~~2021; Part I—Note 13, Contingencies and commitments, to the condensed consolidated financial statements in our Quarterly ~~Reports~~Report on Form 10-Q for the ~~periods~~period ended March 31, ~~2021~~2022; and ~~June 30, 2021, respectively; and~~ Part I—Note ~~14,~~13, Contingencies and commitments, to the condensed consolidated financial statements in this Quarterly Report.

~~Aranesp~~®KYPROLIS

Total ~~Aranesp~~®KYPROLIS sales by geographic region were as follows (dollar amounts in millions):

Three months ended
September 30, Nine months ended
September 30,
2021 2020 Change 2021 2020 Change
Aranesp® — U.S.
$ 149 $ 158 (6) % $ 409 $ 489 (16) %
Aranesp® — ROW
247 226 9 % 709 704 1 %
Total Aranesp®
$ 396 $ 384 3 % $ 1,118 $ 1,193 (6) %


	Three months ended June 30,						Six months ended June 30,
	2022		2021		Change		2022		2021		Change
KYPROLIS — U.S.	$	213	$	190	12	%	$	409	$	349	17	%
KYPROLIS — ROW	104		90		16	%	195		182		7	%
Total KYPROLIS	$	317	$	280	13	%	$	604	$	531	14	%

The increase in global ~~Aranesp~~® sales for the three months ended September 30, 2021, was driven by higher unit demand and favorable changes to estimated sales deductions, partially offset by lower net selling price due to competition. The decrease in global Aranesp® ~~sales for the nine months ended September 30, 2021, was primarily driven by lower net selling price due to competition.~~

~~Aranesp~~® ~~continues to face competition from a long-acting erythropoiesis-stimulating agent (ESA) and~~KYPROLIS ~~also faces competition from a biosimilar version of EPOGEN~~®~~, which will continue to impact sales in the future.~~

~~Repatha~~®

~~Total Repatha~~® ~~sales by geographic region were as follows (dollar amounts in millions):~~

Three months ended
September 30, Nine months ended
September 30,
2021 2020 Change 2021 2020 Change
Repatha® — U.S.
$ 139 $ 92 51 % $ 421 $ 331 27 %
Repatha® — ROW
133 113 18 % 423 303 40 %
Total Repatha®
$ 272 $ 205 33 % $ 844 $ 634 33 %

~~The increase in global Repatha~~®sales for the three and ~~nine~~six months ended ~~September~~June 30, ~~2021,~~2022, was ~~primarily~~ driven by higher unit demand, partially offset by lower net selling price.

~~For a discussion of ongoing litigation related to Repatha~~®, see Note 19, Contingencies and commitments, to the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2020; Notes 12 and 13, Contingencies and commitments, to the condensed consolidated financial statements for the periods ended March 31, 2021 and June 30, 2021, respectively; and Note 14, Contingencies and commitments, to the condensed consolidated financial statements in this Quarterly Report.

~~KYPROLIS~~®

~~Total KYPROLIS~~® ~~sales by geographic region were as follows (dollar amounts in millions):~~

Three months ended
September 30, Nine months ended
September 30,
2021 2020 Change 2021 2020 Change
KYPROLIS® — U.S.
$ 198 $ 173 14 % $ 547 $ 527 4 %
KYPROLIS® — ROW
95 87 9 % 277 266 4 %
Total KYPROLIS®
$ 293 $ 260 13 % $ 824 $ 793 4 %

~~The increase in global KYPROLIS~~® ~~sales for the three and nine months ended September 30, 2021, was primarily driven by higher unit demand.~~

~~We are engaged in litigation with two companies that are challenging certain of our patents related to KYPROLIS~~® and that are seeking to market generic carfilzomib products. 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 19, Contingencies and commitments, to the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2020; and Notes 12 and 13, Contingencies and commitments, to the condensed consolidated financial statements for the periods ended March 31, 2021 and June 30, 2021, respectively. The FDA has reported that it has granted tentative or final approval of ANDAs for generic carfilzomib products filed by a number of companies. The date of approval of those ANDAs for generic carfilzomib products is governed by the ~~Hatch-Waxman~~Hatch–Waxman Act and any applicable settlement agreements between us and certain companies that seek to develop generic carfilzomib products.

Nplate

Total Nplate sales by geographic region were as follows (dollar amounts in millions):


	Three months ended June 30,						Six months ended June 30,
	2022		2021		Change		2022		2021		Change
Nplate — U.S.	$	156	$	136	15	%	$	312	$	248	26	%
Nplate — ROW	128		109		17	%	238		224		6	%
Total Nplate	$	284	$	245	16	%	$	550	$	472	17	%

The increase in global Nplate sales for the ~~parties.~~three and six months ended June 30, 2022, was primarily driven by higher unit demand and net selling price.

3635

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,
2021 2020 Change 2021 2020 Change
MVASI® — U.S.
$ 187 $ 185 1 % $ 617 $ 442 40 %
MVASI® — ROW
87 46 89 % 245 76 *
Nplate® — U.S.
156 118 32 % 404 352 15 %
Nplate® — ROW
117 94 24 % 341 271 26 %
Vectibix® — U.S.
84 90 (7) % 255 249 2 %
Vectibix®— ROW
116 103 13 % 375 341 10 %
KANJINTI® — U.S.
92 149 (38) % 354 346 2 %
KANJINTI® — ROW
24 18 33 % 79 63 25 %
EPOGEN® — U.S.
138 149 (7) % 393 465 (15) %
EVENITY® — U.S.
94 54 74 % 230 131 76 %
EVENITY®— ROW
55 5 * 157 129 22 %
BLINCYTO® — U.S.
74 54 37 % 201 167 20 %
BLINCYTO® — ROW
51 35 46 % 139 109 28 %
AMGEVITA™ — ROW
111 80 39 % 324 228 42 %
Aimovig® — U.S.
77 105 (27) % 225 274 (18) %
Aimovig® — ROW
2 — NM 2 — NM
Parsabiv® — U.S.
24 156 (85) % 107 462 (77) %
Parsabiv® — ROW
37 27 37 % 104 82 27 %
NEUPOGEN® — U.S.
32 44 (27) % 86 117 (26) %
NEUPOGEN® — ROW
20 21 (5) % 51 62 (18) %
Sensipar® — U.S.
— 7 (100) % 4 81 (95) %
Sensipar®/Mimpara™ — ROW
19 32 (41) % 62 162 (62) %
LUMAKRAS® — U.S.
33 — NM 42 — NM
LUMYKRAS™ — ROW
3 — NM 3 — NM
Other — U.S. 61 31 97 % 141 78 81 %
Other — ROW 32 52 (38) % 92 129 (29) %
Total other products $ 1,726 $ 1,655 4 % $ 5,033 $ 4,816 5 %
Total U.S. — other products $ 1,052 $ 1,142 (8) % $ 3,059 $ 3,164 (3) %
Total ROW — other products 674 513 31 % 1,974 1,652 19 %
Total other products $ 1,726 $ 1,655 4 % $ 5,033 $ 4,816 5 %

~~___________~~


	Three months ended June 30,						Six months ended June 30,
	2022		2021		Change		2022		2021		Change
MVASI — U.S.	$	161	$	206	(22)	%	$	329	$	430	(23)	%
MVASI — ROW	82		88		(7)	%	158		158		—	%
Vectibix — U.S.	96		92		4	%	181		171		6	%
Vectibix— ROW	111		147		(24)	%	227		259		(12)	%
EVENITY — U.S.	130		79		65	%	240		136		76	%
EVENITY— ROW	61		52		17	%	121		102		19	%
BLINCYTO — U.S.	77		62		24	%	156		127		23	%
BLINCYTO — ROW	62		46		35	%	121		88		38	%
EPOGEN — U.S.	136		130		5	%	256		255		—	%
AMGEVITA — ROW	116		107		8	%	224		213		5	%
Aimovig — U.S.	88		82		7	%	186		148		26	%
Aimovig — ROW	4		—		NM		7		—		NM
Parsabiv — U.S.	71		37		92	%	128		83		54	%
Parsabiv — ROW	32		34		(6)	%	61		67		(9)	%
KANJINTI — U.S.	69		132		(48)	%	149		262		(43)	%
KANJINTI — ROW	16		24		(33)	%	32		55		(42)	%
LUMAKRAS — U.S.	51		9		*		99		9		*
LUMYKRAS — ROW	26		—		NM		40		—		NM
NEUPOGEN — U.S.	21		36		(42)	%	44		54		(19)	%
NEUPOGEN — ROW	16		15		7	%	31		31		—	%
Sensipar — U.S.	5		4		25	%	9		4		*
Sensipar/Mimpara — ROW	15		20		(25)	%	31		43		(28)	%
Other — U.S.(1)	98		38		*		162		80		*
Other — ROW(1)	44		30		47	%	72		60		20	%
Total other products	$	1,588	$	1,470	8	%	$	3,064	$	2,835	8	%
Total U.S. — other products	$	1,003	$	907	11	%	$	1,939	$	1,759	10	%
Total ROW — other products	585		563		4	%	1,125		1,076		5	%
Total other products	$	1,588	$	1,470	8	%	$	3,064	$	2,835	8	%

NM ~~- Not~~= not meaningful

* - Change in excess of 100%

____________

(1) Other products include Corlanor, AVSOLA, TEZSPIRE, IMLYGIC and RIABNI as well as sales by Gensenta and Bergamo subsidiaries.

Operating expenses

Operating expenses were as follows (dollar amounts in millions):

Three months ended
September 30, Nine months ended
September 30,
2021 2020 Change 2021 2020 Change
Operating expenses:
Cost of sales $ 1,609 $ 1,561 3 % $ 4,736 $ 4,562 4 %
% of product sales 25.5 % 25.6 % 26.3 % 25.5 %
% of total revenues 24.0 % 24.3 % 24.8 % 24.3 %
Research and development $ 1,422 $ 1,062 34 % $ 3,471 $ 2,978 17 %
% of product sales 22.5 % 17.4 % 19.3 % 16.6 %
% of total revenues 21.2 % 16.5 % 18.1 % 15.8 %
Acquired in-process research and development $ — $ — — % $ 1,505 $ — NM
% of product sales — % — % 8.3 % — %
% of total revenues — % — % 7.9 % — %
Selling, general and administrative $ 1,305 $ 1,346 (3) % $ 3,943 $ 3,957 — %
% of product sales 20.6 % 22.1 % 21.9 % 22.1 %
% of total revenues 19.5 % 21.0 % 20.6 % 21.1 %
Other $ (8) $ 1 * $ 143 $ 162 (12) %

~~___________~~


	Three months ended June 30,								Six months ended June 30,
	2022			2021			Change		2022			2021			Change
Operating expenses:
Cost of sales	$	1,510		$	1,637		(8)	%	$	3,071		$	3,127		(2)	%
% of product sales	24.0		%	26.8		%			25.6		%	26.7		%
% of total revenues	22.9		%	25.1		%			23.9		%	25.2		%
Research and development	$	1,039		$	1,082		(4)	%	$	1,998		$	2,049		(2)	%
% of product sales	16.5		%	17.7		%			16.6		%	17.5		%
% of total revenues	15.8		%	16.6		%			15.6		%	16.5		%
Acquired in-process research and development	$	—		$	1,505		NM		$	—		$	1,505		NM
% of product sales	—		%	24.6		%			—		%	12.9		%
% of total revenues	—		%	23.1		%			—		%	12.1		%
Selling, general and administrative	$	1,327		$	1,384		(4)	%	$	2,555		$	2,638		(3)	%
% of product sales	21.1		%	22.6		%			21.3		%	22.5		%
% of total revenues	20.1		%	21.2		%			19.9		%	21.2		%
Other	$	542		$	90		*		$	532		$	151		*
Total operating expenses	$	4,418		$	5,698		(22)	%	$	8,156		$	9,470		(14)	%

NM ~~- Not~~= not meaningful

* - Change in excess of 100%

Cost of sales

Cost of sales decreased to ~~24.0%~~22.9% and 23.9% of total revenues for the three and six months ended ~~September~~June 30, ~~2021, primarily~~2022, respectively, driven by lower COVID-19 antibody shipments, lower manufacturing costs and lower amortization expense from acquisition-related assets, partially offset by unfavorable product mix.

Cost of sales increased to 24.8% of total revenues for the nine months ended September 30, 2021, primarily driven by unfavorable product mix, partially offset by lower amortization expense from acquisition-related assets.

Research and development

The ~~increase~~decrease in R&D expense for the three months ended ~~September~~June 30, ~~2021,~~2022, was driven by ~~a licensing-related upfront payment to KKC,~~lower marketed product support and lower expense resulting from acquisition-related activity, partially offset by ~~lower late-stage support for existing programs.~~higher spend in research and early pipeline.

The ~~increase~~decrease in R&D expense for the ~~nine~~six months ended ~~September~~June 30, ~~2021,~~2022, was ~~primarily~~ driven by ~~a licensing-related upfront payment to KKC~~lower marketed product support and lower expense resulting from acquisition-related activity, partially offset by higher late-stage development program spend and research and early pipeline ~~spend, partially offset by lower late-stage support for existing programs.~~spend.

Acquired in-process research and development

The decrease in Acquired IPR&D expense for the ~~nine~~three and six months ended ~~September~~June 30, ~~2021, is related~~2022, was due to the bemarituzumab program, which was acquired as part of the Five Prime ~~acquisition.~~acquisition in 2021. See Note 2, Acquisitions and divestitures.

Selling, general and administrative

The decrease in ~~Selling, general and administrative (SG&A)~~SG&A expense for the three and six months ended ~~September~~June 30, ~~2021,~~2022, was primarily driven by lower spend ~~in general~~for marketed products and ~~administrative activities.~~

~~The decrease in SG&A~~lower expense for the nine months ended September 30, 2021, was primarily driven by lower spend in general and administrative activities and favorable adjustments to estimated U.S. healthcare reform federal excise fees, partially offset by higher marketed-product support and investment in new launches.

resulting from acquisition-related activity.

Other

Other operating expenses for the three and six months ended ~~September~~June 30, ~~2021,~~2022, consisted primarily of ~~changes in the fair values of contingent consideration liabilities.~~a loss on a nonstrategic divestiture. See Note 2, Acquisitions and divestitures. Other operating expenses for the ~~nine~~three and six months ended ~~September~~June 30, 2021, consisted primarily of expenses related to cost ~~savings~~saving initiatives.

~~Other operating expenses for the nine months ended September 30, 2020, consisted of legal settlement expenses.~~

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 June 30,						Six months ended June 30,
		2021			2020			2021			2020				2022			2021			2022			2021
Interest expense, net	Interest expense, net	$	(296)		$	(302)		$	(862)		$	(944)		Interest expense, net	$	(328)		$	(281)		$	(623)		$	(566)
Other income, net		$	73		$	55		$	97		$	69
Other (expense) income, net														Other (expense) income, net	$	(317)		$	11		$	(847)		$	24
Provision for income taxes	Provision for income taxes	$	271		$	185		$	576		$	607		Provision for income taxes	$	214		$	94		$	413		$	305
Effective tax rate	Effective tax rate	12.6		%	8.4		%	12.6		%	9.7		%	Effective tax rate	14.0		%	16.8		%	12.9		%	12.6		%

Interest expense, net

The ~~decrease~~increase in Interest expense, net, for the three and six months ended ~~September~~June 30, ~~2021,~~2022, was primarily due to ~~lower~~higher overall debt outstanding and higher LIBOR rates ~~in the current year period~~ on debt for which we effectively pay a variable rate of interest through the use of interest rate ~~swaps, partially offset by higher overall debt outstanding in the current year period.~~

The decrease in Interest expense, net, for the nine months ended September 30, 2021, was primarily due to net costs associated with the early retirement of debt in the first quarter of the prior year and lower LIBOR rates in the current year period on debt for which we effectively pay a variable rate of interest through the use of interest rate swaps, partially offset by higher overall debt outstanding in the current year period.swaps.

Other (expense) income, net

The ~~increase~~change in Other (expense) income, net, for the three and ~~nine~~six months ended ~~September~~June 30, ~~2021,~~2022, was primarily due to net ~~gains~~losses recognized on our strategic equity investments ~~partially offset by~~in the current year compared with net gains recognized in the prior year and higher current year losses in connection with our BeiGene investment.

Income taxes

The Administration proposed and Congress ~~are~~is considering a variety of potentially significant changes to existing tax ~~law, including an increase in the corporate tax rate and the tax rate on foreign earnings.~~law. These changes, or others, could substantially increase ~~U.S. taxation of our operations both in and outside the United States, including~~taxes we pay to the U.S. ~~territory of Puerto Rico. In addition,~~government. Further, the ~~Organisation for Economic Co-operation and Development (OECD)~~OECD recently reached an agreement to align countries on a minimum corporate tax rate and an expansion of the taxing rights of market countries. If enacted, either by all OECD participants or unilaterally by individual countries, this agreement could result in tax increases in both the United States and foreign jurisdictions. The U.S. Treasury recently released final foreign tax credit regulations that eliminate U.S. creditability of the Puerto Rico Excise Tax beginning in 2023, which would increase our U.S. tax liability. However, the U.S. territory of Puerto Rico recently enacted Act 52-2022, which provides for an alternate fixed tax rate on industrial development income that is expected to be creditable under U.S. law. As part of this new law, eligible businesses would be subject to incremental income and withholding taxes in lieu of payment of the Puerto Rico Excise Tax. In order to qualify for the alternative fixed tax rate, we must amend our current tax grant with the Puerto Rico government by December 31, 2022. Once we qualify for this alternative fixed tax rate, which we expect to occur as of January 1, 2023, our tax expense will increase. While we expect these taxes to be partially offset by U.S. foreign tax credits, the U.S. Treasury has not yet issued guidance on whether the alternative fixed tax rate will be creditable under U.S. law.

In 2017, we received an RAR and a modified RAR from the IRS for the years ~~2010, 2011 and~~ 2010–2012, proposing significant adjustments that primarily relate to the allocation of profits between certain of our entities in the United States and the U.S. territory of Puerto Rico. We disagreed with the proposed adjustments and calculations and pursued ~~a resolution with the IRS administrative appeals office. As previously reported, we were unable to reach~~ resolution with the IRS appeals ~~office.~~office but were unable to reach resolution. In July 2021, we filed a petition in the U.S. Tax Court to contest two duplicate Statutory Notices of Deficiency (Notices) for ~~2010, 2011 and~~ the years 2010–2012 that we received in May and July ~~2021. The duplicate Notices~~2021, which seek to increase our U.S. taxable income for the years 2010–2012 by an amount that would result in additional federal tax of approximately $3.6 billion plus interest. Any additional tax that could be imposed for the years 2010–2012 would be reduced by up to approximately $900 million of repatriation tax previously accrued on our foreign earnings. ~~In any event, we firmly believe that the IRS’s positions in the Notices are without merit, and we will vigorously contest the Notices through the judicial process.~~

3938

Final resolution of these complex matters is not likely within the next 12 months. We believe our accrual for income tax liabilities is appropriate based on past experience, interpretations of tax law, application of the tax law to our facts and judgments about potential actions by tax authorities; however, due to the complexity of the provision for income taxes and uncertain resolution of these matters, the ultimate outcome of any tax matters may result in payments substantially greater than amounts accrued ~~as noted above~~ and could have a material adverse impact on our condensed consolidated financial statements.

We are no longer subject to U.S. federal income tax examinations for years ended on or before December 31, 2009.

See Part II, Item 1A, Risk Factors—The adoption and interpretation of new tax legislation or exposure to additional tax liabilities could affect our profitability, and Note 4, Income taxes, to the condensed consolidated financial statements for further discussion.

Financial condition, liquidity and capital resources

Selected financial data were as follows (in millions):


		September 30, 2021		December 31, 2020			June 30, 2022		December 31, 2021
Cash, cash equivalents and marketable securities	Cash, cash equivalents and marketable securities	$	12,921	$	10,647	Cash, cash equivalents and marketable securities	$	7,183	$	8,037
Total assets	Total assets	$	64,993	$	62,948	Total assets	$	59,294	$	61,165
Current portion of long-term debt	Current portion of long-term debt	$	4,288	$	91	Current portion of long-term debt	$	817	$	87
Long-term debt	Long-term debt	$	33,291	$	32,895	Long-term debt	$	35,705	$	33,222
Stockholders’ equity	Stockholders’ equity	$	8,217	$	9,409	Stockholders’ equity	$	2,419	$	6,700

Cash, cash equivalents and marketable securities

Our balance of cash, cash equivalents and marketable securities was ~~$12.9~~$7.2 billion ~~at September~~as of June 30, ~~2021.~~2022. The primary objective of our investment portfolio is to maintain 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 deploy our accumulated cash balances in a strategic manner and consider a number of alternatives, including investments in innovation, both internally and externally, strategic transactions (including those that expand our portfolio of products in areas of therapeutic interest), payment of dividends, stock repurchases and repayment of debt.

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 and our desire to optimize our cost of capital. 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 block purchases, tender offers, ASRs and market transactions.

In ~~July 2021,~~ March ~~2021~~2022 and December ~~2020,~~2021, the Board of Directors declared a quarterly cash dividend of ~~$1.76~~$1.94 per share of common stock, which were paid on ~~September 8, 2021,~~ June 8, ~~2021~~2022 and March 8, ~~2021,~~2022, respectively, an increase of 10% over ~~the~~ quarterly cash dividend paid in each quarter in ~~2020.~~2021. In ~~October 2021,~~August 2022, the Board of Directors declared a quarterly cash dividend of ~~$1.76~~$1.94 per share of common stock, which will be paid on ~~December~~September 8, ~~2021.~~2022 to all stockholders of record as of the close of business on August 18, 2022.

We also returned capital to stockholders through our stock repurchase program. During the ~~nine~~six months ended ~~September~~June 30, ~~2021,~~2022, we executed trades to repurchase ~~$3.5~~$5.4 billion of common ~~stock.~~stock, including $5.1 billion of an initial purchase under the ASR agreements described below. As of ~~September~~June 30, ~~2021, $2.9~~2022, $4.6 billion of authorization remained available under our stock repurchase program.

In ~~October 2021,~~February 2022, we entered into ASR agreements under which we paid an aggregate amount of $6.0 billion to the ~~Board~~Dealers and retired an initial 23.3 million shares of ~~Directors increased~~common stock. Approximately $0.9 billion of stock remains to be delivered by the ~~amount authorized~~Dealers pending final settlement, which will be based on the daily volume-weighted average stock price of our common stock during the terms of the ASR agreements, less a discount and subject to adjustments pursuant to the terms and conditions of the ASR agreements. At settlement, which is scheduled to occur in the third quarter of 2022, the Dealers may be required to deliver additional shares of common stock to us, or under certain circumstances, we may be required to deliver shares of common stock or to make a cash payment, at our ~~stock repurchase program by an additional $4.5 billion.~~

election, to the Dealers.

As a result of stock repurchases and quarterly dividend payments, we have an accumulated deficit as of ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020.~~2021. Our accumulated deficit is not anticipated 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, ~~to meet~~ capital expenditure and debt service requirements, ~~to fund~~ our plans to pay dividends and repurchase stock and ~~to fulfill~~ other business initiatives we ~~expect~~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, ~~equity markets and~~ borrowings ~~(including~~through commercial paper and/or syndicated credit facilities and access to other domestic and foreign debt ~~markets).~~markets and equity markets. See our Annual Report on Form 10-K for the year ended December 31, ~~2020,~~2021, 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 that requires us to maintain a specified minimum interest coverage ratio of (i) the sum of consolidated net income, interest expense, provision for income taxes, depreciation expense, amortization expense, unusual or nonrecurring charges and other noncash items ~~(Consolidated EBITDA)~~(consolidated earnings before interest, taxes, depreciation and amortization) to (ii) ~~Consolidated Interest Expense,~~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~~June 30, ~~2021.~~2022.

Cash flows

Our summarized cash flow activity was as follows (in millions):


		Nine months ended September 30,					Six months ended June 30,
		2021		2020			2022		2021
Net cash provided by operating activities	Net cash provided by operating activities	$	6,453	$	8,344	Net cash provided by operating activities	$	4,094	$	4,035
Net cash provided by (used in) investing activities		$	963	$	(4,017)
Net cash (used in) provided by investing activities						Net cash (used in) provided by investing activities	$	(2,304)	$	890
Net cash used in financing activities	Net cash used in financing activities	$	(1,713)	$	(1,277)	Net cash used in financing activities	$	(4,576)	$	(4,561)

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 ~~nine~~six months ended ~~September~~June 30, ~~2021, decreased~~2022, increased primarily due to ~~(i) the monetization of interest rate swaps in the prior year, (ii) a difference in the timing of payments to tax authorities and sales deductions paid to customers, (iii) lower Net~~higher net income, after adjustments for noncash items, ~~and (iv)~~partially offset by the ~~timing~~impact of ~~collections from customers.~~working capital items.

Investing

Cash used in investing activities during the six months ended June 30, 2022, was primarily due to net cash outflows related to marketable securities activity of $1.9 billion and capital expenditures of $436 million. Cash provided by investing activities during the ~~nine~~six months ended ~~September~~June 30, 2021, was primarily due to net cash inflows related to marketable securities activity of ~~$3.4~~$2.9 billion, partially offset by the acquisition of Five Prime for $1.6 billion ~~net of cash acquired,~~ and capital expenditures of $593 million. Cash used in investing activities during the nine months ended September 30, 2020, was due to our $3.2 billion of equity investments, primarily BeiGene, capital expenditures of $435 million and net cash outflows related to marketable securities of $394$351 million. We currently estimate ~~2021~~2022 spending on capital projects to be approximately ~~$900~~$950 million.

Financing

Cash used in financing activities during the ~~nine~~six months ended ~~September~~June 30, 2022, was primarily due to payments to repurchase our common stock of $6.4 billion, including amounts paid under the ASR agreements discussed above, and the payment of dividends of $2.1 billion, partially offset by proceeds from the issuance of debt of $4.0 billion. Cash used in financing activities during the six months ended June 30, 2021, was primarily due to payments to repurchase our common stock of ~~$3.5~~$2.5 billion and the payment of dividends of $3.0 billion, partially offset by proceeds from the issuance of debt of $4.9 billion. Cash used in financing activities during the nine months ended September 30, 2020, was primarily due to the payment of dividends of $2.8 billion and payments to repurchase our common stock of $2.3 billion, partially offset by proceeds from the issuance of debt, net of repayments, of $3.9$2.0 billion. See Note ~~10,~~9, Financing arrangements, and Note ~~11,~~10, Stockholders’ equity, to the condensed consolidated financial statements for further discussion.

Critical ~~accounting policies~~Accounting Policies and Estimates

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 and estimates 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, ~~2020.~~2021.


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, ~~2020,~~2021, and is incorporated herein by reference. ~~Except as discussed below, there~~There were no material changes during the ~~nine~~six months ended ~~September~~June 30, ~~2021,~~2022, 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, ~~2020.~~

~~Interest rate sensitive financial instruments~~

To achieve a desired mix of fixed and floating interest rate debt, we entered into additional interest rate swap contracts with an aggregate notional amount of $1.5 billion during the three months ended June 30, 2021. As of September 30, 2021, an aggregate notional amount of $7.4 billion of interest rate swap contracts was outstanding. These interest rate swap contracts effectively converted a fixed-interest-rate coupon to a floating-rate LIBOR-based coupon over the life of the respective notes. A hypothetical 100-basis-point increase in interest rates relative to interest rates at September 30, 2021, would have resulted in a reduction in fair value of approximately $370 million on our interest rate swap contracts on that date. The analysis of the interest rate swap contracts does not consider the impact that hypothetical changes in interest rates would have on the related fair value of debt that these interest-rate-sensitive instruments were designed to offset.


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 gets recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information gets accumulated and communicated to Amgen’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to facilitate 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 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 on 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~~June 30, ~~2021.~~2022.

Management determined that as of ~~September~~June 30, ~~2021,~~2022, no changes in our internal control over financial reporting had occurred during the fiscal quarter then ended that materially affected or are reasonably likely to materially affect our internal control over financial reporting.

PART II — OTHER INFORMATION


Item 1.			LEGAL PROCEEDINGS

See ~~Notes 12,~~Note 13, ~~and 14,~~ Contingencies and commitments, to the condensed consolidated financial statements included in our Quarterly Reports on Form 10-Q for the periods ended March 31, ~~2021,~~2022 and June 30, ~~2021 and September 30, 2021, respectively,~~2022, for discussions that are limited to certain recent developments concerning our legal proceedings. Those discussions should be read in conjunction with Part IV—Note 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, ~~2020.~~2021.


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 they involve certain risks, uncertainties and assumptions that are difficult to predict. You should carefully consider the risks and uncertainties our business faces. The risks described below 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 and international operations. 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 provide in supplemental form the material changes to our risk factors that occurred during the past quarter. Our risk factors disclosed in Part I, Item 1A, of our Annual Report on Form 10-K for the year ended December 31, ~~2020,~~2021, provide additional disclosure for these supplemental risks and are incorporated herein by reference.

~~RISKS RELATED TO ECONOMIC CONDITIONS AND OPERATING A GLOBAL BUSINESS, INCLUDING DURING THE COVID-19 PANDEMIC~~

The COVID-19 pandemic, and the effort to mitigate the spread of the disease, have had, and are expected to continue to have, an adverse effect, and may have a material adverse effect, on our clinical trials, operations, manufacturing, supply chains, distribution systems, product development, product sales, business and results of operations.

The novel coronavirus identified in late 2019, SARS-CoV-2, which causes the disease known as COVID-19, is an ongoing global pandemic that has resulted in public and governmental efforts to contain or slow the spread of the disease, including widespread shelter-in-place orders, social distancing interventions, quarantines, travel restrictions and various forms of operational shutdowns. The COVID-19 pandemic and the resulting measures implemented in response to the pandemic are adversely affecting, and are expected to continue to adversely affect, our business (including our R&D, clinical trials, operations, manufacturing, supply chains, distribution systems, product development and sales activities), the business activities of our suppliers, customers, third-party payers and our patients. See our Annual Report on Form 10-K for the year ended December 31, 2020, Part I, Item 1A. Risk Factors—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 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;~~see also~~ ~~Our current products and products in development cannot be sold without regulatory approval~~;~~and see also~~ ~~We must conduct clinical trials in humans before we commercialize and sell any of our product candidates or existing products for new indications~~. Due to the pandemic and these measures and their effects, we have experienced, and expect to continue to experience, unpredictable reductions in demand for certain of our products, exacerbated by COVID-19 surges resulting in repeated shutdowns and/or disruptions in certain geographies.

Federal, state and local, and international governmental policies and initiatives designed to reduce the transmission of COVID-19 also have resulted in the cancellation or delay 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. For example, a recent NPR/Harvard poll found that, with hospitals crowded from COVID-19, one in five U.S. households has had to delay care for serious illnesses in the past few months. These measures and challenges will likely continue to varying degrees for the duration of the pandemic and have significantly reduced patient access to, and administration of, certain of our drugs. For example, Prolia® ~~requires 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 therapies that are less immunosuppressive or

therapies that do not require administration in a hospital setting, potentially adversely affecting certain of our products. Also, new patients have been, and are expected to continue to be, less likely to be diagnosed and/or to start therapeutics during the pandemic, and these effects, together with the lower treatment rates during the pandemic, have had, and are expected to continue to have, a cumulative negative effect on the commercial performance of our business. The decrease in diagnoses over the course of the pandemic has suppressed the volume of new patients starting treatment, which we expect to continue to impact our business for the remainder of the year. Once the pandemic subsides, we anticipate there could be a backlog of patients seeking appointments with physicians relating to a variety of medical conditions, and as a result, patients seeking treatment with certain of our products may have to navigate lower provider capacity, and this lower provider capacity could have a continued adverse effect on our sales following the opening up of various geographies and/or 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 patients toward treatments that do not require administration by healthcare professionals or visits to medical facilities.

As the pandemic continues, and if conditions worsen or if the duration of the pandemic extends significantly, we expect to experience additional adverse effects on our development, operational and commercial activities, customer purchases and our collections of accounts receivable. It remains uncertain the degree to which these adverse effects would impact our future operational and commercial activities, customer purchases and our collections as conditions begin to improve. There has been a resurgence in COVID-19 infections in numerous jurisdictions to date in 2021, resulting in the reinstatement of stricter restrictions and shutdowns in a number of jurisdictions, including in the United States., Europe and Asia Pacific regions. It is expected that the pandemic will continue to ebb and flow, with different jurisdictions having higher levels of infections than others over the course of the pandemic. New variants of the SARS-CoV-2 virus have emerged, including the delta variant, and have been shown to be present in many geographies, and appear to spread more easily and quickly than other variants. Further, although some studies suggest that antibodies generated with currently authorized vaccines may be effective against these variants, it remains uncertain whether currently available vaccines will retain their efficacy against future variants of the virus. Further, even while vaccine booster shots are available for certain patients, persistent vaccine hesitancy may result in under-vaccinated populations which may prolong the duration of the COVID-19 pandemic and continue to disrupt the availability of healthcare services to the patients we serve. Jurisdictions may implement, continue or reinstate border closures, impose or reimpose prolonged quarantines and further restrict travel and business activity, which could significantly affect our ability to support our operations and customers and the ability of our employees to get to their workplaces to discover, study, develop and produce our product candidates and products, disrupt the movement of our products through the supply chain, and further prevent or discourage patients from participating in our clinical trials, seeking healthcare services and the administration of certain of our products. Further, in connection with the global 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 the United States, on January 21, 2021, President Biden issued an Executive Order instructing federal agencies to use all available legal authorities, including the Defense Production Act, to improve current and future pandemic response and biological threat preparedness. The rapid reallocation of resources for the treatment and prevention of COVID-19 (including the production of COVID-19 vaccinations or related therapies, such as our agreement to contribute to the production of COVID-19 antibody therapies for Eli Lilly and Company) and/or disruptions and shortages in the global supply chain caused by the pandemic, could also result in increased competition for, or reduced availability of, materials or components used in the development, manufacturing, distribution, or administration of our products. For example, during the second quarter of 2021, an industry-wide shortage of certain lab kit supplies necessary for some activities that support our clinical trials has developed that we are actively monitoring and managing. In addition, unpredictable increases in demand for certain of our products could exceed our capacity to meet such demand, which could adversely affect our financial results and customer relationships.

The COVID-19 pandemic and the volatile global economic conditions stemming from it may precipitate or amplify the other risks described in the “Risk Factors” section of our Annual Report on Form 10-K for the year ended December 31, 2020, which could materially adversely affect our business, operations and financial conditions and results. For example, if a natural disaster or other potentially disruptive event occurs concurrently with the COVID-19 pandemic, such disaster or event could deplete our inventory levels and we could experience a disruption to our manufacturing or ability to supply our products. Further, the global pandemic has exacerbated geopolitical tensions, and some countries, such as China, may be especially vulnerable to such dynamics. If relations between the United States and China or other governments deteriorates, our business and investments in China or other such markets may also be adversely affected. See our Annual Report on Form 10-K for the year ended December 31, 2020, Part I, Item 1A. Risk Factors—~~Our sales and operations are subject to the risks of doing business internationally, including in emerging markets.~~

The rapid development and fluidity of the pandemic preclude any prediction as to the ultimate effect of COVID-19 on us. The duration of the measures being taken by the authorities to mitigate against the spread of COVID-19 (including the distribution and/or availability of vaccines), and the extent to which such measures are effective, if at all, remain highly uncertain. The magnitude and degree of COVID-19’s adverse effect on our business (including our product development,

product sales, operating results and resulting cash flows) and financial condition will be driven by the severity and duration of the pandemic, the pandemic’s effect on the United States and global economies and the timing, scope and effectiveness of federal, state, local and international governmental responses to the pandemic. If mitigation of the pandemic continues to require further shelter-in-place and shutdown orders and/or restrictions on individual and/or group conduct, any adverse effects of the COVID-19 pandemic will likely grow and could be enduring and our business and financial position could be materially adversely affected.

A breakdown, cyberattack or information security breach could compromise the confidentiality, integrity and availability of our information technology systems, network-connected control systems and/or our data, interrupt the operation of our business and/or affect our reputation.

To achieve our business objectives, we rely on sophisticated information technology systems, including software, mobile applications, cloud services and network-connected control systems, some of which are managed, hosted, provided or serviced by third parties. Internal or external events that compromise the confidentiality, integrity and availability of our systems and data may significantly interrupt the operation of our business, result in significant costs and/or adversely affect our reputation.

Our information technology systems are highly integrated into our business, including our R&D efforts, our clinical and commercial manufacturing processes and our product sales and distribution processes. Further, as the majority of our employees are working remotely, our reliance on our and third-party information technology systems has increased substantially and is expected to continue to increase. The complexity and interconnected nature of our systems makes them potentially vulnerable to breakdown or other service interruptions. Upgrades or changes to our systems or the software that we use may result in the introduction of new cybersecurity vulnerabilities and risks. Our systems are also subject to frequent cyberattacks. As the cyber-threat landscape evolves, these attacks are growing in frequency, sophistication and intensity and are becoming increasingly difficult to detect. Such attacks could include the use of harmful and virulent malware, including ransomware or other denials of service, that can be deployed through various means, including the software supply chain, e-mail, malicious websites and/or the use of social engineering. We have also experienced unsuccessful denial of service attacks against our network, and although such attacks did not succeed, there can be no assurance that our efforts to guard against the wide and growing variety of potential attack techniques will be successful in the future. Attacks such as those experienced by governmental entities (including those that approve and/or regulate our products, such as the European Medicines Agency (EMA)) and other multi-national companies, including some of our peers, could leave us unable to utilize key business systems or access or protect important data, and could have a material adverse effect on our ability to operate our business, including developing, gaining regulatory approval for, manufacturing, selling and/or distributing our products. For example, in 2017, a pharmaceutical company experienced a cyberattack involving virulent malware that significantly disrupted its operations, including its research and sales operations and the production of some of its medicines and vaccines. As a result of the cyberattack, its orders and sales for certain products in certain markets were negatively affected. In December 2020, SolarWinds Corporation, a leading provider of software for monitoring and managing information technology infrastructure, disclosed that it had suffered a cybersecurity incident whereby attackers had inserted malicious code into legitimate software updates for its products that were installed by myriad private and government customers, enabling the attackers to access a backdoor to such systems. See our Annual Report on Form 10-K for the year ended December 31, 2020, ~~Part I, Item 1A. Risk Factors—~~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 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 ~~for a discussion of the cyberattack on the EMA.~~

Our systems also contain and utilize a high volume of sensitive data, including intellectual property, trade secrets, financial information, regulatory information, strategic plans, sales trends and forecasts, litigation materials and/or personal information belonging to us, our staff, our patients, customers and/or other parties. In some cases, we utilize third-party service providers to process, store, manage or transmit such data, which may increase our risk. Intentional or inadvertent data privacy or security breaches (including cyberattacks) resulting from attacks or lapses by employees, service providers (including providers of information technology-specific services), nation states (including groups associated with or supported by foreign intelligence agencies), organized crime organizations, “hacktivists” or others, create risks that our sensitive data may be exposed to unauthorized persons, our competitors, or the public. For example, a supplier recently experienced a data breach in which an unauthorized third party acquired access to certain information provided to the supplier in the course of its provision of services to us, including business documents and certain personally identifiable patient information (not including social security or other financial or health insurance information). As required, we promptly notified the applicable state attorneys general and the individuals whose personally identifiable information was affected of this data breach at the supplier. Although the supplier data breach did not result in a material adverse effect on our business, there can be no assurance that a similar future cybersecurity incident would not result in a material adverse effect on our business or results of operations. Another vendor experienced a cyberattack and, while initially reporting that our information was not involved, the vendor subsequently informed us that the attacker had accessed limited, non-significant information. Although this breach did not have a significant

~~adverse effect on us, we may not receive timely reporting of future breaches.~~

Domestic and global government regulators, our business partners, suppliers with whom we do business, companies that provide us or our partners with business services, and companies we have or may acquire face similar risks, and security breaches of their systems or service outages could adversely affect our security, leave us without access to important systems, products, raw materials, components, services or information or expose our confidential data or sensitive personal information. For example, in 2019, two vendors that perform testing and analytical services that we use in developing and manufacturing our products have experienced cyberattacks, and in April and September of 2020, vendors that provide us with information technology services and clinical data services, respectively, each experienced ransomware attacks. Although there was no breach of our systems, each of these incidents required us to disconnect our systems from those vendors’ systems. While we were able to reconnect our systems following restoration of these vendors’ capabilities without significantly affecting product availability, a more extended service outage affecting these or other vendors, particularly where such vendor is the single source from which we obtain the services, could have a material adverse effect on our business or results of operations. In addition, we distribute our products in the United States primarily through three pharmaceutical wholesalers, and a security breach that impairs the distribution operations of our wholesalers could significantly impair our ability to deliver our products to healthcare providers and patients.

Although we have experienced system breakdowns, attacks and information security breaches, we do not believe such breakdowns, attacks and breaches have had a material adverse effect on our business or results of operations. We continue to invest in the monitoring, protection and resilience of our critical and/or sensitive data and systems. However, there can be no assurances that our efforts will detect, prevent or fully recover systems or data from all breakdowns, service interruptions, attacks and/or breaches of our systems that could adversely affect our business and operations and/or result in the loss or exposure of critical, proprietary, private, confidential or otherwise sensitive data, which could result in material financial, legal, business or reputational harm to us or negatively affect our stock price. While we maintain cyber-liability insurance, our insurance is not sufficient to cover us against all losses that could potentially result from a service interruption, breach of our systems or loss of our critical or sensitive data.

We are also subject to various laws and regulations globally regarding privacy and data protection, including laws and regulations relating to the collection, storage, handling, use, disclosure, transfer and security of personal data. The legislative and regulatory environment regarding privacy and data protection is continuously evolving and developing and the subject of significant attention globally. For example, we are subject to the European Union’s General Data Protection Regulation, which became effective in May 2018, and the California Consumer Privacy Act of 2018 (CCPA), which became effective in January 2020, both of which provide for substantial penalties for non-compliance. The CCPA was amended in late 2020, to create the California Privacy Rights Act to create opt-in requirements for the use of sensitive personal data and the formation of a new dedicated agency for the enforcement of the law, the California Privacy Protection Agency. Since then, Virginia and Colorado both passed similar consumer privacy laws that will go into effect in 2023. Other jurisdictions where we operate continue to propose similar legislation and/or regulations with others expected to pass in 2021. Failure to comply with these current and future laws could result in significant penalties and reputational harm and could have a material adverse effect on our business and results of operations.

~~RISKS RELATED TO GOVERNMENT REGULATIONS AND THIRD-PARTY POLICIES~~

Our sales depend on coverage and reimbursement from government and commercial third-party payers, and pricing and reimbursement pressures have affected and are likely to continue to affect our profitability.

Sales 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 manage drug utilization and contain costs. These payers are increasingly focused on ~~the effectiveness, benefits and~~ costs, ~~of similar treatments,~~ which have resulted, and are expected to continue to result, in lower reimbursement rates for our products 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, have limited, and are likely to continue to limit, our ability to set or adjust the price of our products based on their value, which can have a material adverse effect on our business. In the United States, particularly over the past few years, a number of legislative and regulatory proposals have been introduced ~~in an~~to attempt to lower drug prices. These include proposals that would ~~allow~~enable the U.S. government to negotiate drug prices directly, limit drug reimbursement in Medicare and/or the commercial market based on a reference prices, impose penalties if drug prices are increased at a rate faster than inflation or permit importation of drugs from Canada. Additional proposals would require a rebate to the government for any price increase in excess of the Consumer Price Index for All Urban Consumers and/or to shift some of the costs of these Medicare Part D reforms to manufacturers to offset the ~~cost. Proposals~~costs. Certain proposals focused on drug pricing have been ~~implemented~~adopted, and additional proposals are likely to ~~continue to be proposed and may~~ be adopted and implemented in some form. ~~See our Annual Report on Form 10-K for the year ended December 31, 2020, Part I, Item 1A. Risk Factors—~~Our sales depend on coverage and reimbursement from government and commercial third-party payers, and pricing and reimbursement pressures have affected, and are likely to continue to affect, our profitability.

—Changing U.S. federal coverage and reimbursement policies and practices have affected and may continue to affect access to, pricing of and sales of our products

A substantial portion of our U.S. business relies on reimbursement from federal government healthcare programs and commercial insurance plans regulated by federal and state governments. See Part I, Item 1. Business—Reimbursement of our Annual Report on Form 10-K for the year ended December 31, ~~2020, Part I, Item 1. Business—Reimbursement.~~2021. Our business has been and will continue to be affected by legislative actions changing U.S. federal reimbursement policy. Congress has ~~been~~ focused on drug pricing reforms and oversight since 2018, and this activity is ~~ongoing. For example,~~still ongoing and has intensified.Since 2019, a number of Congressional committees debated drug pricing reform proposals, and in 2020, Amgen participated in House Oversight and Reform Committee hearings on drug pricing practices. ~~Additionally, in 2019 and 2020, a number of other Congressional committees debated drug pricing reform proposals. For example, in~~In 2019, the 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/or D faster than the rate of inflation, cap out-of-pocket expenses for Medicare Part D beneficiaries and require ~~higher/~~higher or additional manufacturer discounts in Medicare Part D. Additionally, in late 2019, a drug-pricing bill, H.R. 3, passed the House of Representatives ~~which would,~~and included provisions that, among other things, ~~enable~~enabled direct price negotiations by the federal government on certain drugs, (with the maximum price paid by Medicare capped by prices derived from an international index), ~~includes a penalty for failing~~penalized failures to reach agreement with the government and ~~requires~~required that manufacturers offer these negotiated prices to other payers. ~~Further, proposals~~Provisions from H.R. 3 have

been incorporated and adapted into other proposed legislation, including the ~~House’s drug pricing provisions based on H.R. 3 in the Build Back Better~~most recent reconciliation bill and proposals from H.R. 3 are also likely to be included in the version of the reconciliation bill that remains to be further debated between the House, Senate and White House. Other legislation has also contained drug pricing reforms, including the Infrastructure Investment and Jobs Act passedreleased by the Senate in ~~August 2021,~~July 2022, which ~~includes a provision that would, starting in 2023, require manufacturers to provide~~included penalties if drug price benchmarks rise faster than inflation, Medicare ~~with rebates~~price setting for certain drugs paid under Medicare Part B, and the American Rescue Plan Act of 2021, which includes a provision, to be implemented in 2024, that increases the Medicaid rebate liability for certain medicines that raise prices in excess of inflation. On November 2, 2021, Congress announced a framework for drug pricing reform that includes inflation penalties, Medicare negotiation for select drugs paid for under Parts B and D (whereby manufacturers must accept a price established by the government or face penalties on all U.S. sales), and Part D redesign including a cap on beneficiary spending and a ~~Medicare Part D redesign. As of the date of this filing, this~~new manufacturer discount program. This framework remains in discussion with policymakers in Congress and the Administration.

There are other outstanding proposals ~~that have been introduced by the prior Administration~~ that, if enacted and implemented, in whole or in part, could also affect access to and sales of our products, including, but not limited to, federal and various state proposals to allow importation of prescription medications from Canada or other ~~countries~~countries. See —Changing reimbursement and pricing actions in various states have negatively affected and may continue to ~~set Medicare payment rates using international price referencing. Further, in mid-2020, the prior Administration announced a number~~negatively affect access to and have affected and may continue to affect sales of Executive Orders intended to reduce the cost of biopharmaceuticals for patients, including a most favored nation (MFN) policy for Medicare Parts B and D, under which the Health & Human Services (HHS) was directed to take steps to implement payment models that set Medicare purchase prices based on the lowest price available in economically comparable countries for certain Part B and Part D medicines. In September 2020, in response to the corresponding Executive Order, HHS released a final rule to allow states (or other nonfederal government entities) to submit proposals to the FDA allowing for the importation of certain nonbiologic prescription drugs from Canada. Currently, the rule is being challenged by litigation, however, should such litigation be unsuccessful and should the Secretary of HHS authorize state proposals for importation, this rule could allow the importation of Canadian versions of certain of Amgen’s products (including Otezla®), that could have a material adverse effect on Amgen’s business. Further, in November 2020, also in response to the corresponding Executive Order, HHS released an interim final rule to implement the MFN pricing approach. If implemented, the MFN rule would set the reimbursement rate for 50 Medicare Part B drugs (including our products ~~such as Prolia~~®~~, XGEVA~~®~~, KYPROLIS~~®~~, Neulasta~~®~~, Nplate~~®~~, EPOGEN~~® ~~and Aranesp~~®) equal to the lowest adjusted price for such products of the 22 OECD nations. Lawsuits have been filed by certain trade groups challenging the implementation of this MFN rule based on, among other things, procedural defects. Late in 2020, in the case filed by the Biotechnology Innovation Organization (BIO) and others, the U.S. District Court for the Northern District of California issued a preliminary injunction preventing the rule from taking effect nationwide, pending the government’s completion of required administrative procedures. The case was subsequently stayed by the court and will remain stayed until at least November 10, 2021, when the parties will be required to submit a joint status report to the court. Another case, filed by the Pharmaceutical Research and Manufacturers of America and others in the U.S. District Court for the District of Maryland, was also stayed until either a final rule based on the MFN interim rule is published in the Federal Register, or until the court orders a lifting of the stay based on, among other things, the status of the nationwide preliminary injunction issued in the BIO case.. In August 2021, Centers for Medicare & Medicaid Services (CMS) released a proposal to withdraw the MFN rule, noting, however, that the proposal to withdraw “does not reflect any judgment by HHS regarding future policy.”Notwithstanding these stays and the proposed withdrawal of the rule, the MFN rule’s approach to drug pricing and other similar approaches remain of interest. Further, despite the change in Administration, we expect continued significant focus on healthcare and similar drug pricing proposals for the foreseeable future, including proposals similar to the MFN rule or other proposals that would grant the HHS secretary the authority to negotiate drug prices directly with manufacturers. On July 9, 2021, the Administration issued an Executive Order designed to address anticompetitive behavior across multiple sectors, and for the healthcare sector, called for, among other things, the FDA to work with states and Indian tribes to develop prescription drug importation programs, more scrutiny of anticompetitive activity by the ~~Federal Trade~~

~~Commission (FTC),~~FTC, emphasized the need for actions to allow for greater competition from generics and biosimilars, and ~~called for the FDA to work with states and Indian Tribes to develop prescription drug importation programs. The Executive Order established~~included a process and timeline for federal agencies to deliver ~~ideas on drug pricing~~ to the Administration ~~including requiring HHS to develop a comprehensive plan within 45 days to~~ideas that address drug pricing. Subsequently, onin September 9, 2021, ~~the~~ HHS released a report that presented guiding principles for the Administration’s drug pricing proposals, including changes to promote competition throughout the prescription drug industry, highlighting potential legislative policies that Congress could pursue (including drug price negotiation in Medicare Parts B and D, making those negotiated prices available to commercial plans and legislation to speed the entry of biosimilar and generic drugs) and examples of potential administrative tools available to the HHS (including testing various ~~testing~~ models and enhanced focus of the FTC and the USPTO to address impediments to generic drug and biosimilar competition). Also, in response to the July 92021 Executive Order, the FDA sent a letter to the USPTO describing ways to strengthen coordination between the two agencies, ~~offered~~offering training to help identify prior art and seeking USPTO’s views on practices that extend market exclusivities, whether pharmaceutical patent examiners need additional resources, and the effect of post-grant challenges at the PTAB on drug patents. In its reply to the FDA, on July 6, 2022, the USPTO affirmed its interest in coordinating with the FDA and outlined specific initiatives, including enhancing procedures for obtaining patents and easing the process for challenging issued patents before the PTAB.

Legislation enacted in 2021 also contained drug pricing reforms. For example, the Infrastructure Investment and Jobs Act includes a provision requiring manufacturers to provide refunds, beginning in 2023, to the government for discarded amounts of certain drugs (including certain Amgen products) from single use containers under Medicare Part B, and CMS recently released proposed regulations to implement this requirement. Also, the American Rescue Plan Act of 2021 includes a provision that increases the Medicaid rebate liability, beginning in 2024, by no longer capping Medicaid rebates at 100% of the Average Manufacturer Price for certain medicines that raise prices in excess of inflation. The implementation of a final rule issued by HHS that revises regulations under the federal antikickback statute to encourage PBMs to use rebates received from biopharmaceutical manufacturers to reduce patient cost-sharing at the point of sale under Medicare Part D has been delayed to January 1, 2027. However, the future of this rule remains uncertain because, among other issues, it is subject to litigation and because a permanent repeal is being considered in other legislation.

Our business has been, and is expected to continue to be, affected by changes in U.S. federal reimbursement policy resulting from federal regulations and federal demonstration projects. Over the past ~~three~~several years, federal agencies, including the CMS, announced a number of recommendations, policies, proposals and demonstration projects addressing drug pricing. 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 changes or demonstration projects that can quickly and significantly affect how drugs, including our products, are covered and reimbursed. CMS 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 lowered reimbursement rates for new Medicare Part B drugs. Further, HHS issued a final rule under Medicare Part D revising the regulations under the federal antikickback statute to encourage Pharmacy Benefit Managers (PBMs) to use rebates received from biopharmaceutical manufacturers to reduce patient cost-sharing at the point of sale. While the implementation date for the rule is January 1, 2023, the rule remains subject to litigation, there are numerous logistical hurdles to overcome before it can be effectively implemented, and it is unclear how PBMs will respond and what the current Administration’s position is on the rule. Further, while the prior Administration finalized a rule (effective January 1, 2022) mandating price and cost-sharing transparency for almost all health plans and insurers in the individual and group commercial markets, the currentThe Administration has ~~delayed implementation of those drug price transparency provisions~~also developed and ~~has indicated that there will be future rulemaking on the issue. It is unclear how group health plans and health insurers may respond. The Administration also could develop and seek~~sought to advance a range of policy proposals that could ~~impact~~affect U.S. federal reimbursement policy for drugs and biologics, including changes to Medicare Parts B and D. For example, in 2020, in response to an Executive Order, HHS released a rule to allow states to potentially enable the importation of certain drugs from Canada. This rule is in litigation, but should such litigation be unsuccessful, it could allow for the importation of Canadian versions of certain of Amgen’s products (including Otezla), that could have a material adverse effect on Amgen’s business. Also in response to an Executive Order, CMS released an interim final rule to implement the MFN pricing approach aimed at setting the reimbursement rate for 50 Medicare Part B.B drugs (including our products, such as Prolia, XGEVA, KYPROLIS, Neulasta, Nplate, EPOGEN and Aranesp) equal to the lowest adjusted price in 22 OECD nations for these drugs. In December 2021, subsequent to challenges, including procedural defects, CMS announced it was withdrawing the MFN rule. Notwithstanding the withdrawal of the rule, the MFN rule’s approach to drug pricing and other similar approaches remain of interest to policymakers. In connection with its withdrawal of the MFN rule, CMS noted that it will “… explore all options to incorporate value into payments for Medicare Part B drugs, improve beneficiaries’ access to evidence-based care, and reduce drug spending for consumers and throughout the health care system.” Further, we expect continued significant focus on healthcare and similar drug pricing proposals for the foreseeable future, including proposals under which the government would set drug prices or limit drug reimbursement. In the second quarter of 2022, several Medicare Administrative Contractors issued notice, in contravention of TEZSPIRE’s FDA approved labeling, that TEZSPIRE would be added to their “self-administered drug” exclusion lists. While the effective date for adding TEZSPIRE to the exclusion list has been deferred until further notice, this exclusion, if implemented, would result in Medicare beneficiaries with severe asthma losing access to TEZSPIRE coverage under Medicare Part B and potentially also under Medicare Advantage.

CMS policy changes and demonstration projects to test new care, delivery and payment models can also significantly affect how drugs, including our products, are covered and reimbursed. ~~In end-stage renal disease (ESRD), CMS uses bundled payment rates. Between 2018 and 2020, Sensipar~~® ~~and Parsabiv~~®~~, our calcimimetics~~For example, we believe that are used in dialysis clinics, were eligible for temporary drug add-on payment adjustments (TDAPA) to the bundled rate. In November 2020, CMS released its final rule ending the TDAPA for calcimimetics and adjusting ESRD Prospective Payment System bundled rates on January 1, 2021 by $9.93 per dialysis treatment for calcimimetics. As a result, sales of Parsabiv® have been materially adversely affected by this rule change. Additionally, CMS created a new mandatory payment model, effective January 1, 2021, focused on encouraging greater use of home dialysis and kidney transplants for ESRD patients that could result in changes to treatment of dialysis patients, including reduction of the use of our ESAs. Further, in November 2019, CMS announced additional voluntary payment models for nephrologists and dialysis facility partners that also seek to encourage home dialysis and preemptive transplantation through increased risk sharing, effective January 1, 2022. CMS has also solicited suggestions regarding other potential care models. In 2016, CMS initiated theCMS’s Oncology Care Model demonstration ~~which provides~~(which has, beginning in 2016, provided participating physician practices with performance-based financial incentives that aim to manage or reduce Medicare costs without negatively affecting the efficacy of ~~care, that has been extended by one year (to 2022) due to COVID-19. We believe the Oncology Care Model has~~care) reduced utilization of certain of our oncology products by participating physician ~~practices and expect it to continue to do so in~~practices. While the ~~future. Additionally, in late 2019,~~Oncology Care Model demonstration ended on June 30, 2022, CMS announced a ~~request~~new oncology model (the Enhancing Oncology Model) that will run for ~~information on the Oncology Care First model, a new voluntary model~~five years (from July 2023 through June 2028) that builds on the Oncology Care Model. CMS has indicated a continued interest in exploring demonstrations of mandatory models, and may propose both new mandatory payment models in the future that could adversely affect our business. For example,this prior demonstration program. Further, HHS’s September 2021 comprehensive plan to address drug pricing included potential future mandatory models that link payment for prescription drugs and biologics to factors such as: improved patient outcomes, reductions in health disparities, patient affordability and lower overall costs; bundled payment models; total cost of care models; models in which Medicare Part B savings from utilization of biosimilars, generics, or other high-value products are shared between prescribing providers and the government; ~~models that provide~~ additional Medicare Part D cost-sharing support for biosimilars and generics; and potential expansion of the Part D Senior Savings Model to additional classes of drugs. CMS also recently finalized a ~~rule~~national Medicare coverage determination for certain Alzheimer’s disease medications that ~~starting January 1, 2023, unless a manufacturer can ensure~~received accelerated FDA approvals that ~~the~~limits coverage to only patients in qualifying clinical trials, thereby suggesting that accelerated regulatory approval does not necessarily result in full ~~amount of manufacturer patient assistance programs is passed on to the patient, such amount will be treated as a price reduction that will be taken into account when~~

reporting our Best Price and/or Average Manufacturer Price. Given the use by PBMs and insurers of copay accumulator adjustment programs to apply such patient assistance for the benefit of such companies and not to defray costs to patients, it could be difficult to impossible for manufacturers to ensure that the full value of such amounts is being passed on to the patient. This new policy, if implemented, would have significant implications for our ability to offer copay assistance programs.Medicare coverage. In this dynamic environment, particularly in light of the pressures on healthcare budgets as a result of the pandemic, we are unable to predict which or how many federal policy, legislative, regulatory, executive or administrative changes may ultimately be, or effectively estimate the consequences to our business if, enacted and implemented. However, to the extent that these or other federal government initiatives further decrease or modify the coverage or reimbursement available for our products, require that we pay increased rebates or shift other costs to us, limit or affect our decisions regarding the pricing of or otherwise reduce the use of our U.S. products, or limit our ability to offer co-pay ~~payment~~ assistance to commercial patients, such actions could have a material adverse effect on our business and results of operations.

We also face risks ~~relating~~related to the reporting of pricing data that affects ~~the~~ reimbursement of and discounts provided for our products. U.S. government price reporting regulations are complex and may require a biopharmaceutical ~~manufacturer~~manufacturers 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, which could have a material adverse effect on our business and results of operations. In addition, as a result of restating previously reported price data, we ~~also~~ may be required to pay additional rebates and provide additional discounts. The prior Administration finalized a rule (the implementation of which has been delayed by the current Administration) mandating price and cost-sharing transparency for almost all health plans and insurers in the individual and group commercial markets. Further, the current Administration finalized transparency provisions required under the Consolidated Appropriations Act of 2021 for health plans and insurer reporting of certain drug pricing information by December 27, 2022, and each June thereafter, resulting in a biennial public report highlighting drug pricing trends and the impact of prescription drug costs on premiums and out-of-pocket costs. It is unclear how group health plans and health insurers may respond.

—Changing reimbursement and pricing actions in various states have negatively affected and may continue to negatively affect access to and have affected and may continue to affect sales of our products

At the state 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 are considering, drug importation programs or other new pricing actions, including proposals designed to require biopharmaceutical manufacturers to publicly report proprietary pricing information, limit price increases or place a maximum price ceiling or cap on biopharmaceutical products. Existing and proposed state pricing laws have added complexity to the pricing of drugs and may already be affecting industry pricing decisions. For example, a California law, the constitutionality of which is currently being challenged, purports to require biopharmaceutical manufacturers to notify health insurers and government health plans at least 60 days before scheduled prescription drug price increases that exceed certain thresholds. Similar laws exist in Oregon and Washington. States are also seeking to change the way they pay for drugs for patients covered by state programs. California adopted a 2020–21 budget that incorporates international pricing into Medicaid supplemental rebate negotiations and allows its Medicaid program to seek federal approval to extend supplemental rebates to non-Medicaid populations. New York has established a Medicaid drug spending cap, and Massachusetts implemented a new review and supplemental rebate negotiation process. Other states may consider implementing similar policies and procedures as they face budget deficits from the effects of the COVID-19 pandemic. Additionally, Colorado, Florida, Maine, New Hampshire, New Mexico and Vermont have enacted laws, and several other states have proposed bills, to implementimportation of drugs from Canada. The FDA recently met with representatives from Colorado, Florida, Maine and New Mexico to discuss those states’ proposed importation programs, and the FDA may be working towards approving such plans. 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 material adverse effect on our product sales, business and results of operations.

—U.S. commercial payer actions have affected and may continue to affect access to and sales of our products

Payers, including healthcare insurers, PBMs, integrated healthcare delivery systems (vertically-integrated organizations built from consolidations of healthcare insurers and PBMs) and group purchasing organizations, increasingly seek ways to reduce their costs. With increasing frequency, payers are adopting benefit plan changes that shift a greater proportion of drug costs to patients. Such measures include more limited benefit plan designs, high deductible plans, higher patient copay or coinsurance obligations and more significant limitations on patients’ use of manufacturer commercial copay assistance programs. Further, government regulation of payers may affect these trends. For example, CMS finalized a policy in May 2020 (for plan years starting on or after January 1, 2021, which remains standing policy for 2022) that has caused commercial payers to more widely adopt copay accumulator adjustment programs. Payers have sought, and continue to seek, price discounts or rebates in connection with the placement of our products on their formularies or those they manage, particularly in treatment areas in which the payer has taken the position that multiple branded products are therapeutically comparable. Payers also control costs by imposing restrictions on access to or usage of our products, such 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 payer fully-owned mail-order or specialty pharmacies. Payers have also chosen to exclude certain indications for which our products are approved or chosen to exclude coverage entirely. For example, some payers require physicians to demonstrate or document that the patients for whom Repatha has been prescribed meet payer utilization management criteria, and these requirements have served to limit 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 limited and may continue to limit patient use. For example, in late 2018 and early 2019, in response to a very high percentage of Medicare patients abandoning their Repathaprescriptions rather than paying their co-pay, we introduced a set of new National Drug Codes to make Repatha available at a lower list price in an attempt to address affordability for patients, particularly those on Medicare, and on December 31, 2019, we discontinued the higher list price option for Repatha. Despite these net and list price reductions, some payers have restricted and may continue to restrict patient access, and have changed and may continue to change formulary coverage for Repatha, and they may seek further discounts or rebates or take other actions that could reduce our sales of Repatha. These factors have served to limit and may continue to limit patient affordability and use, and negatively affect Repatha sales.

Further, significant consolidation in the health insurance industry has resulted in a few large insurers and PBMs, which places greater pressure on pricing and usage negotiations with biopharmaceutical manufacturers, significantly increasing discount and rebate requirements and limiting patient access and usage. For example, in the United States, as of the beginning of 2021, the top five integrated health plans and PBMs controlled about 85% of all pharmacy prescriptions. 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 biopharmaceutical manufacturers, and has resulted in greater price discounts, rebates and service fees realized by those payers. In 2019, 2020 and 2021, CVS, Express Scripts and United Health Group, respectively, each created Rebate Management Organizations that further increase their respective leverage to negotiate deeper discounts. Ultimately, additional discounts, rebates, fees, coverage changes, plan changes, restrictions or exclusions imposed by these commercial payers could have a material adverse effect on our product sales, business and results of operations. Policy reforms advanced by Congress or the Administration that refine the role of PBMs in the U.S. marketplace could have downstream implications or consequences for our business and how we interact with these entities. For example, on June 7, 2022, the FTC launched an inquiry into the business practices of PBMs, and the results of such inquiry could have an effect on manufacturer interactions with PBMs, resulting in changes to access to certain medicines. See our Annual Report on Form 10-K for the year ended December 31, 2021, Part I, Item 1A. Risk Factors—Concentration of sales at certain of our wholesaler distributors and at one free-standing dialysis clinic business and consolidation of private payers may negatively affect our business.

—Government and commercial payer actions outside the United States have affected and will continue to affect access to and sales of our products

Outside the United States, we expect countries will also continue to take actions to reduce their drug expenditures. See Part I, Item 1. Business—Reimbursement of our Annual Report on Form 10-K for the year ended December 31, 2021. 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 change quickly and frequently and may not reflect differences in the burden of disease, indications, market structures, or affordability differences across countries or regions. Other expenditure control practices, including but not limited to the use of revenue clawbacks, rebates and percentage caps on price increases, are used in various foreign jurisdictions as well. 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 to meet certain cost effectiveness thresholds. For example, despite the EMA’s approval of Repatha for the treatment of patients with established atherosclerotic disease, the reimbursement for Repatha in France prior to

2020 was limited to a narrower patient population (such as those with homozygous familial hypercholesterolemia (HoFH)) following a national health technology assessment, which had limited our efforts in France to expand Repatha access to the broader patient population covered by the approved label. Some countries decide on reimbursement between potentially competing products through national or regional tenders that often result in one product receiving most or all 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 in the timeliness or certainty of payment by payers to physicians and other providers has negatively affected, and may further negatively affect, 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 realize for them. Such changes have had, and could in the future have, a material adverse effect on our product sales, business and results of operations.

The adoption and interpretation of new tax legislation or exposure to additional tax liabilities could affect our profitability.

We are subject to income and other taxes in the United States and other jurisdictions in which we do business. As a result, our provision for income taxes is derived from a combination of applicable tax rates in the various places we operate. Significant judgment is required for determining our provision for income tax.

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 can ~~arise~~and have arisen with tax authorities involving issues regarding the timing and amount of deductions, the use of tax credits and allocations of income and expenses among various tax jurisdictions because of differing interpretations of tax laws, regulations and relevant facts, and such tax authorities (including the IRS) are becoming more aggressive in their audits and are particularly focused on such matters. In 2017, we received aan RAR and a modified RAR from the IRS for the years ~~2010, 2011 and~~ 2010–2012, proposing significant adjustments that primarily relate to the allocation of profits between certain of our entities in the United States and the U.S. territory of Puerto Rico. ~~As previously reported, we~~We disagreed with the proposed adjustments and calculations and pursued a resolution with the IRS administrative appeals ~~office. However, we~~office but were unable to reach ~~resolution with the IRS appeals office.~~resolution. In July 2021, we filed a petition in the U.S. Tax Court to contest two ~~duplicative~~duplicate Notices for ~~2010, 2011 and~~ the years 2010–2012 that we received in May and July 2021 which seek to increase our U.S. taxable ~~income. We firmly believe that~~income for the IRS’s positions set forth in the Notices are without merit, and we will vigorously contest the Notices through the judicial process. See Note 4, Income taxes, to the condensed consolidated financial statements.years 2010–2012.

In ~~addition, in~~ 2020, we received an RAR and a modified RAR from the IRS for the years 2013, 2014 and 2015, also proposing significant adjustments that primarily relate to the allocation of profits between certain of our entities in the United States and the U.S. territory of Puerto Rico similar to those proposed for the years ~~2010, 2011 and~~ 2010–2012. We ~~disagree~~disagreed with the proposed adjustments and calculations and ~~have been pursuing~~pursued resolution with the IRS ~~administrative~~ appeals ~~office. As~~office but were unable to reach resolution. In July 2022, we filed a ~~consequence~~petition in the U.S. Tax Court to contest a Notice for the years 2013–2015 that we previously reported receiving in April 2022 that seeks to increase our U.S. taxable income for the years 2013–2015 and asserts penalties.

We firmly believe that the IRS positions set forth in the 2010–2012 and 2013–2015 Notices are without merit. We are contesting the 2010–2012 and 2013–2015 Notices through the judicial process, and we will seek consolidation of the 2010-2012 Tax Court litigation, the IRS administrative appeals office recently informed us that it does not plan to engage in discussions at this time regarding the allocation of profits between our entitiestwo periods into one case in the ~~United States and the~~ U.S. ~~territory of Puerto Rico for the 2013-2015 period.~~ Tax Court.

We are currently also under examination by the IRS for the years 2016, 2017 and ~~2018. We~~2018 with respect to issues similar to those for the 2010 through 2015 period. In addition, we are ~~also currently~~ under examination by a number of ~~other~~ state and foreign tax jurisdictions.

Final resolution of these complex matters is not likely within the next 12 months. We continue to believe our accrual for income tax liabilities is appropriate based on past experience, interpretations of tax law, application of the tax law to our facts and judgments about potential actions by tax authorities; however, due to the complexity of the provision for income taxes and uncertain resolution of these matters, the ultimate outcome of any tax matters may result in payments substantially greater than amounts accrued and could have a material adverse effect on the results of our operations.

See Part I, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations, Income Taxes, and Part I—Note 4, Income taxes, to the condensed consolidated financial statements.

Our provision for income taxes and results of operations in the future could be adversely affected by changes to our operating structure, changes in the mix of income and expenses in countries with differing tax rates, changes in the valuation of deferred tax assets and liabilities and changes in applicable tax laws, regulations or administrative interpretations thereof. The ~~Tax Cuts and Jobs Act (the~~ 2017 Tax ~~Act)~~Act is complex and a large volume of regulations and guidance has been issued and could be subject to different interpretations. We could face audit challenges to our application of the 2017 Tax Act. The Administration proposed and Congress ~~are~~is considering a variety of potentially significant changes to existing tax ~~law, including an increase in the corporate tax~~

~~rate and the tax rate on foreign earnings.~~law. These changes, or others, could substantially increase ~~U.S. taxation of our operations both in and outside the United States, including~~taxes we pay to the U.S. ~~territory of Puerto Rico.~~government. Further, the OECD recently reached an agreement to align countries on a minimum corporate tax rate and an expansion of the taxing rights of market countries. If enacted, either by all OECD participants or unilaterally by individual countries, this agreement could result in tax increases in both the United States and

foreign ~~jurisdictions~~. jurisdictions.

The U.S. Treasury recently released final foreign tax credit regulations that eliminate U.S. creditability of the Puerto Rico Excise Tax beginning 2023, which would increase our U.S. tax liability. However, the U.S. territory of Puerto Rico recently enacted Act 52-2022, which provides for an alternate fixed tax rate on industrial development income that is expected to be creditable under U.S. law. As part of this new law, eligible businesses would be subject to incremental income and withholding taxes in lieu of payment of the Puerto Rico Excise Tax. In order to qualify for the alternative fixed tax rate, we must amend our current tax grant with the Puerto Rico government by December 31, 2022. Once we qualify for this alternative fixed tax rate, which we expect to occur as of January 1, 2023, our tax expense will increase. While we expect these taxes to be partially offset by U.S. foreign tax credits, the U.S. Treasury has not yet issued guidance on whether the alternative fixed tax rate will be creditable under U.S. law.

Changes to existing tax law in the United States, the U.S. territory of Puerto Rico, or other jurisdictions, ~~that would likely~~including the changes and potential changes discussed above, could result in tax increases where we do business and could have a material adverse effect on the results of our operations.

Our efforts to collaborate with or acquire other companies, products, or technology, and to integrate the operations of companies or to support the products or technology we have acquired, 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, partnerships, alliances, licenses, joint ventures, mergers and acquisitions (collectively, acquisition activity). Acquisition activities may be subject to regulatory approvals or other requirements that are not within our control. There can be no assurance that such regulatory or other approvals will be obtained or that all closing conditions required in connection with our acquisition activities will be satisfied or waived, which could result in us being unable to complete the planned acquisition activities. In addition, antitrust scrutiny by regulatory agencies and changes to regulatory approval process in the U.S. and foreign jurisdictions may cause approvals to take longer than anticipated to obtain, not be obtained at all, or contain burdensome conditions, which may jeopardize, delay or reduce the anticipated benefits of acquisitions to us and could impede the execution of our business strategy.

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 other challenges may arise in connection with our proposed acquisition of ChemoCentryx, in addition to our acquisitions of Otezla, Five Prime, Teneobio and/or our collaborations with BeiGene and Kyowa Kirin Co., Ltd., or with other acquisition activities, which could have a material adverse effect on our business, results of operations and stock price.


Item 2.			UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

During the three months ended ~~September~~June 30, ~~2021,~~2022, 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 1,763,784 $ 245.52 1,763,784 $ 3,486,312,736
August 1 - 31 1,250,282 $ 226.31 1,250,282 $ 3,203,364,954
September 1 - 30 1,624,898 $ 217.23 1,624,898 $ 2,850,385,563
Total 4,638,964 $ 230.43 4,638,964


Period	Total number of shares purchased (1)	Average price paid per share	Total number of shares purchased as part of publicly announced program	Maximum dollar value that may yet be purchased under the program
April 1 - 30	—	—	—	4,579,263,848
May 1 - 31	—	—	—	4,579,263,848
June 1 - 30	—	—	—	4,579,263,848
Total	—		—

___________

(1)~~Average price paid per share includes related expenses.~~

~~(2)~~ ~~In March 2021, our Board~~As part of ~~Directors increased~~ the ~~amount authorized under our~~ stock repurchase program, the Company entered into ASR agreements with three third-party financial institutions (Dealers) in February 2022. Under the ASR agreements, the Company made payments in an aggregate amount of $6.0 billion to the Dealers and received and retired an initial 23,258,997 shares of common stock. Approximately $0.9 billion of stock was held back by anthe Dealers pending final settlement of the ASR agreement, which will be based on the volume-weighted average stock price of the Company’s common stock during the term of the ASR agreements, less a discount and subject to adjustments pursuant to the terms and conditions of the ASR agreements. At settlement, which is scheduled to occur in the third quarter of 2022, the Dealers may be required to deliver additional ~~$3.4 billion. In October 2021,~~shares of common stock to the ~~Board~~Company, or under certain circumstances, the Company may be required to deliver shares of ~~Directors increased~~common stock or to make a cash payment, at its election, to the ~~amount authorized under our stock repurchase program by an additional $4.5 billion.~~Dealers.

5049


Item 6.			EXHIBITS

Reference is made to the Index to Exhibits included herein.

5150

INDEX TO EXHIBITS


Exhibit No.						Description
2.1						Asset Purchase Agreement, dated August 25, 2019, by and between Amgen Inc. and Celgene Corporation. (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~~®.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 Company. (Filed as an exhibit to Form 8-K on August 26, 2019 and incorporated herein by reference.)

2.6						Agreement and Plan of Merger, dated ~~as of March 4, 2021, by and among Amgen Inc., Franklin Acquisition Sub, Inc. and Five Prime Therapeutics, Inc.~~ ~~(Filed as an exhibit to Form 8-K on March 4, 2021 and incorporated herein by reference.)~~

2.7*						~~Agreement and Plan of Merger, dated~~ July 27, 2021, by and among Amgen Inc., Teneobio, Inc., Tuxedo Merger Sub, Inc., and Fortis Advisors LLC. (portions of the exhibit have been omitted because they are both (i) not material and (ii) is the type of information that the Company treats as private or confidential).(Filed as an exhibit to Form 10-Q for the quarter ended September 30, 2021 on November 3, 2021 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						Officer’s Certificate of Amgen Inc., dated April 8, 1997, establishing a series of securities entitled “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.)

4.7						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						Officers’ Certificate of Amgen Inc., dated May 30, 2007, including form of the Company’s 6.375% Senior Notes due 2037. (Filed as an exhibit to Form 8-K on May 30, 2007 and incorporated herein by reference.)

4.10						Officers’ Certificate of Amgen Inc., dated May 23, 2008, including form of the Company’s 6.90% Senior Notes due 2038. (Filed as exhibit to Form 8-K on May 23, 2008 and incorporated herein by reference.)


4.11						Officers’ Certificate of Amgen Inc., dated January 16, 2009, including form of the Company’s 6.40% Senior Notes due 2039. (Filed as exhibit to Form 8-K on January 16, 2009 and incorporated herein by reference.)


Exhibit No.						Description
4.12						Officers’ Certificate of Amgen Inc., dated March 12, 2010, including form of the Company’s 5.75% Senior Notes due 2040. (Filed as exhibit to Form 8-K on March 12, 2010 and incorporated herein by reference.)

4.13						Officers’ Certificate of Amgen Inc., dated September 16, 2010, including form of the Company’s 4.95% Senior Notes due 2041. (Filed as an exhibit to Form 8-K on September 17, 2010 and incorporated herein by reference.)

4.14						Officers’ Certificate of Amgen Inc., dated June 30, 2011, including form of the Company’s 5.65% Senior Notes due 2042. (Filed as an exhibit to Form 8-K on June 30, 2011 and incorporated herein by reference.)

4.15						Officers’ Certificate of Amgen Inc., dated November 10, 2011, including form of the Company’s 5.15% Senior Notes due 2041. (Filed as an exhibit to Form 8-K on November 10, 2011 and incorporated herein by reference.)

4.16						Officers’ Certificate of Amgen Inc., dated December 5, 2011, including form of the Company’s 5.50% Senior Notes due 2026. (Filed as an exhibit to Form 8-K on December 5, 2011 and incorporated herein by reference.)

4.17						Officers’ Certificate of Amgen Inc., dated May 15, 2012, including ~~forms~~form of the Company’s ~~3.625% Senior Notes due 2022 and~~ 5.375% Senior Notes due 2043. (Filed as an exhibit to Form 8-K on May 15, 2012 and incorporated herein by reference.)

4.18						Officers’ Certificate of Amgen Inc., dated September 13, 2012, including form of the Company’s 4.000% Senior Notes due 2029. (Filed as an exhibit to Form 8-K on September 13, 2012 and incorporated herein by reference.)

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						Officers’ Certificate of Amgen Inc., dated May 22, 2014, including form of the Company’s 3.625% Senior Notes due 2024. (Filed as an exhibit to Form 8-K on May 22, 2014 and incorporated herein by reference.)

4.21						Officer’s Certificate of Amgen Inc., dated May 1, 2015, including forms of the Company’s ~~2.700% Senior Notes due 2022,~~ 3.125% Senior Notes due 2025 and 4.400% Senior Notes due 2045. (Filed as an exhibit on Form 8-K on May 1, 2015 and incorporated herein by reference.)

4.22						Officer’s Certificate of Amgen Inc., dated as of February 25, 2016, including ~~forms~~form of the Company’s ~~1.250% Senior Notes due 2022 and~~ 2.000% Senior Notes due 2026. (Filed as an exhibit on Form 8-K on February 26, 2016 and incorporated herein by reference.)

4.23						Form of Permanent Global Certificate for the Company’s 0.410% bonds due 2023. (Filed as an exhibit on Form 8-K on March 8, 2016 and incorporated herein by reference.)

4.24						Terms of the Bonds for the Company’s 0.410% bonds due 2023. (Filed as an exhibit on Form 8-K on March 8, 2016 and incorporated herein by reference.)

4.25						Officer’s Certificate of Amgen Inc., dated as of June 14, 2016, including forms of the Company’s 4.563% Senior Notes due 2048 and 4.663% Senior Notes due 2051. (Filed as an exhibit to Form 8-K on June 14, 2016 and incorporated herein by reference.)

4.26						Officer’s Certificate of Amgen Inc., dated as of August 19, 2016, including forms of the Company’s 2.250% Senior Notes due 2023 and 2.600% Senior Notes due 2026. (Filed as an exhibit to Form 8-K on August 19, 2016 and incorporated herein by reference.)

4.27						Officer’s Certificate of Amgen Inc., dated as of ~~May 11, 2017 including form of the Company’s 2.650% Senior Notes due 2022.~~ ~~(Filed as an exhibit to Form 8-K on May 11, 2017 and incorporated herein by reference.)~~

~~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~~4.28						Officer’s Certificate of Amgen Inc., dated as of February 21, 2020, including forms of the Company’s 1.900% Senior Notes due 2025, 2.200% Senior Notes due 2027, 2.450% Senior Notes due 2030, 3.150% Senior Notes due 2040 and 3.375% Senior Notes due 2050. (Filed as an exhibit to Form 8-K on February 21, 2020 and incorporated herein by reference.)


~~4.30~~4.29						Officer’s Certificate of Amgen Inc., dated as of May 6, 2020, including form of the Company’s 2.300% Senior Notes due 2031. (Filed as an exhibit to Form 8-K on May 6, 2020 and incorporated herein by reference.)


~~4.31~~Exhibit No.						Description
4.30						Officer’s Certificate of Amgen Inc., dated as of August 17, 2020, including forms of the Company’s 2.770% Senior Notes due 2053. (Filed as an exhibit to Form 8-K on August 18, 2020 and incorporated herein by reference.)

~~4.32~~4.31						Registration Rights Agreement, dated as of August 17, 2020, by and among Amgen Inc., BofA Securities, Inc. and J.P. Morgan Securities LLC, as lead dealer managers, and BNP Paribas Securities Corp., Deutsche Bank Securities Inc., RBC Capital Markets, LLC, Blaylock Van, LLC and Siebert Williams Shank & Co., LLC, as co-dealer managers. (Filed as an exhibit to Form 8-K on August 18, 2020 and incorporated herein by reference.)

4.32						Officer’s Certificate of Amgen Inc., dated as of August 9, 2021, including forms of the Company’s 1.650% Senior Notes due 2028, 2.000% Senior Notes due 2032, 2.800% Senior Notes due 2041 and 3.000% Senior Notes due 2052. (Filed as an exhibit to Form 8-K on August 9, 2021 and incorporated herein by reference.)

4.33						Officer’s Certificate of Amgen Inc., dated as of February 22, 2022, including forms of the Company’s 3.000% Senior Notes due 2029, 3.350% Senior Notes due 2032, 4.200% Senior Notes due 2052 and 4.400% Senior Notes due 2062. (Filed as an exhibit to Form 8-K on February 22, 2022 and incorporated herein by reference.)

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 and Restated on December ~~15, 2020.~~2, 2021.) (Filed as an exhibit to Form 10-K for the year ended December 31, ~~2020~~2021 on February ~~9, 2021~~16, 2022 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 and Restated on December ~~15, 2020.~~2, 2021.) (Filed as an exhibit to Form 10-K for the year ended December 31, ~~2020~~2021 on February ~~9, 2021~~16, 2022 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 and Restated on December ~~15, 2020.~~2, 2021.) (Filed as an exhibit to Form 10-K for the year ended December 31, ~~2020~~2021 on February ~~9, 2021~~16, 2022 and incorporated herein by reference.)

10.8+						Amgen Inc. 2009 Director Equity Incentive Program. (As Amended and Restated on October 21, 2020.) (Filed as an exhibit to Form 10-K for the year ended December 31, 2020 on February 9, 2021 and incorporated herein by reference.)

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 December 11, 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.)

10.11+						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, 2019 on February 12, 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.)


Exhibit No.						Description

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+						Third Amendment to the Amgen Inc. Supplemental Retirement Plan, effective October 20, 2021. (Filed as an exhibit to Form 10-K for the year ended December 31, 2021 on February 16, 2022 and incorporated herein by reference.)

10.16+						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.)



~~10.16+~~10.17+						Amgen Inc. Executive Incentive Plan. (As Amended and Restated effective January 1, ~~2009.~~2022.) (Filed as an exhibit to Form 10-Q for the quarter ended ~~September 30, 2008~~March 31, 2022 on ~~November 7, 2008~~April 28, 2022 and incorporated herein by reference.)

~~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.)~~

10.18+						~~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.)~~

~~10.19+~~						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.)

~~10.20+~~10.19+						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.)

~~10.21+~~10.20+						Second Amendment to the Amgen Nonqualified Deferred Compensation Plan,, 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+~~10.21+						~~Agreement between~~Third Amendment to the Amgen ~~Inc. and Murdo Gordon, dated July 25, 2018.~~Nonqualified Deferred Compensation Plan, effective January 1, 2022. ~~(Filed~~(Filed as an exhibit to Form ~~10-Q~~10-K for the ~~quarter~~year ended ~~September 30, 2018~~December 31, 2021 on ~~October 31, 2018~~February 16, 2022 and incorporated herein by reference.)

~~10.23+~~10.22+						Agreement between Amgen Inc. and Peter Griffith, dated October 18, 2019. (Filed as an exhibit to Form 10-Q for the quarter ended March 31, 2020 on May 1, 2020 and incorporated herein by reference.)

10.23+						Aircraft Time Sharing Agreement, dated December 3, 2021, by and between Amgen Inc. and Robert A. Bradway. (Filed as an exhibit to Form 10-K for the year ended December 31, 2021 on February 16, 2022 and incorporated herein by reference.)

10.24						Second Amended and Restated Credit Agreement, dated December 12, 2019, among Amgen Inc., the Banks therein named, Citibank, N.A., as administrative agent, and JPMorgan Chase Bank, N.A., as syndication agent. (Filed as an exhibit to Form 8-K on December 12, 2019 and incorporated herein by reference.)

10.25						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.)

10.26						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.)

10.27						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.)

10.28						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.)

10.29						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.)


Exhibit No.						Description
10.30						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.)

10.31						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.)

10.32

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.)

10.33

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.)

10.34

Side Letter Regarding Collaboration Agreement and Stivarga Agreement, dated February 13, 2020, by and between Onyx Pharmaceuticals, Inc. and Bayer HealthCare LLC. (Filed as an exhibit to Form 10-Q for the quarter ended March 31, 2020 on May 1, 2020 and incorporated herein by reference.)

10.35

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.)

10.36

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

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.)

10.38

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.)

10.39

~~Amended~~Amendment No. 3 to the Exclusive License and ~~Restated~~ Collaboration Agreement, dated ~~June 2, 2021,~~January 31, 2022, by and between Amgen Inc. and Novartis Pharma AG (portions of the exhibit have been omitted because they are both (i) not material and (ii) ~~would be competitively harmful if publicly disclosed)~~is the type of information that the Company treats as private or confidential). (Filed as an exhibit to the Company’s Current Report on Form ~~10-Q for the quarter ended June 30, 2021~~8-K on ~~August 4, 2021~~January 31, 2022 and incorporated herein by reference.)

10.40

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.)

~~10.41~~10.41*

First Amendment to Collaboration Agreement, dated April 20, 2022, by and between Amgen Inc. and BeiGene Switzerland GmbH, and BeiGene, Ltd. (portions of the exhibit have been omitted because they are both (i) not material and (ii) is the type of information that the Company treats as private or confidential.)

10.42

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.)

~~10.42~~10.43

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.)

~~10.43~~10.44

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.)


Exhibit No.						Description

~~10.44~~10.45						Restated Amendment No. 2 to Share Purchase Agreement, dated September 24, 2020, by and among BeiGene, Ltd. and Amgen Inc. (Filed as an exhibit to Form 10-Q for the quarter ended September 30, 2020 on October 29, 2020 and incorporated herein by reference.)

~~10.45~~10.46*						Collaboration Agreement dated March 30, 2012 by and between Amgen Inc. and AstraZeneca Collaboration Ventures, LLC, a wholly owned subsidiary of AstraZeneca Pharmaceuticals LP (portions of the exhibit have been omitted ~~pursuant to a request for confidential treatment). (Filed~~because they are both (i) not material and (ii) is the type of information that the Company treats as ~~an exhibit to Form 10-Q for the quarter ended March 31, 2012 on May 8, 2012 and incorporated herein by reference.~~private or confidential.)

~~10.46~~10.47*						Amendment No. 1 to the Collaboration Agreement, dated October 1, 2014, by and among Amgen Inc., AstraZeneca Collaboration Ventures, LLC and AstraZeneca Pharmaceuticals LP (portions of the exhibit have been omitted ~~pursuant to a request for confidential treatment). (Filed~~because they are both (i) not material and (ii) is the type of information that the Company treats as ~~an exhibit to Form 10-K for the year ended December 31, 2014 on February 19, 2015 and incorporated herein by reference.~~private or confidential.)


~~10.47~~10.48						Amendment Nos. 2 through 6 to the March 30, 2012 Collaboration Agreement between Amgen Inc. and AstraZeneca Collaboration Ventures, LLC, dated May 2 and 27 and October 2, 2016, January 31, 2018, and May 15, 2020, respectively (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, 2020 on July 29, 2020 and incorporated herein by reference.)

~~10.48~~10.49						Amendment No. 7 to the Collaboration Agreement, dated December ~~18,~~17, 2020, by and between Amgen Inc. and AstraZeneca Collaboration Ventures, LLC (portions of the exhibit have been omitted because they are both (i) not material and (ii) would be competitively harmful if publicly disclosed.) (Filed as an exhibit to Form 10-K for the year ended December 31, 2020 on February 9, 2021 and incorporated herein by reference.)

~~10.49~~10.50						Amendment No. 8 to the Collaboration Agreement, dated November 19, 2021, by and between Amgen Inc. and AstraZeneca Collaboration Ventures, LLC (portions of the exhibit have been omitted because they are both (i) not material and (ii) is the type of information that the Company treats as private or confidential.)(Filed as an exhibit to Form 10-K for the year ended December 31, 2021 on February 16, 2022 and incorporated herein by reference.)

10.51						License and Collaboration Agreement, dated June 1, 2021, by and between Amgen Inc. and Kyowa Kirin Co., Ltd. (portions of the exhibit have been omitted because they are both (i) not material and (ii) would be competitively harmful if publicly disclosed). (Filed as an exhibit to Form 10-Q for the quarter ended June 30, 2021 on August 4, 2021 and incorporated herein by reference.)

10.52						Form of ASR Agreement. (Filed as an exhibit to Form 8-K on February 24, 2022 and incorporated herein by reference.)

31*						Rule 13a-14(a) Certifications.

32**						Section 1350 Certifications.

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

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)

5756

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:

~~November 2, 2021~~August 4, 2022

By:

/S/ PETER H. GRIFFITH

Peter H. Griffith

Executive Vice President and Chief Financial Officer

(Principal Financial Officer)

5857


		Page No.
	DEFINED TERMS AND PRODUCTS	ii
PART I - FINANCIAL INFORMATION		1
Item 1.	FINANCIAL STATEMENTS	1
	CONDENSED CONSOLIDATED STATEMENTS OF INCOME	1
	CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME	2
	CONDENSED CONSOLIDATED BALANCE SHEETS	3
	CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY	4
	CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS	6
	NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS	7
Item 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	3029
Item 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	4241
Item 4.	CONTROLS AND PROCEDURES	42
PART II - OTHER INFORMATION		43
Item 1.	LEGAL PROCEEDINGS	43
Item 1A.	RISK FACTORS	43
Item 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	5049
Item 6.	EXHIBITS	5150
INDEX TO EXHIBITS		5251
SIGNATURES		5857


Contractual maturities	September 30, 2021		December 31, 2020
Maturing in one year or less	$	12,275	$	9,795
Maturing after one year through three years	—		50




Total available-for-sale investments	$	12,275	$	9,845


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	1,763,784	$	245.52	1,763,784	$	3,486,312,736
August 1 - 31	1,250,282	$	226.31	1,250,282	$	3,203,364,954
September 1 - 30	1,624,898	$	217.23	1,624,898	$	2,850,385,563
Total	4,638,964	$	230.43	4,638,964