Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Feb. 02, 2018 | Jun. 30, 2017 | |
Document and Entity Information | |||
Entity Registrant Name | CELGENE CORP /DE/ | ||
Entity Central Index Key | 816,284 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2017 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $ 101,580,696,211 | ||
Entity Common Stock, Shares Outstanding | 752,175,608 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 7,013 | $ 6,170 |
Marketable securities available-for-sale | 5,029 | 1,800 |
Accounts receivable, net of allowances of $36 and $31 as of December 31, 2017 and 2016, respectively | 1,921 | 1,621 |
Inventory | 541 | 498 |
Other current assets | 388 | 779 |
Total current assets | 14,892 | 10,868 |
Property, plant and equipment, net | 1,070 | 930 |
Intangible assets, net | 8,436 | 10,392 |
Goodwill | 4,866 | 4,866 |
Other non-current assets | 877 | 1,030 |
Total assets | 30,141 | 28,086 |
Current liabilities: | ||
Short-term borrowings and current portion of long-term debt | 0 | 501 |
Accounts payable | 305 | 247 |
Accrued expenses and other current liabilities | 2,523 | 2,115 |
Income taxes payable | 84 | 41 |
Current portion of deferred revenue | 75 | 55 |
Total current liabilities | 2,987 | 2,959 |
Deferred revenue, net of current portion | 34 | 28 |
Income taxes payable | 2,490 | 420 |
Deferred income tax liabilities | 1,327 | 0 |
Other non-current tax liabilities | 0 | 2,519 |
Other non-current liabilities | 544 | 1,771 |
Long-term debt, net of discount | 15,838 | 13,789 |
Total liabilities | 23,220 | 21,486 |
Commitments and Contingencies (Note 18) | ||
Stockholders' Equity: | ||
Preferred stock, $.01 par value per share, 5.0 million shares authorized; none outstanding as of December 31, 2017 and 2016, respectively | 0 | 0 |
Common stock, $.01 par value per share, 1,150.0 million shares authorized; issued 971.7 million and 954.1 million shares as of December 31, 2017 and 2016, respectively | 10 | 10 |
Common stock in treasury, at cost; 212.4 million and 175.5 million shares as of December 31, 2017 and 2016, respectively | (20,243) | (16,281) |
Additional paid-in capital | 13,806 | 12,378 |
Retained earnings | 13,061 | 10,074 |
Accumulated other comprehensive income | 287 | 419 |
Total stockholders' equity | 6,921 | 6,600 |
Total liabilities and stockholders' equity | $ 30,141 | $ 28,086 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowances (in dollars) | $ 36 | $ 31 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 1,150,000,000 | 1,150,000,000 |
Common stock, shares issued | 971,700,000 | 954,100,000 |
Common stock, treasury | 212,400,000 | 175,500,000 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Revenue: | |||
Net product sales | $ 12,973 | $ 11,185 | $ 9,161 |
Other revenue | 30 | 44 | 95 |
Total revenue | 13,003 | 11,229 | 9,256 |
Expenses: | |||
Cost of goods sold (excluding amortization of acquired intangible assets) | 461 | 438 | 420 |
Research and development | 5,915 | 4,470 | 3,697 |
Selling, general and administrative | 2,941 | 2,658 | 2,305 |
Amortization of acquired intangible assets | 329 | 459 | 279 |
Acquisition related (gains) charges and restructuring, net | (1,350) | 38 | 300 |
Total costs and expenses | 8,296 | 8,063 | 7,001 |
Operating income | 4,707 | 3,166 | 2,255 |
Other income and (expense): | |||
Interest and investment income, net | 105 | 30 | 31 |
Interest (expense) | (500) | (311) | |
Other income (expense), net | (324) | 48 | |
Income before income taxes | 4,314 | 2,372 | 2,023 |
Income tax provision | 1,374 | 373 | 421 |
Net income | $ 2,940 | $ 1,999 | $ 1,602 |
Net income per share: | |||
Basic (in dollars per share) | $ 3.77 | $ 2.57 | $ 2.02 |
Diluted (in dollars per share) | $ 3.64 | $ 2.49 | $ 1.94 |
Weighted average shares: | |||
Basic (in shares) | 779.2 | 777.2 | 792.2 |
Diluted (in shares) | 808.7 | 803.3 | 824.9 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 2,940 | $ 1,999 | $ 1,602 |
Other comprehensive income (loss): | |||
Foreign currency translation adjustments | 70 | (26) | (26) |
Pension liability adjustment | 16 | (24) | 2 |
Net unrealized (losses) gains related to cash flow hedges: | |||
Unrealized holding (losses) gains | (434) | 145 | 411 |
Tax benefit (expense) | 6 | (13) | 7 |
Unrealized holding (losses) gains, net of tax | (428) | 132 | 418 |
Reclassification adjustment for (gains) included in net income | (178) | (300) | (349) |
Tax (benefit) | (3) | (3) | (2) |
Reclassification adjustment for (gains) included in net income, net of tax | (181) | (303) | (351) |
Excluded component related to cash flow hedges: | |||
Amortization of excluded component (losses) | (15) | 0 | 0 |
Reclassification of realized excluded component losses to net income | 18 | 0 | 0 |
Reclassification adjustment for losses included in net income | 3 | 0 | 0 |
Net unrealized gains (losses) on marketable securities available for sale: | |||
Unrealized holding gains (losses) | 611 | (563) | (315) |
Tax (expense) benefit | (216) | 203 | 110 |
Unrealized holding gains (losses), net of tax | 395 | (360) | (205) |
Reclassification adjustment for losses included in net income | 37 | 358 | 23 |
Tax (benefit) | (14) | (126) | (8) |
Reclassification adjustment for losses included in net income, net of tax | 23 | 232 | 15 |
Total other comprehensive (loss) | (102) | (349) | (147) |
Comprehensive income | $ 2,838 | $ 1,650 | $ 1,455 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Cash flows from operating activities: | |||
Net income | $ 2,940 | $ 1,999 | $ 1,602 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation | 134 | 121 | 115 |
Amortization | 337 | 384 | 287 |
Deferred income taxes | (1,330) | (344) | (33) |
Impairment charges | 1,679 | 489 | 49 |
Change in value of contingent consideration | (1,350) | 21 | (8) |
(Gain) on sale of business | 0 | (38) | 0 |
Net (gain) on sale of investments | (61) | (7) | (84) |
Share-based compensation expense | 644 | 606 | 577 |
Share-based employee benefit plan expense | 34 | 40 | 35 |
Derivative instruments | 72 | 169 | (25) |
Other, net | (24) | (10) | 26 |
Change in current assets and liabilities, excluding the effect of acquisitions: | |||
Accounts receivable | (236) | (222) | (305) |
Inventory | (42) | (55) | (51) |
Other operating assets | (73) | 94 | (326) |
Accounts payable and other operating liabilities | 273 | 619 | 527 |
Payment of contingent consideration | 0 | (9) | 0 |
Income tax payable | 2,229 | 301 | 362 |
Deferred revenue | 20 | 7 | 37 |
Net cash provided by operating activities | 5,246 | 4,165 | 2,785 |
Cash flows from investing activities: | |||
Proceeds from sales of marketable securities available for sale | 5,968 | 633 | 3,800 |
Purchases of marketable securities available for sale | (8,478) | (1,281) | (1,889) |
Payments for acquisition of businesses, net of cash acquired | 0 | 0 | (7,695) |
Capital expenditures | (279) | (236) | (286) |
Proceeds from sales of investment securities | 20 | 15 | 92 |
Purchases of investment securities | (95) | (132) | (273) |
Other investing activities | (27) | (1) | (8) |
Net cash used in investing activities | (2,891) | (1,002) | (6,259) |
Cash flows from financing activities: | |||
Payment for treasury shares | (3,833) | (2,160) | (3,257) |
Proceeds from short-term borrowing | 0 | 100 | 6,111 |
Principal repayments on short-term borrowing | 0 | (100) | (6,213) |
Proceeds from the issuance of long-term debt | 3,468 | 0 | 7,913 |
Repayments of long-term debt | (1,904) | 0 | (514) |
Net proceeds (payments) from common equity put options | 0 | 8 | (9) |
Payment of contingent consideration | 0 | (41) | 0 |
Net proceeds from share-based compensation arrangements | 685 | 359 | 252 |
Net cash (used in) provided by financing activities | (1,584) | (1,834) | 4,283 |
Effect of currency rate changes on cash and cash equivalents | 72 | (39) | (51) |
Net increase in cash and cash equivalents | 843 | 1,290 | 758 |
Cash and cash equivalents at beginning of period | 6,170 | 4,880 | 4,122 |
Cash and cash equivalents at end of period | 7,013 | 6,170 | 4,880 |
Supplemental schedule of non-cash investing and financing activity: | |||
Fair value of contingent consideration issued in business combinations | 0 | 0 | 166 |
Change in net unrealized (gain) loss on marketable securities available for sale | (611) | 563 | 315 |
Supplemental disclosure of cash flow information: | |||
Interest paid | 539 | 527 | 243 |
Income taxes paid | 475 | 373 | 361 |
Human Longevity | |||
Supplemental schedule of non-cash investing and financing activity: | |||
Investment in Human Longevity, Inc. common stock | 0 | 40 | 0 |
Celularity | |||
Supplemental schedule of non-cash investing and financing activity: | |||
Investment in Human Longevity, Inc. common stock | $ 22 | $ 0 | $ 0 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Millions | Total | Common Stock | Treasury Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) |
Balances at beginning of period at Dec. 31, 2014 | $ 6,525 | $ 9 | $ (10,699) | $ 9,827 | $ 6,473 | $ 915 |
Increase (decrease) in stockholders' equity | ||||||
Net income | 1,602 | 1,602 | ||||
Other comprehensive income (loss) | (147) | (147) | ||||
Exercise of stock options and conversion of restricted stock units | 260 | 0 | (135) | 395 | ||
Shares purchased under share repurchase program | (3,257) | (3,257) | ||||
Issuance of common stock for employee benefit plans | 57 | 39 | 18 | |||
Expense related to share-based compensation | 577 | 577 | ||||
Income tax benefit upon exercise of stock options | 302 | 302 | ||||
Balances at end of period at Dec. 31, 2015 | 5,919 | 9 | (14,052) | 11,119 | 8,075 | 768 |
Increase (decrease) in stockholders' equity | ||||||
Net income | 1,999 | 1,999 | ||||
Other comprehensive income (loss) | (349) | (349) | ||||
Exercise of stock options and conversion of restricted stock units | 349 | 1 | (105) | 453 | ||
Shares purchased under share repurchase program | (2,160) | (2,160) | ||||
Issuance of common stock for employee benefit plans | 51 | 36 | 15 | |||
Expense related to share-based compensation | 606 | 606 | ||||
Income tax benefit upon exercise of stock options | 185 | 185 | ||||
Balances at end of period at Dec. 31, 2016 | 6,600 | 10 | (16,281) | 12,378 | 10,074 | 419 |
Increase (decrease) in stockholders' equity | ||||||
Net income | 2,940 | 2,940 | ||||
Other comprehensive income (loss) | (102) | (102) | ||||
Exercise of stock options and conversion of restricted stock units | 693 | 0 | (83) | 776 | ||
Shares purchased under share repurchase program | (3,911) | (3,911) | ||||
Issuance of common stock for employee benefit plans | 40 | 32 | 8 | |||
Expense related to share-based compensation | 644 | 644 | ||||
Adoption of ASU 2016-09 and ASU 2017-12 (Note 1) | 17 | 47 | (30) | |||
Balances at end of period at Dec. 31, 2017 | $ 6,921 | $ 10 | $ (20,243) | $ 13,806 | $ 13,061 | $ 287 |
Nature of Business, Basis of Pr
Nature of Business, Basis of Presentation and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Nature of Business, Basis of Presentation and Summary of Significant Accounting Policies | Nature of Business, Basis of Presentation and Summary of Significant Accounting Policies Celgene Corporation, together with its subsidiaries (collectively “we,” “our,” “us,” “Celgene” or the “Company”), is an integrated global biopharmaceutical company engaged primarily in the discovery, development and commercialization of innovative therapies for the treatment of cancer and inflammatory diseases through next-generation solutions in protein homeostasis, immuno-oncology, epigenetics, immunology and neuro-inflammation. Celgene Corporation was incorporated in the State of Delaware in 1986. Our primary commercial stage products include REVLIMID ® , POMALYST ® /IMNOVID ® , OTEZLA ® , ABRAXANE ® , VIDAZA ® , azacitidine for injection (generic version of VIDAZA ® ), THALOMID ® (sold as THALOMID ® or Thalidomide Celgene ® outside of the U.S.) and IDHIFA ® . IDHIFA ® was approved by the U.S. Food and Drug Administration (FDA) in August 2017 for the treatment of adult patients with relapsed or refractory acute myeloid leukemia (AML) or (R/R AML) with an isocitrate dehydrogenase-2 (IDH2) mutation as detected by an FDA approved diagnostic test. We began recognizing revenue related to IDHIFA ® during the third quarter of 2017. In addition, we earn revenue from other product sales and licensing arrangements. The consolidated financial statements include the accounts of Celgene Corporation and its subsidiaries. Investments in limited partnerships and interests where we have an equity interest of 50% or less and do not otherwise have a controlling financial interest are accounted for by either the equity or cost method. We operate in a single segment engaged in the discovery, development, manufacturing, marketing, distribution and sale of innovative therapies for the treatment of cancer and inflammatory diseases. Consistent with our operational structure, our Chief Executive Officer (CEO), as the chief operating decision maker, manages and allocates resources at the global corporate level. Our global research and development organization is responsible for discovery of new drug candidates and supports development and registration efforts for potential future products. Our global supply chain organization is responsible for the manufacturing and supply of products. Regional/therapeutic area commercial organizations market, distribute and sell our products. The business is also supported by global corporate staff functions. Managing and allocating resources at the global corporate level enables our CEO to assess both the overall level of resources available and how to best deploy these resources across functions, therapeutic areas, regional commercial organizations and research and development projects in line with our overarching long-term corporate-wide strategic goals, rather than on a product or franchise basis. Consistent with this decision-making process, our CEO uses consolidated, single-segment financial information for purposes of evaluating performance, allocating resources, setting incentive compensation targets, as well as forecasting future period financial results. The preparation of the consolidated financial statements requires management to make estimates and assumptions that affect reported amounts and disclosures. Actual results could differ from those estimates. We are subject to certain risks and uncertainties related to, among other things, product development, regulatory approval, market acceptance, scope of patent and proprietary rights, competition, outcome of legal and governmental proceedings, credit risk, technological change and product liability. Certain prior year amounts have been reclassified to conform to the current year's presentation. Financial Instruments: Certain financial instruments reflected in the Consolidated Balance Sheets, (e.g., cash, cash equivalents, accounts receivable, certain other assets, accounts payable, short-term borrowings and certain other liabilities) are recorded at cost, which approximates fair value due to their short-term nature. The fair values of financial instruments other than marketable securities are determined through a combination of management estimates and information obtained from third parties using the latest market data. The fair value of available-for-sale marketable securities is determined utilizing the valuation techniques appropriate to the type of security. (see Note 4). Derivative Instruments and Hedges: All derivative instruments are recognized on the balance sheet at their fair value. Changes in the fair value of derivative instruments are recorded each period in current earnings or other comprehensive income (loss), depending on whether a derivative instrument is designated as part of a hedging transaction and, if it is, the type of hedging transaction. For a derivative to qualify as a hedge at inception and throughout the hedged period, we formally document the nature and relationships between the hedging instruments and hedged item. We assess, both at inception and on an on-going basis, whether derivative instruments are highly effective in offsetting the changes in the fair value or cash flows of hedged items. If we determine that a forecasted transaction is no longer probable of occurring, we discontinue hedge accounting and any related unrealized gain or loss on the derivative instrument is recognized in Other income (expense), net in our Consolidated Statements of Income. We use derivative instruments, including those not designated as part of a hedging transaction, to manage our exposure to movements in foreign exchange, our stock price and interest rates. The use of these derivative instruments modifies the exposure of these risks with the intent to reduce our risk or cost. Prior to the adoption of Accounting Standards Update No. 2017-12, "Targeted Improvements to Accounting for Hedging Activities" (ASU 2017-12), we were required to separately measure and reflect the amount by which the hedging instrument did not offset the changes in the fair value or cash flows of hedged items, which was referred to as the ineffective amount. We assessed hedge effectiveness on a quarterly basis and recorded the gain or loss related to the ineffective portion of derivative instruments, if any, in Other income (expense), net in the Consolidated Statements of Income. Pursuant to the provisions of ASU 2017-12, we are no longer required to separately measure and recognize hedge ineffectiveness. Upon adoption of ASU 2017-12, we no longer recognize hedge ineffectiveness in our Consolidated Statements of Income, but we instead recognize the entire change in the fair value of: • cash flow hedges included in the assessment of hedge effectiveness in Other comprehensive income (loss). The amounts recorded in Other comprehensive income (loss) will subsequently be reclassified to earnings in the same line item in the Consolidated Statements of Income as impacted by the hedged item when the hedged item affects earnings; and • fair value hedges included in the assessment of hedge effectiveness in the same line item in the Consolidated Statements of Income that is used to present the earnings effect of the hedged item. Prior to the adoption of ASU 2017-12, we excluded option premiums and forward points (excluded components) from our assessment of hedge effectiveness for our foreign exchange cash flow hedges. We recognized all changes in fair value of the excluded components in Other income (expense), net in the Consolidated Statements of Income. The amendments in ASU 2017-12 continue to allow those components to be excluded from the assessment of hedge effectiveness, which we have elected to continue to apply. Pursuant to the provisions of ASU 2017-12, we no longer recognize changes in the fair value of the excluded components in Other income (expense), net, but we instead recognize the initial value of the excluded component on a straight-line basis over the life of the derivative instrument, within the same line item in the Consolidated Statements of Income that is used to present the earnings effect of the hedged item. Cash, Cash Equivalents and Marketable Securities Available for Sale: We invest our excess cash primarily in money market funds, repurchase agreements, time deposits, commercial paper, U.S. Treasury securities, U.S. government-sponsored agency mortgage-backed securities (MBS), an ultra short income fund, global corporate debt securities and asset backed securities. All liquid investments with maturities of three months or less from the date of purchase are classified as cash equivalents and all investments with maturities of greater than three months from date of purchase are classified as marketable securities available for sale. We determine the appropriate classification of our investments in marketable debt and equity securities at the time of purchase. In addition, our equity investments in the publicly traded common stock of companies, including common stock of companies with whom we have entered into collaboration agreements, are designated as marketable securities available for sale. Our marketable securities available for sale are primarily equity investments in the publicly traded common stock of companies, including common stock of companies with whom we have entered into collaboration agreements. In addition, we invest in debt securities that are carried at fair value, held for an unspecified period of time and are intended for use in meeting our ongoing liquidity needs. Unrealized gains and losses on available-for-sale securities, which are deemed to be temporary, are reported as a separate component of stockholders' equity, net of tax. The cost of debt securities is adjusted for amortization of premiums and accretion of discounts to maturity. The amortization, along with realized gains and losses and other-than-temporary impairment charges related to debt securities, is included in Interest and investment income, net. Realized gains and losses and other than temporary impairment charges related to equity securities are included in Other income (expense), net in the Consolidated Statements of Income. A decline in the market value of any available-for-sale security below its carrying value that is determined to be other-than-temporary would result in a charge to earnings and decrease in the security's carrying value down to its newly established fair value. Factors evaluated to determine if an investment is other-than-temporarily impaired include significant deterioration in earnings performance, credit rating, asset quality or business prospects of the issuer; adverse changes in the general market condition in which the issuer operates; our intent to hold to maturity and an evaluation as to whether it is more likely than not that we will not have to sell before recovery of its cost basis; our expected future cash flows from the security; and issues that raise concerns about the issuer's ability to continue as a going concern. Concentration of Credit Risk: Cash, cash equivalents and marketable securities are financial instruments that potentially subject the Company to concentration of credit risk. We invest our excess cash primarily in money market funds, repurchase agreements, time deposits, commercial paper, U.S. Treasury securities, U.S. government-sponsored agency MBS, an ultra short income fund, global corporate debt securities and asset backed securities (see Note 6). We have established guidelines relative to diversification and maturities to maintain safety and liquidity. These guidelines are reviewed periodically and may be modified to take advantage of trends in yields and interest rates. We sell our products in the United States primarily through wholesale distributors and specialty contracted pharmacies. Therefore, wholesale distributors and large pharmacy chains account for a large portion of our U.S. trade receivables and net product revenues (see Note 19). International sales are primarily made directly to hospitals, clinics and retail chains, many of which in Europe are government owned and have extended their payment terms in recent years given the economic pressure these countries are facing. We continuously monitor the creditworthiness of our customers, including these governments, and have internal policies regarding customer credit limits. We estimate an allowance for doubtful accounts primarily based on the credit worthiness of our customers, historical payment patterns, aging of receivable balances and general economic conditions, including publicly available information on the credit worthiness of countries themselves and provinces or areas within such countries where they are the ultimate customers. We continue to monitor economic conditions, including the volatility associated with international economies, the sovereign debt situation in certain European countries and associated impacts on the financial markets and our business. Our current business model in these markets is typically to sell our hematology and oncology products directly to principally government owned or controlled hospitals, which in turn directly deliver critical care to patients. Many of our products are used to treat life-threatening diseases and we believe this business model enables timely delivery and adequate supply of products. Many of the outstanding receivable balances are related to government-funded hospitals and we believe the receivable balances are ultimately collectible. Similarly, we believe that future sales to these customers will continue to be collectible. Inventory: Inventories are recorded at the lower of cost or net realizable value, with cost determined on a first-in, first-out basis. We periodically review the composition of inventory in order to identify obsolete, slow-moving or otherwise non-saleable items. If non-saleable items are observed and there are no alternate uses for the inventory, we will record a write-down to net realizable value in the period that the decline in value is first recognized. Included in inventory are raw materials used in the production of preclinical and clinical products, which are charged to research and development expense when consumed. We capitalize inventory costs associated with certain products prior to regulatory approval of products, or for inventory produced in new production facilities, when management considers it highly probable that the pre-approval inventories will be saleable. The determination to capitalize is based on the particular facts and circumstances relating to the expected regulatory approval of the product or production facility being considered, and accordingly, the time frame within which the determination is made varies from product to product. The assessment of whether or not the product is considered highly probable to be saleable is made on a quarterly basis and includes, but is not limited to, how far a particular product or facility has progressed along the approval process, any known safety or efficacy concerns, potential labeling restrictions and other impediments. We could be required to write down previously capitalized costs related to pre-launch inventories upon a change in such judgment, or due to a denial or delay of approval by regulatory bodies, a delay in commercialization or other potential factors. As of December 31, 2017, the carrying value of pre-approval inventory was not material. Property, Plant and Equipment: Property, plant and equipment are stated at cost less accumulated depreciation. Depreciation of plant and equipment is recorded using the straight-line method. Building improvements are depreciated over the remaining useful life of the building. Leasehold improvements are depreciated over the lesser of the economic useful life of the asset or the remaining term of the lease, including anticipated renewal options. The estimated useful lives of capitalized assets are as follows: Buildings 40 years Building and operating equipment 15 years Manufacturing machinery and equipment 10 years Other machinery and equipment 5 years Furniture and fixtures 5 years Computer equipment and software 3-7 years Maintenance and repairs are charged to operations as incurred, while expenditures for improvements which extend the life of an asset are capitalized. Capitalized Software Costs: We capitalize software costs incurred in connection with developing or obtaining software. Capitalized software costs are included in property, plant and equipment, net and are amortized over their estimated useful life of three to seven years from the date the systems are ready for their intended use. Investments in Other Entities: We hold a portfolio of investments in equity securities and certain investment funds that are accounted for under either the equity method or cost method. Investments in companies or certain investment funds over which we have significant influence but not a controlling interest are accounted for using the equity method, with our share of earnings or losses reported in Other income (expense), net in the Consolidated Statements of Income. Our equity investments in the publicly traded common stock of companies, including common stock of companies with whom we have entered into collaboration agreements, are designated as marketable securities available-for-sale. Investments in equity securities of companies that become publicly traded and are not classified as equity method investments are accounted for as available-for-sale marketable securities prospectively from the date of such companies' initial public offering if we are not restricted from selling our investment for greater than one year. Our cost method and equity method investments are included in Other non-current assets on the Consolidated Balance Sheets. All investments are reviewed on a regular basis for possible impairment. If an investment's fair value is determined to be less than its net carrying value and the decline is determined to be other-than-temporary, the investment is written down to its fair value. Such an evaluation is judgmental and dependent on specific facts and circumstances. Factors considered in determining whether an other-than-temporary decline in value has occurred include: market value or exit price of the investment based on either market-quoted prices or future rounds of financing by the investee; length of time that the market value was below its cost basis; financial condition and business prospects of the investee; our intent and ability to retain the investment for a sufficient period of time to allow for recovery in market value of the investment; issues that raise concerns about the investee's ability to continue as a going concern; any other information that we may be aware of related to the investment. Other Intangible Assets: Intangible assets with definite useful lives are amortized to their estimated residual values over their estimated useful lives and reviewed for impairment if certain events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Amortization is initiated for IPR&D intangible assets when their useful lives have been determined. IPR&D intangible assets which are determined to have had a drop in their fair value are adjusted downward and an expense recognized in Research and development in the Consolidated Statements of Income. These in-process research and development (IPR&D) intangible assets are tested at least annually or when a triggering event occurs that could indicate a potential impairment. Goodwill: Goodwill represents the excess of purchase price over fair value of net assets acquired in a business combination accounted for by the acquisition method of accounting and is not amortized, but is subject to impairment testing. We test our goodwill for impairment at least annually or when a triggering event occurs that could indicate a potential impairment by assessing qualitative factors or performing a quantitative analysis in determining whether it is more likely than not that the fair value of net assets are below their carrying amounts. Impairment of Long-Lived Assets: Long-lived assets, such as property, plant and equipment and certain other long-term assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset or asset group to the estimated undiscounted future cash flows expected to be generated by the asset or asset group. If the carrying amount of the assets exceed their estimated future undiscounted net cash flows, an impairment charge is recognized for the amount by which the carrying amount of the assets exceed the fair value of the assets. Contingent Consideration from Business Combinations: Subsequent to the acquisition date, we measure contingent consideration arrangements at fair value for each period with changes in fair value recognized in income as Acquisition related (gains) charges and restructuring, net in the Consolidated Statements of Income. Changes in contingent consideration obligation values can result from movements in publicly listed prices of our Contingent Value Rights (CVRs), adjustments to discount rates, updates in the assumed achievement or timing of milestones or changes in the probability of certain clinical events and changes in the assumed probability associated with regulatory approval. In the absence of new information, changes in fair value reflect only the passage of time as development work towards the achievement of the milestones progresses, and is accrued based on an accretion schedule. Foreign Currency Translation: Operations in non-U.S. entities are recorded in the functional currency of each entity. For financial reporting purposes, the functional currency of an entity is determined by a review of the source of an entity's most predominant cash flows. The results of operations for non-U.S. dollar functional currency entities are translated from functional currencies into U.S. dollars using the average currency rate during each month, which approximates the results that would be obtained using actual currency rates on the dates of individual transactions. Assets and liabilities are translated using currency rates at the end of the period. Adjustments resulting from translating the financial statements of our foreign entities into the U.S. dollar are excluded from the determination of net income and are recorded as a component of other comprehensive income (loss). Transaction gains and losses are recorded in Other income (expense), net in the Consolidated Statements of Income. Research and Development Costs: Research and development costs are expensed as incurred. These include all internal and external costs related to services contracted by us. Upfront and milestone payments made to third parties in connection with research and development collaborations are expensed as incurred up to the point of regulatory approval. Milestone payments made to third parties upon regulatory approval are capitalized and amortized over the remaining useful life of the related product. Upfront payments are recorded when incurred, and milestone payments are recorded when the specific milestone has been achieved. Asset acquisition expenses, including expenses to acquire rights to pre-commercial compounds from a collaboration partner when there will be no further participation from the collaboration partner or other parties, are recorded as incurred. Income Taxes: We utilize the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial statement carrying amounts and tax bases of assets and liabilities using enacted tax rates in effect for years in which the temporary differences are expected to reverse. A valuation allowance is provided when it is more likely than not that some portion or all of a deferred tax asset will not be realized. We recognize the benefit of an uncertain tax position that we have taken or expect to take on income tax returns we file if such tax position is more likely than not to be sustained. Revenue Recognition: Revenue from the sale of products is recognized when title and risk of loss of the product is transferred to the customer and the sales price is fixed and determinable. Provisions for discounts, early payments, rebates, sales returns and distributor chargebacks under terms customary in the industry are provided for in the same period the related sales are recorded. We record estimated reductions to revenue for volume-based discounts and rebates at the time of the initial sale. The estimated reductions to revenue for such volume-based discounts and rebates are based on the sales terms, historical experience and trend analysis. We base our sales returns allowance on estimated on-hand retail/hospital inventories, measured end-customer demand as reported by third-party sources, actual returns history and other factors, such as the trend experience for lots where product is still being returned or inventory centralization and rationalization initiatives conducted by major pharmacy chains, as applicable. If the historical data we use to calculate these estimates do not properly reflect future returns, then a change in the allowance would be made in the period in which such a determination is made and revenues in that period could be materially affected. Under this methodology, we track actual returns by individual production lots. Returns on closed lots, that is, lots no longer eligible for return credits, are analyzed to determine historical returns experience. Returns on open lots, that is, lots still eligible for return credits, are monitored and compared with historical return trend rates. Any changes from the historical trend rates are considered in determining the current sales return allowance. Sales discount accruals are based on payment terms extended to customers. Government rebate accruals are based on estimated payments due to governmental agencies for purchases made by third parties under various governmental programs. U.S. Medicaid rebate accruals are generally based on historical payment data and estimates of future Medicaid beneficiary utilization applied to the Medicaid unit rebate formula established by the Center for Medicaid and Medicare Services. The Medicaid rebate percentage was increased and extended to Medicaid Managed Care Organizations in March 2010. The accrual of the rebates associated with Medicaid Managed Care Organizations is calculated based on estimated historical patient data related to Medicaid Managed Care Organizations. We also analyze actual billings received from the states to further support the accrual rates. Manufacturers of pharmaceutical products are responsible for 50% of the patient’s cost of branded prescription drugs related to the Medicare Part D Coverage Gap. In order to estimate the cost to us of this coverage gap responsibility, we analyze data for eligible Medicare Part D patients against data for eligible Medicare Part D patients treated with our products as well as the historical invoices. This expense is recognized throughout the year as costs are incurred. In certain international markets government-sponsored programs require rebates to be paid based on program specific rules and, accordingly, the rebate accruals are determined primarily on estimated eligible sales. Rebates or administrative fees are offered to certain wholesale customers, group purchasing organizations and end-user customers, consistent with pharmaceutical industry practices. Settlement of rebates and fees may generally occur from one to 15 months from the date of sale. We record a provision for rebates at the time of sale based on contracted rates and historical redemption rates. Assumptions used to establish the provision include level of wholesaler inventories, contract sales volumes and average contract pricing. We regularly review the information related to these estimates and adjust the provision accordingly. Chargeback accruals are based on the differentials between product acquisition prices paid by wholesalers and lower government contract pricing paid by eligible customers covered under federally qualified programs. Distributor service fee accruals are based on contractual fees to be paid to the wholesale distributor for services provided. TRICARE is a health care program of the U.S. Department of Defense Military Health System that provides civilian health benefits for military personnel, military retirees and their dependents. TRICARE rebate accruals are included in chargeback accruals and are based on estimated Department of Defense eligible sales multiplied by the TRICARE rebate formula. We record estimated reductions to revenue for free goods and volume-based discounts at the time of the initial sale. The estimated reductions to revenue for such free goods and volume-based discounts are based on the sales terms, historical experience and trend analysis. The cost of free goods is included in cost of goods sold (excluding amortization of acquired intangible assets). We recognize revenue from royalties based on licensees' sales of our products or products using our technologies. Royalties are recognized as earned in accordance with the contract terms when royalties from licensees can be reasonably estimated and collectability is reasonably assured. If royalties cannot be reasonably estimated or collectability of a royalty amount is not reasonably assured, royalties are recognized as revenue when the cash is received. Share-Based Compensation: We utilize share based compensation in the form of stock options, restricted stock units (RSUs) and performance-based restricted stock units (PSUs). Compensation expense is recognized in the Consolidated Statements of Income based on the estimated fair value of the awards at grant date. Compensation expense recognized reflects an estimate of the number of awards expected to vest after taking into consideration an estimate of award forfeitures based on actual experience and is recognized on a straight-line basis over the requisite service period, which is generally the vesting period required to obtain full vesting. Management expectations related to the achievement of performance goals associated with PSU grants is assessed regularly and that assessment is used to determine whether PSU grants are expected to vest. If performance-based milestones related to PSU grants are not met or not expected to be met, any compensation expense recognized to date associated with grants that are not expected to vest will be reversed. The fair values of stock option grants are estimated as of the date of grant using a Black-Scholes option valuation model. The fair values of RSU and PSU grants that are not based on market performance are based on the market value of our Common Stock on the date of grant. Certain of our PSU grants are measured based on the achievement of specified performance and market targets, including non-GAAP revenue, non-GAAP earnings per share, and relative total shareholder return. The grant date fair value for the portion of the PSUs related to non-GAAP revenue and non-GAAP earnings per share is estimated using the fair market value of our common stock on the grant date. The grant date fair value for the portion of the PSUs related to relative total shareholder return is estimated using the Monte Carlo valuation model. Earnings Per Share: Basic earnings per share is computed by dividing net income by the weighted-average number of common shares outstanding during the period. Diluted earnings per share is computed by dividing net income by the weighted-average number of common shares outstanding during the period, assuming potentially dilutive common shares resulting from option exercises, RSUs, PSUs, warrants and other incentives had been issued and any proceeds thereof used to repurchase common stock at the average market price during the period. The assumed proceeds used to repurchase common stock is the sum of the amount to be paid to us upon exercise of options and the amount of compensation cost attributed to future services and not yet recognized. New accounting standards which have been adopted In July 2015, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2015-11, "Inventory (Topic 330): Simplifying the Measurement of Inventory" (ASU 2015-11). ASU 2015-11 applies only to inventory for which cost is determi |
Acquisitions and Divestitures
Acquisitions and Divestitures | 12 Months Ended |
Dec. 31, 2017 | |
Business Combinations [Abstract] | |
Acquisitions and Divestitures | Acquisitions and Divestitures Acquisitions in 2017: Delinia, Inc. (Delinia): On February 3, 2017, we acquired all of the outstanding shares of Delinia, a privately held biotechnology company focused on developing novel therapeutics for the treatment of autoimmune diseases. The transaction expands our Inflammation and Immunology pipeline primarily through the acquisition of Delinia’s lead program, DEL-106, as well as related second generation programs. DEL-106 is a novel IL-2 mutein Fc fusion protein designed to preferentially upregulate regulatory T cells (Tregs), immune cells that are critical to maintaining natural self-tolerance and immune system homeostasis. The consideration included an initial payment of $302 million . In addition, the sellers of Delinia are eligible to receive up to $475 million in contingent development, regulatory and commercial milestones. The acquisition did not include any significant processes and thus, for accounting purposes, we have concluded that the acquired assets did not meet the definition of a business. The initial payment was allocated primarily to the DEL-106 program, resulting in a $300 million research and development asset acquisition expense and approximately $2 million of net assets acquired. Other acquisitions: In addition, during the first quarter of 2017, we acquired all of the outstanding shares of a privately held biotechnology company for total initial consideration of $26 million . The sellers are also eligible to receive up to $210 million in contingent development and regulatory approval milestones. The acquisition did not include any significant processes and thus, for accounting purposes, we have concluded that the acquired assets did not meet the definition of a business. The consideration transferred resulted in a $25 million research and development asset acquisition expense and $1 million of net assets acquired. Divestitures in 2017: Celgene Pharmaceutical (Shanghai) Co. Ltd. (Celgene China): On August 31, 2017, we completed the sale of our Celgene commercial operations in China to BeiGene, Ltd. (BeiGene). The transaction resulted in an immaterial loss on disposal that was recorded on our Consolidated Statement of Income in Other income (expense), net during the third quarter of 2017. In conjunction with the sale, we contemporaneously entered into both a product supply agreement and strategic collaboration arrangement with BeiGene. See Note 17 for additional details related to the collaboration arrangement with BeiGene. Acquisitions in 2016: EngMab AG (EngMab): On September 27, 2016, we acquired all of the outstanding shares of EngMab, a privately held biotechnology company focused on T-cell bi-specific antibodies. EngMab’s lead molecule, EM901 is a preclinical T-cell bi-specific antibody targeting B-cell maturation antigen (BCMA). The acquisition also included another early stage program. The consideration included an initial payment of approximately 607 million Swiss Francs (CHF) (approximately $625 million at the time of acquisition), contingent development and regulatory milestones of up to CHF 150 million (approximately $155 million at the time of the acquisition) and contingent commercial milestones of up to CHF 2.3 billion (approximately $2.3 billion at the time of the acquisition) based on cumulative sales levels of between $1 billion and $40 billion . The acquisition of EngMab did not include any significant processes and thus, for accounting purposes, we have concluded that the acquired assets did not meet the definition of a business. The initial payment was allocated primarily to the EM901 molecule and another early stage program, resulting in a $623 million research and development asset acquisition expense and $2 million of net working capital acquired. Acetylon Pharmaceuticals, Inc. (Acetylon): On December 16, 2016, we acquired all of the remaining outstanding equity interests we did not already own (approximately 86% ) in Acetylon, a privately held biotechnology company focused on developing next-generation selective small molecule histone deacetylase (HDAC) inhibitors, which allow for epigenetic regulation of gene and protein function. Acetylon’s lead molecule, ACY-241 is a HDAC6 inhibitor in phase I trials for relapsed and/or refractory multiple myeloma. The acquisition also included another early stage molecule. Prior to the acquisition, we had an equity interest equal to approximately 14% of Acetylon’s total capital stock with a carrying value of approximately $30 million . The consideration transferred included an initial payment of approximately $196 million . In addition, the sellers of Acetylon are eligible to receive contingent regulatory milestones of up to $375 million per eligible product, contingent commercial milestones of up to $1.5 billion based on achieving annual net sales in excess of $1 billion and tiered royalties on annual net sales of eligible products. The acquisition did not include any significant processes and thus, for accounting purposes, we have concluded that the acquired assets did not meet the definition of a business. The initial payment and carrying value of our previous equity interest were allocated primarily to ACY-241 and another early stage molecule, resulting in a $226 million research and development asset acquisition expense. Triphase Research and Development I Corporation (Triphase): On November 17, 2016, we acquired from Triphase Accelerator, L.P. (Sellers) all of the outstanding shares of Triphase by exercising the option we acquired on October 22, 2012. Triphase was a privately held, biotechnology company focusing on the development of marizomib for glioblastoma and relapsed and/or refractory multiple myeloma. The consideration transferred was valued at approximately $42 million including the value of the exercised option of $18 million . In addition, the sellers are eligible to receive contingent development and regulatory milestones of up to $125 million , contingent commercial milestones of up to $300 million based on achieving annual net sales equal in excess of $1 billion and royalties on annual net sales. The acquisition did not include any significant processes and thus, for accounting purposes, we have concluded that the acquired assets did not meet the definition of a business. The consideration transferred was allocated primarily to the marizomib asset, resulting in a $44 million research and development asset acquisition expense and $1 million of net liabilities acquired. Divestitures in 2016: LifebankUSA: In February 2016, we completed the sale of certain assets of Celgene Cellular Therapeutics (CCT) comprising CCT's biobanking business known as LifebankUSA, CCT’s biomaterials portfolio of assets, including Biovance ® , and CCT's rights to PSC-100, a placental stem cell program, to Human Longevity, Inc. (HLI), a genomics and cell therapy-based diagnostic and therapeutic company based in San Diego, California. We received 3.4 million shares of HLI Class A common stock with a fair value of approximately $40 million as consideration in the transaction. The fair value of the shares common stock we received was determined based on the most recent preferred share offering and reduced for the estimated value of the liquidation preference not offered to common share-holders. The transaction generated a $38 million gain that was recorded on our Consolidated Statements of Income in Other income (expense), net. As of December 31, 2017, our total investment in HLI represents approximately 14% of HLI's outstanding capital stock. Acquisitions in 2015: Receptos, Inc. (Receptos): On August 27, 2015 (Acquisition Date), we acquired all of the outstanding common stock of Receptos, resulting in Receptos becoming our wholly-owned subsidiary. Receptos' lead drug candidate, ozanimod, is a small molecule that modulates sphingosine 1-phosphate 1 and 5 receptors and it is in development for immune-inflammatory indications, including inflammatory bowel disease and relapsing multiple sclerosis (RMS). The acquisition of Receptos also included RPC4046, an anti-interleukin-13 (IL-13) antibody in development for eosinophilic esophagitis (EoE), an allergic/immune-mediated orphan disease. RPC4046 was licensed from AbbVie Bahamas Ltd. and AbbVie Inc. (collectively referred to as AbbVie). The results of operations and cash flows for Receptos are included in our consolidated financial statements from the Acquisition Date and the assets and liabilities of Receptos have been recorded at their respective fair values on the Acquisition Date and consolidated with our assets and liabilities. We paid approximately $7.6 billion , consisting of $7.3 billion for common stock outstanding and $315 million for the portion of equity compensation attributable to the pre-combination period. In addition, we paid $197 million for the portion of equity compensation attributable to the post-combination service period, which has been recorded as expense over the required service period ending in the fourth quarter of 2015. The acquisition has been accounted for using the acquisition method of accounting which requires that assets acquired and liabilities assumed be recognized at their fair values as of the Acquisition Date and requires the fair value of acquired IPR&D to be classified as indefinite-lived assets until the successful completion or abandonment of the associated research and development efforts. The total consideration for the acquisition of Receptos is summarized as follows (in millions): Total Consideration Cash paid for outstanding common stock $ 7,311 Cash for equity compensation attributable to pre-combination service 315 Total consideration $ 7,626 The purchase price allocation resulted in the following amounts being allocated to the assets acquired and liabilities assumed at the Acquisition Date based upon their respective fair values summarized below. During the fourth quarter of 2015, adjustments were recorded to increase the amounts initially recorded for deferred tax assets, deferred tax liabilities and goodwill as of the Acquisition Date (in millions). Amounts Recognized as of the Acquisition Date Working capital 1 $ 479 Property, plant and equipment 5 In-process research and development product rights 6,842 Current deferred tax assets 2 241 Other non-current assets 8 Non-current deferred tax liabilities 3 (2,519 ) Total identifiable net assets 5,056 Goodwill 2,570 Total net assets acquired $ 7,626 1 Includes cash and cash equivalents, available for sale marketable securities, other current assets, accounts payable, and accrued expenses and other current liabilities. 2 Following adoption of Accounting Standards Update No. 2015-17, "Balance Sheet Classification of Deferred Taxes" in the fourth quarter of 2015 all deferred tax assets and liabilities and associated valuation allowances are classified as non-current. 3 Upon integration of the acquired intangible assets into our offshore research, manufacturing, and commercial operations, the deferred tax liability was reclassified to a non-current tax liability. Upon enactment of the 2017 Tax Act, the non-current tax liability was reclassified to a deferred tax liability and remeasured for the change in tax rates. The fair values of current and other non-current assets, current liabilities and property, plant and equipment were determined to approximate their book values. The fair value assigned to acquired IPR&D was based on the present value of expected after-tax cash flows attributable to ozanimod, which is in phase II and III testing. The present value of expected after-tax cash flows attributable to ozanimod and assigned to IPR&D was determined by estimating the after-tax costs to complete development of ozanimod into a commercially viable product, estimating future revenue and ongoing expenses to produce, support and sell ozanimod, on an after-tax basis, and discounting the resulting net cash flows to present value. The revenue and costs projections used were reduced based on the probability that compounds at similar stages of development will become commercially viable products. The rate utilized to discount the net cash flows to their present value reflects the risk associated with the intangible asset and is benchmarked to the cost of equity. Acquired IPR&D will be accounted for as an indefinite-lived intangible asset until regulatory approval in a major market or discontinuation of development. The excess of purchase price over the fair value amounts assigned to identifiable assets acquired and liabilities assumed represents the goodwill amount resulting from the acquisition. The goodwill recorded as part of the acquisition is primarily attributable to the broadening of our product portfolio and research capabilities in the inflammation and immunology therapeutic area, the assembled workforce and the deferred tax consequences of the IPR&D asset recorded for financial statement purposes. We do not expect any portion of this goodwill to be deductible for tax purposes. The goodwill attributable to the acquisition has been recorded as a non-current asset in our Consolidated Balance Sheets and is not amortized, but is subject to review for impairment annually. From the Acquisition Date through December 31, 2015, our Consolidated Statements of Income included expenses of $381 million associated with the acquisition and operations of Receptos as follows 1 (in millions): Statements of Income Location Acquisition Date Through December 31, 2015 Research and development $ 79 Selling, general and administrative 5 Acquisition related charges and restructuring, net 2 297 Total $ 381 1 In addition, Celgene incurred $20 million of acquisition related costs prior to the acquisition date. 2 Consists of acquisition-related compensation expense and transaction costs. Pro Forma Financial Information: The following table provides unaudited pro forma financial information for the twelve-month periods ended December 31, 2015 as if the acquisition of Receptos had occurred on January 1, 2014 (in millions). Twelve-Month Periods Ended December 31, 2015 Total revenue $ 9,256 Net income $ 1,631 Net income per common share: basic $ 2.06 Net income per common share: diluted $ 1.98 The unaudited pro forma financial information was prepared using the acquisition method of accounting and was based on the historical financial information of Celgene and Receptos. The pro-forma financial information assumes that the acquisition-related transaction fees and costs incurred were removed from the twelve-month period ended December 31, 2015 and were assumed to have been incurred during the first quarter of 2014. The unaudited pro forma results do not reflect any operating efficiencies or potential cost savings that may result from the combined operations of Celgene and Receptos. Accordingly, these unaudited pro forma results are presented for illustrative purposes and are not intended to represent or be indicative of the actual results of operations of the combined company that would have been achieved had the acquisition occurred at the beginning of the period presented, nor are they intended to represent or be indicative of future results of operations. Quanticel Pharmaceuticals, Inc. (Quanticel): On October 19, 2015, we completed our acquisition of Quanticel, a privately held biotechnology company focused on cancer drug discovery, for consideration consisting of $96 million in cash at closing plus contingent consideration consisting of future payments of up to $385 million for achieving specified discovery and development targets. We had a research collaboration arrangement with Quanticel since 2011. Through this purchase, Quanticel has become our wholly-owned subsidiary, and we will benefit from full access to Quanticel’s proprietary platform for the single-cell genomic analysis of human cancer, as well as Quanticel’s programs that target specific epigenetic modifiers, which we expect will advance our pipeline of innovative cancer therapies. The acquisition was accounted for using the acquisition method of accounting for business combinations which requires the assets and liabilities of Quanticel to be recorded at their respective fair values on the acquisition date and consolidated into our Consolidated Balance Sheets. The results of operations and cash flows for Quanticel have been included in our consolidated financial statements from the date of acquisition. Pro-forma results of operations for this acquisition have not been presented because this acquisition is not material to our consolidated results of operations. Fair value amounts allocated to contingent consideration and goodwill presented below have been reduced by $11 million during 2016. These measurement period adjustments were not significant and did not have a significant impact on our financial condition, results of operations or cash flows. The fair value of consideration transferred in the acquisition of Quanticel is shown in the table below (in millions): Fair Value at October 19, 2015 (as adjusted) Cash $ 96 Fair value of pre-existing equity ownership 12 Contingent consideration 155 Total fair value of consideration $ 263 Prior to the acquisition of Quanticel, we had an equity interest equal to approximately 5% of the company’s total capital stock (on an “as converted” basis). Based on the fair market value of this interest derived from the purchase price, we recognized a gain of $10 million , which was reflected as a component of Other income (expense), net within our Consolidated Statement of Income for the year ended December 31, 2015. Our potential contingent consideration payments are classified as liabilities, which were measured at fair value as of the acquisition date. We estimated the fair value of potential contingent consideration using a probability-weighted discounted cash flow approach, which reflects the probability and timing of future potential payments. This fair value measurement is based on significant inputs that are not observable in the market and thus represents a level three liability within the fair value hierarchy. The resulting probability-weighted cash flows were discounted using a discount rate based on a market participant assumption. See Note 4 for post-acquisition changes in fair value. The purchase price allocation resulted in the following amounts being allocated to the assets acquired and liabilities assumed at the acquisition date based upon their respective fair values summarized below (in millions): Fair Value at October 19, 2015 (as adjusted) Working capital 1 $ 7 Property, plant and equipment 2 Other non-current assets 1 Technology platform intangible asset 2 232 Debt obligations (14 ) Non-current deferred tax liabilities (72 ) Total identifiable net assets 156 Goodwill 107 Total net assets acquired $ 263 1 Includes cash and cash equivalents, available-for-sale marketable securities, other current assets, accounts payable and accrued expenses and other current liabilities. 2 Technology platform related to Quanticel’s proprietary technology platform for the single-cell genomic analysis of human cancer. The fair values of current and other non-current assets, property, plant and equipment, current liabilities and debt were determined to approximate their book values. The fair value of the technology platform intangible asset is equal to the present value of the after-tax cash flows attributable to the intangible asset, which was calculated based on the multi-period excess earnings method of the income approach. The multi-period excess earnings method of the income approach included estimating probability adjusted annual after-tax net cash flows through the cycle of development and commercialization of potential products generated by the technology platform then discounting the resulting probability adjusted net post-tax cash flows using a discount rate commensurate with the risk of our overall business operations to arrive at the net present value. The excess of purchase price over the fair value amounts assigned to the identifiable assets acquired and liabilities assumed represents the goodwill amount resulting from the acquisition. The goodwill recorded as part of the acquisition is largely attributable to the deferred tax consequences of the finite-lived technology platform intangible asset recorded for financial statement purposes, as well as intangible assets that do not qualify for separate recognition at the time of the acquisition. We do not expect any portion of this goodwill to be deductible for tax purposes. Goodwill attributable to the acquisition has been recorded as a non-current asset in our Consolidated Balance Sheets and is not amortized, but is subject to review for impairment annually. |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share (Amounts in millions, except per share) 2017 2016 2015 Net income $ 2,940 $ 1,999 $ 1,602 Weighted-average shares: Basic 779.2 777.2 792.2 Effect of dilutive securities: Options, RSUs, PSUs, warrants and other 29.5 26.1 32.7 Diluted 808.7 803.3 824.9 Net income per share: Basic $ 3.77 $ 2.57 $ 2.02 Diluted $ 3.64 $ 2.49 $ 1.94 The total number of potential shares of common stock excluded from the diluted earnings per share computation because their inclusion would have been anti-dilutive was 24.5 million in 2017 , 23.8 million in 2016 and 14.1 million in 2015 . Share Repurchase Program: During the period of April 2009 through December 2017, our Board of Directors approved repurchases of up to an aggregate of $20.5 billion of our common stock. As part of the management of our share repurchase program, we may, from time to time, sell put options on our common stock with strike prices that we believe represent an attractive price to purchase our shares. If the trading price of our shares exceeds the strike price of the put option at the time the option expires, we will have economically reduced the cost of our share repurchase program by the amount of the premium we received from the sale of the put option. If the trading price of our stock is below the strike price of the put option at the time the option expires, we would purchase the shares covered by the option at the strike price of the put option. During 2017, we did not sell any put options on our common stock. During 2016 and 2015, we recorded net gains of $8 million , and net losses of $10 million , respectively, from selling put options on our common stock on the Consolidated Statements of Income in Other income (expense), net . As of December 31, 2017, we had no outstanding put options. We repurchased 36.7 million shares of common stock under the program from all sources during 2017 at a total cost of $3.9 billion . As of December 31, 2017, we had a remaining open-ended repurchase authorization of approximately $822 million . |
Financial Instruments and Fair
Financial Instruments and Fair Value Measurement | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Financial Instruments and Fair Value Measurement | Financial Instruments and Fair Value Measurement The table below presents information about assets and liabilities that are measured at fair value on a recurring basis as of December 31, 2017 and 2016 , and the valuation techniques we utilized to determine such fair value. • Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities. Our level 1 assets consist of marketable equity securities. Our level 1 liability relates to our publicly traded CVRs. See Note 18 for a description of the CVRs. • Level 2 inputs utilize observable quoted prices for similar assets and liabilities in active markets and observable quoted prices for identical or similar assets in markets that are not very active. Our level 2 assets consist primarily of U.S. Treasury securities, U.S. government-sponsored agency securities, U.S. government-sponsored agency MBS, global corporate debt securities, asset backed securities, ultra short income fund investments, time deposits and repurchase agreements with original maturities of greater than three months, foreign currency forward contracts, purchased foreign currency options and interest rate swap contracts. Our level 2 liabilities relate to written foreign currency options, foreign currency forward contracts and interest rate swap contracts. • Level 3 inputs utilize unobservable inputs and include valuations of assets or liabilities for which there is little, if any, market activity. We do not have any level 3 assets. Our level 3 liabilities consist of contingent consideration related to undeveloped product rights and technology platforms resulting from the acquisitions of Gloucester Pharmaceuticals, Inc. (Gloucester), Nogra Pharma Limited (Nogra), Avila Therapeutics, Inc. (Avila) and Quanticel. Our contingent consideration obligations are recorded at their estimated fair values and we revalue these obligations each reporting period until the related contingencies are resolved. The fair value measurements are estimated using probability-weighted discounted cash flow approaches that are based on significant unobservable inputs related to product candidates acquired in business combinations and are reviewed quarterly. These inputs include, as applicable, estimated probabilities and timing of achieving specified development and regulatory milestones, estimated annual sales and the discount rate used to calculate the present value of estimated future payments. Significant changes which increase or decrease the probabilities of achieving the related development and regulatory events, shorten or lengthen the time required to achieve such events, or increase or decrease estimated annual sales would result in corresponding increases or decreases in the fair values of these obligations. Changes in the fair value of contingent consideration obligations are recognized in Acquisition related (gains) charges and restructuring, net in the Consolidated Statements of Income. The fair value of our contingent consideration as of December 31, 2017 and December 31, 2016 was calculated using the following significant unobservable inputs: Inputs Ranges (weighted average) utilized as of: December 31, 2017 December 31, 2016 Discount rate 2.7 to 12.0% (3.5%) 1.5% to 12.0% (8.6%) Probability of payment 0% to 20% (4%) 0% to 95% (42%) Projected year of payment for development and regulatory milestones 2020 to 2029 (2024) 2017 to 2029 (2019) Projected year of payment for sales-based milestones and other amounts calculated as a percentage of annual sales 2024 to 2030 (2028) 2019 to 2033 (2024) The maximum remaining potential payments related to the contingent consideration from the acquisitions of Gloucester, Avila and Quanticel are estimated to be $120 million , $475 million and $276 million , respectively, and $1.8 billion plus other amounts calculated as a percentage of annual sales pursuant to the license agreement with Nogra. Balance at December 31, 2017 Quoted Price in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Available-for-sale securities $ 5,029 $ 1,810 $ 3,219 $ — Purchased currency options 36 — 36 — Total assets $ 5,065 $ 1,810 $ 3,255 $ — Liabilities: Contingent value rights $ (42 ) $ (42 ) $ — $ — Forward currency contracts (42 ) — (42 ) — Interest rate swaps (7 ) — (7 ) — Written currency options (172 ) — (172 ) — Other acquisition related contingent consideration (80 ) — — (80 ) Total liabilities $ (343 ) $ (42 ) $ (221 ) $ (80 ) Balance at December 31, 2016 Quoted Price in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Available-for-sale securities $ 1,800 $ 891 $ 909 $ — Forward currency contracts 379 — 379 — Purchased currency options 140 — 140 — Interest rate swaps 31 — 31 — Total assets $ 2,350 $ 891 $ 1,459 $ — Liabilities: Contingent value rights $ (44 ) $ (44 ) $ — $ — Written currency options (54 ) — (54 ) — Other acquisition related contingent consideration (1,490 ) — — (1,490 ) Total liabilities $ (1,588 ) $ (44 ) $ (54 ) $ (1,490 ) There were no security transfers between levels 1, 2 and 3 during the years ended December 31, 2017 and 2016 . The following tables represent a roll-forward of the fair value of level 3 instruments: Year Ended December 31, 2017 Liabilities: Gloucester Nogra Avila Quanticel Total Balance as of December 31, 2016 $ (21 ) $ (1,346 ) $ (8 ) $ (115 ) $ (1,490 ) Net change in fair value (1 ) 1,340 5 4 1,348 Settlements, including transfers to Accrued expenses and other current liabilities — — — 62 62 Balance as of December 31, 2017 $ (22 ) $ (6 ) $ (3 ) $ (49 ) $ (80 ) Year Ended December 31, 2016 Liabilities: Gloucester Nogra Avila Quanticel Total Balance as of December 31, 2015 $ (19 ) $ (1,239 ) $ (97 ) $ (167 ) $ (1,522 ) Amounts acquired or issued, including measurement period adjustments — — — 11 11 Net change in fair value (2 ) (107 ) 89 (9 ) (29 ) Settlements, including transfers to Accrued expenses and other current liabilities — — — 50 50 Balance as of December 31, 2016 $ (21 ) $ (1,346 ) $ (8 ) $ (115 ) $ (1,490 ) Discontinuance of Certain GED-0301 Phase III Trials: On October 19, 2017, we announced our decision to discontinue the GED-0301 phase III REVOLVE (CD-002) trial in Crohn’s disease (CD) and the SUSTAIN (CD-004) extension trial (the Trials). At that time, we concluded we would record a significant impairment of our GED-0301 IPR&D asset, incur wind-down costs associated with discontinuing the Trials and certain development activities, and record a benefit related to the significant reduction of GED-0301 contingent consideration liabilities. At the date GED-0301 was acquired by Celgene, a phase II trial of GED-0301 in patients with active CD had been completed and a multi-year clinical program designed to support global registrations of GED-0301 in CD was planned, while other indications were not as advanced. As such, substantially all of the IPR&D asset and contingent consideration liabilities were attributed to the development and commercialization of GED-0301 for the treatment of CD. As a result of the discontinuance of the Trials, the Company recorded a net pre-tax charge to earnings of approximately $411 million during the fourth quarter of 2017. The net pre-tax charge was comprised of the following: • An impairment charge relating to the entire GED-0301 IPR&D asset of approximately $1,620 million ; • Other one-time charges of approximately $188 million that will require cash payments primarily related to wind-down costs associated with discontinuing the Trials and certain development activities; and • A reduction in contingent consideration liabilities of approximately $1,397 million related to GED-0301. |
Derivative Instruments and Hedg
Derivative Instruments and Hedging Activities | 12 Months Ended |
Dec. 31, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments and Hedging Activities | Derivative Instruments and Hedging Activities During the third quarter of 2017, we adopted ASU 2017-12. Among other provisions, the new standard required modifications to existing presentation and disclosure requirements on a prospective basis. As such, certain disclosures for the fiscal year ended December 31, 2016 below conform to the disclosure requirements prior to the adoption of ASU 2017-12. See Note 1 for additional information related to the adoption of ASU 2017-12. Our revenue and earnings, cash flows and fair values of assets and liabilities can be impacted by fluctuations in foreign exchange rates and interest rates. We actively manage the impact of foreign exchange rate and interest rate movements through operational means and through the use of various financial instruments, including derivative instruments such as foreign currency option contracts, foreign currency forward contracts, treasury rate lock agreements and interest rate swap contracts. In instances where these financial instruments are accounted for as cash flow hedges or fair value hedges we may from time to time terminate the hedging relationship. If a hedging relationship is terminated we generally either settle the instrument or enter into an offsetting instrument. Foreign Currency Risk Management We maintain a foreign exchange exposure management program to mitigate the impact of volatility in foreign exchange rates on future foreign currency cash flows, translation of foreign earnings and changes in the fair value of assets and liabilities denominated in foreign currencies. Through our revenue hedging program, we endeavor to reduce the impact of possible unfavorable changes in foreign exchange rates on our future U.S. Dollar cash flows that are derived from foreign currency denominated sales. To achieve this objective, we hedge a portion of our forecasted foreign currency denominated sales that are expected to occur in the foreseeable future, typically within the next three years , with a maximum of five years . We manage our anticipated transaction exposure principally with foreign currency forward contracts, a combination of foreign currency put and call options, and occasionally purchased foreign currency put options. Foreign Currency Forward Contracts: We use foreign currency forward contracts to hedge specific forecasted transactions denominated in foreign currencies, manage exchange rate volatility in the translation of foreign earnings, and reduce exposures to foreign currency fluctuations of certain assets and liabilities denominated in foreign currencies. We manage a portfolio of foreign currency forward contracts to protect against changes in anticipated foreign currency cash flows resulting from changes in foreign currency exchange rates, primarily associated with non-functional currency denominated revenues and expenses of foreign subsidiaries. The foreign currency forward hedging contracts outstanding as of December 31, 2017 and December 31, 2016 had settlement dates within 20 months and 31 months , respectively. The spot rate components of these foreign currency forward contracts are designated as cash flow hedges and any unrealized gains or losses are reported in other comprehensive income (OCI) and reclassified to the Consolidated Statements of Income in the same periods during which the underlying hedged transactions affect earnings. If a hedging relationship is terminated with respect to a foreign currency forward contract, accumulated gains or losses associated with the contract remain in OCI until the hedged forecasted transaction occurs and are reclassified to operations in the same periods during which the underlying hedged transactions affect earnings. Prior to the adoption of ASU 2017-12, the forward point components of these foreign currency forward contracts were excluded from assessing effectiveness of the hedging relationship and all fair value adjustments of forward point amounts were recorded on the Consolidated Statements of Income in Other income (expense), net. Upon adoption of ASU 2017-12, we recognize in earnings the initial value of the forward point components on a straight-line basis over the life of the derivative instrument within the same line item in the Consolidated Statements of Income that is used to present the earnings effect of the hedged item. See Note 1 for additional information related to the adoption of ASU 2017-12. Foreign currency forward contracts entered into to hedge forecasted revenue and expenses were as follows as of December 31, 2017 and December 31, 2016 : Notional Amount Foreign Currency: 2017 2016 Australian Dollar $ 61 $ 49 British Pound 97 199 Canadian Dollar 227 193 Euro 954 1,812 Japanese Yen 356 597 Total $ 1,695 $ 2,850 We consider the impact of our own and the counterparties’ credit risk on the fair value of the contracts as well as the ability of each party to execute its obligations under the contract on an ongoing basis. As of December 31, 2017 , credit risk did not materially change the fair value of our foreign currency forward contracts. We also manage a portfolio of foreign currency contracts to reduce exposures to foreign currency fluctuations of certain recognized assets and liabilities denominated in foreign currencies and, from time to time, we enter into foreign currency contracts to manage exposure related to translation of foreign earnings. These foreign currency forward contracts have not been designated as hedges and, accordingly, any changes in their fair value are recognized on the Consolidated Statements of Income in Other (expense), net in the current period. The aggregate notional amount of the foreign currency forward non-designated hedging contracts outstanding as of December 31, 2017 and December 31, 2016 were $885 million and $934 million , respectively. Foreign Currency Option Contracts: From time to time, we may hedge a portion of our future foreign currency exposure by utilizing a strategy that involves both a purchased local currency put option and a written local currency call option that are accounted for as hedges of future sales denominated in that local currency. Specifically, we sell (or write) a local currency call option and purchase a local currency put option with the same expiration dates and local currency notional amounts but with different strike prices. This combination of transactions is generally referred to as a “collar.” The expiration dates and notional amounts correspond to the amount and timing of forecasted foreign currency sales. The foreign currency option contracts outstanding as of December 31, 2017 and December 31, 2016 had settlement dates within 36 months and 48 months , respectively. If the U.S. Dollar weakens relative to the currency of the hedged anticipated sales, the purchased put option value reduces to zero and we benefit from the increase in the U.S. Dollar equivalent value of our anticipated foreign currency cash flows; however, this benefit would be capped at the strike level of the written call, which forms the upper end of the collar. The premium collected from the sale of the call option is equal to the premium paid for the purchased put option, resulting in a net zero cost for each collar. Outstanding foreign currency option contracts entered into to hedge forecasted revenue were as follows as of December 31, 2017 and December 31, 2016 : Notional Amount 1 2017 2016 Foreign currency option contracts designated as hedging activity: Purchased Put $ 3,319 $ 1,790 Written Call 3,739 2,009 1 U.S. Dollar notional amounts are calculated as the hedged local currency amount multiplied by the strike value of the foreign currency option. The local currency notional amounts of our purchased put and written call that are designated as hedging activities are equal to each other. We also have entered into foreign currency put option contracts to hedge forecasted revenue which were not part of a collar strategy. Such put option contracts had a notional value of $258 million and $387 million as of December 31, 2017 and December 31, 2016 , respectively, and settlement dates within 12 months and 24 months , respectively. Interest Rate Risk Management Forward Starting Interest Rate Swaps and Treasury Rate Locks: In anticipation of issuing fixed-rate debt, we may use forward starting interest rate swaps (forward starting swaps) or treasury rate lock agreements (treasury rate locks) that are designated as cash flow hedges to hedge against changes in interest rates that could impact expected future issuances of debt. To the extent these hedges of cash flows related to anticipated debt are effective, any realized or unrealized gains or losses on the forward starting swaps or treasury rate locks are reported in OCI and are recognized in income over the life of the anticipated fixed-rate notes. We have entered into swap contracts that were designated as hedges of certain of our fixed rate notes in 2017 and 2016 and also terminated the hedging relationship by settling certain of those swap contracts during 2017. During 2017, we settled $500 million notional amount of certain swap contracts, and then subsequently entered into new $500 million notional amount swap contracts. We terminated the hedging relationship on those certain outstanding swap contracts amounting to $500 million notional amount by settling such swap contracts. The net settlement and termination of those swap contracts resulted in a net loss of approximately $4 million . See Note 11 for additional details related to reductions of current and future interest expense. Additionally, we re-designated $500 million 10-year notional amount forward starting swaps to certain of our 30-year outstanding fixed rate notes, resulting in a gain of approximately $29 million. In addition, in 2017, we entered into and then subsequently settled, $500 million notional treasury locks on 30-year debt, resulting in a loss of approximately $2 million . We had outstanding forward starting swaps with effective dates in 2017 and 2018 and maturing in ten years that were designated as cash flow hedges with notional amounts as shown in the table below: Notional Amount 2017 2016 Forward starting interest rate swap contracts: Forward starting swaps with effective dates in 2017 $ — $ 500 Forward starting swaps with effective dates in 2018 — 500 Interest Rate Swap Contracts: From time to time we hedge the fair value of certain debt obligations through the use of interest rate swap contracts. The interest rate swap contracts are designated hedges of the fair value changes in the notes attributable to changes in benchmark interest rates. Gains or losses resulting from changes in fair value of the underlying debt attributable to the hedged benchmark interest rate risk are recorded on the Consolidated Statement of Income within Interest (expense) with an associated offset to the carrying value of the notes recorded on the Consolidated Balance Sheet. Since the specific terms and notional amount of the swap are intended to match those of the debt being hedged all changes in fair value of the swap are recorded on the Consolidated Statement of Income within Interest (expense) with an associated offset to the derivative asset or liability on the Consolidated Balance Sheet. Consequently, there is no net impact recorded in income. Any net interest payments made or received on interest rate swap contracts are recognized as interest expense on the Consolidated Statement of Income. If a hedging relationship is terminated for an interest rate swap contract, accumulated gains or losses associated with the contract are measured and recorded as a reduction or increase of current and future interest expense associated with the previously hedged debt obligations. The following table summarizes the notional amounts of our outstanding interest rate swap contracts as of December 31, 2017 and December 31, 2016 : Notional Amount 2017 2016 Interest rate swap contracts entered into as fair value hedges of the following fixed-rate senior notes: 3.875% senior notes due 2025 $ 200 $ 200 3.450% senior notes due 2027 250 — Total $ 450 $ 200 We have entered into swap contracts that were designated as hedges of certain of our fixed rate notes in 2017 and 2016 and also terminated the hedging relationship by settling certain of those swap contracts during 2017 and 2016 . In 2017, we terminated the hedging relationship on certain outstanding swap contracts amounting to $200 million notional amount by settling such swap contracts. In July 2016, we terminated the hedging relationship on all of our then outstanding swap contracts, amounting to $3.6 billion notional amount, by settling such swap contracts. The settlement of swap contracts resulted in the receipt of net proceeds of $3 million and $196 million during the years ended December 31, 2017 and 2016 , respectively, which are accounted for as a reduction of current and future interest expense associated with these notes. See Note 11 for additional details related to reductions of current and future interest expense. The following table summarizes the fair value and presentation in the Consolidated Balance Sheets for derivative instruments as of December 31, 2017 and 2016 : December 31, 2017 Fair Value Instrument Balance Sheet Location Asset Derivatives Liability Derivatives Derivatives designated as hedging instruments: Foreign exchange contracts 1 Other current assets $ 5 $ 1 Accrued expense and other current liabilities 30 79 Other non-current assets 1 — Other non-current liabilities 36 159 Interest rate swap agreements Other current assets 3 — Other non-current liabilities — 11 Derivatives not designated as hedging instruments: Foreign exchange contracts 1 Other current assets 8 1 Accrued expenses and other current liabilities 4 22 Interest rate swap agreements Other current assets 2 2 Other non-current assets 4 3 Total $ 93 $ 278 1 Derivative instruments in this category are subject to master netting arrangements and are presented on a net basis on the Consolidated Balance Sheets in accordance with ASC 210-20. December 31, 2016 Fair Value Instrument Balance Sheet Location Asset Derivatives Liability Derivatives Derivatives designated as hedging instruments: Foreign exchange contracts 1 Other current assets $ 317 $ 10 Other non-current assets 178 71 Interest rate swap agreements Other current assets 1 — Other non-current assets 38 7 Other non-current liabilities — 2 Derivatives not designated as hedging instruments: Foreign exchange contracts 1 Other current assets 57 4 Accrued expenses and other current liabilities — 2 Interest rate swap agreements Other current assets 2 2 Other non-current assets 3 2 Total $ 596 $ 100 1 Derivative instruments in this category are subject to master netting arrangements and are presented on a net basis in the Consolidated Balance Sheets in accordance with ASC 210-20. As of December 31, 2017 and December 31, 2016 , the following amounts were recorded on the Consolidated Balance Sheet related to cumulative basis adjustments for fair value hedges: Carrying Amount of the Hedged Liability Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Liability Consolidated Balance Sheet Classification in Which the Hedged Item Is Included December 31, 2017 (1) December 31, 2016 (1) December 31, 2017 (2) December 31, 2016 (2) Current portion of long-term debt, net of discount $ — $ 501 $ — $ 1 Long-term debt, net of discount 7,270 6,703 128 163 (1) The current portion of long-term debt, net of discount includes $501 million of carrying value with discontinued hedging relationships as of December 31, 2016 . The long-term debt, net of discount includes approximately $3.8 billion and $4.2 billion of carrying value with discontinued hedging relationships as of December 31, 2017 and December 31, 2016 , respectively. (2) The current portion of long-term debt, net of discount includes $1 million of hedging adjustments on discontinued hedging relationships as of December 31, 2016 . The long-term debt, net of discount includes $139 million and $172 million of hedging adjustment on discontinued hedging relationships on long-term debt as of December 31, 2017 and December 31, 2016 , respectively. The following tables summarizes the effect of derivative instruments designated as cash-flow hedging instruments in Accumulated OCI for the years ended December 31, 2017 and 2016 : 2017 Instrument Amount of Gain/(Loss) Recognized in OCI on Derivative (1)( 2) Classification of Gain/(Loss) Reclassified from Accumulated OCI into Income Amount of Gain/(Loss) Reclassified from Accumulated OCI into Income Classification of Gain/(Loss) Recognized in Income Related to Amount Excluded from Effectiveness Testing Amount of Gain/(Loss) Recognized in Income on Derivative Related to Amount Excluded from Effectiveness Testing Foreign exchange contracts $ (419 ) Net product sales $ 184 Net product sales $ (3 ) Treasury rate lock agreements (2 ) Interest (expense) (5 ) N/A Forward starting interest rate swaps (13 ) Interest (expense) (1 ) N/A 1 Net losses of $76 million are expected to be reclassified from Accumulated OCI into income in the next 12 months. 2 For the year ended December 31, 2017 , the straight-line amortization of the initial value of the amount excluded from the assessment of hedge effectiveness for our foreign exchange contracts recognized in OCI was a loss of $15 million of which $18 million related to the cumulative effect adjustment related to the adoption of ASU 2017-12. There were no excluded components for out treasury rate lock and interest rate swap agreements. 2016 (Effective Portion) (Ineffective Portion and Amount Excluded From Effectiveness Testing) Instrument Amount of Classification of Amount of Classification of Amount of Foreign exchange contracts $ 109 Net product sales $ 307 Other income, net $ 19 (1) Treasury rate lock agreements $ — Interest expense $ (5 ) Other income, net $ — Forward starting interest rate swaps $ 36 Interest expense $ (2 ) Other income, net $ — 1 The amount of net gains recognized in income represents $17 million of gains related to amounts excluded from the assessment of hedge effectiveness (fair value adjustments of forward point amounts) and $2 million in gains related to the ineffective portion of the hedging relationships. The following table summarizes the effect of derivative instruments designated as fair value hedging instruments on the Consolidated Statements of Income for the years ended December 31, 2017 and 2016 : Classification of Gain Recognized in Income on Derivative Amount of Gain Recognized in Income on Derivative Instrument 2017 1 2016 1 Interest rate swaps Interest (expense) 35 $ 45 1 The amounts include a benefit of $35 million and $20 million relating to the amortization of the cumulative amount of fair value hedging adjustments included in the carrying amount of the hedged liability for discontinued hedging relationships for the years ending December 31, 2017 and December 31, 2016, respectively. The following table summarizes the effect of derivative instruments not designated as hedging instruments on the Consolidated Statements of Income for the years ended December 31, 2017 and 2016 : Classification of (Loss) Gain Recognized in Income on Derivative Classification of (Loss) Gain Recognized in Income on Derivative Instrument 2017 2016 Foreign exchange contracts Other income (expense), net $ (52 ) $ 21 Put options sold Other income (expense), net — 8 The impact of gains and losses on foreign exchange contracts not designated as hedging instruments related to changes in the fair value of assets and liabilities denominated in foreign currencies are generally offset by net foreign exchange gains and losses, which are also included on the Consolidated Statements of Income in Other income (expense), net for all periods presented. When we enter into foreign exchange contracts not designated as hedging instruments to mitigate the impact of exchange rate volatility in the translation of foreign earnings, gains and losses will generally be offset by fluctuations in the U.S. Dollar translated amounts of each Income Statement account in current and/or future periods. Classification and Amount of Gain or (Loss) Recognized in Income on Fair Value and Cash Flow Hedging Relationships 2017 Net product sales Interest (expense) Other income (expense), net Total amounts of income and expense line items presented in the Consolidated Statements of Income in which the effects of fair value or cash flow hedges are recorded $ 12,973 $ (522 ) $ 24 The effects of fair value and cash flow hedging: Gain (loss) on fair value hedging relationships Interest rate swap agreements: Hedged items — 2 — Derivatives designated as hedging instruments (1) — 35 — Gain (loss) on cash flow hedging relationships Foreign exchange contracts: Amount of gain or (loss) reclassified from AOCI into income 184 — — Amount excluded from effectiveness testing recognized using a systematic and rational amortization approach / changes in fair value 15 — — Reclassification adjustment for excluded component (loss) gain (18 ) — — Treasury rate lock agreements: Amount of gain or (loss) reclassified from AOCI into income — (5 ) — Interest rate swap agreements: Amount of gain or (loss) reclassified from AOCI into income — (1 ) — (1) The amounts include a benefit of $35 million relating to the amortization of the cumulative amount of fair value hedging adjustments included in the carrying amount of the hedged liability for discontinued hedging relationships for the year ended December 31, 2017. |
Cash, Cash Equivalents and Mark
Cash, Cash Equivalents and Marketable Securities Available-for-Sale | 12 Months Ended |
Dec. 31, 2017 | |
Cash, Cash Equivalents, and Short-term Investments [Abstract] | |
Cash, Cash Equivalents and Marketable Securities Available-for-Sale | Cash, Cash Equivalents and Marketable Securities Available-for-Sale Time deposits, repurchase agreements, and commercial paper instruments with original maturities less than three months and money market funds are included in Cash and cash equivalents. As of December 31, 2017 , the carrying value of our time deposits and repurchase agreements was $1.2 billion , commercial paper instruments was $35 million , and money market funds was $4.5 billion , all of which are included in Cash and cash equivalents. As of December 31, 2016 , the carrying value of our time deposits and repurchase agreements was $2.8 billion , commercial paper instruments was $65 million , and money market funds was $1.6 billion , all of which were included in Cash and cash equivalents. The carrying values approximated fair value as of December 31, 2017 and December 31, 2016 . The amortized cost, gross unrealized holding gains, gross unrealized holding losses and estimated fair value of available-for-sale securities by major security type and class of security as of December 31, 2017 and 2016 were as follows: December 31, 2017 Amortized Cost Gross Unrealized Gain Gross Unrealized Loss Estimated Fair Value U.S. Treasury securities $ 445 $ — $ (3 ) $ 442 U.S. government-sponsored agency securities 42 — — 42 U.S. government-sponsored agency MBS 17 — — 17 Corporate debt - global 2,080 — (5 ) 2,075 Asset backed securities 203 — (1 ) 202 Ultra short income fund 352 — — 352 Time deposits (1) and Repurchase agreements (1) 89 — — 89 Marketable equity securities 935 881 (6 ) 1,810 Total available-for-sale marketable securities $ 4,163 $ 881 $ (15 ) $ 5,029 December 31, 2016 Amortized Cost Gross Unrealized Gain Gross Unrealized Loss Estimated Fair Value U.S. Treasury securities $ 121 $ — $ (1 ) $ 120 U.S. government-sponsored agency MBS 31 — — 31 Corporate debt - global 378 — (1 ) 377 Asset backed securities 17 — — 17 Time deposits (1) 364 — — 364 Marketable equity securities 672 238 (19 ) 891 Total available-for-sale marketable securities $ 1,583 $ 238 $ (21 ) $ 1,800 (1) Have original maturities of greater than three months. U.S. Treasury securities include government debt instruments issued by the U.S. Department of the Treasury. U.S. government-sponsored agency securities include general unsecured obligations either issued directly by or guaranteed by U.S. government sponsored enterprises. U.S. government-sponsored agency MBS include mortgage-backed securities issued by the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation and the Government National Mortgage Association. Corporate debt-global includes obligations issued by investment-grade corporations, including some issues that have been guaranteed by governments and government agencies. Asset backed securities consist of triple-A rated securities with cash flows collateralized by credit card receivables and auto loans. Ultra short income fund includes investments in certificates of deposit, repurchase agreements, commercial paper and corporate notes. Time deposits and repurchase agreements in the tables above have original maturities greater than three months. Our repurchase agreements are collateralized by U.S. government securities, cash, bonds, commercial paper and bank certificates of deposit. As of December 31, 2017 , all of our time deposits and repurchase agreements had original maturities less than one year. Marketable equity securities consist of investments in publicly traded equity securities. During the fourth quarter of 2016, we recorded an expense of $272 million to reclassify the unrealized loss in OCI related to our holding of Juno Therapeutics, Inc. (Juno) common shares due to a decline in the underlying fair value of the securities, which we concluded to be other-than-temporary. The adjustment reflects Juno’s share price as of December 31, 2016 and is included on the Consolidated Statement of Income in Other income (expense), net . The fair value of all available-for-sale securities, which have been in an unrealized loss position for less than and longer than 12 months as of December 31, 2017 , was as follows: Less than 12 months 12 months or longer Total December 31, 2017 Estimated Fair Value Gross Unrealized Loss Estimated Fair Value Gross Unrealized Loss Estimated Fair Value Gross Unrealized Loss U.S. Treasury securities $ 411 $ (3 ) $ 31 $ — $ 442 $ (3 ) U.S. government-sponsored agency securities 42 — — — 42 — U.S. government-sponsored agency MBS 2 — 14 — 16 — Corporate debt - global 1,391 (5 ) 22 — 1,413 (5 ) Asset backed securities 175 — 4 (1 ) 179 (1 ) Marketable equity securities 16 (6 ) — — 16 (6 ) Total $ 2,037 $ (14 ) $ 71 $ (1 ) $ 2,108 $ (15 ) We believe that the remaining decline in fair value of securities held as of December 31, 2017 below their cost is temporary and intend to retain our investment in these securities for a sufficient period of time to allow for recovery in the market value of these investments. Duration periods of available-for-sale debt securities as of December 31, 2017 were as follows: Amortized Cost Fair Value Duration of one year or less $ 1,869 $ 1,868 Duration of one through three years 1,241 1,233 Duration of three through five years 29 29 Total $ 3,139 $ 3,130 |
Inventory
Inventory | 12 Months Ended |
Dec. 31, 2017 | |
Inventory Disclosure [Abstract] | |
Inventory | Inventory A summary of inventories by major category as of December 31, 2017 and 2016 follows: 2017 2016 Raw materials $ 289 $ 274 Work in process 89 87 Finished goods 163 137 Total $ 541 $ 498 |
Property, Plant and Equipment
Property, Plant and Equipment | 12 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment, Net [Abstract] | |
Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment as of December 31, 2017 and 2016 consisted of the following: 2017 2016 Land $ 77 $ 77 Buildings 525 443 Building and operating equipment 54 45 Leasehold improvements 153 150 Machinery and equipment 310 281 Furniture and fixtures 64 60 Computer equipment and software 496 442 Construction in progress 224 149 Subtotal 1,903 1,647 Less: accumulated depreciation and amortization 833 717 Total $ 1,070 $ 930 |
Other Financial Information
Other Financial Information | 12 Months Ended |
Dec. 31, 2017 | |
Other Financial Information | |
Other Financial Information | Other Financial Information Other current assets as of December 31, 2017 and 2016 consisted of the following: 2017 2016 Income tax receivable $ — $ 43 Other receivables 80 29 Derivative assets 14 361 Other prepaid taxes 102 119 Prepaid income taxes — 95 Prepaid maintenance and software licenses 42 39 Other 150 93 Total $ 388 $ 779 Accrued expenses and other current liabilities as of December 31, 2017 and 2016 consisted of the following: 2017 2016 Rebates, distributor chargebacks and distributor services $ 814 $ 561 Compensation 358 414 Clinical trial costs and grants 622 342 Litigation-related loss contingency (see Note 18) — 199 Interest 173 168 Sales, use, value added, and other taxes 59 101 Contingent consideration (see Note 4) — 47 Milestones payable 62 — Other 435 283 Total $ 2,523 $ 2,115 Other non-current liabilities as of December 31, 2017 and 2016 consisted of the following: 2017 2016 Contingent consideration (see Note 4) $ 80 $ 1,443 Deferred compensation and long-term incentives 240 215 Contingent value rights (see Notes 4 and 18) 42 45 Derivative contracts 134 1 Other 48 67 Total $ 544 $ 1,771 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets and Goodwill | Intangible Assets and Goodwill Intangible Assets: Our finite lived intangible assets primarily consist of developed product rights and technology obtained from the Pharmion Corp. (Pharmion), Gloucester, Abraxis BioScience, Inc. (Abraxis), Avila and Quanticel acquisitions. Our indefinite lived intangible assets as of December 31, 2016 consist of acquired IPR&D product rights from the Receptos, Nogra and Gloucester acquisitions and Receptos and Gloucester as of December 31, 2017. See Note 4 for details related to the impairment of our acquired Nogra IPR&D product rights asset as it relates to the discontinuation of certain GED-0301 phase III trials. Intangible assets outstanding as of December 31, 2017 and December 31, 2016 are summarized as follows: December 31, 2017 Gross Carrying Value Accumulated Amortization Intangible Assets, Net Amortizable intangible assets: Acquired developed product rights $ 3,406 $ (1,939 ) $ 1,467 Technology 483 (410 ) 73 Licenses 66 (30 ) 36 Other 43 (34 ) 9 3,998 (2,413 ) 1,585 Non-amortized intangible assets: Acquired IPR&D product rights 6,851 — 6,851 Total intangible assets $ 10,849 $ (2,413 ) $ 8,436 December 31, 2016 Gross Carrying Value Accumulated Amortization Intangible Assets, Net Amortizable intangible assets: Acquired developed product rights $ 3,406 $ (1,694 ) $ 1,712 Technology 483 (326 ) 157 Licenses 66 (26 ) 40 Other 43 (31 ) 12 3,998 (2,077 ) 1,921 Non-amortized intangible assets: Acquired IPR&D product rights 8,471 — 8,471 Total intangible assets $ 12,469 $ (2,077 ) $ 10,392 Amortization expense was $336 million , $466 million and $285 million for the years ended December 31, 2017 , 2016 and 2015 , respectively. Amortization expense decreased in 2017 compared to 2016, primarily related to the prior year accelerated amortization expense and impairment charge to write down the technology platform asset obtained in the acquisition of Avila. Assuming no changes in the gross carrying amount of finite lived intangible assets, the future annual amortization expense related to finite lived intangible assets is expected to be approximately $252 million in 2018 , $155 million in 2019, $154 million in 2020, $152 million in 2021 and $151 million in 2022. Goodwill: There was no change in the carrying value of the Company’s goodwill from December 31, 2016 to December 31, 2017. |
Debt
Debt | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Debt | Debt Short-Term Borrowings and Current Portion of Long-Term Debt: We had no outstanding short-term borrowings as of December 31, 2017 and 2016. The current portion of long-term debt outstanding as of December 31, 2017 and 2016 includes: 2017 2016 1.900% senior notes due 2017 $ — $ 501 Long-Term Debt: Our outstanding senior notes with maturity dates in excess of one year after December 31, 2017 have an aggregate principal amount of $15.850 billion with varying maturity dates and interest rates. The carrying values of the long-term portion of these senior notes as of December 31, 2017 and 2016 are summarized below: 2017 2016 2.125% senior notes due 2018 $ — $ 998 2.300% senior notes due 2018 — 402 2.250% senior notes due 2019 505 509 2.875% senior notes due 2020 1,495 1,493 3.950% senior notes due 2020 514 518 2.250% senior notes due 2021 497 — 3.250% senior notes due 2022 1,044 1,054 3.550% senior notes due 2022 994 994 2.750% senior notes due 2023 746 — 4.000% senior notes due 2023 737 744 3.625% senior notes due 2024 1,001 1,001 3.875% senior notes due 2025 2,478 2,475 3.450% senior notes due 2027 991 — 5.700% senior notes due 2040 247 247 5.250% senior notes due 2043 393 393 4.625% senior notes due 2044 987 987 5.000% senior notes due 2045 1,975 1,974 4.350% senior notes due 2047 1,234 — Total long-term debt $ 15,838 $ 13,789 As of December 31, 2017 and 2016, the fair value of our outstanding Senior Notes was $16.6 billion and $14.6 billion , respectively, and represented a level 2 measurement within the fair value measurement hierarchy. Debt Issuance: In November 2017, we issued an additional $750 million principal amount of 2.750% senior notes due 2023 (2023 Notes), $1.000 billion principal amount of 3.450% senior notes due 2027 (2027 Notes) and $1.250 billion principal amount of 4.350% senior notes due 2047 (2047 Notes). The 2023 Notes, 2027 Notes and 2047 Notes were issued at 99.944% , 99.848% and 99.733% of par, respectively and the discount is being amortized as additional interest expense over the period from issuance through maturity. Aggregate offering costs of approximately $23 million have been recorded as a direct deduction from the carrying amount of the 2023 Notes, 2027 Notes and 2047 Notes on our Consolidated Balance Sheets. The offering costs are being amortized as additional interest expense using the effective interest rate method over the period from issuance through maturity. Interest on the 2023 Notes is payable semi-annually in arrears on February 15 and August 15 of each year, beginning on February 15, 2018 and the principal is due in full at the maturity date. Interest on the 2027 Notes and 2047 Notes is payable semi-annually in arrears on May 15 and November15 of each year, beginning on May 15, 2018 and the principal is due in full at the maturity date. The 2023 Notes, 2027 Notes and 2047 Notes may be redeemed at our option, in whole or in part, at any time at a redemption price equaling accrued and unpaid interest plus the greater of 100% of the principal amount of the notes to be redeemed or the sum of the present values of the remaining schedule payments of interest and principal discounted to the date of redemption on a semi-annual basis plus 12.5 basis points for the 2023 Notes, 20 basis points for the 2027 Notes and 25 basis points for the 2047 Notes. If we experience a change of control, we will be required to offer to repurchase the 2023 Notes, 2027 Notes and 2047 Notes at a purchase price equal to 101% of the principal amount plus accrued and unpaid interest. We are subject to covenants which limit our ability to pledge properties as security under borrowing arrangements and limit our ability to perform sale and leaseback transactions involving our property. In August 2017, we issued an additional $500 million principal amount of 2.250% senior notes due 2021 (2021 Notes). The 2021 Notes were issued at 99.706% of par, and the discount is being amortized as additional interest expense over the period from issuance through maturity. Offering costs of approximately $2 million have been recorded as a direct deduction from the carrying amount of the 2021 Notes on our Consolidated Balance Sheets. The offering costs are being amortized as additional interest expense using the effective interest rate method over the period from issuance through maturity. Interest on the 2021 Notes is payable semi-annually in arrears on February 15 and August 15 of each year, beginning on February 15, 2018 and the principal on the 2021 Notes is due in full at the maturity date. The 2021 Notes may be redeemed at our option, in whole or in part, at any time at a redemption price equaling accrued and unpaid interest plus the greater of 100% of the principal amount of the 2021 Notes to be redeemed or the sum of the present values of the remaining schedule payments of interest and principal discounted to the date of redemption on a semi-annual basis plus 15 basis points. If we experience a change of control accompanied by a downgrade of the debt to below investment grade, we will be required to offer to repurchase the 2021 Notes at a purchase price equal to 101% of the principal amount plus accrued and unpaid interest. We are subject to covenants which limit our ability to pledge properties as security under borrowing arrangements and limit our ability to perform sale and leaseback transactions involving our property. Debt Redemption: On November 9, 2017, we announced the redemption of all of the outstanding $1.000 billion aggregate principal amount of 2.125% senior notes and $400 million aggregate principal amount of 2.300% senior notes, each maturing in August 2018. On December 11, 2017, we paid cash of approximately $1.4 billion , including accrued interest of $10 million , to complete the redemption resulting in a loss on extinguishment of debt of $4 million , which was recorded in Other income (expense), net in the Consolidated Statement of Income during the fourth quarter of 2017. The charge is comprised of the make-whole-premium and write-off of unamortized premium, discount and debt issuance costs related to the redeemed notes. Debt Repayment: In August 2017, we repaid the 1.900% senior notes with a principal amount of $500 million upon maturity. From time to time, we have used treasury rate locks and forward starting interest rate swap contracts to hedge against changes in interest rates in anticipation of issuing fixed-rate notes. As of December 31, 2017 and 2016 a balance of $31 million and $61 million in losses remained in accumulated OCI related to settlements of these derivative instruments and will be recognized as interest expense over the life of the notes. As of December 31, 2017 and 2016, we were party to pay-floating, receive-fixed interest rate swap contracts designated as fair value hedges of fixed-rate notes as described in Note 5. Our swap contracts outstanding as of December 31, 2017 effectively convert the hedged portion of our fixed-rate notes to floating rates. From time to time we terminate the hedging relationship on certain of our swap contracts by settling the contracts or by entering into offsetting contracts. Any net proceeds received or paid in these settlements are accounted for as a reduction or increase of current and future interest expense associated with the previously hedged notes. As of December 31, 2017 and 2016, we had balances of $139 million and $173 million , respectively, of unamortized gains recorded as a component of our debt as a result of past swap contract settlements, including $3 million and $196 million related to the settlement of swap contracts during 2017 and 2016, respectively. See Note 5 for additional details related to interest rate swap contract activity. Commercial Paper: In April 2016, our Board of Directors authorized an increase in the maximum amount of commercial paper issuable to $2.0 billion . As of both December 31, 2017 and 2016, we had available capacity to issue up to $2.0 billion of Commercial Paper and there were no borrowings under the Program. Senior Unsecured Credit Facility: We maintain a senior unsecured revolving credit facility (Credit Facility) that provides revolving credit in the aggregate amount of $2.0 billion , which was increased from $1.75 billion in April 2016. During the second quarter of 2017, we amended our Credit Facility to extend the expiration date to April 17, 2022. Amounts may be borrowed in U.S. dollars for general corporate purposes. The Credit Facility currently serves as backup liquidity for our Commercial Paper borrowings. As of both December 31, 2017 and 2016 , there were no outstanding borrowings against the Credit Facility. The Credit Facility contains affirmative and negative covenants including certain customary financial covenants. We were in compliance with all financial covenants as of December 31, 2017 . |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2017 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | Stockholders' Equity Preferred Stock: Our Board of Directors is authorized to issue, at any time, without further stockholder approval, up to 5.0 million shares of preferred stock, and to determine the price, rights, privileges, and preferences of such shares. Common Stock: As of December 31, 2017 , we were authorized to issue up to 1.150 billion shares of common stock of which shares of common stock issued totaled 971.7 million . Treasury Stock: During the period of April 2009 through December 2017, our Board of Directors has approved repurchases of up to an aggregate $20.5 billion of our common stock. We repurchased $3.9 billion , $2.2 billion , and $3.3 billion of treasury stock under the program in 2017 , 2016 and 2015 , respectively, excluding transaction fees. As of December 31, 2017 , an aggregate 204.9 million common shares were repurchased under the program at an average price of $96.03 per common share and total cost of $19.7 billion . Other: When employee awards of RSUs vest and are settled net in order to fulfill minimum statutory tax withholding requirements, the shares withheld are reflected as treasury stock. A summary of changes in common stock issued and treasury stock is presented below (in millions of shares): Common Stock Common Stock in Treasury Balances as of December 31, 2014 924.8 (124.6 ) Exercise of stock options and conversion of restricted stock units 15.3 (1.2 ) Issuance of common stock for employee benefit plans — 0.4 Shares repurchased under share repurchase program — (28.1 ) Balances as of December 31, 2015 940.1 (153.5 ) Exercise of stock options and conversion of restricted stock units 14.0 (1.0 ) Issuance of common stock for employee benefit plans — 0.4 Shares repurchased under share repurchase program — (21.4 ) Balances as of December 31, 2016 954.1 (175.5 ) Exercise of stock options and conversion of restricted stock units 17.6 (0.6 ) Issuance of common stock for employee benefit plans — 0.4 Shares repurchased under share repurchase program — (36.7 ) Balances as of December 31, 2017 971.7 (212.4 ) |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income | 12 Months Ended |
Dec. 31, 2017 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income | Accumulated Other Comprehensive Income The components of other comprehensive income (loss) consist of changes in pension liability, changes in net unrealized gains (losses) on marketable securities classified as available-for-sale, net unrealized gains (losses) related to cash flow hedges, the amortization of the excluded component related to cash flow hedges and changes in foreign currency translation adjustments. The accumulated balances related to each component of other comprehensive income (loss), net of tax, are summarized as follows: Pension Liability Adjustment Net Unrealized Gains (Losses) On Available-for-Sale Marketable Securities Net Unrealized Gains (Losses) Related to Cash Flow Hedges Amortization of Excluded Component Related to Cash Flow Hedges (See Note 1) Foreign Currency Translation Adjustments Accumulated Other Comprehensive Income (Loss) Balances as of December 31, 2015 $ (14 ) $ 272 $ 586 $ — $ (76 ) $ 768 Other comprehensive (loss) income before reclassifications, net of tax (24 ) (360 ) 132 — (26 ) (278 ) Reclassified losses (gains) from accumulated other comprehensive income (loss), net of tax — 232 (303 ) — — (71 ) Net current-period other comprehensive (loss), net of tax (24 ) (128 ) (171 ) — (26 ) (349 ) Balances as of December 31, 2016 $ (38 ) $ 144 $ 415 $ — $ (102 ) $ 419 Cumulative effect adjustment for the adoption of ASU 2017-12 (See Note 1) — — (12 ) (18 ) — (30 ) Other comprehensive income (loss) before reclassifications, net of tax 16 395 (428 ) (15 ) 70 38 Reclassified losses (gains) from accumulated other comprehensive income (loss), net of tax — 23 (181 ) 18 — (140 ) Net current-period other comprehensive income (loss), net of tax 16 418 (609 ) 3 70 (102 ) Balances as of December 31, 2017 $ (22 ) $ 562 $ (206 ) $ (15 ) $ (32 ) $ 287 Gains (Losses) Reclassified Out of Accumulated Other Comprehensive Income (Loss) Accumulated Other Comprehensive Income (Loss) Components Affected Line Item in the Consolidated Statements of Income Years Ended December 31, 2017 2016 2015 Gains (losses) related to cash-flow hedges: Foreign exchange contracts Net product sales $ 184 $ 307 $ 354 Treasury rate lock agreements Interest (expense) (5 ) (5 ) (4 ) Interest rate swap agreements Interest (expense) (1 ) (2 ) (1 ) Income tax provision 3 3 2 Amortization of excluded component Net product sales (18 ) — — Gains (losses) on available-for-sale marketable securities: Realized gain (loss) on sales of marketable securities Interest and investment income, net (37 ) (358 ) (23 ) Income tax provision 14 126 8 Total reclassification, net of tax $ 140 $ 71 $ 336 |
Share-Based Compensation
Share-Based Compensation | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-Based Compensation | Share-Based Compensation We have a stockholder-approved stock incentive plan, the Celgene Corporation 2017 Stock Incentive Plan (formerly the 2008 Stock Incentive Plan) (Plan) that provides for the granting of options, RSUs, PSUs and other share-based awards to our employees, officers and non-employee directors. The Management Compensation and Development Committee of the Board of Directors (Compensation Committee) may determine the type, amount and terms, including vesting, of any awards made under the Plan. On June 14, 2017, our stockholders approved an amendment of the Plan, which included the following key modifications: adoption of an aggregate share reserve of approximately 275.3 million shares of Common Stock, which includes 10.0 million new shares of Common Stock; increase the maximum individual payment under performance-based cash awards for 3 years performance periods to $15 million ; provide that stock options and stock appreciation rights granted under the Plan may receive or retain dividends or dividend equivalents unless the underlying common stock subject to such award vests or are no longer subject to forfeiture restrictions; provide that, in the event of a change in control, allow for accelerated vesting or lapse of restrictions; provide that, if any performance-based award is subject to vesting after an involuntary termination of employment within the two -year period following a change in control, any vesting of such award shall be determined based on the higher of (A) Committee’s determination and certification of the extent to which the applicable performance goals have been achieved, and (B) the deemed achievement of all relevant performance goals at the “target” level prorated based on service during the performance period prior to the change in control. The term of the Plan is through April 18, 2027. With respect to options granted under the Plan, the exercise price may not be less than the market closing price of the common stock on the date of grant. In general, options granted under the Plan vest over periods ranging from immediate vesting to four -year vesting and expire ten years from the date of grant, subject to earlier expiration in case of termination of employment unless the participant meets the retirement provision under which the option would have a maximum of three additional years to vest. The vesting period for options granted under the Plan is subject to certain acceleration provisions if a change in control, as defined in the Plan, occurs. Plan participants may elect to exercise options at any time during the option term. However, any shares so purchased which have not vested as of the date of exercise shall be subject to forfeiture, which will lapse in accordance with the established vesting time period. We issue PSUs to certain executive officers that are payable in shares of our common stock at the end of a three -year performance measurement period. The number of shares to be issued at the end of the measurement period will vary, based on performance, from 0% to 200% of the target number of PSUs granted, depending on the achievement of specified performance and market targets for non-GAAP revenue ( 37.5% weighting), non-GAAP earnings per share ( 37.5% weighting) and relative total shareholder return ( 25% weighting). All shares delivered upon PSU vesting are restricted from trading for one year and one day from the vesting date. The grant date fair value for the portion of the PSUs related to non-GAAP revenue and non-GAAP earnings per share was estimated using the fair market value of our common stock on the grant date. The grant date fair value for the portion of the PSUs related to relative total shareholder return was estimated using the Monte Carlo valuation model. Shares of common stock available for future share-based grants under all plans were 36.6 million at December 31, 2017 . The following table summarizes the components of share-based compensation expense in the Consolidated Statements of Income for the years ended December 31, 2017 , 2016 and 2015 : 2017 2016 2015 Cost of goods sold $ 29 $ 33 $ 32 Research and development 268 253 251 Selling, general and administrative 347 320 294 Total share-based compensation expense 644 606 577 Tax benefit related to share-based compensation expense 180 167 161 Reduction in net income $ 464 $ 439 $ 416 The tax benefit related to share-based compensation expense above excludes excess tax benefits of $290 million , $189 million , and $301 million from share-based compensation awards that vested or were exercised during the years ended December 31, 2017 , 2016 and 2015 , respectively. See Note 1 for additional information related to the adoption of ASU 2016-09. Included in share-based compensation expense for the years ended December 31, 2017 , 2016 and 2015 was compensation expense related to non-qualified stock options of $347 million , $357 million and $346 million , respectively. Net proceeds received from share-based compensation arrangements for the years ended December 31, 2017 , 2016 and 2015 were $685 million , $359 million and $252 million , respectively. Prior to the adoption of ASU 2016-09, we did not recognize a deferred tax asset for excess tax benefits that had not been realized and had applied the tax law method as our accounting policy regarding the ordering of tax benefits to determine whether an excess tax benefit has been realized. Stock Options: As of December 31, 2017 , there was $553 million of total unrecognized compensation cost related to stock options granted under the plans. That cost will be recognized over an expected remaining weighted-average period of 2.2 years. The weighted-average grant date fair value of the stock options granted during the years ended December 31, 2017 , 2016 and 2015 was $32.42 per share, $32.49 per share and $38.83 per share, respectively. We estimated the fair value of options granted using a Black-Scholes option pricing model with the following assumptions: 2017 2016 2015 Risk-free interest rate 1.70% - 2.22% 1.03% - 2.08% 1.17% - 1.72% Expected volatility 24% - 30% 29% - 35% 31% - 38% Weighted average expected volatility 27% 32% 34% Expected term (years) 5.03 - 5.06 5.04 - 5.06 5.02 - 5.04 Expected dividend yield 0% 0% 0% The risk-free interest rate is based on the U.S. Treasury zero-coupon curve. Expected volatility of stock option awards is estimated based on the implied volatility of our publicly traded options with settlement dates of six months. The use of implied volatility was based upon the availability of actively traded options on our common stock and the assessment that implied volatility is more representative of future stock price trends than historical volatility. The expected term of an employee share option is the period of time for which the option is expected to be outstanding. We made a determination of expected term by analyzing employees' historical exercise experience from its history of grants and exercises in our option database and management estimates. Forfeiture rates are estimated based on historical data. The following table summarizes all stock option activity for the year ended December 31, 2017 : Options (in Millions) Weighted Average Exercise Price Per Option Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value (in Millions) Outstanding as of December 31, 2016 73.8 $ 70.62 6.2 $ 3,388 Changes during the Year: Granted 11.5 118.80 Exercised (15.6 ) 49.49 Forfeited (1.8 ) 108.00 Expired (0.1 ) 97.59 Outstanding as of December 31, 2017 67.8 $ 82.53 6.1 $ 1,823 Vested as of December 31, 2017 or expected to vest in the future 66.9 $ 82.07 6.0 $ 1,822 Vested as of December 31, 2017 41.1 $ 63.58 4.7 $ 1,754 The total fair value of shares vested during the years ended December 31, 2017 , 2016 and 2015 was $346 million , $335 million and $267 million , respectively. The total intrinsic value of stock options exercised during the years ended December 31, 2017 , 2016 and 2015 was $1.2 billion , $747 million and $994 million , respectively. We primarily utilize newly issued shares to satisfy the exercise of stock options. Restricted Stock Units: We issue RSUs, under our equity program in order to provide an effective incentive award with a strong retention component. Equity awards may, at the option of employee participants, be divided between stock options and RSUs. The employee may choose between alternate Company defined mixes of stock options and RSUs, with the number of options to be granted reduced by four for every one RSU to be granted. Information regarding the Company's RSUs for the year ended December 31, 2017 is as follows (shares in millions): Nonvested RSUs Share Equivalent Weighted Average Grant Date Fair Value Nonvested as of December 31, 2016 7.1 $ 103.00 Changes during the period: Granted 3.1 113.23 Vested (2.0 ) 91.27 Forfeited (0.5 ) 109.15 Nonvested as of December 31, 2017 7.7 $ 109.55 As of December 31, 2017 , there was $422 million of total unrecognized compensation cost related to non-vested RSU awards. That cost is expected to be recognized over a weighted-average period of 1.6 years. The Company primarily utilizes newly issued shares to satisfy the vesting of RSUs. Performance-Based Restricted Stock Units: We grant performance-based restricted stock units that vest contingent upon the achievement of pre-determined performance-based milestones that are either related to product development or the achievement of specified performance and market targets, including non-GAAP revenue, non-GAAP earnings per share and relative total shareholder return. The following table summarizes the Company's performance-based restricted stock unit activity for the year ended December 31, 2017 (shares in thousands): Nonvested Performance-Based RSUs Share Equivalent Weighted Average Grant Date Fair Value Nonvested as of December 31, 2016 463 $ 107.38 Changes during the period: Granted 169 123.86 Vested (38 ) 87.92 Forfeited (36 ) 109.61 Non-vested as of December 31, 2017 558 $ 116.27 As of December 31, 2017 , there was $25 million of total unrecognized compensation cost related to non-vested awards of performance-based RSUs that is expected to be recognized over a weighted-average period of 1.3 years. |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2017 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plans | Employee Benefit Plans We sponsor an employee savings and retirement plan, which qualifies under Section 401(k) of the Internal Revenue Code, as amended (the Code) for our U.S. employees. Our contributions to the U.S. savings plan are discretionary and have historically been made in the form of our common stock (see Note 12). Such contributions are based on specified percentages of employee contributions up to 6% of eligible compensation or a maximum permitted by law. Total expense for contributions to the U.S. savings plans were $34 million , $40 million and $35 million in 2017 , 2016 and 2015 , respectively. We also sponsor defined contribution plans in certain foreign locations. Participation in these plans is subject to the local laws that are in effect for each country and may include statutorily imposed minimum contributions. We also maintain defined benefit plans in certain foreign locations for which the obligations and the net periodic pension costs were determined not to be material as of and for the year ended December 31, 2017 . In 2000, our Board of Directors approved a deferred compensation plan. The plan was frozen effective as of December 31, 2004, and no additional contributions or deferrals can be made to that plan. Accrued benefits under the frozen plan will continue to be governed by the terms under the tax laws in effect prior to the enactment of American Jobs Creation Act of 2004, Section 409A (Section 409A). In February 2005, our Board of Directors adopted the Celgene Corporation 2005 Deferred Compensation Plan, effective as of January 1, 2005, and amended the plan in February 2008. This plan operates as our ongoing deferred compensation plan and is intended to comply with Section 409A. Eligible participants, which include certain top-level executives as specified by the plan, can elect to defer up to an amended 90% of the participant's base salary, 100% of cash bonuses and equity compensation allowed under Section 409A. Company contributions to the deferred compensation plan represent a match to certain participants' deferrals up to a specified percentage, which currently ranges from 10% to 20% , depending on the employee's position as specified in the plan, of the participant's base salary. Expenses related to our contributions to the deferred compensation plans in 2017 , 2016 and 2015 , were not material. The Company's matches are fully vested upon contribution. All other Company contributions to the plan do not vest until the specified requirements are met. As of December 31, 2017 and 2016 , we had a deferred compensation liability included in other non-current liabilities in the Consolidated Balance Sheets of approximately $156 million and $125 million , respectively, which included the participant's elected deferral of salaries and bonuses, the Company's matching contribution and earnings on deferred amounts as of that date. The plan provides various alternatives for the measurement of earnings on the amounts participants defer under the plan. The measurement alternatives are based on returns of a variety of funds that offer plan participants the option to spread their risk across a diverse group of investments. We have established a Long-Term Incentive Plan, or LTIP, designed to provide key officers and executives with performance-based incentive opportunities contingent upon achievement of pre-established corporate performance objectives covering a three -year period. As of December 31, 2017, we had recorded liabilities for three separate three -year performance cycles running concurrently and ending December 31, 2017, 2018 and 2019. Performance measures for each of the performance cycles are based on the following components: 37.5% on non-GAAP earnings per share (as defined in the LTIP); 37.5% on total non-GAAP revenue (as defined in the LTIP); and 25% on relative total shareholder return, which is a measurement of our stock price performance during the applicable three-year period compared with a group of other companies in the biopharmaceutical industry. Threshold, target and maximum cash payout levels are calculated as a percentage between 0% to 200% of each participant’s base salary at the time the LTIP was approved by the Compensation Committee. Such awards are payable in cash or common stock or a mixture of cash and common stock, which will be determined by the Compensation Committee at the time of award delivery. Share-based payout levels are calculated using the cash-based threshold, target and maximum levels, divided by the average closing price of Celgene stock for the 30 trading days prior to the commencement of each performance cycle. Therefore, final share-based award values are reflective of the stock price at the end of the measurement period. The Compensation Committee may determine that payments made in common stock are restricted from trading for a period of time. The estimated payout value for the three -year performance cycle ended December 31, 2017 is $7 million , which is included in Accrued expenses and other current liabilities as of December 31, 2017, and the maximum potential cash-based payout, assuming maximum objectives are achieved for performance cycles ending in 2018, 2019 and 2020 are $13 million , $14 million and $12 million , respectively. The reduction in the maximum potential cash-based payout for cycles ending after 2016 reflect a shift in the mix of compensation components for certain senior executives, including performance-based equity compensation in lieu of LTIP participation. We accrue the long-term incentive liability over each three-year cycle. Prior to the end of a three-year cycle, the accrual is based on an estimate of our level of achievement during the cycle. Upon a change in control, participants will be entitled to an immediate payment equal to their target award or, if higher, an award based on actual performance through the date of the change in control. For the years ended December 31, 2017 , 2016 and 2015 , we recognized expense related to the LTIP of $5 million , $13 million and $25 million , respectively. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes In December 2017, the President signed U.S. tax reform legislation (2017 Tax Act), which includes a broad range of provisions, many of which significantly differ from those contained in previous U.S. tax law. Changes in tax law are accounted for in the period of enactment. As such, the 2017 consolidated financial statements reflect the immediate tax effect of the 2017 Tax Act, which was enacted on December 22, 2017 (Enactment Date). The 2017 Tax Act contains several key provisions including, among other things: • A one-time tax on the mandatory deemed repatriation of post-1986 untaxed foreign earnings and profits (E&P), referred to as the toll charge; • Reduction in the Corporate tax rate from 35% to 21% for tax years beginning after December 31, 2017; • Introduction of a new U.S. tax on certain off-shore earnings referred to as Global Intangible Low-Taxed Income (GILTI) at an effective tax rate of 10.5% for tax years beginning after December 31, 2017 (increasing to 13.125% for tax years beginning after December 31, 2025) with a partial offset by foreign tax credits; and • Introduction of a territorial tax system beginning in 2018 by providing a 100% dividends received deduction on certain qualified dividends from foreign subsidiaries. During the fourth quarter of 2017, we recorded an income tax expense of $1,269 million , which was comprised of the following: • An income tax expense of $1,890 million for the one-time deemed repatriation of E&P. In accordance with the 2017 Tax Act, the toll charge liability may be paid over eight years. As such, we have recorded $1,732 million and $150 million in non-current and current income tax liability on an undiscounted basis, respectively, as of December 31, 2017; and • An income tax benefit of $621 million , primarily for the remeasurement of our deferred tax assets and liabilities at the enacted tax rate of 21% . The net charge recorded was based on currently available information and interpretations of applying the provisions of the 2017 Tax Act as of the time of filing this Annual Report on Form 10-K. In accordance with authoritative guidance issued by the Securities and Exchange Commission (SEC), the income tax effect for certain aspects of the 2017 Tax Act represent provisional amounts for which our accounting is incomplete but a reasonable estimate could be determined and recorded during the fourth quarter of 2017. The guidance provides for a measurement period, up to one year from the Enactment Date, in which provisional amounts may be adjusted when additional information is obtained, prepared or analyzed about facts and circumstances, that existed as of the Enactment Date, if known, which would have affected the amounts that were initially recorded as provisional amounts. Adjustments to provisional amounts identified during the measurement period should be recorded as an income tax expense or benefit in the period the adjustment is determined. We continue to evaluate the impacts of the 2017 Tax Act and consider the amounts recorded to be provisional, except for the one-time impact of the change in tax rate on our deferred tax assets and liabilities as of December 31, 2017 for which our accounting is complete. In addition, we are still evaluating the GILTI provisions of the 2017 Tax Act and its impact, if any, on our consolidated financial statements as of December 31, 2017. The FASB allows companies to adopt an accounting policy to either recognize deferred taxes for GILTI or treat such as a tax cost in the year incurred. We have not yet determined our accounting policy because determining the impact of the GILTI provisions requires analysis of our existing legal entity structure, the reversal of our U.S. GAAP and U.S. tax basis differences in the assets and liabilities of our foreign subsidiaries, and our ability to offset any tax with foreign tax credits. As such, we did not record a deferred income tax expense or benefit related to the GILTI provisions in our Consolidated Statement of Income for the year ended December 31, 2017 and we will finalize this during the measurement period. The Company recorded a provisional amount for its toll charge, which represents its reasonable estimate of the liability due for the mandatory deemed repatriation of its post-1986 untaxed foreign E&P. Determining the provisional toll charge liability required a significant effort based on a number of factors including: • Analyzing our accumulated untaxed foreign E&P since 1986 including historical practices and assertions made in determining such; • Determining the composition, including intercompany receivables and payables of specified foreign corporations, of our post-1986 untaxed foreign E&P that is held in cash or liquid assets and other assets at several measurement dates, as a different tax rate is applied to each when determining the toll charge liability; and • Assessing the potential impact of existing uncertain tax positions in determining our accumulated undistributed E&P. For the aforementioned factors as well as the proximity of the enactment of the 2017 Tax Act to our year-end, we had limited time to understand the 2017 Tax Act and its various interpretations (including any additional guidance issued through the time of filing this Annual Report on Form 10-K), to assess how to apply the new law to our specific facts and circumstances and determine the toll charge. These factors also contributed to the tax effects recorded being provisional amounts. In addition, we made certain assumptions in determining the provisional toll charge that may result in adjustments when we finalize our analysis and accounting for the 2017 Tax Act including, but not limited to, the following: • Finalize our analysis of our post-1986 untaxed foreign E&P; • Finalize our analysis as to the amounts and nature of, among other items, our intercompany transactions and balances as of December 31, 2017, 2016 and 2015 to determine the appropriate composition of our post-1986 untaxed E&P as either cash / liquid assets or other assets; and • Finalize our analysis of the impacts of the Tax Act on our accounting for the GILTI provisions. Certain income tax effects of applying the 2017 Tax Act represent provisional amounts for which our analysis is incomplete but a reasonable estimate could be determined and recorded during the fourth quarter of 2017. Our actual results may materially differ from our current estimate due to, among other things, further guidance that may be issued by U.S. tax authorities or regulatory bodies including the SEC and the FASB to interpret the 2017 Tax Act. We will continue to analyze the 2017 Tax Act and any additional guidance that may be issued so we can finalize the full effects of applying the new legislation on our financial statements in the measurement period. Income before income taxes is as follows: 2017 2016 2015 U.S. $ 445 $ 735 $ 525 Non-U.S. 3,869 1,637 1,498 Income before income taxes $ 4,314 $ 2,372 $ 2,023 For the years ended December 31, 2017, 2016 and 2015, U.S. income before income taxes reflects charges related to share-based compensation, upfront collaboration payments, asset impairments, acquisitions and interest expense which in the aggregate, increased from 2015 to 2017. Many of these charges are not deductible for U.S. income tax purposes. Non-U.S. income before income taxes reflects the results of our commercial, research and manufacturing operations outside the U.S. The provision (benefit) for taxes on income is as follows: 2017 2016 2015 United States: Taxes currently payable: Federal $ 2,545 $ 569 $ 321 State and local 52 43 63 Deferred income taxes (1,331 ) (343 ) (29 ) Total U.S. tax provision 1,266 269 355 International: Taxes currently payable 107 106 71 Deferred income taxes 1 (2 ) (5 ) Total international tax provision 108 104 66 Total provision $ 1,374 $ 373 $ 421 Amounts are reflected in the preceding tables based on the location of the taxing authorities. Deferred taxes arise because of different treatment between financial statement accounting and tax accounting, known as temporary differences. We record the tax effect on these temporary differences as deferred tax assets (generally items that can be used as a tax deduction or credit in future periods) or deferred tax liabilities (generally items for which we received a tax deduction but have not yet recorded in the Consolidated Statements of Income and the tax effects of acquisition related temporary differences). We evaluate the likelihood of the realization of deferred tax assets and record a valuation allowance if it is more likely than not that all or a portion of the asset will not be realized. We consider many factors when assessing the likelihood of future realization of deferred tax assets, including our recent cumulative earnings experience by taxing jurisdiction, expectations of future taxable income, the carryforward periods available to us for tax reporting purposes, tax planning strategies and other relevant factors. Significant judgment is required in making this assessment. As of December 31, 2017 and 2016, it was more likely than not that we would realize our deferred tax assets, net of valuation allowances. The $134 million increase in the valuation allowance from 2016 to 2017 relates primarily to certain state and foreign net operating loss (NOL) carryforwards. As a result of the 2017 Tax Act, we recorded an income tax benefit of $621 million primarily related to the remeasurement of our deferred tax liabilities and assets at December 31, 2017. Many of our operations are conducted outside the United States. As a result of the 2017 Tax Act and the toll charge, we expect to have access to our offshore earnings as of December 31, 2017 with minimal to no additional U.S. tax impact. Therefore, we no longer consider these earnings to be permanently reinvested offshore. In prior years, we recorded U.S. deferred tax liabilities of $317 million for certain offshore earnings that were expected to be remitted to our domestic operations. These deferred tax liabilities reduced the income tax expense recorded in the fourth quarter of 2017 for the toll charge. The remaining amounts earned overseas were expected to be permanently reinvested outside of the United States, and therefore, no accrual for U.S. taxes was provided. We continue to evaluate our assertions on any remaining outside basis differences in our foreign subsidiaries as of December 31, 2017 and have not completed our analysis. In accordance with authoritative guidance issued by the SEC, we expect to finalize our accounting related to the toll charge and any remaining outside basis differences in our foreign subsidiaries during later periods as we complete our analysis, computations and assertions. As of December 31, 2017 and 2016 the tax effects of temporary differences that give rise to deferred tax assets and liabilities were as follows: 2017 2016 Assets Liabilities Assets Liabilities NOL carryforwards $ 249 $ — $ 133 $ — Tax credit carryforwards 11 — 14 — Share-based compensation 317 — 412 — Other assets and liabilities 38 (52 ) 60 (10 ) Intangible assets 333 (2,008 ) 808 (1,013 ) Accrued and other expenses 278 — 263 — Unremitted earnings — — — (317 ) Unrealized (gains) losses on securities — (193 ) — (69 ) Subtotal 1,226 (2,253 ) 1,690 (1,409 ) Valuation allowance (277 ) — (143 ) — Total deferred taxes $ 949 $ (2,253 ) $ 1,547 $ (1,409 ) Net deferred tax asset (liability) $ (1,304 ) $ 138 As of December 31, 2017 and 2016 , deferred tax assets and liabilities were classified on our Consolidated Balance Sheets as follows: 2017 2016 Other non-current assets $ 23 $ 138 Deferred income tax liabilities (1,327 ) — Net deferred tax asset (liability) $ (1,304 ) $ 138 Reconciliation of the U.S. statutory income tax rate to the Company's effective tax rate is as follows: Percentages 2017 2016 2015 U.S. statutory rate 35.0 % 35.0 % 35.0 % Foreign tax rate differences (28.8 )% (21.1 )% (21.0 )% State taxes, net of federal benefit 0.6 % 0.8 % 1.2 % Change in valuation allowance 0.8 % 0.5 % 2.0 % Acquisition and collaboration related differences 2.1 % (0.7 )% 4.5 % Changes in uncertain tax positions 0.1 % (0.4 )% (0.5 )% Stock compensation (6.7 )% — % — % 2017 Tax Act 29.4 % — % — % Other (0.7 )% 1.6 % (0.4 )% Effective income tax rate 31.8 % 15.7 % 20.8 % Our reconciliation of the U.S. statutory income tax rate to our effective tax rate includes foreign tax rate differences from our foreign operations which are subject to income taxes at different rates than the United States. The benefit related to foreign tax rate differences primarily results from our commercial operations in Switzerland, which include significant research and development and manufacturing for worldwide markets. We operated under an income tax agreement in Switzerland through 2015 that provided an exemption from most Swiss income taxes on our operations in Switzerland. Beginning in 2016, we have been operating under a new agreement with the Swiss tax authorities which reflects a reorganization and expansion of our Swiss operations, and results in similar tax benefits through the end of 2024. The difference between the maximum statutory Swiss income tax rate (approximately 15.6% in 2017, 15.6% in 2016 and 17.0% in 2015) and our Swiss income tax rate under the tax agreements resulted in a reduction in our 2017, 2016 and 2015 effective tax rates of 14.8 , 20.5 and 25.7 percentage points, respectively. The increase in the tax benefit from foreign tax rate differences was primarily due to an increase in pre-tax earnings from foreign tax jurisdictions. The impact of acquisition and collaboration related differences on our effective tax rate was higher in 2017 and 2015 compared to 2016 primarily due to a non-recurring tax benefit related to a loss on our investment in Avila in 2016. The increase in tax benefits from stock compensation related to excess tax benefits from employee stock compensation upon adoption of ASU 2016-09. The reconciliation also includes the effect of changes in uncertain tax positions, which include the effect of settlements, expirations of statutes of limitations, and other changes in prior year tax positions. As of December 31, 2017, we had U.S. federal NOL carryforwards of approximately $200 million and state NOL carryforwards of approximately $1.1 billion that will expire in the years 2018 through 2037. We also have U.S. federal and state research and experimentation credit carryforwards of approximately $12 million that will expire in the years 2020 through 2034. Deferred tax assets for most of our U.S. federal and state carryforwards and all of our foreign carryforwards are subject to a full valuation allowance. Prior to the adoption of ASU 2016-09, excess tax benefits related to share-based compensation deductions incurred after December 31, 2005 were required to be recognized in the period in which the tax deduction was realized through a reduction of income taxes payable. As a result, we had not recorded deferred tax assets for these share-based compensation deductions included in our NOL carryforwards and research and experimentation credit carryforwards. ASU 2016-09 was effective for us on January 1, 2017. Among other provisions, the new standard requires that excess tax benefits and tax deficiencies that arise upon vesting or exercise of share-based payments be recognized as income tax benefits and expenses in the income tax provision. Previously, such amounts were recorded to additional paid-in-capital. This aspect of the new guidance was required to be adopted prospectively, and accordingly, the income tax provision for the year ended December 31, 2017 includes $290 million of excess tax benefits arising from share-based compensation awards that vested or were exercised during the period. In addition, at January 1, 2017, the Company recorded a cumulative-effect adjustment to Retained earnings, with a corresponding increase to net deferred tax assets, in the amount of $17 million related to previously unrecognized excess tax benefits. During the third quarter of 2017, we completed an updated analysis of our current and prior year estimates of our U.S. research and development and orphan drug tax credits. The analysis resulted in additional net income tax benefits of approximately $65 million including $55 million related to prior year estimated tax credits, which were recorded on our Consolidated Statements of Income within Income tax provision. The effect of the change in estimate increased net income by approximately $65 million . On a per share basis, this increased both of the Company’s basic and diluted income per share by $0.08 . We realized excess tax benefits related to share-based compensation in 2016 and 2015 for income tax purposes an increased additional paid-in capital in the amount of approximately $185 million and $302 million , respectively. We have recorded deferred income tax expense in 2017 of $227 million and deferred income tax benefits in 2016 and 2015 of $61 million and $107 million , respectively, primarily related net unrealized gains/losses on securities, as a component of accumulated other comprehensive income. In 2015, we acquired all of the outstanding common stock of Receptos. The acquisition was accounted for using the acquisition method of accounting, and we recorded a deferred tax liability of $2.5 billion related to the acquisition. Upon integration of the acquired assets into our offshore research, manufacturing, and commercial operations, the deferred tax liability was reclassified to a non-current tax liability which represented an estimate of income tax that may have been incurred in the future upon successful development of the acquired IPR&D into a commercially viable product. Upon enactment of the 2017 Tax Act, the non-current tax liability was reclassified to a deferred tax liability and remeasured for the enacted change in tax rates that are expected to apply when the temporary difference reverses. Our tax returns are under routine examination in many taxing jurisdictions. The scope of these examinations includes, but is not limited to, the review of our taxable presence in a jurisdiction, our deduction of certain items, our claims for research and development tax credits, our compliance with transfer pricing rules and regulations and the inclusion or exclusion of amounts from our tax returns as filed. Our U.S. federal income tax returns have been audited by the IRS through the year ended December 31, 2008. Tax returns for the years ended December 31, 2009, 2010, and 2011 are currently under examination by the IRS. We are also subject to audits by various state and foreign taxing authorities, including, but not limited to, most U.S. states and major European and Asian countries where we have operations. We regularly reevaluate our tax positions and the associated interest and penalties, if applicable, resulting from audits of federal, state and foreign income tax filings, as well as changes in tax law (including regulations, administrative pronouncements, judicial precedents, etc.) that would reduce the technical merits of the position to below more likely than not. We believe that our accruals for tax liabilities are adequate for all open years. Many factors are considered in making these evaluations, including past history, recent interpretations of tax law and the specifics of each matter. Because tax regulations are subject to interpretation and tax litigation is inherently uncertain, these evaluations can involve a series of complex judgments about future events and can rely heavily on estimates and assumptions. We apply a variety of methodologies in making these estimates and assumptions, which include studies performed by independent economists, advice from industry and subject matter experts, evaluation of public actions taken by the IRS and other taxing authorities, as well as our industry experience. These evaluations are based on estimates and assumptions that have been deemed reasonable by management. However, if management's estimates are not representative of actual outcomes, our results of operations could be materially impacted. Unrecognized tax benefits, generally represented by liabilities on the consolidated balance sheet and all subject to tax examinations, arise when the estimated benefit recorded in the financial statements differs from the amounts taken or expected to be taken in a tax return because of the uncertainties described above. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: 2017 2016 Balance at beginning of year $ 414 $ 326 Increases related to prior year tax positions 67 — Decreases related to prior year tax positions — (11 ) Increases related to current year tax positions 426 108 Settlements — — Lapses of statutes of limitations (11 ) (9 ) Balance at end of year $ 896 $ 414 These unrecognized tax benefits relate primarily to issues common among multinational corporations. If recognized, unrecognized tax benefits of approximately $826 million would have a net impact on the effective tax rate. We account for interest and penalties related to uncertain tax positions as part of our provision for income taxes. Accrued interest as of December 31, 2017 and 2016 is approximately $60 million and $40 million , respectively. We have recorded changes in the liability for unrecognized tax benefits related to income tax audits, new information, and expirations of statutes of limitations in various taxing jurisdictions. The liability for unrecognized tax benefits is expected to increase in the next twelve months relating to operations occurring in that period. Any settlements of examinations with taxing authorities or expirations of statutes of limitations would likely result in a decrease in our liability for unrecognized tax benefits and a corresponding increase in taxes paid or payable and/or a decrease in income tax expense. It is reasonably possible that the amount of the liability for unrecognized tax benefits could change by a significant amount during the next twelve-month period as a result of settlements or expirations of statutes of limitations. Finalizing examinations with the relevant taxing authorities can include formal administrative and legal proceedings and, as a result, it is difficult to estimate the timing and range of possible change related to the Company’s unrecognized tax benefits. An estimate of the range of the possible change cannot be made until issues are further developed or examinations close. Our estimates of tax benefits and potential tax benefits may not be representative of actual outcomes, and variation from such estimates could materially affect our financial statements in the period of settlement or when the statutes of limitations expire. |
Collaboration Agreements
Collaboration Agreements | 12 Months Ended |
Dec. 31, 2017 | |
Collaboration Agreements | |
Collaboration Agreements | Collaboration Agreements We enter into collaborative arrangements for the research and development, license, manufacture and/or commercialization of products and/or product candidates. In addition, we also acquire products, product candidates and research and development technology rights and establish research and development collaborations with third parties to enhance our strategic position within our industry by strengthening and diversifying our research and development capabilities, product pipeline and marketed product base. These arrangements may include non-refundable, upfront payments, payments by us for options to acquire rights to products and product candidates and other rights, as well as contingent obligations by us for potential development, regulatory and commercial performance milestone payments, cost sharing arrangements, royalty payments, profit sharing and equity investments (including equity investments in the event of an initial public offering of equity by our partners). The activities under these collaboration agreements are performed with no guarantee of either technological or commercial success. Although we do not consider any individual alliance to be material, certain of the more notable alliances are described below. Summarized financial information for each of our alliances is presented in tabular format after the alliance description: Acceleron Pharma (Acceleron): We have worldwide strategic collaboration agreements with Acceleron for the joint development and commercialization of sotatercept (ACE-011) and luspatercept (ACE-536). Luspatercept is currently in phase III studies for beta-thalassemia and myelodysplastic syndromes (MDS). On January 1, 2013, we became responsible for the payment of all development costs related to sotatercept and luspatercept and have recognized development expenses as research and development expense as they were incurred. With respect to the sotatercept program, Acceleron is eligible to receive up to $367 million in development, regulatory approval and sales-based milestones and up to an additional $348 million for each of three specific discovery stage programs. We also agreed to co-promote the developed products in North America. Acceleron will receive tiered royalties on worldwide net sales upon the commercialization of a development compound. With respect to the luspatercept program, we have an exclusive, worldwide, royalty-bearing license to luspatercept and future Acceleron products for the treatment of anemia. We also agreed to co-promote the products in the United States, Canada and Mexico. Acceleron is eligible to receive development, regulatory approval and sales-based milestones of up to $218 million for luspatercept and up to an additional $171 million for the first discovery stage program, $149 million for the second discovery stage program and $125 million for each additional discovery stage program thereafter. Acceleron will receive tiered royalties on worldwide net sales upon the commercialization of a development compound. The sotatercept and luspatercept agreements may be terminated by us, at our sole discretion, at any time or by either party, among other things, upon a material breach by the other party. In September 2017, we amended and restated the collaboration agreement with Acceleron for the joint development and commercialization of sotatercept. Under the amended and restated collaboration agreement, Acceleron has the right to fund and conduct all research and development activities for sotatercept in the pulmonary hypertension field. Should sotatercept be approved for an indication in the pulmonary hypertension field, Acceleron will be responsible for global commercialization and Celgene will be eligible to receive royalties on global net sales in that field. The original collaboration deal terms will remain in place with respect to development and commercialization outside of the pulmonary hypertension field. Summarized financial information related to Acceleron is presented below: Year ended December 31, As of December 31, 1 Research and Development Expense Upfront Fees Milestones Extension/ Termination of Agreements Amortization of Prepaid Research and Development Equity Investments Made During Period Intangible Asset Balance Equity Investment Balance Percentage of Outstanding Equity 2017 $ — $ — $ — $ — $ 28 $ — $ 261 13.6 % 2016 — 15 — — 32 — 138 14.1 % 2015 — — — — — 2014 and prior 70 45 — — 93 1 Year-end balance and percentage of outstanding equity are presented for the current and prior year. Agios Pharmaceuticals, Inc. (Agios): During 2010, we entered into a discovery and development collaboration and license agreement with Agios (2010 Collaboration Agreement) that focused on cancer metabolism targets and the discovery, development and commercialization of associated therapeutics. With respect to each product that we choose to license, Agios could receive up to approximately $120 million upon achievement of certain milestones and other payments plus royalties on worldwide sales, and Agios may also participate in the development and commercialization of certain products in the United States. In June 2014, we exercised our option to license AG-221 (enasidenib), now IDHIFA ® , from Agios on an exclusive worldwide basis, with Agios retaining the right to conduct a portion of commercialization activities for enasidenib in the United States. Enasidenib is currently in a phase III study in patients that present an isocitrate dehydrogenase-2 (IDH2) mutation in relapsed refractory acute myeloid leukemia (rrAML). A New Drug Application (NDA) was submitted to the U.S. Food and Drug Administration (FDA) in the fourth quarter of 2016 based on phase I/II data generated in the rrAML population. IDHIFA ® was approved in August 2017 for the treatment of adult patients with relapsed or refractory acute myeloid leukemia with an isocitrate dehydrogenase (IDH2) detected by and FDA-approved companion diagnostic. In January 2015, we exercised our option to an exclusive license from Agios to AG-120, an orally available, selective inhibitor of the mutated isocitrate dehydrogenase-1 (IDH1) protein for the treatment of patients with cancers that harbor an IDH1 mutation, outside the United States, with Agios retaining the right to conduct development and commercialization within the United States. In May 2016, we agreed to return to Agios the AG-120 lead development candidate. As a result, Agios obtained global rights to AG-120 and the IDH1 program. Neither Agios nor Celgene have any continuing financial obligation, including royalties or milestone payments, to the other concerning AG-120 or the IDH1 program. In April 2015, we and Agios entered into a new joint worldwide development and profit share collaboration for AG-881. AG-881 is a small molecule that has shown in preclinical studies to fully penetrate the blood brain barrier and inhibit IDH1 and IDH2 mutant cancer cells. Under the terms of the AG-881 collaboration, Agios is eligible to receive contingent payments of up to $70 million based on the attainment of specified regulatory goals. We and Agios will jointly collaborate on the worldwide development program for AG-881, sharing development costs equally. The two companies will share profits equally, with Celgene recording commercial sales worldwide. Agios will lead commercialization in the U.S. with both companies sharing equally in field-based commercial activities, and we will lead commercialization ex-U.S. with Agios providing one third of field-based commercial activities in the major European Union (EU) markets. In May 2016, we and one of our subsidiaries entered into a new global collaboration agreement with Agios (2016 Collaboration Agreement), focused on the research and development of immunotherapies against certain metabolic targets that exert their antitumor efficacy primarily via the immune system. In addition to new programs identified under the 2016 Collaboration Agreement, we and Agios have also agreed that all future development and commercialization of two programs that were conducted under the 2010 Collaboration Agreement will now be governed by the 2016 Collaboration Agreement. During the term of the 2016 Collaboration Agreement, Agios plans to conduct research programs focused on discovering compounds that are active against metabolic targets in the immuno-oncology (IO) field. The initial four -year term will expire in May 2020. We may extend the term for up to two additional one -year terms or in specified cases, up to four additional years. Under the 2016 Collaboration Agreement, Agios has granted us exclusive options to obtain development and commercialization rights for each program that we have designated for further development. We may exercise each such option beginning on the designation of a development candidate for such program (or on the designation of such program as a continuation program) and ending on the earlier of the end of a specified period after Agios has furnished us with specified information for such program, or January 1, 2030. Programs that have applications in the inflammation or autoimmune (I&I) field that may result from the 2016 Collaboration Agreement will also be subject to the exclusive options described above. Summarized financial information related to Agios is presented below: Year ended December 31, As of December 31, 1 Research and Development Expense Upfront Fees Milestones Extension/ Termination of Agreements Amortization of Prepaid Research and Development Equity Investments Made During Period Intangible Asset Balance Equity Investment Balance Percentage of Outstanding Equity 2017 $ 8 $ — $ — $ — $ 31 $ — $ 335 12.0 % 2016 200 25 — 1 — — 219 12.4 % 2015 9 — — — — 2014 and prior 121 — 60 — 89 1 Year-end balance and percentage of outstanding equity are presented for the current and prior year. AstraZeneca PLC (AstraZeneca): In April 2015, we entered into a strategic collaboration agreement with MedImmune Limited (MedImmune), a subsidiary of AstraZeneca, to develop and commercialize durvalumab, a novel anti-PD-L1 monoclonal antibody, for hematologic malignancies. The agreement provides for a negotiation period to expand the agreement for other immuno-therapeutics. We lead clinical development across all new clinical trials within the collaboration and are responsible for all costs associated with such trials until December 31, 2016, after which we will be responsible for 75 percent of those costs. We also will be responsible for the global commercialization of approved durvalumab indications in hematology, and will receive royalty rates starting at 70 percent of worldwide sales from all uses in hematology. Royalty rates will decrease gradually to 50 percent over a period of 4 years after the start of commercial sales. The agreement may be terminated at our discretion upon nine months’ prior written notice to MedImmune, and by either party upon material breach of the other party, subject to cure periods. The agreement, if not terminated sooner, expires upon the expiration of all applicable royalty terms under such agreement. Summarized financial information related to AstraZeneca is presented below: Year ended December 31, As of December 31, Research and Development Expense Upfront Fees Milestones Extension/ Termination of Agreements Amortization of Prepaid Research and Development Equity Investments Made During Period Intangible Asset Balance Equity Investment Balance Percentage of Outstanding Equity 2017 $ — $ — $ — $ — $ — $ — n/a n/a 2016 — — — — — — n/a n/a 2015 450 — — — — BeiGene, Ltd. (BeiGene): On July 5, 2017, we entered into a strategic collaboration to develop and commercialize BeiGene’s investigational anti-programmed cell death protein-1 (PD-1) inhibitor, BGB-A317, for patients with solid tumor cancers in the United States, Europe, Japan and the rest of the world outside of Asia. BeiGene will retain exclusive rights for the development and commercialization of BGB-A317 for hematological malignancies globally and for solid tumors in Asia (with the exception of Japan). BeiGene acquired our commercial operations in China and gained an exclusive license to commercialize our approved therapies in China - ABRAXANE ® , REVLIMID ® and VIDAZA ® . See Note 2 for additional details related to the divestiture of Celgene China. In addition, BeiGene was granted licensing rights in China to CC-122, under the same terms and conditions as our approved commercial products. CC-122 is a next generation CELMoD ® agent currently in development by us for relapsed / refractory multiple myeloma, lymphoma and hepatocellular carcinoma. This transaction closed on August 31, 2017. The license arrangement will expire in its entirety on the later of (a) expiration of the last valid claim that covers the composition of matter or method of use of the last licensed product, (b) expiration of regulatory exclusivity for the last licensed product or (c) twelve years after the first commercial sale of the last licensed product. The license agreement may be terminated by us, at our sole discretion, or by either party, among other things upon material breach by the other party. The supply arrangement has an initial term of ten years, which can be extended upon the mutual agreement of both parties. Summarized financial information related to BeiGene is presented below: Year ended December 31, As of December 31, 1 Research and Development Expense Upfront Fees Milestones Extension/ Termination of Agreements Amortization of Prepaid Research and Development Equity Investments Made During Period Intangible Asset Balance Equity Investment Balance Percentage of Outstanding Equity 2017 $ 268 $ — $ — $ — $ 174 $ — $ 246 5.5 % 1 Year-end balance and percentage of outstanding equity are presented for the current year. bluebird bio, Inc. (bluebird) In June 2015, we amended and restated the March 2013 collaboration agreement with bluebird. The amended and restated collaboration focuses on the discovery, development and commercialization of novel disease-altering gene therapy product candidates targeting BCMA. BCMA is a cell surface protein that is expressed in normal plasma cells and in most multiple myeloma cells, but is absent from other normal tissues. The collaboration applies gene therapy technology to modify a patient’s own T cells, known as chimeric antigen receptor (CAR) T cells, to target and destroy cancer cells that express BCMA. We have an option to license any anti-BCMA products resulting from the collaboration after the completion of a phase I clinical study by bluebird. Under the amended and restated collaboration agreement bluebird developed the lead anti-BCMA product candidate (bb2121) through a phase I clinical study and will develop next-generation anti-BCMA product candidates. The payment was recorded as prepaid research and development on the balance sheet and is being recognized as expense as development work is performed. Upon exercising our option to license a product and achievement of certain milestones, we may be obligated to pay up to $230 million per licensed product in aggregate potential option fees and clinical and regulatory milestone payments. bluebird also has the option to participate in the development and commercialization of any licensed products resulting from the collaboration through a 50/50 co-development and profit share in the United States in exchange for a reduction of milestone payments. Royalties would also be paid to bluebird in regions where there is no profit share, including in the United States, if bluebird declines to exercise their co-development and profit sharing rights. In February 2016, we exercised our option to license bb2121. In December 2017, bluebird notified us of their intention to enter into a 50/50 co-development and profit share in the United States for bb2121. We have the ability to terminate the collaboration at our discretion upon 90 days written notice to bluebird. If a product is optioned, the parties will enter into a pre-negotiated license agreement and potentially a co-development agreement should bluebird exercise its option to participate in the development and commercialization in the United States. The license agreement, if not terminated sooner, would expire upon the expiration of all applicable royalty terms under the agreement with respect to the particular product, and the co-development agreement, if not terminated sooner, would expire when the product is no longer being developed or commercialized in the United States. Upon the expiration of a particular license agreement, we will have a fully paid-up, royalty-free license to use bluebird intellectual property to manufacture, market, use and sell such licensed product. As of December 31, 2017, we have entered into two such license agreements with bluebird for bb2121 and bb21217. Summarized financial information related to bluebird is presented below: Year ended December 31, As of December 31, 1 Research and Development Expense Upfront Fees Milestones Extension/ Termination of Agreements Amortization of Prepaid Research and Development Equity Investments Made During Period Intangible Asset Balance Equity Investment Balance Percentage of Outstanding Equity 2017 $ 15 $ — $ — $ 8 $ 37 $ 4 $ 171 1.9 % 2016 10 — — 8 50 12 41 1.6 % 2015 — — — 5 — 2014 and prior 75 — — — — 1 Year-end balance and percentage of outstanding equity are presented for the current year. FORMA Therapeutics Holdings LLC (FORMA): In April 2013, we entered into a collaboration agreement with FORMA to discover, develop and commercialize drug candidates to regulate protein homeostasis targets. Protein homeostasis, which is important in oncology, neurodegenerative and other disorders, involves a tightly regulated network of pathways controlling the biogenesis, folding, transport and degradation of proteins. The collaboration enables us to evaluate selected targets and lead assets in protein homeostasis pathways during the pre-clinical phase. Based on such evaluation, we have the right to obtain exclusive licenses with respect to the development and commercialization of multiple drug candidates outside of the United States, in exchange for research and early development payments of up to approximately $200 million to FORMA. Under the terms of the collaboration agreement, FORMA is incentivized to advance the full complement of drug candidates through phase I, while Celgene is responsible for all further global clinical development for each licensed candidate. FORMA is eligible to receive up to an additional $315 million in potential payments based upon development, regulatory and sales objectives for the first ex-U.S. license. FORMA is also eligible to receive potential payments for successive licenses, which escalate for productivity, increasing up to a maximum of an additional $430 million per program. In addition, FORMA will receive royalties on ex-U.S. sales and additional payments if multiple drug candidates reach defined cumulative sales objectives. The collaboration agreement includes provisions for Celgene to obtain rights with respect to development and commercialization of drug candidates inside the United States in exchange for additional payments. Under the collaboration, the parties perform initial research and development for a term of four years . If, during such research term, a drug candidate meets certain criteria, then the parties enter into a pre-negotiated license agreement and the collaboration continues until all license agreements have expired and all applicable royalty terms under the collaboration with respect to the particular products have expired. Each license agreement, if not terminated sooner, expires upon the expiration of all applicable royalty terms under such agreement. Upon the expiration of each license agreement, we will have an exclusive, fully-paid, royalty-free license to use the applicable FORMA intellectual property to manufacture, market, use and sell the product developed under such agreement outside of the United States. As of December 31, 2017, we have entered into seven such license agreements with FORMA. On March 21, 2014, we entered into a second collaboration arrangement with FORMA (March 2014 Collaboration), pursuant to which FORMA granted us an option to license the rights to select current and future FORMA drug candidates during a term of three and one-half years. In addition, with respect to each licensed drug candidate, we have the obligation to pay designated amounts when certain development, regulatory and sales milestone events occur, with such amounts being variable and contingent on various factors. With respect to each licensed drug candidate, we will assume responsibility for all global development activities and costs after completion of phase I clinical trials. FORMA will retain U.S. rights to all such licensed assets, including responsibility for manufacturing and commercialization. As of December 31, 2017, we have entered into two such license agreements with FORMA under the second collaboration. Under this collaboration arrangement, we also have an option to enter into up to two additional collaborations for additional payments totaling approximately $375 million . During July 2017, we entered into the first of the two additional collaborations. FORMA granted us an option to license the worldwide rights (except the U.S.) to select current and future drug candidates for the next two years and three months (or through October 1, 2019). In addition, with respect to each licensed drug candidate, we have the same rights and obligations as under the March 2014 Collaboration. If we exercise our option to enter into an additional collaboration pursuant to the March 2014 Collaboration, we will receive an exclusive option to acquire FORMA, including the U.S. rights to all licensed drug candidates, and worldwide rights to other wholly-owned assets within FORMA at that time. Summarized financial information related to FORMA is presented below: Year ended December 31, As of December 31, Research and Development Expense Upfront Fees Milestones Extension/ Termination of Agreements Amortization of Prepaid Research and Development Equity Investments Made During Period Intangible Asset Balance Equity Investment Balance Percentage of Outstanding Equity 2017 $ 246 $ 25 $ — $ — $ — $ — n/a n/a 2016 71 — — — — — n/a n/a 2015 59 — — — — 2014 and prior 278 — — — — Jounce Therapeutics, Inc. (Jounce): In July 2016, we entered into a collaboration agreement with Jounce for the development and commercialization of immunotherapies for cancer, including Jounce’s lead product candidate, JTX-2011, targeting ICOS (the Inducible T cell CO-Stimulator), up to four early stage programs to be selected from a defined pool of B cell, T regulatory cell and tumor-associated macrophage targets emerging from Jounce’s research platform, and a Jounce checkpoint immuno-oncology program. Under the terms of the collaboration agreement Jounce is eligible to receive regulatory, development and net sales milestone payments. We have the right to opt into the collaboration programs at defined stages of development. Following opt-in, the parties will share U.S. profits and losses on the collaboration programs as follows: (a) Jounce will retain a 60 percent U.S. profit share of JTX-2011, with 40 percent allocated to us; (b) Jounce will retain a 25 percent U.S. profit share on the first additional program, with 75 percent allocated to us; and (c) the parties will equally share U.S. profits on up to three additional programs. Also, following opt-in to each of the foregoing programs, we will receive exclusive ex-U.S. commercialization rights with respect to such program, Jounce will be eligible to receive tiered royalties on sales outside the United States, and development costs will be shared by the parties in a manner that is commensurate with their respective product rights under such program. The parties will equally share global profits from the checkpoint program. The collaboration agreement has an initial term of 4 years , which may be extended up to three additional years. If the parties enter into any pre-negotiated license or co-commercialization agreement during the initial term, the collaboration agreement will continue until all such license and co-commercialization agreements have expired. The collaboration agreement may be terminated at our discretion upon 120 days prior written notice to Jounce and by either party upon material breach of the other party, subject to cure periods. Summarized financial information related to Jounce is presented below: Year ended December 31, As of December 31, 1 Research and Development Expense Upfront Fees Milestones Extension/ Termination of Agreements Amortization of Prepaid Research and Development Equity Investments Made During Period Intangible Asset Balance Equity Investment Balance Percentage of Outstanding Equity 2017 $ — $ — $ — $ — $ 10 $ — $ 44 10.7 % 2016 238 — — — 24 — 24 11.4 % 1 Year-end balance and percentage of outstanding equity are presented for the current and prior year. Juno Therapeutics, Inc. (Juno): In June 2015, we announced a collaboration and investment agreement with Juno for the development and commercialization of immunotherapies for cancer and autoimmune diseases. The collaboration and investment agreement became effective on July 31, 2015. Under the terms of the agreement, we have the option to be the commercialization partner for Juno’s oncology and cell therapy auto-immune product candidates, including Juno’s CD19 and CD22 directed CAR T cell product candidates. For Juno-originated programs co-developed under the collaboration, (a) Juno will be responsible for research and development in North America and will retain commercialization rights in those territories, (b) we will be responsible for development and commercialization in the rest of the world, and will pay Juno a royalty on sales in those territories, and (c) we have certain co-promotion options for global profit sharing arrangements under which the parties will share worldwide expenses and profits equally, except in China. Juno will have the option to enter into co-development and co-commercialization arrangements on certain Celgene-originated development candidates that target T cells. For any such Celgene-originated programs co-developed under the collaboration, (a) the parties will share global costs and profits, with 70 percent allocated to us and 30 percent allocated to Juno, and (b) we will lead global development and commercialization, subject to a Juno co-promote option in the US and certain EU territories. Upon closing, we made a $1.0 billion payment to Juno, of which $575 million was recorded to research and development expense as a collaboration-related upfront expense and the balance of the payment was recorded as an equity investment in Marketable securities available-for-sale. The collaboration agreement has an initial term of 10 years. If the parties enter into any pre-negotiated license or co-commercialization agreement during the initial term, the collaboration agreement will continue until all such license and co-commercialization agreements have expired. The collaboration agreement may be terminated at our discretion upon 120 days prior written notice to Juno and by either party upon material breach of the other party, subject to cure periods. In April 2016, we exercised our option to develop and commercialize Juno’s CD19 program outside North America and China and entered into a pre-negotiated license agreement with Juno with respect to such program. On January 21, 2018, we entered into a merger agreement with Juno under which we will pay $87 per share in cash, or approximately $9.0 billion net of cash and marketable securities acquired and Juno shares already owned by us (approximately 9.7% of outstanding shares). See Note 21 of Notes to Consolidated Financial Statements contained in this Annual Report on Form 10-K for additional information relating to the proposed acquisition. Summarized financial information related to Juno is presented below: Year ended December 31, As of December 31, 1 Research and Development Expense Upfront Fees Milestones Extension/ Termination of Agreements Amortization of Prepaid Research and Development Equity Investments Made During Period Intangible Asset Balance Equity Investment Balance 2 Percentage of Outstanding Equity 2017 $ — $ — $ — $ — $ 33 $ — $ 508 9.7 % 2016 50 — — — 41 — 194 9.7 % 2015 575 — — — 425 1 Year-end balance and percentage of outstanding equity are presented for the current and prior year. 2 See Note 6 for additional information relating to our equity investment balance in Juno. Lycera Corp. (Lycera): In June 2015, we entered into a collaboration and option agreement with Lycera. Under the agreement, the parties will support the development of Lycera’s portfolio of immune modulator assets, including (1) oral agonists that target RORγ, a master control switch of immune system activation, for the potential treatment of a broad range of cancers, and (2) LYC-30937, an oral gut-directed ATPase modulator currently in phase II clinical studies. In addition, we have an exclusive right to acquire Lycera at a later date at a purchase price based upon future independent company valuations. Lycera has developed orally bioavailable RORγ agonists that have demonstrated single agent therapeutic activity in multiple animal models of cancer. Ex-vivo treatment with RORγ agonist compounds has been shown to enhance the therapeutic benefit of adoptive T-cell therapy by improving both immune cell persistence and activation. Development of LYC-30937 is focused on the treatment of inflammatory bowel disease, with the goal of delivering significant disease improvement without global immune suppression. Under the collaboration, Lycera will continue to advance its other programs. Under the terms of the agreement, we received an exclusive option to license Lycera’s portfolio of ex-vivo RORγ agonist compounds, an equity interest and an exclusive right to acquire Lycera. If we exercise the acquisition right, Lycera shareholders will also be eligible to receive future success-based milestone payments of up to $190 million . The agreement has an initial term of three years and may be terminated earlier at our discretion upon six months’ prior written notice to Lycera and by either party upon material breach of the other party, subject to cure periods. In December 2015, we entered into a license agreement with Lycera, under which Lycera granted to us an exclusive license for Lycera’s portfolio of novel ex vivo RORγ agonist compounds. In April 2017, we entered into a license agreement with Lycera, under which Lycera granted to us an exclusive license to Lycera’s RORγ antagonist compounds. Lycera is eligible to receive development and regulatory milestones, as well as tiered royalties based on annual net sales of licensed products. Summarized financial information related to Lycera is presented below: Year ended December 31, As of December 31, 1 Research and Development Expense Upfront Fees Milestones Extension/ Termination of Agreements Amortization of Prepaid Research and Development Equity Investments Made During Period Intangible Asset Balance Equity Investment Balance 2 Percentage of Outstanding Equity 2017 $ 14 $ — $ — $ — $ 3 $ 3 $ 13 10.0 % 2016 — — — — — 3 10 8.0 % 2015 87 — — — 10 1 Year-end balance and percentage of outstanding equity are presented for the current and prior year. NantBioScience, Inc. (NantBioScience): In January 2014, we entered into a collaboration agreement with NantBioScience, an entity controlled by Dr. Patrick Soon-Shiong in which Celgene contributed $75 million of cash, the rights to the future royalty stream based on net sales of certain products of Active Biomaterials, LLC, another entity controlled by Dr. Patrick Soon-Shiong, and licenses to two nab ® product candidates. In return, Celgene received a 14 percent preferred equity ownership in NantBioScience, an option to license a certain number of product candidates developed by NantBioScience, including the two nab ® product candidates that Celgene is licensing to NantBioScience, and the parent company of NantBioScience assumed, and agreed to pay and satisfy when due, our obligation to pay The Chan Soon-Shiong Institute for Advanced Health (CSS Institute) $50 million in contingent, matching contributions. The transaction became effective in March 2014. Unless Celgene terminates the collaboration earlier, in Celgene’s sole discretion upon 30 days written notice, th |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Contingent Value Rights: In connection with the acquisition of Abraxis in 2010, CVRs were issued under a Contingent Value Rights Agreement, or CVR Agreement, entered into between Celgene and American Stock Transfer & Trust Company, LLC, as trustee. The CVRs are registered for trading on the NASDAQ Global Market under the symbol "CELGZ." The fair value of the liability of the Company related to payments under the CVR Agreement are subject to fluctuation based on trading prices for the publicly traded CVRs. Subsequent to the Abraxis acquisition date, we measured the contingent consideration represented by the CVRs at fair value with changes in fair value recognized in operating earnings. The fair value of our liability related to the CVRs was $42 million and $45 million as of December 31, 2017 and 2016, respectively, which was recorded in Other non-current liabilities on our Consolidated Balance Sheets. For each full one -year period ending December 31 during the term of the CVR Agreement, which we refer to as a net sales measuring period, each holder of a CVR is entitled to receive a pro rata portion, based on the number of CVRs then outstanding, of net sales related payments, calculated as follows: • 2.5% of the net sales of ABRAXANE ® and the Abraxis pipeline products that exceed $1.0 billion but are less than or equal to $2.0 billion for such period, plus • an additional amount equal to 5% of the net sales of ABRAXANE ® and the Abraxis pipeline products that exceed $2.0 billion but are less than or equal to $3.0 billion for such period, plus • an additional amount equal to 10% of the net sales of ABRAXANE ® and the Abraxis pipeline products that exceed $3.0 billion for such period. No payments will be due under the CVR Agreement with respect to net sales of ABRAXANE ® and the Abraxis pipeline products after December 31, 2025, which we refer to as the net sales payment termination date, unless net sales for the net sales measuring period ending on December 31, 2025 are equal to or greater than $1.0 billion , in which case the net sales payment termination date will be extended until the last day of the first net sales measuring period subsequent to December 31, 2025 during which net sales of ABRAXANE ® and the Abraxis pipeline products are less than $1.0 billion or, if earlier, December 31, 2030. In addition to the above, each holder of a CVR was entitled to receive a pro rata portion of two potential contingent milestone payments. The first contingent milestone payment was not achieved, as the October 2012 FDA approval of ABRAXANE ® for use in the treatment of NSCLC did not result in the use of a marketing label that included a progression-free survival claim. The second contingent milestone payment was achieved upon the FDA approval of ABRAXANE ® for use in the treatment of pancreatic cancer permitting us to market with a label that included an overall survival claim. This approval resulted in a subsequent payment of $300 million to CVR holders in October 2013. Leases: We lease offices and research facilities under various operating lease agreements in the United States and international markets. We also lease automobiles and certain equipment in these same markets. As of December 31, 2017, the non-cancelable lease terms for the operating leases expire at various dates between 2018 and 2025 and include renewal options. In general, the Company is also required to reimburse the lessors for real estate taxes, insurance, utilities, maintenance and other operating costs associated with the leases. Future minimum lease payments under non-cancelable operating leases as of December 31, 2017 are: Operating Leases 2018 $ 56 2019 48 2020 41 2021 31 2022 26 Thereafter 33 Total minimum lease payments $ 235 Total rental expense under operating leases was approximately $69 million in 2017 , $70 million in 2016 and $66 million in 2015 . Lines of Credit: We maintain lines of credit with several banks to support our hedging programs and to facilitate the issuance of bank letters of credit and guarantees on behalf of our subsidiaries. Lines of credit supporting our hedging programs as of December 31, 2017 allowed us to enter into derivative contracts with settlement dates through 2020. As of December 31, 2017 , we have entered into derivative contracts with net notional amounts totaling $10.3 billion . Lines of credit facilitating the issuance of bank letters of credit and guarantees as of December 31, 2017 allowed us to have letters of credit and guarantees issued on behalf of our subsidiaries totaling $224 million . Other Commitments: Our obligations related to product supply contracts totaled $748 million at December 31, 2017 . In addition, we have committed to invest an aggregate $47 million in investment funds, which are callable at any time. 2017 Tax Act: During the fourth quarter of 2017, we recorded an income tax expense of $1,890 million which represents the toll charge liability for the deemed repatriation of earnings and profits. We have elected to pay the toll charge in installments over eight years, or through 2025, however, the liability is not discounted on our financial statements. As such, we have recorded $1,732 million and $150 million as a non-current and current income tax liability, respectively, as of December 31, 2017. See Note 16 for additional information related to the 2017 Tax Act. Collaboration Arrangements: We have entered into certain research and development collaboration agreements, as identified in Note 17 above, with third parties that include the funding of certain development, manufacturing and commercialization efforts with the potential for future milestone and royalty payments upon the achievement of pre-established developmental, regulatory and/or commercial targets. Our obligation to fund these efforts is contingent upon continued involvement in the programs and/or the lack of any adverse events which could cause the discontinuance of the programs. Due to the nature of these arrangements, the future potential payments are inherently uncertain, and accordingly no amounts have been recorded for the potential future achievement of these targets in our accompanying Consolidated Balance Sheets as of December 31, 2017 and 2016 . Contingencies: We believe we maintain insurance coverage adequate for our current needs. Our operations are subject to environmental laws and regulations, which impose limitations on the discharge of pollutants into the air and water and establish standards for the treatment, storage and disposal of solid and hazardous wastes. We review the effects of such laws and regulations on our operations and modify our operations as appropriate. We believe we are in substantial compliance with all applicable environmental laws and regulations. We have ongoing customs, duties and VAT examinations in various countries that have yet to be settled. Based on our knowledge of the claims and facts and circumstances to date, none of these matters, individually or in the aggregate, are deemed to be material to our financial condition. Legal Proceedings: Like many companies in our industry, we have from time to time received inquiries and subpoenas and other types of information requests from government authorities and others and we have been subject to claims and other actions related to our business activities. While the ultimate outcome of investigations, inquiries, information requests and legal proceedings is difficult to predict, adverse resolutions or settlements of those matters may result in, among other things, modification of our business practices, product recalls, costs and significant payments, which may have a material adverse effect on our results of operations, cash flows or financial condition. Pending patent proceedings include challenges to the scope, validity and/or enforceability of our patents relating to certain of our products, uses of products or processes. Further, as certain of our products mature or they near the end of their regulatory exclusivity periods, it is more likely that we will receive challenges to our patents, and in some jurisdictions we have received such challenges. We are also subject, from time to time, to claims of third parties that we infringe their patents covering products or processes. Although we believe we have substantial defenses to these challenges and claims, there can be no assurance as to the outcome of these matters and an adverse decision in these proceedings could result in one or more of the following: (i) a loss of patent protection, which could lead to a significant reduction of sales that could materially affect our future results of operations, cash flows or financial condition (ii) our inability to continue to engage in certain activities, and (iii) significant liabilities, including payment of damages, royalties and/or license fees to any such third party. Among the principal matters pending are the following: Patent-Related Proceedings: REVLIMID ® : In 2012, our European patent EP 1 667 682 (the ’682 patent) relating to certain polymorphic forms of lenalidomide expiring in 2024 was opposed in a proceeding before the European Patent Office (EPO) by Generics (UK) Ltd. and Teva Pharmaceutical Industries Ltd. On July 21, 2015, the EPO determined that the ’682 patent was not valid. Celgene appealed the EPO ruling to the EPO Board of Appeal, thereby staying any revocation of the patent until the appeal is finally adjudicated. No appeal hearing date has been set. In 2010, Celgene’s European patent EP 1 505 973 (the ’973 patent) relating to certain uses of lenalidomide expiring in 2023 was opposed in a proceeding before the EPO by Synthon B.V. and an anonymous party. On February 25, 2013, the EPO determined that the ’973 patent was not valid. Celgene appealed the EPO ruling to the EPO Board of Appeal, which appeal was withdrawn on November 28, 2017. Accordingly, there will be no further action in this case. We believe that our patent portfolio for lenalidomide in Europe, including the composition of matter patent which expires in 2022, is strong. Notwithstanding the withdrawal of the appeal relating to the ’973 patent, in the event that we do not prevail on the appeal relating to the ’682 patent, we still expect that we will have protection in the EU for lenalidomide through at least 2022. We received a letter dated June 26, 2017 from Accord Healthcare Ltd. (Accord) notifying us of Accord’s filing of three individual lawsuits against us in the United Kingdom (UK) seeking to commence patent revocation proceedings originally for three UK patents (which was amended later to include a recently-granted, related divisional patent for a total of four challenged UK patents). The patents named in the lawsuit, which was filed in the High Court of Justice in London, are EP (UK) 0925294 and its associated SPC (the ’294 patent), EP (UK) 1505973 (the ’973 patent); EP (UK) 2915533 (the ’533 patent) and EP (UK) 1 667 682 (the ’682 patent), all claiming aspects of REVLIMID ® . The Court has set separate trial dates for each patent. The ’294 patent trial will begin between October 1-5, 2018; the ’973 and ’533 (combined) patents have been abandoned; and the ’682 patent trial will begin on November 26, 2018. These proceedings are limited to the patents granted in the UK. We intend to vigorously defend our intellectual property rights in these matters. We received a Notice of Allegation dated June 13, 2017 from Dr. Reddy’s Laboratories Ltd. (DRL) notifying us of the filing of DRL’s Abbreviated New Drug Submission (ANDS) with Canada’s Minister of Health, with respect to Canadian Letters Patent Nos. 2,261,762; 2,476,983; 2,477,301; 2,537,092; 2,687,924; 2,687,927; 2,688,694; 2,688,695; 2,688,708; 2,688,709; 2,741,412; and 2,741,575. DRL is seeking to manufacture and market a generic version of 2.5mg, 5mg, 10mg, 15mg, 20mg, and 25mg REVLIMID ® (lenalidomide) capsules in Canada. We commenced a court proceeding in the Federal Court of Canada on July 27, 2017, seeking an Order prohibiting the Minister of Health from granting marketing approval to DRL until expiry of these patents. We received a further Notice of Allegation dated September 20, 2017 from DRL relating to the same submission, but also referencing 2.5mg capsules. DRL’s Notice of Allegation contains invalidity allegations relating to Canadian Letters Patent Nos. 2,537,092; 2,687,924; 2,687,927; 2,688,694; 2,688,695; 2,688,708; 2,688,709; 2,741,412; and 2,741,575. We commenced a court proceeding on November 2, 2017, seeking an order prohibiting the Minister of Health from granting marketing approval to DRL until expiry of these patents. The hearing for both applications is scheduled for September 23-24, 2019 and September 30 - October 3, 2019, respectively. We received a Notice Letter dated September 9, 2016 from DRL notifying us of DRL’s Abbreviated New Drug Application (ANDA) which contains Paragraph IV certifications against U.S. Patent Nos. 7,456,800; 7,855,217; 7,968,569; 8,530,498; 8,648,095; 9,101,621; and 9,101,622 that are listed in the FDA list of Approved Drug Products with Therapeutic Equivalence Evaluations, commonly referred to as the Orange Book (Orange Book) for REVLIMID ® . DRL is seeking to manufacture and market a generic version of 2.5mg, 5mg, 10mg, 15mg, 20mg, and 25mg REVLIMID ® (lenalidomide) capsules in the United States. In response to the Notice Letter, we timely filed an infringement action against DRL in the United States District Court for the District of New Jersey on October 20, 2016. As a result of the filing of our action, the FDA cannot grant final approval of DRL's ANDA until the earlier of (i) a final decision that each of the patents is invalid, unenforceable, and/or not infringed; or (ii) March 10, 2019. On November 18, 2016, DRL filed an answer and counterclaims asserting that the patents-in-suit are invalid and/or not infringed. On December 27, 2016, we filed a reply to DRL’s counterclaims. Fact discovery is set to close on May 31, 2018. The Court has not yet entered a schedule for expert discovery or trial. We subsequently received an additional Notice Letter from DRL dated June 8, 2017 notifying us of additional Paragraph IV certifications against U.S. Patent Nos. 7,189,740; 8,404,717; and 9,056,120 that are listed in the Orange Book for REVLIMID ® . In response to the Notice Letter, we timely filed an infringement action against DRL in the United States District Court for the District of New Jersey on July 20, 2017. As a result of the filing of our action, the FDA cannot grant final approval of DRL's ANDA until the earlier of (i) a final decision that each of the patents is invalid, unenforceable, and/or not infringed; or (ii) December 9, 2019. On October 3, 2017, DRL filed an answer and counterclaims asserting that each of the patents are invalid and/or not infringed. We filed our reply to DRL’s counterclaims on November 15, 2017. Fact discovery is set to close on March 15, 2019. The Court has not yet entered a schedule for expert discovery or trial. We received a Notice Letter dated February 27, 2017 from Zydus Pharmaceuticals (USA) Inc. (Zydus) notifying us of Zydus’ ANDA which contains Paragraph IV certifications against U.S. Patent Nos. 7,456,800; 7,855,217; 7,968,569; 8,530,498; 8,648,095; 9,101,621; and 9,101,622 that are listed in the Orange Book for REVLIMID ® . Zydus is seeking to manufacture and market a generic version of 2.5 mg, 5 mg, 10 mg, 15 mg, 20 mg, and 25mg REVLIMID ® (lenalidomide) capsules in the United States. In response to the Notice Letter, we timely filed an infringement action against Zydus in the United States District Court for the District of New Jersey on April 12, 2017. As a result of the filing of our action, the FDA cannot grant final approval of Zydus’ ANDA at least until the earlier of (i) a final decision that each of the patents is invalid, unenforceable, and/or not infringed; or (ii) August 28, 2019. On August 7, 2017, Zydus filed an answer and counterclaims asserting that each of the patents are invalid and/or not infringed. On September 11, 2017, we filed a reply to Zydus’s counterclaims. Fact discovery is set to close on March 15, 2019. The Court has yet to enter a schedule for expert discovery and trial. We received a Notice Letter dated June 30, 2017 from Cipla LTD, India (Cipla) notifying us of Cipla’s ANDA which contains Paragraph IV certifications against U.S. Patent Nos. 7,456,800; 7,855,217; 7,968,569; 8,530,498; 8,648,095; 9,101,621; and 9,101,622 that are listed in the Orange Book for REVLIMID ® . Cipla is seeking to manufacture and market a generic version of 5mg, 10mg, 15mg, 20mg, and 25mg REVLIMID ® (lenalidomide) capsules in the United States. In response to the Notice Letter, on August 15, 2017, we timely filed an infringement action against Cipla in the United States District Court for the District of New Jersey. As a result of the filing of our action, the FDA cannot grant final approval of Cipla’s ANDA until the earlier of (i) a final decision that each of the patents is invalid, unenforceable, and/or not infringed; or (ii) January 5, 2020. On October 13, 2017, DRL filed an answer and counterclaims asserting that each of the patents are invalid and/or not infringed. We filed our reply to Cipla’s counterclaims on November 17, 2017. Fact discovery is set to close on March 15, 2019. The Court has yet to enter a schedule for expert discovery and trial. We received a Notice Letter dated July 24, 2017 from Lotus Pharmaceutical Co., Inc. (Lotus) notifying us of Lotus’s ANDA which contains Paragraph IV certifications against U.S. Patent Nos. 5,635,517; 6,315,720; 6,561,977; 6,755,784; 7,189,740; 7,456,800; 7,855,217; 7,968,569; 8,315,886; 8,404,717; 8,530,498; 8,626,531; 8,648,095; 9,056,120; 9,101,621; and 9,101,622 that are listed in the Orange Book for REVLIMID ® . Lotus is seeking to manufacture and market a generic version of 2.5mg, 5mg, 10mg, 15mg, 20mg, and 25mg REVLIMID ® (lenalidomide) capsules in the United States. In response to the Notice Letter, we timely filed an infringement action against Lotus in the United States District Court for the District of New Jersey on September 6, 2017. As a result of the filing of our action, the FDA cannot grant final approval of Lotus’s ANDA until the earlier of (i) a final decision that each of the patents is invalid, unenforceable, and/or not infringed; or (ii) January 25, 2020. On October 5, 2017, Lotus filed an answer and counterclaims asserting that each of the patents are invalid and/or not infringed. We filed our reply to Lotus’s counterclaims on November 9, 2017. Fact discovery is set to close on March 15, 2019. The Court has yet to enter a schedule for expert discovery and trial. We received a Notice Letter dated November 28, 2017 from Apotex Inc. (“Apotex”) notifying us of Apotex’s ANDA, which contains Paragraph IV certifications against U.S. Patent Nos. 6,315,720; 6,561,977; 6,755,784; 7,456,800; 7,468,363; 7,855,217; 8,315,886; 8,626,531; and 8,741,929 that are listed in the Orange Book for REVLIMID ® . Apotex is seeking to manufacture and market a generic version of 2.5mg, 5mg, 10mg, 15mg, 20mg, and 25mg REVLIMID ® (lenalidomide) capsules in the United States. In response to the Notice Letter, we timely filed an infringement action against Apotex in the United States District Court for the District of New Jersey on January 11, 2018. As a result of the filing of our action, the FDA cannot grant final approval of Apotex’s ANDA until at least the earlier of (i) a final decision that each of the patents is invalid, unenforceable, and/or not infringed; or (ii) May 29, 2020. Apotex has not yet responded to the complaint, and the Court has not yet entered a schedule for fact discovery, expert discovery, or trial. POMALYST ® : In July 2015, our European patent EP 2 105 135 (the ’135 patent) relating to certain pharmaceutical compositions for treating cancer expiring in 2023 was opposed in a proceeding before the EPO by Generics (UK) Ltd., Accord Healthcare Ltd., Hexal AG, IPS Intellectual Property Services, Synthon B.V., and Actavis Group PTC EHF. On December 19, 2016, the EPO determined that the ’135 patent was not valid. Regulatory exclusivity for POMALYST ® will expire in Europe in 2023. We received a Notice Letter dated March 30, 2017 from Teva Pharmaceuticals USA, Inc. (Teva) notifying us of Teva’s ANDA submitted to the FDA that contains Paragraph IV certifications against U.S. Patent Nos. 6,316,471; 8,198,262; 8,673,939; 8,735,428; and 8,828,427 that are listed in the Orange Book. Teva is seeking to manufacture and market a generic version of 1 mg, 2 mg, 3 mg, and 4 mg POMALYST ® (pomalidomide) capsules in the United States. We later received similar Notice Letters (the Pomalidomide Notice Letters) from six other generic drug manufacturers - Par Pharmaceutical, Inc. (Par); Apotex, Inc. (Apotex); Hetero USA, Inc. (Hetero); Aurobindo Pharma Ltd. (Aurobindo); Mylan Pharmaceuticals Inc. (Mylan); and Breckenridge Pharmaceutical, Inc. (Breckenridge) - relating to these and other POMALYST ® patents listed in the Orange Book. In response to the Pomalidomide Notice Letters, we timely filed an infringement actions in the United States District Court for the District of New Jersey against Teva and Par on May 4, 2017 and against Apotex, Hetero, Aurobindo, Mylan, and Breckenridge on May 11, 2017. As a result of the filing of our actions, the FDA cannot grant final approval of these ANDAs at least until the earlier of (i) a final decision that each of the patents is invalid, unenforceable, and/or not infringed; or (ii) August 8, 2020. On July 13, 2017, Apotex and Hetero each filed answers and counterclaims asserting that the patents-in-suit are invalid and/or not infringed, and further seeking declaratory judgments of noninfringement and invalidity for additional Celgene patents listed in the Orange Book, namely U.S. Patent Nos. 6,315,720, 6,561,977, 6,755,784, 8,315,886, and 8,626,531. On August 17, 2017, we filed replies to Apotex’s and Hetero’s counterclaims, as well as counter-counterclaims against Hetero and Apotex asserting infringement of U.S. Patent Nos. 6,315,720, 6,561,977, 6,755,784, 8,315,886, and 8,626,531. On September 6, 2017, Apotex filed a reply to our counter-counterclaims. On September 8, 2017, Hetero filed a reply to our counter-counterclaims. On July 24, 2017, Par filed an answer, but did not file any counterclaims. On October 17, 2017, we jointly filed a Stipulation with Par requesting dismissal and stating that Par had converted its Paragraph IV certifications to Paragraph III certifications. The court ordered dismissal on October 20, 2017. On July 31, 2017, Breckenridge filed an answer and counterclaims asserting that each of the patents asserted in the complaint is invalid and/or not infringed. We filed our reply to Breckenridge’s counterclaims on September 5, 2017. On December 6, 2017, Breckenridge filed an amended pleading to include counterclaims seeking declaratory judgments of noninfringement and invalidity for additional Celgene patents listed in the Orange Book, namely U.S. Patent Nos. 6,315,720, 6,561,977, 6,755,784, 8,315,886, and 8,626,531. Celgene replied to Breckenridge’s amended counterclaims and asserted counter-counterclaims on January 3, 2018. On August 7, 2017, Teva filed an answer and counterclaims asserting that each of the patents is invalid and/or not infringed. On September 11, 2017, we filed a reply to Teva’s counterclaims. On August 9, 2017, Mylan filed a motion to dismiss the complaint. Celgene opposed Mylan’s motion on September 29, 2017. Mylan filed its reply in support of its motion on October 24, 2017. The Court has not yet set a hearing date for this motion. On September 15, 2017, Aurobindo filed an answer and counterclaims asserting that each of the patents is invalid and/or not infringed, and further seeking declaratory judgments of noninfringement and invalidity for additional Celgene patents listed in the Orange Book, namely U.S. Patent Nos. 6,315,720, 6,561,977, 6,755,784, 8,315,886, and 8,626,531. We filed our reply to Aurobindo’s counterclaims and counter-counterclaims concerning U.S. Patent Nos. 6,315,720, 6,561,977, 6,755,784, 8,315,886, and 8,626,531 on October 20, 2017. Aurobindo filed its answer to our counter-counterclaims on November 24, 2017. The Court has not yet entered a date for the close of fact discovery, or any schedule for expert discovery or trial, in any of the cases. OTEZLA ® (Apremilast): In February 2015, Polpharma S.A., Teva Pharmaceuticals, Ltd., Zentiva k.s. and LEK Pharmaceutical d.d. opposed Celgene’s European patent EP 2 276 483 (the ’483 patent), which is directed to certain crystalline forms of apremilast. An oral hearing was held on March 21, 2017 at the EPO, whereby the Opposition Division determined that the '483 patent was not valid. The regulatory exclusivity will expire on January 15, 2025. THALOMID ® (thalidomide): We received a Notice Letter dated December 18, 2014 from Lannett Holdings, Inc. (Lannett) notifying us of Lannett’s ANDA which contains Paragraph IV certifications against U.S. Patent Nos. 5,629,327; 6,045,501; 6,315,720; 6,561,976; 6,561,977; 6,755,784; 6,869,399; 6,908,432; 7,141,018; 7,230,012; 7,435,745; 7,874,984; 7,959,566; 8,204,763; 8,315,886; 8,589,188; and 8,626,531 that are listed in the Orange Book for THALOMID ® (thalidomide). Lannett is seeking to market a generic version of 50mg, 100mg, 150mg, and 200mg of THALOMID ® capsules. On January 30, 2015, we filed an infringement action against Lannett in the United States District Court for the District of New Jersey. On October 24, 2017, we entered into an agreement with Lannett to settle all outstanding claims in the litigation. We have agreed to provide Lannett with a license to our patents required to manufacture and sell generic thalidomide in the United States beginning on August 1, 2019. Lannett’s ability to market thalidomide in the U.S. will be contingent on obtaining approval of its ANDA. A Stipulation and Order of Dismissal was filed on October 30, 2017. ABRAXANE ® (paclitaxel protein-bound particles for injectable suspension) (albumin bound): We received a Notice Letter dated February 23, 2016 from Actavis LLC (Actavis) notifying us of Actavis’s ANDA which contains Paragraph IV certifications against U.S. Patent Nos. 7,820,788; 7,923,536; 8,138,229; and 8,853,260 that are listed in the Orange Book for ABRAXANE ® . We then received a Notice Letter dated October 25, 2016 from Cipla notifying us of Cipla’s ANDA, which contains Paragraph IV certifications against the same four patents for ABRAXANE ® . Actavis and Cipla are seeking to manufacture and market a generic version of ABRAXANE ® (paclitaxel protein-bound particles for injectable suspension) (albumin bound) 100 mg/vial. On April 6, 2016, we filed an infringement action against Actavis in the United States District Court for the District of New Jersey. As a result of the filing of our action, the FDA cannot grant final approval of Actavis’s ANDA until the earlier of (i) a final decision that each of the patents is invalid, unenforceable, and/or not infringed; or (ii) August 24, 2018. On May 3, 2016, Actavis filed an answer and counterclaims asserting that the patents-in-suit are invalid and/or not infringed and we filed a reply to Actavis’s counterclaims on June 10, 2016. In January 2018, we entered into a settlement with Actavis to terminate patent litigation and Inter Partes Review (IPR) challenges between the parties relating to certain patents for ABRAXANE ® . As part of the settlement, the parties filed a Consent Judgment with the United States District Court for the District of New Jersey, which was entered on January 26, 2018, enjoining Actavis from marketing generic paclitaxel protein-bound particles for injectable suspension before expiration of the patents-in-suit, except as provided for in the settlement. In the settlement, Celgene has agreed to provide Actavis with a license to Celgene’s patents required to manufacture and sell its generic paclitaxel protein-bound particles for injectable suspension product in the United States beginning on March 31, 2022. On December 7, 2016, we filed an infringement action against Cipla in the United States District Court for the District of New Jersey. As a result of the filing of our action, the FDA cannot grant final approval of Cipla’s ANDA until the earlier of (i) a final decision that each of the patents is invalid, unenforceable, and/or not infringed; or (ii) April 25, 2019. On January 20, 2017, Cipla filed an answer and counterclaims asserting that the patents-in-suit are invalid and/or not infringed. Our reply was filed on February 24, 2017. Fact discovery is currently set to close on April 26, 2018 and expert discovery is currently set to close on November 1, 2018. The Court has not yet set a date for trial. On January 13, 2017, the UK High Court of Justice handed down a ruling after a hearing held on December 20, 2016 in which Celgene argued that the UK Intellectual Property Office improperly rejected our request for an SPC to the ABRAXANE ® patent UK No. 0 961 612 (the ’612 patent). In that ruling, the High Court referred the matter to the Court of Justice for the EU (CJEU). No hearing date has been set at the CJEU. If the CJEU were to find in Celgene’s favor, the ruling would need to be implemented in other jurisdictions in which the proceedings are pending, potentially resulting in the grant of SPCs not only in the UK, but also in other jurisdictions that have previously rejected our initial request including Germany and Ireland. The ’612 patent expired in Europe in September 2017. However, if granted, the SPCs will expire in 2022. Data exclusivity in Europe will expire in January 2019. Proceedings involving the United States Patent and Trademark Office (USPTO): Under the America Invents Act (AIA), any person may seek to challenge an issued patent by petitioning the USPTO to institute a post grant review. On April 23, 2015, we were informed that the Coalition for Affordable Drugs VI LLC filed petitions for IPR challenging the validity of Celgene’s patents U.S. 6,045,501 (the ’501 patent) and U.S. 6,315,720 (the ’720 patent) covering certain aspects of our REMS program. On October 27, 2015, the USPTO Patent Trial and Appeal Board (PTAB) instituted IPR proceedings relating to these patents. An oral hearing was held on July 21, 2016; the decisions, rendered on October 26, 2016, held that the ’501 and ’720 patents are invalid, primarily due to obviousness in view of certain publications. On November 25, 2016, we requested a rehearing with respect to certain claims of these patents. On September 8, 2017, the PTAB denied our rehearing request for the ’501 patent, but granted our rehearing request pertaining to a certain claim of the ’720 patent. We timely appealed to the United States Court of Appeals for the Federal Circuit the PTAB’s determinations regarding certain claims of the ’720 patent and the ’501 patent on November 6, 2017 and on November 9, 2017, respectively. Our opening briefs to that court will be due in late April 2018. The ’501 and ’720 patents remain valid and enforceable pending appeal. We retain other patents covering certain aspects of our REMS program, as well as patents that cover our products that use our REMS system. On April 4, 2017, Actavis filed petitions for IPRs challenging the validity of our patents U.S. 8,138,229 (the ’229 patent); 7,923,536 (the ’536 patent); 7,820,788 (the ’788 patent); and 8,853,260 (the ’260 patent) covering certain aspects of our ABRAXANE ® product. We filed our preliminary response on July 12, 2017. In January 2018, as part of the settlement referenced above, Actavis agreed to terminate its IPR challenges to these patents. On October 10, 2017, the PTAB instituted IPR proceedings on the ’788, ’536, and ’229 patents, and the trial on those patents is scheduled for July 11, 2018. The ’788, ’536, and ’229 patents remain valid and enforceable pending the conclusion of the IPR, including any rehearing requests or appeals. On October 11, 2017, the PTAB denied institution of an IPR on the ’260 patent, which remains valid and enforceable. On November 9, 2017, Apotex and Cipla filed petitions for IPRs challenging the validity of the ’229, the ’536 and the ’788 patents. Apotex and Cipla filed requests for joinder as to the instituted IPRs. We opposed the requests for joinder on December 11, 2017. Our preliminary responses to Apotex and Cipla’s petitions are due on February 16, 2018 and February 20, 2018, respectivel |
Geographic and Product Informat
Geographic and Product Information | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Geographic and Product Information | Geographic and Product Information Operations by Geographic Area: Revenues primarily consisted of sales of our primary commercial stage products including REVLIMID ® , POMALYST ® /IMNOVID ® , OTEZLA ® , ABRAXANE ® , IDHIFA ® , VIDAZA ® , azacitidine for injection (generic version of VIDAZA ® ) and THALOMID ® (sold as THALOMID ® or Thalidomide Celgene ® outside of the U.S.). In addition, we earn revenue from other product sales and licensing arrangements. Revenues 2017 2016 2015 United States $ 8,324 $ 7,010 $ 5,604 Europe 3,327 3,046 2,624 All other 1,352 1,173 1,028 Total revenues $ 13,003 $ 11,229 $ 9,256 Long-Lived Assets 1 2017 2016 United States $ 768 $ 667 Europe 296 251 All other 6 12 Total long lived assets $ 1,070 $ 930 1 Long-lived assets consist of net property, plant and equipment. Revenues by Product: Total revenues from external customers by product for the years ended December 31, 2017 , 2016 and 2015 were as follows: 2017 2016 2015 REVLIMID ® $ 8,187 $ 6,974 $ 5,801 POMALYST ® /IMNOVID ® 1,614 1,311 984 OTEZLA ® 1,279 1,017 472 ABRAXANE ® 992 973 967 IDHIFA ® 20 — — VIDAZA ® 628 608 591 azacitidine for injection 36 66 84 THALOMID ® 132 152 185 ISTODAX ® 76 80 69 Other 9 4 8 Total net product sales 12,973 11,185 9,161 Other revenue 30 44 95 Total revenue $ 13,003 $ 11,229 $ 9,256 Major Customers: We sell our products primarily through wholesale distributors and specialty pharmacies in the United States, which account for a large portion of our total revenues. International sales are primarily made directly to hospitals, clinics and retail chains, many of which are government owned. During the three-year period of 2017 , 2016 and 2015 , customers that accounted for more than 10% of our total revenue in at least one of those years are summarized below. The percentage of amounts due from these customers compared to total net accounts receivable is also summarized below as of December 31, 2017 and 2016 . Percent of Total Revenue Percent of Net Accounts Receivable Customer 2017 2016 2015 2017 2016 CVS Health Corp. 12.5 % 12.0 % 10.7 % 9.7 % 7.9 % McKesson Corp. 12.0 % 10.3 % 8.5 % 9.6 % 9.1 % AmerisourceBergen Corp. 10.0 % 8.5 % 8.1 % 9.7 % 8.7 % |
Quarterly Results of Operations
Quarterly Results of Operations (Unaudited) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Data [Abstract] | |
Quarterly Results of Operations (Unaudited) | Quarterly Results of Operations (Unaudited) 2017 1Q (3) 2Q (3) 3Q 4Q Year Total revenue $ 2,962 $ 3,271 $ 3,287 $ 3,483 $ 13,003 Gross profit (1) 2,839 3,148 3,165 3,360 12,512 Income tax provision (4) 82 77 3 1,212 1,374 Net income (loss) 932 1,101 988 (81 ) 2,940 Net income (loss) per share: (2) Basic $ 1.20 $ 1.41 $ 1.26 $ (0.10 ) $ 3.77 Diluted $ 1.15 $ 1.36 $ 1.21 $ (0.10 ) $ 3.64 Weighted average shares: Basic 779.0 780.4 784.1 773.5 779.2 Diluted 811.2 811.7 815.2 773.5 808.7 2016 1Q 2Q 3Q (5) 4Q Year Total revenue $ 2,512 $ 2,754 $ 2,983 $ 2,980 $ 11,229 Gross profit (1) 2,389 2,633 2,861 2,864 10,747 Income tax provision 121 97 85 70 373 Net income 801 598 171 429 1,999 Net income per share: (2) Basic $ 1.03 $ 0.77 $ 0.22 $ 0.55 $ 2.57 Diluted $ 0.99 $ 0.75 $ 0.21 $ 0.53 $ 2.49 Weighted average shares: Basic 780.6 775.6 775.8 776.8 777.2 Diluted 807.7 801.5 801.5 802.2 803.3 1 Gross profit is computed by subtracting cost of goods sold (excluding amortization of acquired intangible assets) from net product sales. 2 The sum of the quarters may not equal the full year due to rounding. In addition, quarterly and full year basic and diluted earnings per share are calculated separately. 3 During the third quarter of 2017, we adopted ASU 2017-12 with an initial application date of January 1, 2017. Prior to the adoption of ASU 2017-12, we recognized all changes in the fair value of the excluded component of a hedge in Other income (expense), net in the Consolidated Statements of Income under a mark-to-market approach. Pursuant to the provisions of ASU 2017-12, we no longer recognize the adjustments to the fair value of the excluded component in Other income (expense), net but we instead recognize the initial value of the excluded component using an amortization approach over the life of the hedging instrument. In accordance with ASU 2017-12, certain provisions were required to be applied on a modified retrospective basis, which requires a cumulative effect adjustment to accumulated other comprehensive income with a corresponding adjustment to retained earnings as of the beginning of the fiscal year of adoption, or January 1, 2017. See Note 1 for additional information related to the adoption of ASU-2017-12. As such, the unaudited quarterly results of operations for the first and second quarter of 2017 have been recast for retrospective application of ASU 2017-12 as follows: Three-Month Period Ended March 31, 2017 Three-Month Period Ended June 30, 2017 As Reported As Revised As Reported As Revised Total revenue $ 2,960 $ 2,962 $ 3,268 $ 3,271 Other income (expense), net 26 13 (76 ) (31 ) Income tax provision 84 82 69 77 Net income 941 932 1,061 1,101 Basic net income per common share 1.21 1.20 1.36 1.41 Diluted net income per common share $ 1.16 $ 1.15 $ 1.31 $ 1.36 4 The Income tax provision in the fourth quarter of 2017 includes income tax expense of approximately $1,269 million as a result of U.S. tax reform legislation, formerly known as the Tax Cuts and Jobs Act (2017 Tax Act), which was enacted on December 22, 2017. See Note 16 contained in this Annual Report on Form 10-K for additional details related to the 2017 Tax Act. In addition, the income tax provision for 2017 includes $290 million of excess benefits arising from share-based compensation awards that vested or were exercised during 2017 as a result of the adoption of ASU 2016-09, "Compensation - Stock Compensation. 5 The decrease in Net income in the third quarter of 2016 was primarily due to a $623 million research and development asset acquisition expense associated with the purchase of EngMab. |
Subsequent Event
Subsequent Event | 12 Months Ended |
Dec. 31, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Event | Subsequent Events Impact Biomedicines, Inc.: On January 7, 2018, we entered into a definitive agreement to acquire Impact, a privately held biotechnology company which is developing fedratinib, a highly selective JAK2 kinase inhibitor, for myelofibrosis and polycythemia vera. Under the terms of the agreement, we will make an upfront cash payment of approximately $1.1 billion . In addition, Impact Biomedicines' shareholders are eligible to receive contingent regulatory approval milestones up to $1.4 billion and contingent commercial milestones up to $4.5 billion based on cumulative sales levels of between $1.0 billion and $5.0 billion . The acquisition is subject to customary closing conditions and applicable waiting period under the Hart Scott Rodino Antitrust Improvements Act. The transaction is expected to close in the first quarter of 2018. The acquisition of Impact is not anticipated to include any significant processes and thus, for accounting purposes, we have preliminary concluded that the acquired assets will not meet the accounting definition of a business. As such, the transaction will be accounted for as a research and development asset acquisition. Juno Therapeutics, Inc. (Juno): On January 21, 2018, we entered into a merger agreement with Juno under which we will pay $87 per share in cash, or approximately $9.0 billion net of cash and marketable securities acquired and Juno shares already owned by us (approximately 9.7% of outstanding shares), which we anticipate to be accounted for as a business combination. Juno is a publicly held biotechnology company which is developing CAR (chimeric antigen receptor) T and TCR (T cell receptor) therapeutics with a broad, novel portfolio evaluating multiple targets and cancer indications. The acquisition will also add a novel scientific platform and scalable manufacturing capabilities including JCAR017, a CD19-directed CAR T currently in a program for relapsed and/or refractory diffuse large B-Cell lymphoma. The transaction has been approved by the board of directors of Celgene and Juno. We expect to complete the transaction during the first quarter of 2018, subject to customary closing conditions and the expiration of applicable waiting period under the Hart Scott Rodino Antitrust Improvements Act. The transaction is expected to be funded through a combination of existing cash, cash equivalents, marketable securities and new debt. |
Schedule II - Valuation and Qua
Schedule II - Valuation and Qualifying Accounts | 12 Months Ended |
Dec. 31, 2017 | |
Valuation and Qualifying Accounts [Abstract] | |
Schedule II - Valuation and Qualifying Accounts | Schedule II – Valuation and Qualifying Accounts (In Millions) Year ended December 31, Balance at Beginning of Year Charged to Expense or Sales Deductions Balance at End of Year 2017: Allowance for doubtful accounts $ 15 $ (1 ) $ (2 ) $ 16 Allowance for customer discounts 16 193 1 189 20 Subtotal 31 192 187 36 Allowance for sales returns 18 8 1 11 15 Total $ 49 $ 200 $ 198 $ 51 2016: Allowance for doubtful accounts $ 18 $ 1 $ 4 $ 15 Allowance for customer discounts 12 154 1 150 16 Subtotal 30 155 154 31 Allowance for sales returns 17 11 1 10 18 Total $ 47 $ 166 $ 164 $ 49 2015: Allowance for doubtful accounts $ 20 $ — $ 2 $ 18 Allowance for customer discounts 12 111 1 111 12 Subtotal 32 111 113 30 Allowance for sales returns 10 16 1 9 17 Total $ 42 $ 127 $ 122 $ 47 1 Amounts are a reduction from gross sales. |
Nature of Business, Basis of 30
Nature of Business, Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Financial Instruments | Financial Instruments: Certain financial instruments reflected in the Consolidated Balance Sheets, (e.g., cash, cash equivalents, accounts receivable, certain other assets, accounts payable, short-term borrowings and certain other liabilities) are recorded at cost, which approximates fair value due to their short-term nature. The fair values of financial instruments other than marketable securities are determined through a combination of management estimates and information obtained from third parties using the latest market data. The fair value of available-for-sale marketable securities is determined utilizing the valuation techniques appropriate to the type of security. (see Note 4). |
Derivative Instruments and Hedges | Derivative Instruments and Hedges: All derivative instruments are recognized on the balance sheet at their fair value. Changes in the fair value of derivative instruments are recorded each period in current earnings or other comprehensive income (loss), depending on whether a derivative instrument is designated as part of a hedging transaction and, if it is, the type of hedging transaction. For a derivative to qualify as a hedge at inception and throughout the hedged period, we formally document the nature and relationships between the hedging instruments and hedged item. We assess, both at inception and on an on-going basis, whether derivative instruments are highly effective in offsetting the changes in the fair value or cash flows of hedged items. If we determine that a forecasted transaction is no longer probable of occurring, we discontinue hedge accounting and any related unrealized gain or loss on the derivative instrument is recognized in Other income (expense), net in our Consolidated Statements of Income. We use derivative instruments, including those not designated as part of a hedging transaction, to manage our exposure to movements in foreign exchange, our stock price and interest rates. The use of these derivative instruments modifies the exposure of these risks with the intent to reduce our risk or cost. Prior to the adoption of Accounting Standards Update No. 2017-12, "Targeted Improvements to Accounting for Hedging Activities" (ASU 2017-12), we were required to separately measure and reflect the amount by which the hedging instrument did not offset the changes in the fair value or cash flows of hedged items, which was referred to as the ineffective amount. We assessed hedge effectiveness on a quarterly basis and recorded the gain or loss related to the ineffective portion of derivative instruments, if any, in Other income (expense), net in the Consolidated Statements of Income. Pursuant to the provisions of ASU 2017-12, we are no longer required to separately measure and recognize hedge ineffectiveness. Upon adoption of ASU 2017-12, we no longer recognize hedge ineffectiveness in our Consolidated Statements of Income, but we instead recognize the entire change in the fair value of: • cash flow hedges included in the assessment of hedge effectiveness in Other comprehensive income (loss). The amounts recorded in Other comprehensive income (loss) will subsequently be reclassified to earnings in the same line item in the Consolidated Statements of Income as impacted by the hedged item when the hedged item affects earnings; and • fair value hedges included in the assessment of hedge effectiveness in the same line item in the Consolidated Statements of Income that is used to present the earnings effect of the hedged item. Prior to the adoption of ASU 2017-12, we excluded option premiums and forward points (excluded components) from our assessment of hedge effectiveness for our foreign exchange cash flow hedges. We recognized all changes in fair value of the excluded components in Other income (expense), net in the Consolidated Statements of Income. The amendments in ASU 2017-12 continue to allow those components to be excluded from the assessment of hedge effectiveness, which we have elected to continue to apply. Pursuant to the provisions of ASU 2017-12, we no longer recognize changes in the fair value of the excluded components in Other income (expense), net, but we instead recognize the initial value of the excluded component on a straight-line basis over the life of the derivative instrument, within the same line item in the Consolidated Statements of Income that is used to present the earnings effect of the hedged item. |
Cash, Cash Equivalents and Marketable Securities Available for Sale | Cash, Cash Equivalents and Marketable Securities Available for Sale: We invest our excess cash primarily in money market funds, repurchase agreements, time deposits, commercial paper, U.S. Treasury securities, U.S. government-sponsored agency mortgage-backed securities (MBS), an ultra short income fund, global corporate debt securities and asset backed securities. All liquid investments with maturities of three months or less from the date of purchase are classified as cash equivalents and all investments with maturities of greater than three months from date of purchase are classified as marketable securities available for sale. We determine the appropriate classification of our investments in marketable debt and equity securities at the time of purchase. In addition, our equity investments in the publicly traded common stock of companies, including common stock of companies with whom we have entered into collaboration agreements, are designated as marketable securities available for sale. Our marketable securities available for sale are primarily equity investments in the publicly traded common stock of companies, including common stock of companies with whom we have entered into collaboration agreements. In addition, we invest in debt securities that are carried at fair value, held for an unspecified period of time and are intended for use in meeting our ongoing liquidity needs. Unrealized gains and losses on available-for-sale securities, which are deemed to be temporary, are reported as a separate component of stockholders' equity, net of tax. The cost of debt securities is adjusted for amortization of premiums and accretion of discounts to maturity. The amortization, along with realized gains and losses and other-than-temporary impairment charges related to debt securities, is included in Interest and investment income, net. Realized gains and losses and other than temporary impairment charges related to equity securities are included in Other income (expense), net in the Consolidated Statements of Income. A decline in the market value of any available-for-sale security below its carrying value that is determined to be other-than-temporary would result in a charge to earnings and decrease in the security's carrying value down to its newly established fair value. Factors evaluated to determine if an investment is other-than-temporarily impaired include significant deterioration in earnings performance, credit rating, asset quality or business prospects of the issuer; adverse changes in the general market condition in which the issuer operates; our intent to hold to maturity and an evaluation as to whether it is more likely than not that we will not have to sell before recovery of its cost basis; our expected future cash flows from the security; and issues that raise concerns about the issuer's ability to continue as a going concern. |
Concentration of Credit Risk | Concentration of Credit Risk: Cash, cash equivalents and marketable securities are financial instruments that potentially subject the Company to concentration of credit risk. We invest our excess cash primarily in money market funds, repurchase agreements, time deposits, commercial paper, U.S. Treasury securities, U.S. government-sponsored agency MBS, an ultra short income fund, global corporate debt securities and asset backed securities (see Note 6). We have established guidelines relative to diversification and maturities to maintain safety and liquidity. These guidelines are reviewed periodically and may be modified to take advantage of trends in yields and interest rates. We sell our products in the United States primarily through wholesale distributors and specialty contracted pharmacies. Therefore, wholesale distributors and large pharmacy chains account for a large portion of our U.S. trade receivables and net product revenues (see Note 19). International sales are primarily made directly to hospitals, clinics and retail chains, many of which in Europe are government owned and have extended their payment terms in recent years given the economic pressure these countries are facing. We continuously monitor the creditworthiness of our customers, including these governments, and have internal policies regarding customer credit limits. We estimate an allowance for doubtful accounts primarily based on the credit worthiness of our customers, historical payment patterns, aging of receivable balances and general economic conditions, including publicly available information on the credit worthiness of countries themselves and provinces or areas within such countries where they are the ultimate customers. We continue to monitor economic conditions, including the volatility associated with international economies, the sovereign debt situation in certain European countries and associated impacts on the financial markets and our business. Our current business model in these markets is typically to sell our hematology and oncology products directly to principally government owned or controlled hospitals, which in turn directly deliver critical care to patients. Many of our products are used to treat life-threatening diseases and we believe this business model enables timely delivery and adequate supply of products. Many of the outstanding receivable balances are related to government-funded hospitals and we believe the receivable balances are ultimately collectible. Similarly, we believe that future sales to these customers will continue to be collectible. |
Inventory | Inventory: Inventories are recorded at the lower of cost or net realizable value, with cost determined on a first-in, first-out basis. We periodically review the composition of inventory in order to identify obsolete, slow-moving or otherwise non-saleable items. If non-saleable items are observed and there are no alternate uses for the inventory, we will record a write-down to net realizable value in the period that the decline in value is first recognized. Included in inventory are raw materials used in the production of preclinical and clinical products, which are charged to research and development expense when consumed. We capitalize inventory costs associated with certain products prior to regulatory approval of products, or for inventory produced in new production facilities, when management considers it highly probable that the pre-approval inventories will be saleable. The determination to capitalize is based on the particular facts and circumstances relating to the expected regulatory approval of the product or production facility being considered, and accordingly, the time frame within which the determination is made varies from product to product. The assessment of whether or not the product is considered highly probable to be saleable is made on a quarterly basis and includes, but is not limited to, how far a particular product or facility has progressed along the approval process, any known safety or efficacy concerns, potential labeling restrictions and other impediments. We could be required to write down previously capitalized costs related to pre-launch inventories upon a change in such judgment, or due to a denial or delay of approval by regulatory bodies, a delay in commercialization or other potential factors. |
Property, Plant and Equipment | Property, Plant and Equipment: Property, plant and equipment are stated at cost less accumulated depreciation. Depreciation of plant and equipment is recorded using the straight-line method. Building improvements are depreciated over the remaining useful life of the building. Leasehold improvements are depreciated over the lesser of the economic useful life of the asset or the remaining term of the lease, including anticipated renewal options. The estimated useful lives of capitalized assets are as follows: Buildings 40 years Building and operating equipment 15 years Manufacturing machinery and equipment 10 years Other machinery and equipment 5 years Furniture and fixtures 5 years Computer equipment and software 3-7 years Maintenance and repairs are charged to operations as incurred, while expenditures for improvements which extend the life of an asset are capitalized. |
Capitalized Software Costs | Capitalized Software Costs: We capitalize software costs incurred in connection with developing or obtaining software. Capitalized software costs are included in property, plant and equipment, net and are amortized over their estimated useful life of three to seven years from the date the systems are ready for their intended use. |
Investments in Other Entities | Investments in Other Entities: We hold a portfolio of investments in equity securities and certain investment funds that are accounted for under either the equity method or cost method. Investments in companies or certain investment funds over which we have significant influence but not a controlling interest are accounted for using the equity method, with our share of earnings or losses reported in Other income (expense), net in the Consolidated Statements of Income. Our equity investments in the publicly traded common stock of companies, including common stock of companies with whom we have entered into collaboration agreements, are designated as marketable securities available-for-sale. Investments in equity securities of companies that become publicly traded and are not classified as equity method investments are accounted for as available-for-sale marketable securities prospectively from the date of such companies' initial public offering if we are not restricted from selling our investment for greater than one year. Our cost method and equity method investments are included in Other non-current assets on the Consolidated Balance Sheets. All investments are reviewed on a regular basis for possible impairment. If an investment's fair value is determined to be less than its net carrying value and the decline is determined to be other-than-temporary, the investment is written down to its fair value. Such an evaluation is judgmental and dependent on specific facts and circumstances. Factors considered in determining whether an other-than-temporary decline in value has occurred include: market value or exit price of the investment based on either market-quoted prices or future rounds of financing by the investee; length of time that the market value was below its cost basis; financial condition and business prospects of the investee; our intent and ability to retain the investment for a sufficient period of time to allow for recovery in market value of the investment; issues that raise concerns about the investee's ability to continue as a going concern; any other information that we may be aware of related to the investment. |
Other Intangible Assets | Other Intangible Assets: Intangible assets with definite useful lives are amortized to their estimated residual values over their estimated useful lives and reviewed for impairment if certain events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Amortization is initiated for IPR&D intangible assets when their useful lives have been determined. IPR&D intangible assets which are determined to have had a drop in their fair value are adjusted downward and an expense recognized in Research and development in the Consolidated Statements of Income. These in-process research and development (IPR&D) intangible assets are tested at least annually or when a triggering event occurs that could indicate a potential impairment. |
Goodwill | Goodwill: Goodwill represents the excess of purchase price over fair value of net assets acquired in a business combination accounted for by the acquisition method of accounting and is not amortized, but is subject to impairment testing. We test our goodwill for impairment at least annually or when a triggering event occurs that could indicate a potential impairment by assessing qualitative factors or performing a quantitative analysis in determining whether it is more likely than not that the fair value of net assets are below their carrying amounts. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets: Long-lived assets, such as property, plant and equipment and certain other long-term assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset or asset group to the estimated undiscounted future cash flows expected to be generated by the asset or asset group. If the carrying amount of the assets exceed their estimated future undiscounted net cash flows, an impairment charge is recognized for the amount by which the carrying amount of the assets exceed the fair value of the assets. |
Contingent Consideration from Business Combinations | Contingent Consideration from Business Combinations: Subsequent to the acquisition date, we measure contingent consideration arrangements at fair value for each period with changes in fair value recognized in income as Acquisition related (gains) charges and restructuring, net in the Consolidated Statements of Income. Changes in contingent consideration obligation values can result from movements in publicly listed prices of our Contingent Value Rights (CVRs), adjustments to discount rates, updates in the assumed achievement or timing of milestones or changes in the probability of certain clinical events and changes in the assumed probability associated with regulatory approval. In the absence of new information, changes in fair value reflect only the passage of time as development work towards the achievement of the milestones progresses, and is accrued based on an accretion schedule. |
Foreign Currency Translation | Foreign Currency Translation: Operations in non-U.S. entities are recorded in the functional currency of each entity. For financial reporting purposes, the functional currency of an entity is determined by a review of the source of an entity's most predominant cash flows. The results of operations for non-U.S. dollar functional currency entities are translated from functional currencies into U.S. dollars using the average currency rate during each month, which approximates the results that would be obtained using actual currency rates on the dates of individual transactions. Assets and liabilities are translated using currency rates at the end of the period. Adjustments resulting from translating the financial statements of our foreign entities into the U.S. dollar are excluded from the determination of net income and are recorded as a component of other comprehensive income (loss). Transaction gains and losses are recorded in Other income (expense), net in the Consolidated Statements of Income. |
Research and Development Costs | Research and Development Costs: Research and development costs are expensed as incurred. These include all internal and external costs related to services contracted by us. Upfront and milestone payments made to third parties in connection with research and development collaborations are expensed as incurred up to the point of regulatory approval. Milestone payments made to third parties upon regulatory approval are capitalized and amortized over the remaining useful life of the related product. Upfront payments are recorded when incurred, and milestone payments are recorded when the specific milestone has been achieved. Asset acquisition expenses, including expenses to acquire rights to pre-commercial compounds from a collaboration partner when there will be no further participation from the collaboration partner or other parties, are recorded as incurred. |
Income Taxes | Income Taxes: We utilize the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial statement carrying amounts and tax bases of assets and liabilities using enacted tax rates in effect for years in which the temporary differences are expected to reverse. A valuation allowance is provided when it is more likely than not that some portion or all of a deferred tax asset will not be realized. We recognize the benefit of an uncertain tax position that we have taken or expect to take on income tax returns we file if such tax position is more likely than not to be sustained. |
Revenue Recognition | Revenue Recognition: Revenue from the sale of products is recognized when title and risk of loss of the product is transferred to the customer and the sales price is fixed and determinable. Provisions for discounts, early payments, rebates, sales returns and distributor chargebacks under terms customary in the industry are provided for in the same period the related sales are recorded. We record estimated reductions to revenue for volume-based discounts and rebates at the time of the initial sale. The estimated reductions to revenue for such volume-based discounts and rebates are based on the sales terms, historical experience and trend analysis. We base our sales returns allowance on estimated on-hand retail/hospital inventories, measured end-customer demand as reported by third-party sources, actual returns history and other factors, such as the trend experience for lots where product is still being returned or inventory centralization and rationalization initiatives conducted by major pharmacy chains, as applicable. If the historical data we use to calculate these estimates do not properly reflect future returns, then a change in the allowance would be made in the period in which such a determination is made and revenues in that period could be materially affected. Under this methodology, we track actual returns by individual production lots. Returns on closed lots, that is, lots no longer eligible for return credits, are analyzed to determine historical returns experience. Returns on open lots, that is, lots still eligible for return credits, are monitored and compared with historical return trend rates. Any changes from the historical trend rates are considered in determining the current sales return allowance. Sales discount accruals are based on payment terms extended to customers. Government rebate accruals are based on estimated payments due to governmental agencies for purchases made by third parties under various governmental programs. U.S. Medicaid rebate accruals are generally based on historical payment data and estimates of future Medicaid beneficiary utilization applied to the Medicaid unit rebate formula established by the Center for Medicaid and Medicare Services. The Medicaid rebate percentage was increased and extended to Medicaid Managed Care Organizations in March 2010. The accrual of the rebates associated with Medicaid Managed Care Organizations is calculated based on estimated historical patient data related to Medicaid Managed Care Organizations. We also analyze actual billings received from the states to further support the accrual rates. Manufacturers of pharmaceutical products are responsible for 50% of the patient’s cost of branded prescription drugs related to the Medicare Part D Coverage Gap. In order to estimate the cost to us of this coverage gap responsibility, we analyze data for eligible Medicare Part D patients against data for eligible Medicare Part D patients treated with our products as well as the historical invoices. This expense is recognized throughout the year as costs are incurred. In certain international markets government-sponsored programs require rebates to be paid based on program specific rules and, accordingly, the rebate accruals are determined primarily on estimated eligible sales. Rebates or administrative fees are offered to certain wholesale customers, group purchasing organizations and end-user customers, consistent with pharmaceutical industry practices. Settlement of rebates and fees may generally occur from one to 15 months from the date of sale. We record a provision for rebates at the time of sale based on contracted rates and historical redemption rates. Assumptions used to establish the provision include level of wholesaler inventories, contract sales volumes and average contract pricing. We regularly review the information related to these estimates and adjust the provision accordingly. Chargeback accruals are based on the differentials between product acquisition prices paid by wholesalers and lower government contract pricing paid by eligible customers covered under federally qualified programs. Distributor service fee accruals are based on contractual fees to be paid to the wholesale distributor for services provided. TRICARE is a health care program of the U.S. Department of Defense Military Health System that provides civilian health benefits for military personnel, military retirees and their dependents. TRICARE rebate accruals are included in chargeback accruals and are based on estimated Department of Defense eligible sales multiplied by the TRICARE rebate formula. We record estimated reductions to revenue for free goods and volume-based discounts at the time of the initial sale. The estimated reductions to revenue for such free goods and volume-based discounts are based on the sales terms, historical experience and trend analysis. The cost of free goods is included in cost of goods sold (excluding amortization of acquired intangible assets). We recognize revenue from royalties based on licensees' sales of our products or products using our technologies. Royalties are recognized as earned in accordance with the contract terms when royalties from licensees can be reasonably estimated and collectability is reasonably assured. If royalties cannot be reasonably estimated or collectability of a royalty amount is not reasonably assured, royalties are recognized as revenue when the cash is received. |
Share-Based Compensation | Share-Based Compensation: We utilize share based compensation in the form of stock options, restricted stock units (RSUs) and performance-based restricted stock units (PSUs). Compensation expense is recognized in the Consolidated Statements of Income based on the estimated fair value of the awards at grant date. Compensation expense recognized reflects an estimate of the number of awards expected to vest after taking into consideration an estimate of award forfeitures based on actual experience and is recognized on a straight-line basis over the requisite service period, which is generally the vesting period required to obtain full vesting. Management expectations related to the achievement of performance goals associated with PSU grants is assessed regularly and that assessment is used to determine whether PSU grants are expected to vest. If performance-based milestones related to PSU grants are not met or not expected to be met, any compensation expense recognized to date associated with grants that are not expected to vest will be reversed. The fair values of stock option grants are estimated as of the date of grant using a Black-Scholes option valuation model. The fair values of RSU and PSU grants that are not based on market performance are based on the market value of our Common Stock on the date of grant. Certain of our PSU grants are measured based on the achievement of specified performance and market targets, including non-GAAP revenue, non-GAAP earnings per share, and relative total shareholder return. The grant date fair value for the portion of the PSUs related to non-GAAP revenue and non-GAAP earnings per share is estimated using the fair market value of our common stock on the grant date. The grant date fair value for the portion of the PSUs related to relative total shareholder return is estimated using the Monte Carlo valuation model. |
Earnings Per Share | Earnings Per Share: Basic earnings per share is computed by dividing net income by the weighted-average number of common shares outstanding during the period. Diluted earnings per share is computed by dividing net income by the weighted-average number of common shares outstanding during the period, assuming potentially dilutive common shares resulting from option exercises, RSUs, PSUs, warrants and other incentives had been issued and any proceeds thereof used to repurchase common stock at the average market price during the period. The assumed proceeds used to repurchase common stock is the sum of the amount to be paid to us upon exercise of options and the amount of compensation cost attributed to future services and not yet recognized. |
New Accounting Standards | New accounting standards which have been adopted In July 2015, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2015-11, "Inventory (Topic 330): Simplifying the Measurement of Inventory" (ASU 2015-11). ASU 2015-11 applies only to inventory for which cost is determined by methods other than last in, first-out and the retail inventory method, which includes inventory that is measured using first-in, first-out or average cost. Inventory within the scope of this standard is required to be measured at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. ASU 2015-11 was effective for us beginning in the first quarter of 2017. The adoption of this standard did not have a material impact on our consolidated financial statements and related disclosures. In March 2016, the FASB issued Accounting Standards Update No. 2016-07, "Investments-Equity Method and Joint Ventures" (ASU 2016-07). ASU 2016-07 eliminates the requirement that when an investment qualifies for use of the equity method as a result of an increase in the level of ownership interest or degree of influence, an investor must adjust the investment, results of operations, and retained earnings retroactively as if the equity method had been in effect during all previous periods that the investment had been held. Under the new guidance, available-for-sale equity securities that become qualified for the equity method of accounting will result in the recognition through earnings of the unrealized holding gain or loss in accumulated other comprehensive income at the date the investment becomes qualified for use of the equity method. ASU 2016-07 was effective for us beginning in the first quarter of 2017. The adoption of this updated standard did not have a material impact on our consolidated financial statements and related disclosures. In March 2016, the FASB issued Accounting Standards Update No. 2016-09, "Compensation-Stock Compensation" (ASU 2016-09). The new standard was effective for us on January 1, 2017. Among other provisions, the new standard requires that excess tax benefits and tax deficiencies that arise upon vesting or exercise of share-based payments be recognized as income tax benefits and expenses in the income statement. Previously, such amounts were recorded to additional paid-in-capital. This aspect of the new guidance was required to be adopted prospectively, and accordingly, the income tax provision for the year ended December 31, 2017 includes $290 million of excess tax benefits arising from share-based compensation awards that vested or were exercised during the period. In addition, at January 1, 2017, the Company recorded a cumulative-effect adjustment to Retained earnings, with a corresponding increase to net deferred tax assets, in the amount of $17 million related to previously unrecognized excess tax benefits outstanding in the Consolidated Balance Sheet. In addition, the adoption of the new standard increased the diluted share count for the year ended December 31, 2017 by approximately 7.3 million shares. The new standard also amends the presentation of employee share-based payment-related items in the statement of cash flows by requiring that excess income tax benefits and tax deficiencies be classified in Cash flows from operating activities (such amounts were previously included in Cash flows from financing activities). The Company elected to adopt this aspect of the new guidance retrospectively, and accordingly, to conform to the current year presentation, $189 million and $301 million of excess tax benefits were reclassified from Net cash (used in) provided by financing activities to Net cash provided by operating activities and included within the change in Income taxes payable in the Consolidated Statement of Cash Flows for the years ended December 31, 2016 and December 31, 2015, respectively. As a result, Net cash (used in) provided by financing activities increased by $189 million and decreased by $301 million , respectively, with a corresponding increase in Net cash provided by operating activities in the Consolidated Statement of Cash Flows for the years ended December 31, 2016 and December 31, 2015, respectively. In August 2017, the FASB issued ASU 2017-12 which we adopted on August 31, 2017 (Adoption Date). The guidance was issued to improve and more closely align a company’s financial reporting of its hedging relationships with the objective of a company’s risk management activities. Among other provisions, the new standard (1) eliminates the separate measurement and reporting of hedge ineffectiveness and (2) permits an entity to recognize in earnings the initial value of an excluded component under a systematic and rational method over the life of the derivative instrument. In accordance with ASU 2017-12, certain provisions were required to be applied on a modified retrospective basis, which requires a cumulative effect adjustment to accumulated other comprehensive income with a corresponding adjustment to retained earnings as of the beginning of the fiscal year of adoption, or January 1, 2017 (Application Date). In addition, certain provisions in the guidance require modifications to existing presentation and disclosure requirements on a prospective basis. See Note 5 for disclosures relating to the Company’s derivative instruments and hedging activities. Pursuant to the provisions of ASU 2017-12, we are no longer required to separately measure and report hedge ineffectiveness, which was previously recorded in Other income (expense), net in our Consolidated Statements of Income. For fair value hedges, the entire change in the fair value of the hedging instrument included in the assessment of hedge effectiveness is recorded in the same line item in the Consolidated Statements of Income that is used to present the earnings effect of the hedged item. The timing of recognition of the change in fair value of a hedging instrument included in the assessment of hedge effectiveness is the same as prior to the adoption of ASU 2017-12. For cash flow hedges the entire change in the fair value of the hedging instrument included in the assessment of hedge effectiveness is recorded in Other comprehensive income (loss). Those amounts are subsequently reclassified to earnings in the same line item in the Consolidated Statements of Income as impacted by the hedged item when the hedged item affects earnings. In accordance with the transition provisions of ASU 2017-12, the Company is required to eliminate the separate measurement of ineffectiveness for its cash flow hedging instruments existing as of the Adoption Date through a cumulative effect adjustment to retained earnings as of the Application Date. We did not record a cumulative effect adjustment to eliminate ineffectiveness amounts as all such amounts were not material to the Company’s previously issued Consolidated Financial Statements. In addition, we did not have any ineffectiveness during fiscal year 2017. The Company may continue to elect to exclude certain portions of its derivative instruments' change in fair value from the assessment of hedge effectiveness (excluded component). In accordance with the new guidance, the Company may recognize in earnings the initial value of the excluded component on a systematic and rational method over the life of the derivative instrument. Alternatively, the Company may elect to continue to recognize all fair value changes in an excluded component currently in earnings, which is consistent with the guidance prior to the issuance of ASU 2017-12. We will recognize in earnings the initial value of the excluded component on a straight-line basis over the life of the derivative instrument. Previously, we recognized all changes in fair value of the excluded components in Other income (expense), net in the Consolidated Statements of Income. We believe the revised guidance in ASU 2017-12 better portrays the economic results of our risk management activities and hedging relationships in our Consolidated Financial Statements. In accordance with the transition provisions of ASU 2017-12, we modified the recognition model for the excluded component from a mark-to-market approach to an amortization approach for all hedges existing as of the Adoption Date with a cumulative-effect adjustment of $30 million that reduced Accumulated other comprehensive income with a corresponding adjustment that increased Retained earnings as of the Application Date. The effect of the change in recognition model to an amortization approach, increased both income before income taxes and net income by approximately $115 million for the year ended December 31, 2017. In addition, the effect of the change in recognition model to an amortization approach also increased both the Company’s basic and diluted income per share by $0.15 and $0.14 , respectively, for the year ended December 31, 2017. In addition, the Company assessed the impact of applying the guidance to its Consolidated Financial Statements on previously issued interim reports for the three-month period ended March 31, 2017, and the three- and six-month periods ended June 30, 2017. The Company concluded that the impacts to the previously issued interim reports were not material and therefore no recast of such reports have been made at this time. During the nine-month period ended September 30, 2017, the Company recorded pre-tax expense of $11 million for the three-month period ended March 31, 2017 and pre-tax income of $48 million for the three-month period ended June 30, 2017 as a result of applying the new guidance, which is included in the effects disclosed above. Upon filing of the interim reports on Form 10-Q for the quarterly periods ended March 31, 2018 and June 30, 2018, we intend to recast the financial statements for the quarterly periods ended March 31, 2017 and June 30, 2017, respectively, to reflect the adoption of ASU 2017-12. Within this Form 10-K, we have recast the quarterly periods ended March 31, 2017 and June 30, 2017 within our quarterly results of operations footnote (see Note 20). New accounting standards which have not yet been adopted In May 2014, the FASB issued Accounting Standards Update No. 2014-09, “Revenue from Contracts with Customers” (ASU 2014-09) and has subsequently issued a number of amendments to ASU 2014-09. The new standard, as amended, provides a single comprehensive model to be used in the accounting for revenue arising from contracts with customers and supersedes current revenue recognition guidance, including industry-specific guidance. The standard’s stated core principle is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve this core principle, ASU 2014-09 includes provisions within a five step model that includes identifying the contract with a customer, identifying the performance obligations in the contract, determining the transaction price, allocating the transaction price to the performance obligations, and recognizing revenue when, or as, an entity satisfies a performance obligation. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The new standard will be effective for us beginning January 1, 2018 and permits two methods of adoption: the full retrospective method, which requires the standard to be applied to each prior period presented, or the modified retrospective method, which requires the cumulative effect of adoption to be recognized as an adjustment to opening retained earnings in the period of adoption. We will adopt the standard using the modified retrospective method. We have completed an analysis of existing contracts with our customers and assessed the differences in accounting for such contracts under ASU 2014-09 compared with current revenue accounting standards. Based on our review of current customer contracts, we do not expect the implementation of ASU 2014-09 to have a material quantitative impact on our consolidated financial statements as the timing of revenue recognition for product sales is not expected to significantly change. In limited instances, we may recognize revenue earlier than under the current standard. Currently, we defer certain revenue where the price pursuant to the underlying customer arrangement is not fixed and determinable. Under the new standard, such customer arrangements will be accounted for as variable consideration, which may result in revenue being recognized earlier provided we can reliably estimate the ultimate price expected to be realized from the customer. In addition, we do not expect a material cumulative effect adjustment to Retained earnings upon adoption of the standard on January 1, 2018. Adoption of the new standard will also result in additional revenue-related disclosures in the footnotes to our consolidated financial statements. In January 2016, the FASB issued Accounting Standards Update No. 2016-01, "Financial Instruments–Overall: Recognition and Measurement of Financial Assets and Financial Liabilities" (ASU 2016-01). ASU 2016-01 changes accounting for equity investments, financial liabilities under the fair value option, and presentation and disclosure requirements for financial instruments. ASU 2016-01 does not apply to equity investments in consolidated subsidiaries or those accounted for under the equity method of accounting. In addition, the FASB clarified guidance related to the valuation allowance assessment when recognizing deferred tax assets resulting from unrealized losses on available-for-sale debt securities. Equity investments with readily determinable fair values will be measured at fair value with changes in fair value recognized in net income. Companies have the option to either measure equity investments without readily determinable fair values at fair value or at cost adjusted for changes in observable prices minus impairment. We have elected to measure equity investments without readily determinable fair values at cost adjusted for changes in observable prices minus impairment, which will be recognized in net income. Companies that elect the fair value option for financial liabilities must recognize changes in fair value related to instrument-specific credit risk in other comprehensive income. Companies must assess valuation allowances for deferred tax assets related to available-for-sale debt securities in combination with their other deferred tax assets. ASU 2016-01 will be effective for us beginning in the first quarter of 2018. We expect the implementation of this standard to have an impact on our consolidated financial statements and related disclosures, as we held publicly traded equity investments as of December 31, 2017 with a fair value of approximately $1.8 billion in a net unrealized gain position, net of tax of $565 million as of December 31, 2017. We will record a cumulative-effect adjustment to retained earnings for the amount of unrealized gains or losses, net of tax at the beginning of the fiscal year of adoption. The guidance related to equity investments without readily determinable fair values should be applied prospectively to equity investments that exist as of the date of adoption. The adoption of ASU 2016-01 is expected to increase volatility in our net income as changes in the fair value of available-for-sale equity investments and changes in observable prices of equity investments without readily determinable fair values will be recorded in net income. In February 2016, the FASB issued Accounting Standards Update No. 2016-02, "Leases" (ASU 2016-02). ASU 2016-02 provides accounting guidance for both lessee and lessor accounting models. Among other things, lessees will recognize a right-of-use asset and a lease liability for leases with a duration of greater than one year. For income statement purposes, ASU 2016-02 will require leases to be classified as either an operating or finance lease. Operating leases will result in straight-line expense while finance leases will result in a front-loaded expense pattern. The new standard will be effective for us on January 1, 2019 and will be adopted using a modified retrospective approach which will require application of the new guidance at the beginning of the earliest comparative period presented. We are currently evaluating the effect that the updated standard will have on our consolidated financial statements and related disclosures. We expect the implementation of this standard to have an impact on our consolidated financial statements and related disclosures as we had aggregate future minimum lease payments of approximately $235 million as of December 31, 2017 under our portfolio of non-cancelable leased office and research facilities at that time which had various expirations dates between 2018 and 2025. We anticipate recognition of additional assets and corresponding liabilities related to these leases on our consolidated balance sheet. In June 2016, the FASB issued Accounting Standards Update No. 2016-13, "Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments" (ASU 2016-13). ASU 2016-13 requires that expected credit losses relating to financial assets measured on an amortized cost basis and available-for-sale debt securities be recorded through an allowance for credit losses. ASU 2016-13 limits the amount of credit losses to be recognized for available-for-sale debt securities to the amount by which carrying value exceeds fair value and also requires the reversal of previously recognized credit losses if fair value increases. The new standard will be effective for us on January 1, 2020. Early adoption will be available on January 1, 2019. We are currently evaluating the effect that the updated standard will have on our consolidated financial statements and related disclosures. In August 2016, the FASB issued Accounting Standards Update No. 2016-15, "Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments" (ASU 2016-15). ASU 2016-15 clarifies how companies present and classify certain cash receipts and cash payments in the statement of cash flows where diversity in practice exists. ASU 2016-15 is effective for us in our first quarter of fiscal 2018. There will not be any changes to the presentation of our Consolidated Statement of Cash Flows upon adoption of the standard. In October 2016, the FASB issued Accounting Standards Update No. 2016-16, "Intra-Entity Transfers of Assets Other Than Inventory” (ASU 2016-16). ASU 2016-16 requires the income tax consequences of intra-entity transfers of assets other than inventory to be recognized as current period income tax expense or benefit and removes the requirement to defer and amortize the consolidated tax consequences of intra-entity transfers. The new standard will be effective for us on January 1, 2018 and will be adopted using a modified retrospective approach which requires a cumulative effect adjustment to retained earnings as of the beginning of the period of adoption. As of December 31, 2017, we had tax assets of $166 million related to intra-entity transfers of assets other than inventory. Upon adoption, we anticipate recording a cumulative-effect adjustment that will decrease Retained earnings by approximately $166 million . In January 2017, the FASB issued Accounting Standards Update No. 2017-01, “Business Combinations” (ASU 2017-01). ASU 2017-01 provides guidance for evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The guidance provides a screen to determine when an integrated set of assets and activities (a “set”) does not qualify to be a business. The screen requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in an identifiable asset or a group of similar identifiable assets, the set is not a business. If the screen is not met, the guidance requires a set to be considered a business to include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create outputs and removes the evaluation as to whether a market participant could replace the missing elements. The new standard will be effective for us on January 1, 2018 and will be adopted on a prospective basis. We anticipate that the adoption of this standard will result in more acquisitions being accounted for as asset acquisitions including the announced acquisition of Impact Biomedicines, Inc. (Impact). See Note 21 for further details related to our acquisition of Impact. |
Nature of Business, Basis of 31
Nature of Business, Basis of Presentation and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Schedule of estimated useful lives of capitalized assets | The estimated useful lives of capitalized assets are as follows: Buildings 40 years Building and operating equipment 15 years Manufacturing machinery and equipment 10 years Other machinery and equipment 5 years Furniture and fixtures 5 years Computer equipment and software 3-7 years |
Acquisitions and Divestitures (
Acquisitions and Divestitures (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Receptos | |
Business Acquisition [Line Items] | |
Schedule of fair value of consideration transferred | The total consideration for the acquisition of Receptos is summarized as follows (in millions): Total Consideration Cash paid for outstanding common stock $ 7,311 Cash for equity compensation attributable to pre-combination service 315 Total consideration $ 7,626 |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | Amounts Recognized as of the Acquisition Date Working capital 1 $ 479 Property, plant and equipment 5 In-process research and development product rights 6,842 Current deferred tax assets 2 241 Other non-current assets 8 Non-current deferred tax liabilities 3 (2,519 ) Total identifiable net assets 5,056 Goodwill 2,570 Total net assets acquired $ 7,626 1 Includes cash and cash equivalents, available for sale marketable securities, other current assets, accounts payable, and accrued expenses and other current liabilities. 2 Following adoption of Accounting Standards Update No. 2015-17, "Balance Sheet Classification of Deferred Taxes" in the fourth quarter of 2015 all deferred tax assets and liabilities and associated valuation allowances are classified as non-current. 3 Upon integration of the acquired intangible assets into our offshore research, manufacturing, and commercial operations, the deferred tax liability was reclassified to a non-current tax liability. Upon enactment of the 2017 Tax Act, the non-current tax liability was reclassified to a deferred tax liability and remeasured for the change in tax rates. |
Schedule of Included Business Acquisition Expenses | From the Acquisition Date through December 31, 2015, our Consolidated Statements of Income included expenses of $381 million associated with the acquisition and operations of Receptos as follows 1 (in millions): Statements of Income Location Acquisition Date Through December 31, 2015 Research and development $ 79 Selling, general and administrative 5 Acquisition related charges and restructuring, net 2 297 Total $ 381 1 In addition, Celgene incurred $20 million of acquisition related costs prior to the acquisition date. 2 Consists of acquisition-related compensation expense and transaction costs. |
Business Acquisition, Pro Forma Information | The following table provides unaudited pro forma financial information for the twelve-month periods ended December 31, 2015 as if the acquisition of Receptos had occurred on January 1, 2014 (in millions). Twelve-Month Periods Ended December 31, 2015 Total revenue $ 9,256 Net income $ 1,631 Net income per common share: basic $ 2.06 Net income per common share: diluted $ 1.98 |
Quanticel | |
Business Acquisition [Line Items] | |
Schedule of fair value of consideration transferred | The fair value of consideration transferred in the acquisition of Quanticel is shown in the table below (in millions): Fair Value at October 19, 2015 (as adjusted) Cash $ 96 Fair value of pre-existing equity ownership 12 Contingent consideration 155 Total fair value of consideration $ 263 |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The purchase price allocation resulted in the following amounts being allocated to the assets acquired and liabilities assumed at the acquisition date based upon their respective fair values summarized below (in millions): Fair Value at October 19, 2015 (as adjusted) Working capital 1 $ 7 Property, plant and equipment 2 Other non-current assets 1 Technology platform intangible asset 2 232 Debt obligations (14 ) Non-current deferred tax liabilities (72 ) Total identifiable net assets 156 Goodwill 107 Total net assets acquired $ 263 1 Includes cash and cash equivalents, available-for-sale marketable securities, other current assets, accounts payable and accrued expenses and other current liabilities. 2 Technology platform related to Quanticel’s proprietary technology platform for the single-cell genomic analysis of human cancer. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Schedule of earnings per share | 2017 2016 2015 Net income $ 2,940 $ 1,999 $ 1,602 Weighted-average shares: Basic 779.2 777.2 792.2 Effect of dilutive securities: Options, RSUs, PSUs, warrants and other 29.5 26.1 32.7 Diluted 808.7 803.3 824.9 Net income per share: Basic $ 3.77 $ 2.57 $ 2.02 Diluted $ 3.64 $ 2.49 $ 1.94 |
Financial Instruments and Fai34
Financial Instruments and Fair Value Measurement (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Schedule of Significant Unobservable Inputs Calculation | The fair value of our contingent consideration as of December 31, 2017 and December 31, 2016 was calculated using the following significant unobservable inputs: Inputs Ranges (weighted average) utilized as of: December 31, 2017 December 31, 2016 Discount rate 2.7 to 12.0% (3.5%) 1.5% to 12.0% (8.6%) Probability of payment 0% to 20% (4%) 0% to 95% (42%) Projected year of payment for development and regulatory milestones 2020 to 2029 (2024) 2017 to 2029 (2019) Projected year of payment for sales-based milestones and other amounts calculated as a percentage of annual sales 2024 to 2030 (2028) 2019 to 2033 (2024) |
Assets and liabilities measured at fair value on recurring basis | Balance at December 31, 2017 Quoted Price in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Available-for-sale securities $ 5,029 $ 1,810 $ 3,219 $ — Purchased currency options 36 — 36 — Total assets $ 5,065 $ 1,810 $ 3,255 $ — Liabilities: Contingent value rights $ (42 ) $ (42 ) $ — $ — Forward currency contracts (42 ) — (42 ) — Interest rate swaps (7 ) — (7 ) — Written currency options (172 ) — (172 ) — Other acquisition related contingent consideration (80 ) — — (80 ) Total liabilities $ (343 ) $ (42 ) $ (221 ) $ (80 ) Balance at December 31, 2016 Quoted Price in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Available-for-sale securities $ 1,800 $ 891 $ 909 $ — Forward currency contracts 379 — 379 — Purchased currency options 140 — 140 — Interest rate swaps 31 — 31 — Total assets $ 2,350 $ 891 $ 1,459 $ — Liabilities: Contingent value rights $ (44 ) $ (44 ) $ — $ — Written currency options (54 ) — (54 ) — Other acquisition related contingent consideration (1,490 ) — — (1,490 ) Total liabilities $ (1,588 ) $ (44 ) $ (54 ) $ (1,490 ) |
Roll-forward of fair value of Level 3 instruments (significant unobservable inputs), liabilities | There were no security transfers between levels 1, 2 and 3 during the years ended December 31, 2017 and 2016 . The following tables represent a roll-forward of the fair value of level 3 instruments: Year Ended December 31, 2017 Liabilities: Gloucester Nogra Avila Quanticel Total Balance as of December 31, 2016 $ (21 ) $ (1,346 ) $ (8 ) $ (115 ) $ (1,490 ) Net change in fair value (1 ) 1,340 5 4 1,348 Settlements, including transfers to Accrued expenses and other current liabilities — — — 62 62 Balance as of December 31, 2017 $ (22 ) $ (6 ) $ (3 ) $ (49 ) $ (80 ) Year Ended December 31, 2016 Liabilities: Gloucester Nogra Avila Quanticel Total Balance as of December 31, 2015 $ (19 ) $ (1,239 ) $ (97 ) $ (167 ) $ (1,522 ) Amounts acquired or issued, including measurement period adjustments — — — 11 11 Net change in fair value (2 ) (107 ) 89 (9 ) (29 ) Settlements, including transfers to Accrued expenses and other current liabilities — — — 50 50 Balance as of December 31, 2016 $ (21 ) $ (1,346 ) $ (8 ) $ (115 ) $ (1,490 ) |
Derivative Instruments and He35
Derivative Instruments and Hedging Activities (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Derivative [Line Items] | |
Schedule of fair value and balance sheet location of derivative instruments | Classification and Amount of Gain or (Loss) Recognized in Income on Fair Value and Cash Flow Hedging Relationships 2017 Net product sales Interest (expense) Other income (expense), net Total amounts of income and expense line items presented in the Consolidated Statements of Income in which the effects of fair value or cash flow hedges are recorded $ 12,973 $ (522 ) $ 24 The effects of fair value and cash flow hedging: Gain (loss) on fair value hedging relationships Interest rate swap agreements: Hedged items — 2 — Derivatives designated as hedging instruments (1) — 35 — Gain (loss) on cash flow hedging relationships Foreign exchange contracts: Amount of gain or (loss) reclassified from AOCI into income 184 — — Amount excluded from effectiveness testing recognized using a systematic and rational amortization approach / changes in fair value 15 — — Reclassification adjustment for excluded component (loss) gain (18 ) — — Treasury rate lock agreements: Amount of gain or (loss) reclassified from AOCI into income — (5 ) — Interest rate swap agreements: Amount of gain or (loss) reclassified from AOCI into income — (1 ) — (1) The amounts include a benefit of $35 million relating to the amortization of the cumulative amount of fair value hedging adjustments included in the carrying amount of the hedged liability for discontinued hedging relationships for the year ended December 31, 2017. The following table summarizes the fair value and presentation in the Consolidated Balance Sheets for derivative instruments as of December 31, 2017 and 2016 : December 31, 2017 Fair Value Instrument Balance Sheet Location Asset Derivatives Liability Derivatives Derivatives designated as hedging instruments: Foreign exchange contracts 1 Other current assets $ 5 $ 1 Accrued expense and other current liabilities 30 79 Other non-current assets 1 — Other non-current liabilities 36 159 Interest rate swap agreements Other current assets 3 — Other non-current liabilities — 11 Derivatives not designated as hedging instruments: Foreign exchange contracts 1 Other current assets 8 1 Accrued expenses and other current liabilities 4 22 Interest rate swap agreements Other current assets 2 2 Other non-current assets 4 3 Total $ 93 $ 278 1 Derivative instruments in this category are subject to master netting arrangements and are presented on a net basis on the Consolidated Balance Sheets in accordance with ASC 210-20. December 31, 2016 Fair Value Instrument Balance Sheet Location Asset Derivatives Liability Derivatives Derivatives designated as hedging instruments: Foreign exchange contracts 1 Other current assets $ 317 $ 10 Other non-current assets 178 71 Interest rate swap agreements Other current assets 1 — Other non-current assets 38 7 Other non-current liabilities — 2 Derivatives not designated as hedging instruments: Foreign exchange contracts 1 Other current assets 57 4 Accrued expenses and other current liabilities — 2 Interest rate swap agreements Other current assets 2 2 Other non-current assets 3 2 Total $ 596 $ 100 1 Derivative instruments in this category are subject to master netting arrangements and are presented on a net basis in the Consolidated Balance Sheets in accordance with ASC 210-20. |
Cumulative basis adjustments for fair value hedges | As of December 31, 2017 and December 31, 2016 , the following amounts were recorded on the Consolidated Balance Sheet related to cumulative basis adjustments for fair value hedges: Carrying Amount of the Hedged Liability Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Liability Consolidated Balance Sheet Classification in Which the Hedged Item Is Included December 31, 2017 (1) December 31, 2016 (1) December 31, 2017 (2) December 31, 2016 (2) Current portion of long-term debt, net of discount $ — $ 501 $ — $ 1 Long-term debt, net of discount 7,270 6,703 128 163 (1) The current portion of long-term debt, net of discount includes $501 million of carrying value with discontinued hedging relationships as of December 31, 2016 . The long-term debt, net of discount includes approximately $3.8 billion and $4.2 billion of carrying value with discontinued hedging relationships as of December 31, 2017 and December 31, 2016 , respectively. (2) The current portion of long-term debt, net of discount includes $1 million of hedging adjustments on discontinued hedging relationships as of December 31, 2016 . The long-term debt, net of discount includes $139 million and $172 million of hedging adjustment on discontinued hedging relationships on long-term debt as of December 31, 2017 and December 31, 2016 , respectively |
Schedule of effect of derivative instruments not designated as hedging instruments on Consolidated Statements of Income | The following table summarizes the effect of derivative instruments not designated as hedging instruments on the Consolidated Statements of Income for the years ended December 31, 2017 and 2016 : Classification of (Loss) Gain Recognized in Income on Derivative Classification of (Loss) Gain Recognized in Income on Derivative Instrument 2017 2016 Foreign exchange contracts Other income (expense), net $ (52 ) $ 21 Put options sold Other income (expense), net — 8 |
Cash flow hedges | |
Derivative [Line Items] | |
Schedule of effect of derivative instruments designated as hedging instruments on Consolidated Statements of Income | The following tables summarizes the effect of derivative instruments designated as cash-flow hedging instruments in Accumulated OCI for the years ended December 31, 2017 and 2016 : 2017 Instrument Amount of Gain/(Loss) Recognized in OCI on Derivative (1)( 2) Classification of Gain/(Loss) Reclassified from Accumulated OCI into Income Amount of Gain/(Loss) Reclassified from Accumulated OCI into Income Classification of Gain/(Loss) Recognized in Income Related to Amount Excluded from Effectiveness Testing Amount of Gain/(Loss) Recognized in Income on Derivative Related to Amount Excluded from Effectiveness Testing Foreign exchange contracts $ (419 ) Net product sales $ 184 Net product sales $ (3 ) Treasury rate lock agreements (2 ) Interest (expense) (5 ) N/A Forward starting interest rate swaps (13 ) Interest (expense) (1 ) N/A 1 Net losses of $76 million are expected to be reclassified from Accumulated OCI into income in the next 12 months. 2 For the year ended December 31, 2017 , the straight-line amortization of the initial value of the amount excluded from the assessment of hedge effectiveness for our foreign exchange contracts recognized in OCI was a loss of $15 million of which $18 million related to the cumulative effect adjustment related to the adoption of ASU 2017-12. There were no excluded components for out treasury rate lock and interest rate swap agreements. 2016 (Effective Portion) (Ineffective Portion and Amount Excluded From Effectiveness Testing) Instrument Amount of Classification of Amount of Classification of Amount of Foreign exchange contracts $ 109 Net product sales $ 307 Other income, net $ 19 (1) Treasury rate lock agreements $ — Interest expense $ (5 ) Other income, net $ — Forward starting interest rate swaps $ 36 Interest expense $ (2 ) Other income, net $ — 1 The amount of net gains recognized in income represents $17 million of gains related to amounts excluded from the assessment of hedge effectiveness (fair value adjustments of forward point amounts) and $2 million in gains related to the ineffective portion of the hedging relationships. The following table summarizes the effect of derivative instruments designated as fair value hedging instruments on the Consolidated Statements of Income for the years ended December 31, 2017 and 2016 : Classification of Gain Recognized in Income on Derivative Amount of Gain Recognized in Income on Derivative Instrument 2017 1 2016 1 Interest rate swaps Interest (expense) 35 $ 45 1 The amounts include a benefit of $35 million and $20 million relating to the amortization of the cumulative amount of fair value hedging adjustments included in the carrying amount of the hedged liability for discontinued hedging relationships for the years ending December 31, 2017 and December 31, 2016, respectively. |
Foreign currency forward contracts | |
Derivative [Line Items] | |
Schedule of notional amount of foreign currency forward contracts | Foreign currency forward contracts entered into to hedge forecasted revenue and expenses were as follows as of December 31, 2017 and December 31, 2016 : Notional Amount Foreign Currency: 2017 2016 Australian Dollar $ 61 $ 49 British Pound 97 199 Canadian Dollar 227 193 Euro 954 1,812 Japanese Yen 356 597 Total $ 1,695 $ 2,850 |
Foreign exchange option contracts | |
Derivative [Line Items] | |
Foreign currency option contracts entered into to hedge forecasted revenue and expenses | Outstanding foreign currency option contracts entered into to hedge forecasted revenue were as follows as of December 31, 2017 and December 31, 2016 : Notional Amount 1 2017 2016 Foreign currency option contracts designated as hedging activity: Purchased Put $ 3,319 $ 1,790 Written Call 3,739 2,009 1 U.S. Dollar notional amounts are calculated as the hedged local currency amount multiplied by the strike value of the foreign currency option. The local currency notional amounts of our purchased put and written call that are designated as hedging activities are equal to each other. |
Forward starting interest rate swaps | |
Derivative [Line Items] | |
Schedule of notional amount of foreign currency forward contracts | e had outstanding forward starting swaps with effective dates in 2017 and 2018 and maturing in ten years that were designated as cash flow hedges with notional amounts as shown in the table below: Notional Amount 2017 2016 Forward starting interest rate swap contracts: Forward starting swaps with effective dates in 2017 $ — $ 500 Forward starting swaps with effective dates in 2018 — 500 |
Interest rate swaps | |
Derivative [Line Items] | |
Schedule of notional amount of foreign currency forward contracts | The following table summarizes the notional amounts of our outstanding interest rate swap contracts as of December 31, 2017 and December 31, 2016 : Notional Amount 2017 2016 Interest rate swap contracts entered into as fair value hedges of the following fixed-rate senior notes: 3.875% senior notes due 2025 $ 200 $ 200 3.450% senior notes due 2027 250 — Total $ 450 $ 200 |
Cash, Cash Equivalents and Ma36
Cash, Cash Equivalents and Marketable Securities Available-for-Sale (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Cash, Cash Equivalents, and Short-term Investments [Abstract] | |
Schedule of available-for-sale securities by major security type and class | The amortized cost, gross unrealized holding gains, gross unrealized holding losses and estimated fair value of available-for-sale securities by major security type and class of security as of December 31, 2017 and 2016 were as follows: December 31, 2017 Amortized Cost Gross Unrealized Gain Gross Unrealized Loss Estimated Fair Value U.S. Treasury securities $ 445 $ — $ (3 ) $ 442 U.S. government-sponsored agency securities 42 — — 42 U.S. government-sponsored agency MBS 17 — — 17 Corporate debt - global 2,080 — (5 ) 2,075 Asset backed securities 203 — (1 ) 202 Ultra short income fund 352 — — 352 Time deposits (1) and Repurchase agreements (1) 89 — — 89 Marketable equity securities 935 881 (6 ) 1,810 Total available-for-sale marketable securities $ 4,163 $ 881 $ (15 ) $ 5,029 December 31, 2016 Amortized Cost Gross Unrealized Gain Gross Unrealized Loss Estimated Fair Value U.S. Treasury securities $ 121 $ — $ (1 ) $ 120 U.S. government-sponsored agency MBS 31 — — 31 Corporate debt - global 378 — (1 ) 377 Asset backed securities 17 — — 17 Time deposits (1) 364 — — 364 Marketable equity securities 672 238 (19 ) 891 Total available-for-sale marketable securities $ 1,583 $ 238 $ (21 ) $ 1,800 (1) Have original maturities of greater than three months. |
Schedule of available-for-sale securities in an unrealized loss position for less than and longer than 12 months | The fair value of all available-for-sale securities, which have been in an unrealized loss position for less than and longer than 12 months as of December 31, 2017 , was as follows: Less than 12 months 12 months or longer Total December 31, 2017 Estimated Fair Value Gross Unrealized Loss Estimated Fair Value Gross Unrealized Loss Estimated Fair Value Gross Unrealized Loss U.S. Treasury securities $ 411 $ (3 ) $ 31 $ — $ 442 $ (3 ) U.S. government-sponsored agency securities 42 — — — 42 — U.S. government-sponsored agency MBS 2 — 14 — 16 — Corporate debt - global 1,391 (5 ) 22 — 1,413 (5 ) Asset backed securities 175 — 4 (1 ) 179 (1 ) Marketable equity securities 16 (6 ) — — 16 (6 ) Total $ 2,037 $ (14 ) $ 71 $ (1 ) $ 2,108 $ (15 ) |
Schedule of duration periods of available-for-sale debt securities | Duration periods of available-for-sale debt securities as of December 31, 2017 were as follows: Amortized Cost Fair Value Duration of one year or less $ 1,869 $ 1,868 Duration of one through three years 1,241 1,233 Duration of three through five years 29 29 Total $ 3,139 $ 3,130 |
Inventory (Tables)
Inventory (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Inventory Disclosure [Abstract] | |
Summary of inventories by major category | A summary of inventories by major category as of December 31, 2017 and 2016 follows: 2017 2016 Raw materials $ 289 $ 274 Work in process 89 87 Finished goods 163 137 Total $ 541 $ 498 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment, Net [Abstract] | |
Schedule of property, plant and equipment | Property, plant and equipment as of December 31, 2017 and 2016 consisted of the following: 2017 2016 Land $ 77 $ 77 Buildings 525 443 Building and operating equipment 54 45 Leasehold improvements 153 150 Machinery and equipment 310 281 Furniture and fixtures 64 60 Computer equipment and software 496 442 Construction in progress 224 149 Subtotal 1,903 1,647 Less: accumulated depreciation and amortization 833 717 Total $ 1,070 $ 930 |
Other Financial Information (Ta
Other Financial Information (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Other Financial Information | |
Schedule of other current assets | Other current assets as of December 31, 2017 and 2016 consisted of the following: 2017 2016 Income tax receivable $ — $ 43 Other receivables 80 29 Derivative assets 14 361 Other prepaid taxes 102 119 Prepaid income taxes — 95 Prepaid maintenance and software licenses 42 39 Other 150 93 Total $ 388 $ 779 |
Schedule of accrued expenses | Accrued expenses and other current liabilities as of December 31, 2017 and 2016 consisted of the following: 2017 2016 Rebates, distributor chargebacks and distributor services $ 814 $ 561 Compensation 358 414 Clinical trial costs and grants 622 342 Litigation-related loss contingency (see Note 18) — 199 Interest 173 168 Sales, use, value added, and other taxes 59 101 Contingent consideration (see Note 4) — 47 Milestones payable 62 — Other 435 283 Total $ 2,523 $ 2,115 |
Schedule of other non-current liabilities | Other non-current liabilities as of December 31, 2017 and 2016 consisted of the following: 2017 2016 Contingent consideration (see Note 4) $ 80 $ 1,443 Deferred compensation and long-term incentives 240 215 Contingent value rights (see Notes 4 and 18) 42 45 Derivative contracts 134 1 Other 48 67 Total $ 544 $ 1,771 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of finite-lived intangible assets | Intangible assets outstanding as of December 31, 2017 and December 31, 2016 are summarized as follows: December 31, 2017 Gross Carrying Value Accumulated Amortization Intangible Assets, Net Amortizable intangible assets: Acquired developed product rights $ 3,406 $ (1,939 ) $ 1,467 Technology 483 (410 ) 73 Licenses 66 (30 ) 36 Other 43 (34 ) 9 3,998 (2,413 ) 1,585 Non-amortized intangible assets: Acquired IPR&D product rights 6,851 — 6,851 Total intangible assets $ 10,849 $ (2,413 ) $ 8,436 December 31, 2016 Gross Carrying Value Accumulated Amortization Intangible Assets, Net Amortizable intangible assets: Acquired developed product rights $ 3,406 $ (1,694 ) $ 1,712 Technology 483 (326 ) 157 Licenses 66 (26 ) 40 Other 43 (31 ) 12 3,998 (2,077 ) 1,921 Non-amortized intangible assets: Acquired IPR&D product rights 8,471 — 8,471 Total intangible assets $ 12,469 $ (2,077 ) $ 10,392 |
Schedule of indefinite-lived intangible assets | Intangible assets outstanding as of December 31, 2017 and December 31, 2016 are summarized as follows: December 31, 2017 Gross Carrying Value Accumulated Amortization Intangible Assets, Net Amortizable intangible assets: Acquired developed product rights $ 3,406 $ (1,939 ) $ 1,467 Technology 483 (410 ) 73 Licenses 66 (30 ) 36 Other 43 (34 ) 9 3,998 (2,413 ) 1,585 Non-amortized intangible assets: Acquired IPR&D product rights 6,851 — 6,851 Total intangible assets $ 10,849 $ (2,413 ) $ 8,436 December 31, 2016 Gross Carrying Value Accumulated Amortization Intangible Assets, Net Amortizable intangible assets: Acquired developed product rights $ 3,406 $ (1,694 ) $ 1,712 Technology 483 (326 ) 157 Licenses 66 (26 ) 40 Other 43 (31 ) 12 3,998 (2,077 ) 1,921 Non-amortized intangible assets: Acquired IPR&D product rights 8,471 — 8,471 Total intangible assets $ 12,469 $ (2,077 ) $ 10,392 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of Short-term Debt | We had no outstanding short-term borrowings as of December 31, 2017 and 2016. The current portion of long-term debt outstanding as of December 31, 2017 and 2016 includes: 2017 2016 1.900% senior notes due 2017 $ — $ 501 |
Carrying values of the senior notes | The carrying values of the long-term portion of these senior notes as of December 31, 2017 and 2016 are summarized below: 2017 2016 2.125% senior notes due 2018 $ — $ 998 2.300% senior notes due 2018 — 402 2.250% senior notes due 2019 505 509 2.875% senior notes due 2020 1,495 1,493 3.950% senior notes due 2020 514 518 2.250% senior notes due 2021 497 — 3.250% senior notes due 2022 1,044 1,054 3.550% senior notes due 2022 994 994 2.750% senior notes due 2023 746 — 4.000% senior notes due 2023 737 744 3.625% senior notes due 2024 1,001 1,001 3.875% senior notes due 2025 2,478 2,475 3.450% senior notes due 2027 991 — 5.700% senior notes due 2040 247 247 5.250% senior notes due 2043 393 393 4.625% senior notes due 2044 987 987 5.000% senior notes due 2045 1,975 1,974 4.350% senior notes due 2047 1,234 — Total long-term debt $ 15,838 $ 13,789 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Stockholders' Equity Note [Abstract] | |
Summary of changes in common stock issued and treasury stock | A summary of changes in common stock issued and treasury stock is presented below (in millions of shares): Common Stock Common Stock in Treasury Balances as of December 31, 2014 924.8 (124.6 ) Exercise of stock options and conversion of restricted stock units 15.3 (1.2 ) Issuance of common stock for employee benefit plans — 0.4 Shares repurchased under share repurchase program — (28.1 ) Balances as of December 31, 2015 940.1 (153.5 ) Exercise of stock options and conversion of restricted stock units 14.0 (1.0 ) Issuance of common stock for employee benefit plans — 0.4 Shares repurchased under share repurchase program — (21.4 ) Balances as of December 31, 2016 954.1 (175.5 ) Exercise of stock options and conversion of restricted stock units 17.6 (0.6 ) Issuance of common stock for employee benefit plans — 0.4 Shares repurchased under share repurchase program — (36.7 ) Balances as of December 31, 2017 971.7 (212.4 ) |
Accumulated Other Comprehensi43
Accumulated Other Comprehensive Income (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Equity [Abstract] | |
Summary of other comprehensive income (loss) | The accumulated balances related to each component of other comprehensive income (loss), net of tax, are summarized as follows: Pension Liability Adjustment Net Unrealized Gains (Losses) On Available-for-Sale Marketable Securities Net Unrealized Gains (Losses) Related to Cash Flow Hedges Amortization of Excluded Component Related to Cash Flow Hedges (See Note 1) Foreign Currency Translation Adjustments Accumulated Other Comprehensive Income (Loss) Balances as of December 31, 2015 $ (14 ) $ 272 $ 586 $ — $ (76 ) $ 768 Other comprehensive (loss) income before reclassifications, net of tax (24 ) (360 ) 132 — (26 ) (278 ) Reclassified losses (gains) from accumulated other comprehensive income (loss), net of tax — 232 (303 ) — — (71 ) Net current-period other comprehensive (loss), net of tax (24 ) (128 ) (171 ) — (26 ) (349 ) Balances as of December 31, 2016 $ (38 ) $ 144 $ 415 $ — $ (102 ) $ 419 Cumulative effect adjustment for the adoption of ASU 2017-12 (See Note 1) — — (12 ) (18 ) — (30 ) Other comprehensive income (loss) before reclassifications, net of tax 16 395 (428 ) (15 ) 70 38 Reclassified losses (gains) from accumulated other comprehensive income (loss), net of tax — 23 (181 ) 18 — (140 ) Net current-period other comprehensive income (loss), net of tax 16 418 (609 ) 3 70 (102 ) Balances as of December 31, 2017 $ (22 ) $ 562 $ (206 ) $ (15 ) $ (32 ) $ 287 |
Reclassification out of Accumulated Other Comprehensive Income | Gains (Losses) Reclassified Out of Accumulated Other Comprehensive Income (Loss) Accumulated Other Comprehensive Income (Loss) Components Affected Line Item in the Consolidated Statements of Income Years Ended December 31, 2017 2016 2015 Gains (losses) related to cash-flow hedges: Foreign exchange contracts Net product sales $ 184 $ 307 $ 354 Treasury rate lock agreements Interest (expense) (5 ) (5 ) (4 ) Interest rate swap agreements Interest (expense) (1 ) (2 ) (1 ) Income tax provision 3 3 2 Amortization of excluded component Net product sales (18 ) — — Gains (losses) on available-for-sale marketable securities: Realized gain (loss) on sales of marketable securities Interest and investment income, net (37 ) (358 ) (23 ) Income tax provision 14 126 8 Total reclassification, net of tax $ 140 $ 71 $ 336 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Components of share-based compensation expense | The following table summarizes the components of share-based compensation expense in the Consolidated Statements of Income for the years ended December 31, 2017 , 2016 and 2015 : 2017 2016 2015 Cost of goods sold $ 29 $ 33 $ 32 Research and development 268 253 251 Selling, general and administrative 347 320 294 Total share-based compensation expense 644 606 577 Tax benefit related to share-based compensation expense 180 167 161 Reduction in net income $ 464 $ 439 $ 416 |
Schedule of assumptions used in the estimation of fair value of options granted | We estimated the fair value of options granted using a Black-Scholes option pricing model with the following assumptions: 2017 2016 2015 Risk-free interest rate 1.70% - 2.22% 1.03% - 2.08% 1.17% - 1.72% Expected volatility 24% - 30% 29% - 35% 31% - 38% Weighted average expected volatility 27% 32% 34% Expected term (years) 5.03 - 5.06 5.04 - 5.06 5.02 - 5.04 Expected dividend yield 0% 0% 0% |
Schedule of stock option activity | The following table summarizes all stock option activity for the year ended December 31, 2017 : Options (in Millions) Weighted Average Exercise Price Per Option Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value (in Millions) Outstanding as of December 31, 2016 73.8 $ 70.62 6.2 $ 3,388 Changes during the Year: Granted 11.5 118.80 Exercised (15.6 ) 49.49 Forfeited (1.8 ) 108.00 Expired (0.1 ) 97.59 Outstanding as of December 31, 2017 67.8 $ 82.53 6.1 $ 1,823 Vested as of December 31, 2017 or expected to vest in the future 66.9 $ 82.07 6.0 $ 1,822 Vested as of December 31, 2017 41.1 $ 63.58 4.7 $ 1,754 |
Schedule of restricted stock units | Information regarding the Company's RSUs for the year ended December 31, 2017 is as follows (shares in millions): Nonvested RSUs Share Equivalent Weighted Average Grant Date Fair Value Nonvested as of December 31, 2016 7.1 $ 103.00 Changes during the period: Granted 3.1 113.23 Vested (2.0 ) 91.27 Forfeited (0.5 ) 109.15 Nonvested as of December 31, 2017 7.7 $ 109.55 |
Schedule of performance-based restricted stock units | The following table summarizes the Company's performance-based restricted stock unit activity for the year ended December 31, 2017 (shares in thousands): Nonvested Performance-Based RSUs Share Equivalent Weighted Average Grant Date Fair Value Nonvested as of December 31, 2016 463 $ 107.38 Changes during the period: Granted 169 123.86 Vested (38 ) 87.92 Forfeited (36 ) 109.61 Non-vested as of December 31, 2017 558 $ 116.27 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Schedule of income (loss) before income taxes | ncome before income taxes is as follows: 2017 2016 2015 U.S. $ 445 $ 735 $ 525 Non-U.S. 3,869 1,637 1,498 Income before income taxes $ 4,314 $ 2,372 $ 2,023 |
Schedule of provision (benefit) for taxes on income | The provision (benefit) for taxes on income is as follows: 2017 2016 2015 United States: Taxes currently payable: Federal $ 2,545 $ 569 $ 321 State and local 52 43 63 Deferred income taxes (1,331 ) (343 ) (29 ) Total U.S. tax provision 1,266 269 355 International: Taxes currently payable 107 106 71 Deferred income taxes 1 (2 ) (5 ) Total international tax provision 108 104 66 Total provision $ 1,374 $ 373 $ 421 |
Schedule of tax effects of temporary differences that give rise to deferred tax assets and liabilities | December 31, 2017 and 2016 the tax effects of temporary differences that give rise to deferred tax assets and liabilities were as follows: 2017 2016 Assets Liabilities Assets Liabilities NOL carryforwards $ 249 $ — $ 133 $ — Tax credit carryforwards 11 — 14 — Share-based compensation 317 — 412 — Other assets and liabilities 38 (52 ) 60 (10 ) Intangible assets 333 (2,008 ) 808 (1,013 ) Accrued and other expenses 278 — 263 — Unremitted earnings — — — (317 ) Unrealized (gains) losses on securities — (193 ) — (69 ) Subtotal 1,226 (2,253 ) 1,690 (1,409 ) Valuation allowance (277 ) — (143 ) — Total deferred taxes $ 949 $ (2,253 ) $ 1,547 $ (1,409 ) Net deferred tax asset (liability) $ (1,304 ) $ 138 |
Schedule of deferred tax assets and liabilities classified on the company's balance sheet | December 31, 2017 and 2016 , deferred tax assets and liabilities were classified on our Consolidated Balance Sheets as follows: 2017 2016 Other non-current assets $ 23 $ 138 Deferred income tax liabilities (1,327 ) — Net deferred tax asset (liability) $ (1,304 ) $ 138 |
Reconciliation of U.S. statutory income tax rate to company's effective tax rate for continuing operations | Reconciliation of the U.S. statutory income tax rate to the Company's effective tax rate is as follows: Percentages 2017 2016 2015 U.S. statutory rate 35.0 % 35.0 % 35.0 % Foreign tax rate differences (28.8 )% (21.1 )% (21.0 )% State taxes, net of federal benefit 0.6 % 0.8 % 1.2 % Change in valuation allowance 0.8 % 0.5 % 2.0 % Acquisition and collaboration related differences 2.1 % (0.7 )% 4.5 % Changes in uncertain tax positions 0.1 % (0.4 )% (0.5 )% Stock compensation (6.7 )% — % — % 2017 Tax Act 29.4 % — % — % Other (0.7 )% 1.6 % (0.4 )% Effective income tax rate 31.8 % 15.7 % 20.8 % |
Reconciliation of beginning and ending amount of unrecognized tax benefits | A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: 2017 2016 Balance at beginning of year $ 414 $ 326 Increases related to prior year tax positions 67 — Decreases related to prior year tax positions — (11 ) Increases related to current year tax positions 426 108 Settlements — — Lapses of statutes of limitations (11 ) (9 ) Balance at end of year $ 896 $ 414 |
Collaboration Agreements (Table
Collaboration Agreements (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Collaboration Agreements | |
Schedule of Collaboration Agreements | Summarized financial information related to NantBioScience is presented below: Year ended December 31, As of December 31, 1 Research and Development Expense Upfront Fees Milestones Extension/ Termination of Agreements Amortization of Prepaid Research and Development Equity Investments Made During Period Intangible Asset Balance Equity Investment Balance 2 Percentage of Outstanding Equity 2017 $ — $ — $ — $ — $ — $ — $ 90 12.9 % 2016 — — — — — — 90 12.9 % 2015 — — — — — 2014 2 50 — — — 90 1 Year-end balance and percentage of outstanding equity are presented for the current and prior year. 2 $25 million of expense related to the settlement of contingent matching contributions was also recognized in 2014 at the inception of the collaboration agreement with NantBioScience and included in Selling, general and administrative expense. Summarized financial information related to AstraZeneca is presented below: Year ended December 31, As of December 31, Research and Development Expense Upfront Fees Milestones Extension/ Termination of Agreements Amortization of Prepaid Research and Development Equity Investments Made During Period Intangible Asset Balance Equity Investment Balance Percentage of Outstanding Equity 2017 $ — $ — $ — $ — $ — $ — n/a n/a 2016 — — — — — — n/a n/a 2015 450 — — — — Summarized financial information related to Juno is presented below: Year ended December 31, As of December 31, 1 Research and Development Expense Upfront Fees Milestones Extension/ Termination of Agreements Amortization of Prepaid Research and Development Equity Investments Made During Period Intangible Asset Balance Equity Investment Balance 2 Percentage of Outstanding Equity 2017 $ — $ — $ — $ — $ 33 $ — $ 508 9.7 % 2016 50 — — — 41 — 194 9.7 % 2015 575 — — — 425 1 Year-end balance and percentage of outstanding equity are presented for the current and prior year. 2 See Note 6 for additional information relating to our equity investment balance in Juno. Summarized financial information related to bluebird is presented below: Year ended December 31, As of December 31, 1 Research and Development Expense Upfront Fees Milestones Extension/ Termination of Agreements Amortization of Prepaid Research and Development Equity Investments Made During Period Intangible Asset Balance Equity Investment Balance Percentage of Outstanding Equity 2017 $ 15 $ — $ — $ 8 $ 37 $ 4 $ 171 1.9 % 2016 10 — — 8 50 12 41 1.6 % 2015 — — — 5 — 2014 and prior 75 — — — — 1 Year-end balance and percentage of outstanding equity are presented for the current year. Summarized financial information related to Sutro is presented below: Year ended December 31, As of December 31, 1 Research and Development Expense Upfront Fees Milestones Extension/ Termination of Agreements Amortization of Prepaid Research and Development Equity Investments Made During Period Intangible Asset Balance Equity Investment Balance Percentage of Outstanding Equity 2017 $ — $ 10 $ 13 $ 4 $ — $ — $ 18 15.4 % 2016 — 35 — 17 — 6 18 15.4 % 2015 — — — 5 — 2014 and prior 99 — — 3 18 Summarized financial information related to Agios is presented below: Year ended December 31, As of December 31, 1 Research and Development Expense Upfront Fees Milestones Extension/ Termination of Agreements Amortization of Prepaid Research and Development Equity Investments Made During Period Intangible Asset Balance Equity Investment Balance Percentage of Outstanding Equity 2017 $ 8 $ — $ — $ — $ 31 $ — $ 335 12.0 % 2016 200 25 — 1 — — 219 12.4 % 2015 9 — — — — 2014 and prior 121 — 60 — 89 1 Year-end balance and percentage of outstanding equity are presented for the current and prior year. Summarized financial information related to BeiGene is presented below: Year ended December 31, As of December 31, 1 Research and Development Expense Upfront Fees Milestones Extension/ Termination of Agreements Amortization of Prepaid Research and Development Equity Investments Made During Period Intangible Asset Balance Equity Investment Balance Percentage of Outstanding Equity 2017 $ 268 $ — $ — $ — $ 174 $ — $ 246 5.5 % 1 Year-end balance and percentage of outstanding equity are presented for the current year. Summarized financial information related to FORMA is presented below: Year ended December 31, As of December 31, Research and Development Expense Upfront Fees Milestones Extension/ Termination of Agreements Amortization of Prepaid Research and Development Equity Investments Made During Period Intangible Asset Balance Equity Investment Balance Percentage of Outstanding Equity 2017 $ 246 $ 25 $ — $ — $ — $ — n/a n/a 2016 71 — — — — — n/a n/a 2015 59 — — — — 2014 and prior 278 — — — — Summarized financial information related to Jounce is presented below: Year ended December 31, As of December 31, 1 Research and Development Expense Upfront Fees Milestones Extension/ Termination of Agreements Amortization of Prepaid Research and Development Equity Investments Made During Period Intangible Asset Balance Equity Investment Balance Percentage of Outstanding Equity 2017 $ — $ — $ — $ — $ 10 $ — $ 44 10.7 % 2016 238 — — — 24 — 24 11.4 % 1 Year-end balance and percentage of outstanding equity are presented for the current and prior year. Summarized financial information related to Nurix is presented below: Year ended December 31, As of December 31, 1 Research and Development Expense Upfront Fees Milestones Extension/ Termination of Agreements Amortization of Prepaid Research and Development Equity Investments Made During Period Intangible Asset Balance Equity Investment Balance 2 Percentage of Outstanding Equity 2017 $ — $ — $ — $ — $ — $ — $ 17 10.3 % 2016 — — — — — — 17 10.5 % 2015 150 — — — 17 1 Year-end balance and percentage of outstanding equity are presented for the current and prior year. Summarized financial information related to our other collaboration arrangements is presented below: Year ended December 31, As of December 31, 1 Research and Development Expense Upfront Fees Milestones Extension/ Termination of Agreements Amortization of Prepaid Research and Development Equity Investments Made During Period Intangible Asset Balance Equity Investment Balance Percentage of Outstanding Equity 2017 $ 215 $ — $ 7 $ — $ 7 $ 5 $ 91 n/a 2016 247 1 9 — 8 1 80 n/a 2015 70 8 18 21 65 1 Year-end balance is presented for the current and prior year. Summarized financial information related to Lycera is presented below: Year ended December 31, As of December 31, 1 Research and Development Expense Upfront Fees Milestones Extension/ Termination of Agreements Amortization of Prepaid Research and Development Equity Investments Made During Period Intangible Asset Balance Equity Investment Balance 2 Percentage of Outstanding Equity 2017 $ 14 $ — $ — $ — $ 3 $ 3 $ 13 10.0 % 2016 — — — — — 3 10 8.0 % 2015 87 — — — 10 1 Year-end balance and percentage of outstanding equity are presented for the current and prior year. Summarized financial information related to Acceleron is presented below: Year ended December 31, As of December 31, 1 Research and Development Expense Upfront Fees Milestones Extension/ Termination of Agreements Amortization of Prepaid Research and Development Equity Investments Made During Period Intangible Asset Balance Equity Investment Balance Percentage of Outstanding Equity 2017 $ — $ — $ — $ — $ 28 $ — $ 261 13.6 % 2016 — 15 — — 32 — 138 14.1 % 2015 — — — — — 2014 and prior 70 45 — — 93 1 Year-end balance and percentage of outstanding equity are presented for the current and prior year. Summarized financial information related to OncoMed is presented below: Year ended December 31, As of December 31, 1 Research and Development Expense Upfront Fees Milestones Extension/ Termination of Agreements Amortization of Prepaid Research and Development Equity Investments Made During Period Intangible Asset Balance Equity Investment Balance Percentage of Outstanding Equity 2017 $ — $ — $ — $ — $ — $ — $ 12 7.8 % 2016 — — — — 15 — 23 8.0 % 2015 3 70 — — — 2014 and prior 158 — — — 22 1 Year-end balance and percentage of outstanding equity are presented for the current and prior year. |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of future minimum lease payments under non-cancelable operating leases | Future minimum lease payments under non-cancelable operating leases as of December 31, 2017 are: Operating Leases 2018 $ 56 2019 48 2020 41 2021 31 2022 26 Thereafter 33 Total minimum lease payments $ 235 |
Geographic and Product Inform48
Geographic and Product Information (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Schedule of revenues and long-lived assets by geographic area | Revenues 2017 2016 2015 United States $ 8,324 $ 7,010 $ 5,604 Europe 3,327 3,046 2,624 All other 1,352 1,173 1,028 Total revenues $ 13,003 $ 11,229 $ 9,256 Long-Lived Assets 1 2017 2016 United States $ 768 $ 667 Europe 296 251 All other 6 12 Total long lived assets $ 1,070 $ 930 1 Long-lived assets consist of net property, plant and equipment. |
Schedule of total revenues from external customers by product | Total revenues from external customers by product for the years ended December 31, 2017 , 2016 and 2015 were as follows: 2017 2016 2015 REVLIMID ® $ 8,187 $ 6,974 $ 5,801 POMALYST ® /IMNOVID ® 1,614 1,311 984 OTEZLA ® 1,279 1,017 472 ABRAXANE ® 992 973 967 IDHIFA ® 20 — — VIDAZA ® 628 608 591 azacitidine for injection 36 66 84 THALOMID ® 132 152 185 ISTODAX ® 76 80 69 Other 9 4 8 Total net product sales 12,973 11,185 9,161 Other revenue 30 44 95 Total revenue $ 13,003 $ 11,229 $ 9,256 |
Schedule of customer concentration risk based on total revenues and net accounts receivable | The percentage of amounts due from these customers compared to total net accounts receivable is also summarized below as of December 31, 2017 and 2016 . Percent of Total Revenue Percent of Net Accounts Receivable Customer 2017 2016 2015 2017 2016 CVS Health Corp. 12.5 % 12.0 % 10.7 % 9.7 % 7.9 % McKesson Corp. 12.0 % 10.3 % 8.5 % 9.6 % 9.1 % AmerisourceBergen Corp. 10.0 % 8.5 % 8.1 % 9.7 % 8.7 % |
Quarterly Results of Operatio49
Quarterly Results of Operations (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Data [Abstract] | |
Schedule of quarterly results of operations | 2017 1Q (3) 2Q (3) 3Q 4Q Year Total revenue $ 2,962 $ 3,271 $ 3,287 $ 3,483 $ 13,003 Gross profit (1) 2,839 3,148 3,165 3,360 12,512 Income tax provision (4) 82 77 3 1,212 1,374 Net income (loss) 932 1,101 988 (81 ) 2,940 Net income (loss) per share: (2) Basic $ 1.20 $ 1.41 $ 1.26 $ (0.10 ) $ 3.77 Diluted $ 1.15 $ 1.36 $ 1.21 $ (0.10 ) $ 3.64 Weighted average shares: Basic 779.0 780.4 784.1 773.5 779.2 Diluted 811.2 811.7 815.2 773.5 808.7 2016 1Q 2Q 3Q (5) 4Q Year Total revenue $ 2,512 $ 2,754 $ 2,983 $ 2,980 $ 11,229 Gross profit (1) 2,389 2,633 2,861 2,864 10,747 Income tax provision 121 97 85 70 373 Net income 801 598 171 429 1,999 Net income per share: (2) Basic $ 1.03 $ 0.77 $ 0.22 $ 0.55 $ 2.57 Diluted $ 0.99 $ 0.75 $ 0.21 $ 0.53 $ 2.49 Weighted average shares: Basic 780.6 775.6 775.8 776.8 777.2 Diluted 807.7 801.5 801.5 802.2 803.3 1 Gross profit is computed by subtracting cost of goods sold (excluding amortization of acquired intangible assets) from net product sales. 2 The sum of the quarters may not equal the full year due to rounding. In addition, quarterly and full year basic and diluted earnings per share are calculated separately. 3 During the third quarter of 2017, we adopted ASU 2017-12 with an initial application date of January 1, 2017. Prior to the adoption of ASU 2017-12, we recognized all changes in the fair value of the excluded component of a hedge in Other income (expense), net in the Consolidated Statements of Income under a mark-to-market approach. Pursuant to the provisions of ASU 2017-12, we no longer recognize the adjustments to the fair value of the excluded component in Other income (expense), net but we instead recognize the initial value of the excluded component using an amortization approach over the life of the hedging instrument. In accordance with ASU 2017-12, certain provisions were required to be applied on a modified retrospective basis, which requires a cumulative effect adjustment to accumulated other comprehensive income with a corresponding adjustment to retained earnings as of the beginning of the fiscal year of adoption, or January 1, 2017. See Note 1 for additional information related to the adoption of ASU-2017-12. As such, the unaudited quarterly results of operations for the first and second quarter of 2017 have been recast for retrospective application of ASU 2017-12 as follows: Three-Month Period Ended March 31, 2017 Three-Month Period Ended June 30, 2017 As Reported As Revised As Reported As Revised Total revenue $ 2,960 $ 2,962 $ 3,268 $ 3,271 Other income (expense), net 26 13 (76 ) (31 ) Income tax provision 84 82 69 77 Net income 941 932 1,061 1,101 Basic net income per common share 1.21 1.20 1.36 1.41 Diluted net income per common share $ 1.16 $ 1.15 $ 1.31 $ 1.36 4 The Income tax provision in the fourth quarter of 2017 includes income tax expense of approximately $1,269 million as a result of U.S. tax reform legislation, formerly known as the Tax Cuts and Jobs Act (2017 Tax Act), which was enacted on December 22, 2017. See Note 16 contained in this Annual Report on Form 10-K for additional details related to the 2017 Tax Act. In addition, the income tax provision for 2017 includes $290 million of excess benefits arising from share-based compensation awards that vested or were exercised during 2017 as a result of the adoption of ASU 2016-09, "Compensation - Stock Compensation. 5 The decrease in Net income in the third quarter of 2016 was primarily due to a $623 million research and development asset acquisition expense associated with the purchase of EngMab. As such, the unaudited quarterly results of operations for the first and second quarter of 2017 have been recast for retrospective application of ASU 2017-12 as follows: Three-Month Period Ended March 31, 2017 Three-Month Period Ended June 30, 2017 As Reported As Revised As Reported As Revised Total revenue $ 2,960 $ 2,962 $ 3,268 $ 3,271 Other income (expense), net 26 13 (76 ) (31 ) Income tax provision 84 82 69 77 Net income 941 932 1,061 1,101 Basic net income per common share 1.21 1.20 1.36 1.41 Diluted net income per common share $ 1.16 $ 1.15 $ 1.31 $ 1.36 |
Nature of Business, Basis of 50
Nature of Business, Basis of Presentation and Summary of Significant Accounting Policies (Details 1) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended |
Dec. 31, 2017 | Dec. 31, 2017 | |
Property, Plant and Equipment: | ||
Maximum equity ownership percentage, investments | 50.00% | |
Revenue Recognition | ||
Percentage of responsibility for patient's cost of branded prescription taken by manufacturers | 50.00% | |
Minimum | ||
Property, Plant and Equipment: | ||
Estimated useful lives of capitalized assets (in years) | 3 years | |
Revenue Recognition | ||
Period for settlement of rebates and fees | 1 month | |
Maximum | ||
Property, Plant and Equipment: | ||
Estimated useful lives of capitalized assets (in years) | 7 years | |
Revenue Recognition | ||
Period for settlement of rebates and fees | 15 months | |
Buildings | ||
Property, Plant and Equipment: | ||
Estimated useful lives of capitalized assets (in years) | 40 years | |
Building and operating equipment | ||
Property, Plant and Equipment: | ||
Estimated useful lives of capitalized assets (in years) | 15 years | |
Manufacturing machinery and equipment | ||
Property, Plant and Equipment: | ||
Estimated useful lives of capitalized assets (in years) | 10 years | |
Other machinery and equipment | ||
Property, Plant and Equipment: | ||
Estimated useful lives of capitalized assets (in years) | 5 years | |
Furniture and fixtures | ||
Property, Plant and Equipment: | ||
Estimated useful lives of capitalized assets (in years) | 5 years | |
Computer equipment and software | Minimum | ||
Property, Plant and Equipment: | ||
Estimated useful lives of capitalized assets (in years) | 3 years | |
Computer equipment and software | Maximum | ||
Property, Plant and Equipment: | ||
Estimated useful lives of capitalized assets (in years) | 7 years | |
GED 301 | ||
Revenue Recognition | ||
Income before tax | $ 411 | |
Impairment of intangible assets | 1,620 | |
Wind down cost | 188 | |
Contingent consideration adjustment, increase (decrease) | $ 1,397 |
Nature of Business, Basis of 51
Nature of Business, Basis of Presentation and Summary of Significant Accounting Policies (ASU 2016-09) (Details) - USD ($) shares in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
New Accounting Pronouncement, Early Adoption [Line Items] | |||
Effective income tax rate reconciliation, share-based compensation, excess tax benefit, amount | $ 290 | ||
Cumulative effect adjustment for the adoption | (30) | ||
Deferred tax liabilities, net | 1,304 | ||
Net cash provided by operating activities | 5,246 | $ 4,165 | $ 2,785 |
Net cash (used in) provided by financing activities | $ (1,584) | (1,834) | 4,283 |
Accounting Standards Update 2016-09 | |||
New Accounting Pronouncement, Early Adoption [Line Items] | |||
Deferred tax liabilities, net | (17) | ||
Increase in diluted shares outstanding (in shares) | 7.3 | ||
Accounting Standards Update 2016-09, Excess Tax Benefit Component | |||
New Accounting Pronouncement, Early Adoption [Line Items] | |||
Net cash provided by operating activities | 189 | 301 | |
Net cash (used in) provided by financing activities | (189) | (301) | |
Accounting Standards Update 2016-09, Statutory Tax Withholding Component | |||
New Accounting Pronouncement, Early Adoption [Line Items] | |||
Net cash provided by operating activities | 189 | 301 | |
Net cash (used in) provided by financing activities | (189) | $ (301) | |
Retained Earnings | Accounting Standards Update 2016-09 | |||
New Accounting Pronouncement, Early Adoption [Line Items] | |||
Cumulative effect adjustment for the adoption | $ 17 |
Nature of Business, Basis of 52
Nature of Business, Basis of Presentation and Summary of Significant Accounting Policies (ASU 2017-12) (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
New Accounting Pronouncement, Early Adoption [Line Items] | ||||||||||||
Cumulative effect adjustment for the adoption | $ (30) | $ (30) | ||||||||||
Income before income taxes | 4,314 | $ 2,372 | $ 2,023 | |||||||||
Net income | $ (81) | $ 988 | $ 1,101 | $ 932 | $ 429 | $ 171 | $ 598 | $ 801 | $ 2,940 | $ 1,999 | $ 1,602 | |
Basic (in dollars per share) | $ (0.10) | $ 1.26 | $ 1.41 | $ 1.20 | $ 0.55 | $ 0.22 | $ 0.77 | $ 1.03 | $ 3.77 | $ 2.57 | $ 2.02 | |
Diluted (in dollars per share) | $ (0.10) | $ 1.21 | $ 1.36 | $ 1.15 | $ 0.53 | $ 0.21 | $ 0.75 | $ 0.99 | $ 3.64 | $ 2.49 | $ 1.94 | |
Accounting Standards Update 2017-12 | ||||||||||||
New Accounting Pronouncement, Early Adoption [Line Items] | ||||||||||||
Income before income taxes | $ 48 | $ 11 | $ 115 | |||||||||
Basic (in dollars per share) | $ 0.15 | |||||||||||
Diluted (in dollars per share) | $ 0.14 | |||||||||||
Retained Earnings | ||||||||||||
New Accounting Pronouncement, Early Adoption [Line Items] | ||||||||||||
Net income | $ 2,940 | $ 1,999 | $ 1,602 | |||||||||
Retained Earnings | Accounting Standards Update 2017-12 | ||||||||||||
New Accounting Pronouncement, Early Adoption [Line Items] | ||||||||||||
Cumulative effect adjustment for the adoption | $ 30 | 30 | ||||||||||
Accumulated Other Comprehensive Income (Loss) | Accounting Standards Update 2017-12 | ||||||||||||
New Accounting Pronouncement, Early Adoption [Line Items] | ||||||||||||
Cumulative effect adjustment for the adoption | $ (30) | $ (30) |
Nature of Business, Basis of 53
Nature of Business, Basis of Presentation and Summary of Significant Accounting Policies (ASU 2016-01) (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Accounting Policies [Abstract] | |
Marketable securities, equity securities | $ 1,800 |
Marketable securities, unrealized gain (loss) | 565 |
Deferred tax liabilities, net | $ 1,304 |
Nature of Business, Basis of 54
Nature of Business, Basis of Presentation and Summary of Significant Accounting Policies (ASU 2016-02) (Details) $ in Millions | Dec. 31, 2017USD ($) |
Accounting Policies [Abstract] | |
Operating leases, future minimum payments due | $ 235 |
Nature of Business, Basis of 55
Nature of Business, Basis of Presentation and Summary of Significant Accounting Policies (ASU 2016-16) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Deferred tax assets | $ 138 | |
Cumulative effect adjustment for the adoption | $ (30) | |
Retained Earnings | Accounting Standards Update 2016-16 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Cumulative effect adjustment for the adoption | (166) | |
Other Assets | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Deferred tax assets | $ 166 |
Acquisitions and Divestitures56
Acquisitions and Divestitures (Delania) (Details) - USD ($) $ in Millions | Feb. 03, 2017 | Sep. 30, 2017 |
Delinia | ||
Business Acquisition [Line Items] | ||
Total consideration | $ 302 | |
Total fair value of consideration | 2 | |
Delinia | Research and development | ||
Business Acquisition [Line Items] | ||
Total consideration | 300 | |
Privately Held Biotech | ||
Business Acquisition [Line Items] | ||
Total consideration | $ 26 | |
Total fair value of consideration | 1 | |
Privately Held Biotech | Research and development | ||
Business Acquisition [Line Items] | ||
Acquisition cost expensed | $ 25 | |
Development Regulatory and Commercial Milestones | Delinia | ||
Business Acquisition [Line Items] | ||
Potential milestone payments | 475 | |
Development and Regulatory Milestones | Privately Held Biotech | ||
Business Acquisition [Line Items] | ||
Potential milestone payments | $ 210 |
Acquisitions and Divestitures57
Acquisitions and Divestitures (EngMab AG) (Details) - Sep. 27, 2016 - EngMab AG SFr in Millions | CHF (SFr) | USD ($) |
Business Acquisition [Line Items] | ||
Total consideration | SFr 607 | $ 625,000,000 |
Working capital | 2,000,000 | |
Research and development | ||
Business Acquisition [Line Items] | ||
Total consideration | 623,000,000 | |
Development and Regulatory Milestones | ||
Business Acquisition [Line Items] | ||
Potential milestone payments | 150 | 155,000,000 |
Commerical Milestones | ||
Business Acquisition [Line Items] | ||
Potential milestone payments | SFr 2,300 | 2,300,000,000 |
Minimum | ||
Business Acquisition [Line Items] | ||
Cumulative sales levels for milestones | 1,000,000,000 | |
Maximum | ||
Business Acquisition [Line Items] | ||
Cumulative sales levels for milestones | $ 40,000,000,000 |
Acquisitions and Divestitures58
Acquisitions and Divestitures (Acetylon) (Details) - Acetylon - USD ($) | Dec. 16, 2016 | Dec. 15, 2016 |
Business Acquisition [Line Items] | ||
Remaining equity acquired | 86.00% | |
Percentage of equity investment ownership | 14.00% | |
Equity investment | $ 30,000,000 | |
Total consideration | $ 196,000,000 | |
Research and development expense | 226,000,000 | |
Minimum | ||
Business Acquisition [Line Items] | ||
Net annual sales goals | 1,000,000,000 | |
Regulatory milestone | Maximum | ||
Business Acquisition [Line Items] | ||
Contingent milestones eligibility | 375,000,000 | |
Commercial milestone | Maximum | ||
Business Acquisition [Line Items] | ||
Contingent milestones eligibility | $ 1,500,000,000 |
Acquisitions and Divestitures59
Acquisitions and Divestitures (Triphase SPV A) (Details) - Triphase | Nov. 17, 2016USD ($) |
Business Acquisition [Line Items] | |
Total consideration | $ 42,000,000 |
Option premium paid | 18,000,000 |
Research and development expense | 44,000,000 |
Net liabilities acquired | 1,000,000 |
Maximum | Regulatory milestone | |
Business Acquisition [Line Items] | |
Contingent milestones eligibility | 125,000,000 |
Maximum | Commercial milestone | |
Business Acquisition [Line Items] | |
Contingent milestones eligibility | 300,000,000 |
Minimum | |
Business Acquisition [Line Items] | |
Net annual sales goals | $ 1,000,000,000 |
Acquisitions and Divestitures60
Acquisitions and Divestitures (LifebankUSA) (Details) - USD ($) shares in Millions, $ in Millions | 1 Months Ended | |
Feb. 29, 2016 | Dec. 31, 2017 | |
HLI | ||
Business Acquisition [Line Items] | ||
Percentage of equity investment ownership | 14.00% | |
LifebankUSA | Other Income (Expense) | ||
Business Acquisition [Line Items] | ||
Gain on sale of CCT's biobanking business | $ 38 | |
LifebankUSA | HLI | ||
Business Acquisition [Line Items] | ||
Investment owned, balance, shares | 3.4 | |
Investment owned, at fair value | $ 40 |
Acquisitions and Divestitures61
Acquisitions and Divestitures (Receptos) (Details) - USD ($) $ / shares in Units, $ in Millions | Aug. 27, 2015 | Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | |||||
Goodwill | $ 4,866 | $ 4,866 | |||
Business Combination, Separately Recognized Transactions | |||||
Acquisition related charges | $ (1,350) | 38 | $ 300 | ||
Receptos | |||||
Business Combination, Consideration Transferred | |||||
Total consideration | $ 7,626 | ||||
Cash paid for outstanding common stock | 7,311 | ||||
Cash for equity compensation attributable to pre-combination service | 315 | ||||
Cash for the portion of equity compensation attributable to the post-combination service period | 197 | ||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | |||||
Working capital | 479 | ||||
Property, plant and equipment | 5 | ||||
In-process research and development product rights | 6,842 | ||||
Current deferred tax assets | 241 | ||||
Other non-current assets | 8 | ||||
Non-current deferred tax liabilities | (2,519) | ||||
Total identifiable net assets | 5,056 | ||||
Goodwill | 2,570 | ||||
Total net assets acquired | $ 7,626 | ||||
Business Combination, Separately Recognized Transactions | |||||
Expense associated with the acquisition and operations of Receptos included in Celgene's Consolidated Statements of Operation | $ 381 | ||||
Acquisition related charges | 20 | ||||
Business Acquisition, Pro Forma Information | |||||
Total revenue | 9,256 | ||||
Net income | $ 1,631 | ||||
Net income per common share: basic (dollars per share) | $ 2.06 | ||||
Net income per common share: diluted (dollars per share) | $ 1.98 | ||||
Receptos | Research and development | |||||
Business Combination, Separately Recognized Transactions | |||||
Expense associated with the acquisition and operations of Receptos included in Celgene's Consolidated Statements of Operation | 79 | ||||
Receptos | Selling, general and administrative | |||||
Business Combination, Separately Recognized Transactions | |||||
Expense associated with the acquisition and operations of Receptos included in Celgene's Consolidated Statements of Operation | 5 | ||||
Receptos | Acquisition related (gains) charges and restructuring, net | |||||
Business Combination, Separately Recognized Transactions | |||||
Expense associated with the acquisition and operations of Receptos included in Celgene's Consolidated Statements of Operation | $ 297 |
Acquisitions and Divestitures62
Acquisitions and Divestitures (Quanticel) (Details) - USD ($) $ in Millions | Oct. 19, 2015 | Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Oct. 18, 2015 |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | |||||
Goodwill | $ 4,866 | $ 4,866 | |||
Other Income (Expense) | |||||
Business Acquisition [Line Items] | |||||
Gain recognized based on fair market value of interest derived from purchase price | $ 10 | ||||
Quanticel | |||||
Business Acquisition [Line Items] | |||||
Cash | $ 96 | ||||
Contingent consideration | 155 | ||||
Decrease to contingent consideration and goodwill | $ 11 | ||||
Cash | 96 | ||||
Fair value of pre-existing equity ownership | 12 | ||||
Total fair value of consideration | 263 | ||||
Ownership percentage prior to acquisition | 5.00% | ||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | |||||
Working capital | 7 | ||||
Property, plant and equipment | 2 | ||||
Other non-current assets | 1 | ||||
Intangible asset | 232 | ||||
Debt obligations | (14) | ||||
Non-current deferred tax liabilities | (72) | ||||
Total identifiable net assets | 156 | ||||
Goodwill | 107 | ||||
Total net assets acquired | 263 | ||||
Quanticel | Discovery and Development Targets | |||||
Business Acquisition [Line Items] | |||||
Contingent consideration | $ 385 |
Acquisitions and Divestitures63
Acquisitions and Divestitures (Narrative) (Details) - GED 0301 $ in Millions | 3 Months Ended |
Dec. 31, 2017USD ($) | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |
Impairment of intangible assets | $ 1,620 |
Wind down cost | $ 188 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Earnings Per Share [Abstract] | |||||||||||
Net income | $ (81,000,000) | $ 988,000,000 | $ 1,101,000,000 | $ 932,000,000 | $ 429,000,000 | $ 171,000,000 | $ 598,000,000 | $ 801,000,000 | $ 2,940,000,000 | $ 1,999,000,000 | $ 1,602,000,000 |
Weighted average shares: | |||||||||||
Basic (in shares) | 773,500,000 | 784,100,000 | 780,400,000 | 779,000,000 | 776,800,000 | 775,800,000 | 775,600,000 | 780,600,000 | 779,200,000 | 777,200,000 | 792,200,000 |
Effect of dilutive securities: | |||||||||||
Options, restricted stock units, warrants and other (in shares) | 29,500,000 | 26,100,000 | 32,700,000 | ||||||||
Diluted (in shares) | 773,500,000 | 815,200,000 | 811,700,000 | 811,200,000 | 802,200,000 | 801,500,000 | 801,500,000 | 807,700,000 | 808,700,000 | 803,300,000 | 824,900,000 |
Net income per share attributable to Celgene: | |||||||||||
Basic (in dollars per share) | $ (0.10) | $ 1.26 | $ 1.41 | $ 1.20 | $ 0.55 | $ 0.22 | $ 0.77 | $ 1.03 | $ 3.77 | $ 2.57 | $ 2.02 |
Diluted (in dollars per share) | $ (0.10) | $ 1.21 | $ 1.36 | $ 1.15 | $ 0.53 | $ 0.21 | $ 0.75 | $ 0.99 | $ 3.64 | $ 2.49 | $ 1.94 |
Anti-dilutive securities | |||||||||||
Antidilutive securities excluded from computation of earnings per share (in shares) | 24,500,000 | 23,800,000 | 14,100,000 | ||||||||
Approved common share repurchase amount | $ 20,500,000,000 | $ 20,500,000,000 | |||||||||
Put option premium net gains (losses) | $ 8,000,000 | $ (10,000,000) | |||||||||
Put options outstanding | 0 | 0 | |||||||||
Common stock repurchased under the program during the period (in shares) | 36,700,000 | ||||||||||
Common stock repurchased under the program during the period | $ 3,900,000,000 | ||||||||||
Remaining open-ended repurchase authorization | $ 822,000,000 | $ 822,000,000 |
Financial Instruments and Fai65
Financial Instruments and Fair Value Measurement (Assumption Calculations) (Details) - Obligations - Income Approach Valuation Technique - Significant Unobservable Inputs (Level 3) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Minimum | ||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||
Discount rate | 2.70% | 1.50% |
Probability of payment | 0.00% | 0.00% |
Maximum | ||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||
Discount rate | 12.00% | 12.00% |
Probability of payment | 20.00% | 95.00% |
Weighted Average | ||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||
Discount rate | 3.50% | 8.60% |
Probability of payment | 4.00% | 42.00% |
Financial Instruments and Fai66
Financial Instruments and Fair Value Measurement (Narrative) (Details) $ in Millions | 3 Months Ended |
Dec. 31, 2017USD ($) | |
Gloucester Pharmaceuticals, Inc. | |
Business Acquisition [Line Items] | |
Estimated maximum potential payments related to contingent consideration | $ 120 |
Avila Therapeutics, Inc. | |
Business Acquisition [Line Items] | |
Estimated maximum potential payments related to contingent consideration | 475 |
Quanticel | |
Business Acquisition [Line Items] | |
Estimated maximum potential payments related to contingent consideration | 276 |
Nogra Pharma Limited | |
Business Acquisition [Line Items] | |
Estimated maximum potential payments related to contingent consideration | 1,800 |
GED 301 | |
Business Acquisition [Line Items] | |
Income before tax | 411 |
Impairment of intangible assets | 1,620 |
Wind down cost | 188 |
Contingent consideration adjustment, increase (decrease) | $ 1,397 |
Financial Instruments and Fai67
Financial Instruments and Fair Value Measurement (Assets and Liabilities) (Details) - Recurring basis - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Quoted Price in Active Markets for Identical Assets (Level 1) | ||
Assets: | ||
Available-for-sale securities | $ 1,810 | $ 891 |
Total assets | 1,810 | 891 |
Liabilities: | ||
Contingent value rights | (42) | (44) |
Total liabilities | (42) | (44) |
Significant Other Observable Inputs (Level 2) | ||
Assets: | ||
Available-for-sale securities | 3,219 | 909 |
Forward currency contracts | 379 | |
Purchased currency options | 36 | 140 |
Interest rate swaps | 31 | |
Total assets | 3,255 | 1,459 |
Liabilities: | ||
Forward currency contracts | (42) | |
Interest rate swaps | (7) | |
Written currency options | (172) | (54) |
Total liabilities | (221) | (54) |
Significant Unobservable Inputs (Level 3) | ||
Liabilities: | ||
Other acquisition related contingent consideration | (80) | (1,490) |
Total liabilities | (80) | (1,490) |
Fair Value | ||
Assets: | ||
Available-for-sale securities | 5,029 | 1,800 |
Forward currency contracts | 379 | |
Purchased currency options | 36 | 140 |
Interest rate swaps | 31 | |
Total assets | 5,065 | 2,350 |
Liabilities: | ||
Contingent value rights | (42) | (44) |
Forward currency contracts | (42) | |
Interest rate swaps | (7) | |
Written currency options | (172) | (54) |
Other acquisition related contingent consideration | (80) | (1,490) |
Total liabilities | $ (343) | $ (1,588) |
Financial Instruments and Fai68
Financial Instruments and Fair Value Measurement (Level 3 Liabilities) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Liabilities: | ||
Balance at beginning of period | $ (1,490) | $ (1,522) |
Amounts acquired or issued, including measurement period adjustments | 11 | |
Net change in fair value | 1,348 | (29) |
Settlements | 62 | 50 |
Balance at end of period | (80) | (1,490) |
Gloucester Pharmaceuticals, Inc. | ||
Liabilities: | ||
Balance at beginning of period | (21) | (19) |
Amounts acquired or issued, including measurement period adjustments | 0 | |
Net change in fair value | (1) | (2) |
Settlements | 0 | 0 |
Balance at end of period | (22) | (21) |
Nogra Pharma Limited | ||
Liabilities: | ||
Balance at beginning of period | (1,346) | (1,239) |
Amounts acquired or issued, including measurement period adjustments | 0 | |
Net change in fair value | 1,340 | (107) |
Settlements | 0 | 0 |
Balance at end of period | (6) | (1,346) |
Avila Therapeutics, Inc. | ||
Liabilities: | ||
Balance at beginning of period | (8) | (97) |
Amounts acquired or issued, including measurement period adjustments | 0 | |
Net change in fair value | 5 | 89 |
Settlements | 0 | 0 |
Balance at end of period | (3) | (8) |
Quanticel | ||
Liabilities: | ||
Balance at beginning of period | (115) | (167) |
Amounts acquired or issued, including measurement period adjustments | 11 | |
Net change in fair value | 4 | (9) |
Settlements | 62 | 50 |
Balance at end of period | $ (49) | $ (115) |
Derivative Instruments and He69
Derivative Instruments and Hedging Activities (Foreign Currency Forward Contracts) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Derivative [Line Items] | ||
Notional amount | $ 10,300 | |
Designated as hedging instruments | Foreign currency forward contracts | ||
Derivative [Line Items] | ||
Period to settlement dates of derivatives is within this period | 20 months | 31 months |
Notional amount | $ 1,695 | $ 2,850 |
Not designated as hedging instruments | Foreign currency forward contracts | ||
Derivative [Line Items] | ||
Notional amount | 885 | 934 |
Australian Dollar | Designated as hedging instruments | Foreign currency forward contracts | ||
Derivative [Line Items] | ||
Notional amount | 61 | 49 |
British Pound | Designated as hedging instruments | Foreign currency forward contracts | ||
Derivative [Line Items] | ||
Notional amount | 97 | 199 |
Canadian Dollar | Designated as hedging instruments | Foreign currency forward contracts | ||
Derivative [Line Items] | ||
Notional amount | 227 | 193 |
Euro | Designated as hedging instruments | Foreign currency forward contracts | ||
Derivative [Line Items] | ||
Notional amount | 954 | 1,812 |
Japanese Yen | Designated as hedging instruments | Foreign currency forward contracts | ||
Derivative [Line Items] | ||
Notional amount | $ 356 | $ 597 |
Minimum | Foreign currency forward contracts | ||
Derivative [Line Items] | ||
Maturity period (in years) | 3 years | |
Maximum | Foreign currency forward contracts | ||
Derivative [Line Items] | ||
Maturity period (in years) | 5 years |
Derivative Instruments and He70
Derivative Instruments and Hedging Activities (Foreign Currency Option Contracts) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Derivative [Line Items] | ||
Notional amount | $ 10,300 | |
Designated as hedging instruments | Foreign exchange option contracts | ||
Derivative [Line Items] | ||
Period to settlement dates of derivatives is within this period | 36 months | 48 months |
Purchased Put | Foreign exchange option contracts | ||
Derivative [Line Items] | ||
Notional amount | $ 258 | $ 387 |
Settlement dates range | 12 months | 24 months |
Purchased Put | Designated as hedging instruments | Foreign exchange option contracts | ||
Derivative [Line Items] | ||
Notional amount | $ 3,319 | $ 1,790 |
Written Call | Designated as hedging instruments | Foreign exchange option contracts | ||
Derivative [Line Items] | ||
Notional amount | $ 3,739 | $ 2,009 |
Derivative Instruments and He71
Derivative Instruments and Hedging Activities (Forward Starting Interest Rate Swaps) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Derivative [Line Items] | ||
Notional amount | $ 10,300,000,000 | |
New Swap Contract | ||
Derivative [Line Items] | ||
Payments for derivative | 500,000,000 | |
Loss on derivative | 4,000,000 | |
Notional amount | 500,000,000 | |
10 Year Notional Contract | ||
Derivative [Line Items] | ||
Gain on derivative | 29 | |
Notional amount | 500,000,000 | |
30 Year Notional Contract | ||
Derivative [Line Items] | ||
Loss on derivative | 2,000,000 | |
Notional amount | 500,000,000 | |
Forward starting interest rate swaps | ||
Derivative [Line Items] | ||
Payments for derivative | $ 500,000,000 | |
Maturity period (in years) | 10 years | |
Forward starting swaps with effective dates in 2017 | ||
Derivative [Line Items] | ||
Notional amount | $ 0 | $ 500,000,000 |
Forward starting swaps with effective dates in 2018 | ||
Derivative [Line Items] | ||
Notional amount | $ 0 | $ 500,000,000 |
Derivative Instruments and He72
Derivative Instruments and Hedging Activities (Interest Rate Swap Contracts) (Details) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | ||
Jul. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Oct. 31, 2017 | |
Derivative [Line Items] | ||||
Notional amount | $ 10,300 | |||
Interest rate swaps | ||||
Derivative [Line Items] | ||||
Notional amount | 450 | $ 200 | ||
Terminated swaps | $ 3,600 | 200 | ||
Proceeds from settlement of interest rate swap contracts | $ 3 | 196 | ||
3.875% senior notes due 2025 | ||||
Derivative [Line Items] | ||||
Interest rate | 3.875% | |||
3.450% senior notes due 2027 | ||||
Derivative [Line Items] | ||||
Interest rate | 3.45% | 3.45% | ||
Senior Notes | 3.875% senior notes due 2025 | Interest rate swaps | ||||
Derivative [Line Items] | ||||
Notional amount | $ 200 | 200 | ||
Interest rate | 3.875% | |||
Senior Notes | 3.450% senior notes due 2027 | Interest rate swaps | ||||
Derivative [Line Items] | ||||
Notional amount | $ 250 | $ 0 | ||
Interest rate | 3.45% |
Derivative Instruments and He73
Derivative Instruments and Hedging Activities (Fair Value and Presentation in the Balance Sheet) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Fair value of derivative instruments | ||
Asset Derivatives | $ 93 | $ 596 |
Liability Derivatives | 278 | 100 |
Designated as hedging instruments | Foreign exchange contracts | Other current assets | ||
Fair value of derivative instruments | ||
Asset Derivatives | 5 | 317 |
Liability Derivatives | 1 | 10 |
Designated as hedging instruments | Foreign exchange contracts | Accrued expenses and other current liabilities | ||
Fair value of derivative instruments | ||
Asset Derivatives | 30 | |
Liability Derivatives | 79 | |
Designated as hedging instruments | Foreign exchange contracts | Other non-current assets | ||
Fair value of derivative instruments | ||
Asset Derivatives | 1 | 178 |
Liability Derivatives | 0 | 71 |
Designated as hedging instruments | Foreign exchange contracts | Other non-current liabilities | ||
Fair value of derivative instruments | ||
Asset Derivatives | 36 | |
Liability Derivatives | 159 | |
Designated as hedging instruments | Interest rate swaps | Other current assets | ||
Fair value of derivative instruments | ||
Asset Derivatives | 3 | 1 |
Liability Derivatives | 0 | 0 |
Designated as hedging instruments | Interest rate swaps | Other non-current assets | ||
Fair value of derivative instruments | ||
Asset Derivatives | 38 | |
Liability Derivatives | 7 | |
Designated as hedging instruments | Interest rate swaps | Other non-current liabilities | ||
Fair value of derivative instruments | ||
Asset Derivatives | 0 | 0 |
Liability Derivatives | 11 | 2 |
Not designated as hedging instruments | Foreign exchange contracts | Other current assets | ||
Fair value of derivative instruments | ||
Asset Derivatives | 8 | 57 |
Liability Derivatives | 1 | 4 |
Not designated as hedging instruments | Foreign exchange contracts | Accrued expenses and other current liabilities | ||
Fair value of derivative instruments | ||
Asset Derivatives | 4 | 0 |
Liability Derivatives | 22 | 2 |
Not designated as hedging instruments | Interest rate swaps | Other current assets | ||
Fair value of derivative instruments | ||
Asset Derivatives | 2 | 2 |
Liability Derivatives | 2 | 2 |
Not designated as hedging instruments | Interest rate swaps | Other non-current assets | ||
Fair value of derivative instruments | ||
Asset Derivatives | 4 | 3 |
Liability Derivatives | $ 3 | $ 2 |
Derivative Instruments and He74
Derivative Instruments and Hedging Activities (Cumulative Basis Adjustments For Fair Value Hedges) (Details) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Accounting Standards Update 2017-12 | Carrying Amount of the Hedged Liability | ||
Derivative [Line Items] | ||
Current portion of long-term debt, net of discount | $ 0 | $ 501 |
Long-term debt, net of discount | 7,270 | 6,703 |
Accounting Standards Update 2017-12 | Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Liability | ||
Derivative [Line Items] | ||
Current portion of long-term debt, net of discount | 0 | 1 |
Long-term debt, net of discount | 128 | 163 |
Hedging Adjustment Discontinued Hedging Relationship ASU 2017-12 | Carrying Amount of the Hedged Liability | ||
Derivative [Line Items] | ||
Current portion of long-term debt, net of discount | 501 | |
Long-term debt, net of discount | 3,800 | 4,200 |
Hedging Adjustment Discontinued Hedging Relationship ASU 2017-12 | Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Liability | ||
Derivative [Line Items] | ||
Current portion of long-term debt, net of discount | 1 | |
Long-term debt, net of discount | $ 139 | $ 172 |
Derivative Instruments and He75
Derivative Instruments and Hedging Activities (Schedule of Impacts on Income) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Designated as hedging instruments | ||
Derivative instruments gain loss | ||
Gains (losses) expected to be reclassified from accumulated OCI into operations in the next 12 months | $ (76) | |
Reclassification adjustment for excluded component (loss) gain | (15) | |
Designated as hedging instruments | Cash flow hedges | Foreign exchange contracts | ||
Derivative instruments gain loss | ||
Amount of gain/(loss) recognized in OCI on derivative | (419) | $ 109 |
Designated as hedging instruments | Cash flow hedges | Foreign exchange contracts | Net product sales | ||
Derivative instruments gain loss | ||
Amount of gain or (loss) reclassified from AOCI into income | 184 | 307 |
Amount of gain/(loss) recognized in income on derivative | (3) | |
Designated as hedging instruments | Cash flow hedges | Foreign exchange contracts | Other income, net | ||
Derivative instruments gain loss | ||
Amount of gain/(loss) recognized in income on derivative | 19 | |
Reclassification adjustment for excluded component (loss) gain | 17 | |
Derivative, net hedge ineffectiveness gain (loss) | (2) | |
Designated as hedging instruments | Cash flow hedges | Treasury rate lock agreements | ||
Derivative instruments gain loss | ||
Amount of gain/(loss) recognized in OCI on derivative | (2) | 0 |
Designated as hedging instruments | Cash flow hedges | Treasury rate lock agreements | Other income, net | ||
Derivative instruments gain loss | ||
Amount of gain/(loss) recognized in income on derivative | 0 | |
Designated as hedging instruments | Cash flow hedges | Treasury rate lock agreements | Interest expense | ||
Derivative instruments gain loss | ||
Amount of gain or (loss) reclassified from AOCI into income | (5) | (5) |
Designated as hedging instruments | Cash flow hedges | Forward starting interest rate swaps | ||
Derivative instruments gain loss | ||
Amount of gain/(loss) recognized in OCI on derivative | (13) | 36 |
Designated as hedging instruments | Cash flow hedges | Forward starting interest rate swaps | Other income, net | ||
Derivative instruments gain loss | ||
Amount of gain/(loss) recognized in income on derivative | 0 | |
Designated as hedging instruments | Cash flow hedges | Forward starting interest rate swaps | Interest expense | ||
Derivative instruments gain loss | ||
Amount of gain or (loss) reclassified from AOCI into income | (1) | (2) |
Designated as hedging instruments | Fair value hedges | Interest rate swaps | Interest expense | ||
Derivative instruments gain loss | ||
Amount of gain/(loss) recognized in income on derivative | 35 | 45 |
Not designated as hedging instruments | Foreign exchange contracts | Other income, net | ||
Derivative instruments not designated as hedging instruments | ||
Amount of gain/(loss) recognized in income on derivative | (52) | 21 |
Not designated as hedging instruments | Put options sold | Other income, net | ||
Derivative instruments not designated as hedging instruments | ||
Amount of gain/(loss) recognized in income on derivative | 0 | 8 |
Accounting Standards Update 2017-12 | Designated as hedging instruments | ||
Derivative instruments gain loss | ||
Reclassification adjustment for excluded component (loss) gain | (18) | |
Accounting Standards Update 2017-12 | Designated as hedging instruments | Fair value hedges | Interest rate swaps | Interest expense | ||
Derivative instruments gain loss | ||
Amount of gain/(loss) recognized in income on derivative | $ 35 | $ 20 |
Derivative Instruments and He76
Derivative Instruments and Hedging Activities (Location and Amount of Gain or (Loss) Recognized in Income on Fair Value and Cash Flow Hedging Relationships) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Derivative [Line Items] | |||
Net product sales | $ 12,973 | $ 11,185 | $ 9,161 |
Interest (expense) | 500 | 311 | |
Other income (expense), net | (324) | $ 48 | |
Net product sales | |||
Derivative [Line Items] | |||
Net product sales | 12,973 | ||
Net product sales | Interest rate swaps | |||
Derivative [Line Items] | |||
Amount of gain or (loss) reclassified from AOCI into income | 0 | ||
Net product sales | Treasury rate lock agreements | |||
Derivative [Line Items] | |||
Amount of gain or (loss) reclassified from AOCI into income | 0 | ||
Interest (expense) | |||
Derivative [Line Items] | |||
Interest (expense) | 522 | ||
Interest (expense) | Interest rate swaps | |||
Derivative [Line Items] | |||
Amount of gain or (loss) reclassified from AOCI into income | (1) | ||
Interest (expense) | Treasury rate lock agreements | |||
Derivative [Line Items] | |||
Amount of gain or (loss) reclassified from AOCI into income | (5) | ||
Other income (expense), net | |||
Derivative [Line Items] | |||
Other income (expense), net | 24 | ||
Other income (expense), net | Interest rate swaps | |||
Derivative [Line Items] | |||
Amount of gain or (loss) reclassified from AOCI into income | 0 | ||
Other income (expense), net | Treasury rate lock agreements | |||
Derivative [Line Items] | |||
Amount of gain or (loss) reclassified from AOCI into income | 0 | ||
Effects of Fair Value and Cash Flow Hedging | Net product sales | Interest rate swaps | |||
Derivative [Line Items] | |||
Gain (loss) on fair value hedging relationships | 0 | ||
Effects of Fair Value and Cash Flow Hedging | Interest (expense) | Interest rate swaps | |||
Derivative [Line Items] | |||
Gain (loss) on fair value hedging relationships | 2 | ||
Effects of Fair Value and Cash Flow Hedging | Other income (expense), net | Interest rate swaps | |||
Derivative [Line Items] | |||
Gain (loss) on fair value hedging relationships | 0 | ||
Cash flow hedges | Net product sales | Foreign exchange contracts | |||
Derivative [Line Items] | |||
Amount of gain or (loss) reclassified from AOCI into income | 184 | ||
Amount excluded from effectiveness testing recognized using a systematic and rational amortization approach / changes in fair value | 15 | ||
Reclassification adjustment for excluded component (loss) gain | (18) | ||
Cash flow hedges | Interest (expense) | Foreign exchange contracts | |||
Derivative [Line Items] | |||
Amount of gain or (loss) reclassified from AOCI into income | 0 | ||
Amount excluded from effectiveness testing recognized using a systematic and rational amortization approach / changes in fair value | 0 | ||
Reclassification adjustment for excluded component (loss) gain | 0 | ||
Cash flow hedges | Other income (expense), net | Foreign exchange contracts | |||
Derivative [Line Items] | |||
Amount of gain or (loss) reclassified from AOCI into income | 0 | ||
Amount excluded from effectiveness testing recognized using a systematic and rational amortization approach / changes in fair value | 0 | ||
Reclassification adjustment for excluded component (loss) gain | 0 | ||
Designated as hedging instruments | |||
Derivative [Line Items] | |||
Reclassification adjustment for excluded component (loss) gain | (15) | ||
Designated as hedging instruments | Effects of Fair Value and Cash Flow Hedging | Net product sales | Interest rate swaps | |||
Derivative [Line Items] | |||
Gain (loss) on fair value hedging relationships | 0 | ||
Designated as hedging instruments | Effects of Fair Value and Cash Flow Hedging | Interest (expense) | Interest rate swaps | |||
Derivative [Line Items] | |||
Gain (loss) on fair value hedging relationships | 35 | ||
Designated as hedging instruments | Effects of Fair Value and Cash Flow Hedging | Other income (expense), net | Interest rate swaps | |||
Derivative [Line Items] | |||
Gain (loss) on fair value hedging relationships | 0 | ||
Designated as hedging instruments | Cash flow hedges | Interest expense | Treasury rate lock agreements | |||
Derivative [Line Items] | |||
Amount of gain or (loss) reclassified from AOCI into income | (5) | (5) | |
Designated as hedging instruments | Fair value hedges | Interest expense | Interest rate swaps | |||
Derivative [Line Items] | |||
Amount excluded from effectiveness testing recognized using a systematic and rational amortization approach / changes in fair value | 35 | 45 | |
Accounting Standards Update 2017-12 | Designated as hedging instruments | |||
Derivative [Line Items] | |||
Reclassification adjustment for excluded component (loss) gain | (18) | ||
Accounting Standards Update 2017-12 | Designated as hedging instruments | Fair value hedges | Interest expense | Interest rate swaps | |||
Derivative [Line Items] | |||
Amount excluded from effectiveness testing recognized using a systematic and rational amortization approach / changes in fair value | $ 35 | $ 20 |
Cash, Cash Equivalents and Ma77
Cash, Cash Equivalents and Marketable Securities Available-for-Sale (Narrative) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Cash and Cash Equivalents [Abstract] | ||
Time deposits and repurchase agreements | $ 1,200 | $ 2,800 |
Commercial paper | 35 | 65 |
Money market funds | $ 4,500 | $ 1,600 |
Cash, Cash Equivalents and Ma78
Cash, Cash Equivalents and Marketable Securities Available-for-Sale (Amortized Cost, Gross Unrealized Gain/Loss, and Estimated Fair Value) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2017 | |
Cash and cash equivalents | ||
Money market funds | $ 1,600 | $ 4,500 |
Available-for-sale securities by major security type and class of security | ||
Amortized Cost | 1,583 | 4,163 |
Gross Unrealized Gain | 238 | 881 |
Gross Unrealized Loss | (21) | (15) |
Estimated Fair Value | 1,800 | 5,029 |
Unrealized loss on Juno securities | 272 | |
U.S. Treasury securities | ||
Available-for-sale securities by major security type and class of security | ||
Amortized Cost | 121 | 445 |
Gross Unrealized Gain | 0 | 0 |
Gross Unrealized Loss | (1) | (3) |
Estimated Fair Value | 120 | 442 |
U.S. government-sponsored agency securities | ||
Available-for-sale securities by major security type and class of security | ||
Amortized Cost | 42 | |
Gross Unrealized Gain | 0 | |
Gross Unrealized Loss | 0 | |
Estimated Fair Value | 42 | |
U.S. government-sponsored agency MBS | ||
Available-for-sale securities by major security type and class of security | ||
Amortized Cost | 31 | 17 |
Gross Unrealized Gain | 0 | 0 |
Gross Unrealized Loss | 0 | 0 |
Estimated Fair Value | 31 | 17 |
Corporate debt - global | ||
Available-for-sale securities by major security type and class of security | ||
Amortized Cost | 378 | 2,080 |
Gross Unrealized Gain | 0 | 0 |
Gross Unrealized Loss | (1) | (5) |
Estimated Fair Value | 377 | 2,075 |
Asset backed securities | ||
Available-for-sale securities by major security type and class of security | ||
Amortized Cost | 17 | 203 |
Gross Unrealized Gain | 0 | 0 |
Gross Unrealized Loss | 0 | (1) |
Estimated Fair Value | 17 | 202 |
Time deposits | ||
Available-for-sale securities by major security type and class of security | ||
Amortized Cost | 364 | |
Gross Unrealized Gain | 0 | |
Gross Unrealized Loss | 0 | |
Estimated Fair Value | 364 | |
Ultra short income fund | ||
Available-for-sale securities by major security type and class of security | ||
Amortized Cost | 352 | |
Gross Unrealized Gain | 0 | |
Gross Unrealized Loss | 0 | |
Estimated Fair Value | 352 | |
Time deposits and Repurchase agreements | ||
Available-for-sale securities by major security type and class of security | ||
Amortized Cost | 89 | |
Gross Unrealized Gain | 0 | |
Gross Unrealized Loss | 0 | |
Estimated Fair Value | 89 | |
Marketable equity securities | ||
Available-for-sale securities by major security type and class of security | ||
Amortized Cost | 672 | 935 |
Gross Unrealized Gain | 238 | 881 |
Gross Unrealized Loss | (19) | (6) |
Estimated Fair Value | $ 891 | $ 1,810 |
Cash, Cash Equivalents and Ma79
Cash, Cash Equivalents and Marketable Securities Available-for-Sale (Continuous Unrealized Loss Positions) (Details) $ in Millions | Dec. 31, 2017USD ($) |
Estimated Fair Value | |
Less than 12 months | $ 2,037 |
12 months or longer | 71 |
Total | 2,108 |
Gross Unrealized Loss | |
Less than 12 months | (14) |
12 months or longer | (1) |
Total | (15) |
U.S. Treasury securities | |
Estimated Fair Value | |
Less than 12 months | 411 |
12 months or longer | 31 |
Total | 442 |
Gross Unrealized Loss | |
Less than 12 months | (3) |
12 months or longer | 0 |
Total | (3) |
U.S. government-sponsored agency securities | |
Estimated Fair Value | |
Less than 12 months | 42 |
12 months or longer | 0 |
Total | 42 |
Gross Unrealized Loss | |
Less than 12 months | 0 |
12 months or longer | 0 |
Total | 0 |
U.S. government-sponsored agency MBS | |
Estimated Fair Value | |
Less than 12 months | 2 |
12 months or longer | 14 |
Total | 16 |
Gross Unrealized Loss | |
Less than 12 months | 0 |
12 months or longer | 0 |
Total | 0 |
Corporate debt - global | |
Estimated Fair Value | |
Less than 12 months | 1,391 |
12 months or longer | 22 |
Total | 1,413 |
Gross Unrealized Loss | |
Less than 12 months | (5) |
12 months or longer | 0 |
Total | (5) |
Asset backed securities | |
Estimated Fair Value | |
Less than 12 months | 175 |
12 months or longer | 4 |
Total | 179 |
Gross Unrealized Loss | |
Less than 12 months | 0 |
12 months or longer | (1) |
Total | (1) |
Marketable equity securities | |
Estimated Fair Value | |
Less than 12 months | 16 |
12 months or longer | 0 |
Total | 16 |
Gross Unrealized Loss | |
Less than 12 months | (6) |
12 months or longer | 0 |
Total | $ (6) |
Cash, Cash Equivalents and Ma80
Cash, Cash Equivalents and Marketable Securities Available-for-Sale (Debt Securities, Amortized Cost and Fair Value) (Details) $ in Millions | Dec. 31, 2017USD ($) |
Amortized Cost | |
Duration of one year or less | $ 1,869 |
Duration of one through three years | 1,241 |
Duration of three through five years | 29 |
Total | 3,139 |
Fair Value | |
Duration of one year or less | 1,868 |
Duration of one through three years | 1,233 |
Duration of three through five years | 29 |
Total | $ 3,130 |
Inventory (Details)
Inventory (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 289 | $ 274 |
Work in process | 89 | 87 |
Finished goods | 163 | 137 |
Total | $ 541 | $ 498 |
Property, Plant and Equipment82
Property, Plant and Equipment (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Property, Plant and Equipment: | ||
Subtotal | $ 1,903 | $ 1,647 |
Less: accumulated depreciation and amortization | 833 | 717 |
Total | 1,070 | 930 |
Land | ||
Property, Plant and Equipment: | ||
Subtotal | 77 | 77 |
Buildings | ||
Property, Plant and Equipment: | ||
Subtotal | 525 | 443 |
Building and operating equipment | ||
Property, Plant and Equipment: | ||
Subtotal | 54 | 45 |
Leasehold improvements | ||
Property, Plant and Equipment: | ||
Subtotal | 153 | 150 |
Machinery and equipment | ||
Property, Plant and Equipment: | ||
Subtotal | 310 | 281 |
Furniture and fixtures | ||
Property, Plant and Equipment: | ||
Subtotal | 64 | 60 |
Computer equipment and software | ||
Property, Plant and Equipment: | ||
Subtotal | 496 | 442 |
Construction in progress | ||
Property, Plant and Equipment: | ||
Subtotal | $ 224 | $ 149 |
Other Financial Information (Sc
Other Financial Information (Schedule of Other Current Assets) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Income tax receivable | $ 0 | $ 43 |
Other receivables | 80 | 29 |
Derivative assets | 14 | 361 |
Other prepaid taxes | 102 | 119 |
Prepaid income taxes | 0 | 95 |
Prepaid maintenance and software licenses | 42 | 39 |
Other | 150 | 93 |
Total | $ 388 | $ 779 |
Other Financial Information (De
Other Financial Information (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Accrued expenses | ||
Rebates, distributor chargebacks and distributor services | $ 814 | $ 561 |
Compensation | 358 | 414 |
Clinical trial costs and grants | 622 | 342 |
Litigation-related loss contingency (see Note 18) | 0 | 199 |
Interest | 173 | 168 |
Sales, use, value added, and other taxes | 59 | 101 |
Contingent consideration (see Note 4) | 0 | 47 |
Milestones payable | 62 | 0 |
Royalties, license fees and collaboration agreements | ||
Other | 435 | 283 |
Total | 2,523 | 2,115 |
Other non-current liabilities | ||
Contingent consideration (see Note 4) | 80 | 1,443 |
Deferred compensation and long-term incentives | 240 | 215 |
Contingent value rights (see Notes 4 and 18) | 42 | 45 |
Derivative contracts | 134 | 1 |
Other | 48 | 67 |
Total | $ 544 | $ 1,771 |
Intangible Assets and Goodwil85
Intangible Assets and Goodwill (Intangible Assets) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Intangible Assets By Category | |||
Gross Carrying Value | $ 3,998 | $ 3,998 | |
Accumulated Amortization | (2,413) | (2,077) | |
Intangible Assets, Net | 1,585 | 1,921 | |
Total intangible assets | |||
Gross Carrying Value | 10,849 | 12,469 | |
Accumulated Amortization | (2,413) | (2,077) | |
Intangible Assets, Net | 8,436 | 10,392 | |
Amortization | 336 | 466 | $ 285 |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |||
Estimated amortization expense, 2018 | 252 | ||
Estimated amortization expense, 2019 | 155 | ||
Estimated amortization expense, 2020 | 154 | ||
Estimated amortization expense, 2021 | 152 | ||
Estimated amortization expense, 2022 | 151 | ||
Acquired developed product rights | |||
Intangible Assets By Category | |||
Gross Carrying Value | 3,406 | 3,406 | |
Accumulated Amortization | (1,939) | (1,694) | |
Intangible Assets, Net | 1,467 | 1,712 | |
Total intangible assets | |||
Accumulated Amortization | (1,939) | (1,694) | |
Technology | |||
Intangible Assets By Category | |||
Gross Carrying Value | 483 | 483 | |
Accumulated Amortization | (410) | (326) | |
Intangible Assets, Net | 73 | 157 | |
Total intangible assets | |||
Accumulated Amortization | (410) | (326) | |
Licenses | |||
Intangible Assets By Category | |||
Gross Carrying Value | 66 | 66 | |
Accumulated Amortization | (30) | (26) | |
Intangible Assets, Net | 36 | 40 | |
Total intangible assets | |||
Accumulated Amortization | (30) | (26) | |
Other | |||
Intangible Assets By Category | |||
Gross Carrying Value | 43 | 43 | |
Accumulated Amortization | (34) | (31) | |
Intangible Assets, Net | 9 | 12 | |
Total intangible assets | |||
Accumulated Amortization | (34) | (31) | |
Acquired IPR&D product rights | |||
Non-amortized intangible assets: | |||
Gross Carrying Value | $ 6,851 | $ 8,471 |
Intangible Assets and Goodwil86
Intangible Assets and Goodwill (Goodwill) (Details) | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill increase (decrease) | $ 0 |
Debt (Narrative) (Details)
Debt (Narrative) (Details) - USD ($) | Dec. 11, 2017 | Oct. 31, 2017 | Aug. 31, 2017 | Dec. 31, 2017 | Nov. 09, 2017 | Sep. 30, 2017 | Dec. 31, 2016 | Apr. 30, 2016 | Apr. 30, 2015 |
Debt Instrument [Line Items] | |||||||||
Short term debt | $ 0 | $ 0 | |||||||
Long-term debt, fair value | 16,600,000,000 | 14,600,000,000 | |||||||
Repayments of debt | $ 1,400,000,000 | ||||||||
Accrued interest | $ 10,000,000 | ||||||||
Loss on extinguishment of debt | (4,000,000) | ||||||||
Commercial paper, remaining borrowing capacity | 2,000,000,000 | 2,000,000,000 | $ 2,000,000,000 | ||||||
Commercial Paper | |||||||||
Debt Instrument [Line Items] | |||||||||
Short term debt | 0 | 0 | |||||||
Revolving Credit Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Maximum borrowing capacity | $ 2,000,000,000 | $ 1,750,000,000 | |||||||
Outstanding uncommitted facility | 0 | 0 | |||||||
Derivative | |||||||||
Debt Instrument [Line Items] | |||||||||
Accumulated OCI, loss position | 31,000,000 | 61,000,000 | |||||||
Gain as a Result of Past Swap Contract Settlements | |||||||||
Debt Instrument [Line Items] | |||||||||
Deferred (gain) loss on discontinuation of fair value hedge | (139,000,000) | (173,000,000) | |||||||
Gain Related to Settlement of Swap Contracts During Current Fiscal Year | |||||||||
Debt Instrument [Line Items] | |||||||||
Deferred (gain) loss on discontinuation of fair value hedge | $ (3,000,000) | (196,000,000) | |||||||
1.900% senior notes due 2017 | |||||||||
Debt Instrument [Line Items] | |||||||||
Interest rate | 1.90% | 1.90% | |||||||
Repayments of debt | $ 500,000,000 | ||||||||
Senior Notes | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument, redemption price, percentage | 100.00% | ||||||||
Downgrade of debt rate | 101.00% | ||||||||
2.750% senior notes due 2023 | |||||||||
Debt Instrument [Line Items] | |||||||||
Long-term debt | $ 750,000,000 | $ 746,000,000 | 0 | ||||||
Interest rate | 2.75% | 2.75% | |||||||
Offering price as percent of par | 99.944% | ||||||||
Debt issuance cost | $ 23,000,000 | ||||||||
Basis spread rate | 12.50% | ||||||||
4.350% senior notes due 2047 | |||||||||
Debt Instrument [Line Items] | |||||||||
Long-term debt | $ 1,250,000,000 | $ 1,234,000,000 | 0 | ||||||
Interest rate | 4.35% | 4.35% | |||||||
Offering price as percent of par | 99.733% | ||||||||
Basis spread rate | 25.00% | ||||||||
3.450% senior notes due 2027 | |||||||||
Debt Instrument [Line Items] | |||||||||
Long-term debt | $ 1,000,000,000 | $ 991,000,000 | 0 | ||||||
Interest rate | 3.45% | 3.45% | |||||||
Offering price as percent of par | 99.848% | ||||||||
Basis spread rate | 20.00% | ||||||||
2.250% senior notes due 2021 | |||||||||
Debt Instrument [Line Items] | |||||||||
Long-term debt | $ 500,000,000 | $ 497,000,000 | 0 | ||||||
Interest rate | 2.25% | 2.25% | |||||||
Offering price as percent of par | 99.706% | ||||||||
Debt issuance cost | $ 2,000,000 | ||||||||
Debt instrument, redemption price, percentage | 100.00% | ||||||||
Basis spread rate | 15.00% | ||||||||
Downgrade of debt rate | 101.00% | ||||||||
2.125% senior notes due 2018 | |||||||||
Debt Instrument [Line Items] | |||||||||
Short term debt | $ 1,000,000,000 | ||||||||
Long-term debt | $ 0 | 998,000,000 | |||||||
Interest rate | 2.125% | 2.125% | |||||||
2.300% senior notes due 2018 | |||||||||
Debt Instrument [Line Items] | |||||||||
Short term debt | $ 400,000,000 | ||||||||
Long-term debt | $ 0 | $ 402,000,000 | |||||||
Interest rate | 2.30% | 2.30% |
Debt (Short-Term Borrowings and
Debt (Short-Term Borrowings and Current Portion of Long-Term Debt) (Details) - 1.900% senior notes due 2017 - USD ($) $ in Millions | Dec. 31, 2017 | Aug. 31, 2017 | Dec. 31, 2016 |
Short-term Debt [Line Items] | |||
Long term debt, current maturities | $ 0 | $ 501 | |
Interest rate | 1.90% | 1.90% |
Debt (Long-Term Debt) (Details)
Debt (Long-Term Debt) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Nov. 09, 2017 | Oct. 31, 2017 | Sep. 30, 2017 | Aug. 31, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | ||||||
Long-term debt, net of discount | $ 15,838 | $ 13,789 | ||||
2.125% senior notes due 2018 | ||||||
Debt Instrument [Line Items] | ||||||
Long-term debt | $ 0 | 998 | ||||
Interest rate | 2.125% | 2.125% | ||||
2.300% senior notes due 2018 | ||||||
Debt Instrument [Line Items] | ||||||
Long-term debt | $ 0 | 402 | ||||
Interest rate | 2.30% | 2.30% | ||||
2.250% senior notes due 2019 | ||||||
Debt Instrument [Line Items] | ||||||
Long-term debt | $ 505 | 509 | ||||
Interest rate | 2.25% | |||||
2.875% senior notes due 2020 | ||||||
Debt Instrument [Line Items] | ||||||
Long-term debt | $ 1,495 | 1,493 | ||||
Interest rate | 2.875% | |||||
3.950% senior notes due 2020 | ||||||
Debt Instrument [Line Items] | ||||||
Long-term debt | $ 514 | 518 | ||||
Interest rate | 3.95% | |||||
2.250% senior notes due 2021 | ||||||
Debt Instrument [Line Items] | ||||||
Long-term debt | $ 497 | $ 500 | 0 | |||
Interest rate | 2.25% | 2.25% | ||||
3.250% senior notes due 2022 | ||||||
Debt Instrument [Line Items] | ||||||
Long-term debt | $ 1,044 | 1,054 | ||||
Interest rate | 3.25% | |||||
3.550% senior notes due 2022 | ||||||
Debt Instrument [Line Items] | ||||||
Long-term debt | $ 994 | 994 | ||||
Interest rate | 3.55% | |||||
2.750% senior notes due 2023 | ||||||
Debt Instrument [Line Items] | ||||||
Long-term debt | $ 746 | $ 750 | 0 | |||
Interest rate | 2.75% | 2.75% | ||||
4.000% senior notes due 2023 | ||||||
Debt Instrument [Line Items] | ||||||
Long-term debt | $ 737 | 744 | ||||
Interest rate | 4.00% | |||||
3.625% senior notes due 2024 | ||||||
Debt Instrument [Line Items] | ||||||
Long-term debt | $ 1,001 | 1,001 | ||||
Interest rate | 3.625% | |||||
3.875% senior notes due 2025 | ||||||
Debt Instrument [Line Items] | ||||||
Long-term debt | $ 2,478 | 2,475 | ||||
Interest rate | 3.875% | |||||
3.450% senior notes due 2027 | ||||||
Debt Instrument [Line Items] | ||||||
Long-term debt | $ 991 | $ 1,000 | 0 | |||
Interest rate | 3.45% | 3.45% | ||||
5.700% senior notes due 2040 | ||||||
Debt Instrument [Line Items] | ||||||
Long-term debt | $ 247 | 247 | ||||
Interest rate | 5.70% | |||||
5.250% senior notes due 2043 | ||||||
Debt Instrument [Line Items] | ||||||
Long-term debt | $ 393 | 393 | ||||
Interest rate | 5.25% | |||||
4.625% senior notes due 2044 | ||||||
Debt Instrument [Line Items] | ||||||
Long-term debt | $ 987 | 987 | ||||
Interest rate | 4.625% | |||||
5.000% senior notes due 2045 | ||||||
Debt Instrument [Line Items] | ||||||
Long-term debt | $ 1,975 | 1,974 | ||||
Interest rate | 5.00% | |||||
4.350% senior notes due 2047 | ||||||
Debt Instrument [Line Items] | ||||||
Long-term debt | $ 1,234 | $ 1,250 | 0 | |||
Interest rate | 4.35% | 4.35% | ||||
Senior Notes | ||||||
Debt Instrument [Line Items] | ||||||
Long-term debt | $ 15,850 | |||||
Long-term debt, net of discount | $ 15,838 | $ 13,789 |
Stockholders' Equity (Narrative
Stockholders' Equity (Narrative) (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Stockholders' Equity Note [Abstract] | |||
Preferred stock, shares authorized | 5,000,000 | 5,000,000 | |
Common stock, shares authorized | 1,150,000,000 | 1,150,000,000 | |
Common stock, shares issued | 971,700,000 | 954,100,000 | |
Aggregate value of common shares authorized to be purchased under share repurchase program | $ 20,500,000,000 | ||
Amount of stock repurchased under share repurchase program | $ 3,900,000,000 | $ 2,200,000,000 | $ 3,300,000,000 |
Stock repurchase program, aggregate shares repurchased | 204,900,000 | ||
Average price of shares repurchased under share repurchase program (in dollars per share) | $ 96.03 | ||
Cost of shares repurchased under share repurchase program | $ 19,700,000,000 |
Stockholders' Equity (Summary o
Stockholders' Equity (Summary of Common and Treasury Stock) (Details) - shares shares in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Changes in common stock issued and treasury stock | |||
Balance at the beginning of the period (in shares) | 954.1 | ||
Balance at the end of the period (in shares) | 971.7 | 954.1 | |
Common Stock | |||
Changes in common stock issued and treasury stock | |||
Balance at the beginning of the period (in shares) | 954.1 | 940.1 | 924.8 |
Exercise of stock options and conversion of restricted stock units (in shares) | 17.6 | 14 | 15.3 |
Issuance of common stock for employee benefit plans (in shares) | 0 | 0 | 0 |
Shares repurchased under share repurchase program (in shares) | 0 | 0 | 0 |
Balance at the end of the period (in shares) | 971.7 | 954.1 | 940.1 |
Treasury Stock | |||
Changes in common stock issued and treasury stock | |||
Balance at the beginning of the period (in shares) | 175.5 | 153.5 | 124.6 |
Exercise of stock options and conversion of restricted stock units (in shares) | 0.6 | 1 | 1.2 |
Issuance of common stock for employee benefit plans (in shares) | (0.4) | (0.4) | (0.4) |
Shares repurchased under share repurchase program (in shares) | 36.7 | 21.4 | 28.1 |
Balance at the end of the period (in shares) | 212.4 | 175.5 | 153.5 |
Accumulated Other Comprehensi92
Accumulated Other Comprehensive Income (Summary of Components) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Summary of accumulated other comprehensive income (loss), net of tax | |||
Beginning balance | $ 419 | $ 768 | |
Other comprehensive (loss) income before reclassifications, net of tax | 38 | (278) | |
Cumulative effect adjustment for the adoption of ASU 2017-12 (See Note 1) | (30) | ||
Reclassified losses (gains) from accumulated other comprehensive income (loss), net of tax | (140) | (71) | |
Total other comprehensive (loss) | (102) | (349) | $ (147) |
Ending balance | 287 | 419 | 768 |
Pension Liability Adjustment | |||
Summary of accumulated other comprehensive income (loss), net of tax | |||
Beginning balance | (38) | (14) | |
Other comprehensive (loss) income before reclassifications, net of tax | 16 | (24) | |
Cumulative effect adjustment for the adoption of ASU 2017-12 (See Note 1) | 0 | ||
Reclassified losses (gains) from accumulated other comprehensive income (loss), net of tax | 0 | 0 | |
Total other comprehensive (loss) | 16 | (24) | |
Ending balance | (22) | (38) | (14) |
Net Unrealized Gains (Losses) On Available-for-Sale Marketable Securities | |||
Summary of accumulated other comprehensive income (loss), net of tax | |||
Beginning balance | 144 | 272 | |
Other comprehensive (loss) income before reclassifications, net of tax | 395 | (360) | |
Cumulative effect adjustment for the adoption of ASU 2017-12 (See Note 1) | 0 | ||
Reclassified losses (gains) from accumulated other comprehensive income (loss), net of tax | 23 | 232 | |
Total other comprehensive (loss) | 418 | (128) | |
Ending balance | 562 | 144 | 272 |
Net Unrealized Gains (Losses) Related to Cash Flow Hedges | |||
Summary of accumulated other comprehensive income (loss), net of tax | |||
Beginning balance | 415 | 586 | |
Other comprehensive (loss) income before reclassifications, net of tax | (428) | 132 | |
Cumulative effect adjustment for the adoption of ASU 2017-12 (See Note 1) | (12) | ||
Reclassified losses (gains) from accumulated other comprehensive income (loss), net of tax | (181) | (303) | |
Total other comprehensive (loss) | (609) | (171) | |
Ending balance | (206) | 415 | 586 |
Amortization of Excluded Component Related to Cash Flow Hedges (See Note 1) | |||
Summary of accumulated other comprehensive income (loss), net of tax | |||
Beginning balance | 0 | 0 | |
Other comprehensive (loss) income before reclassifications, net of tax | (15) | 0 | |
Cumulative effect adjustment for the adoption of ASU 2017-12 (See Note 1) | (18) | ||
Reclassified losses (gains) from accumulated other comprehensive income (loss), net of tax | 18 | 0 | |
Total other comprehensive (loss) | 3 | 0 | |
Ending balance | (15) | 0 | 0 |
Foreign Currency Translation Adjustments | |||
Summary of accumulated other comprehensive income (loss), net of tax | |||
Beginning balance | (102) | (76) | |
Other comprehensive (loss) income before reclassifications, net of tax | 70 | (26) | |
Cumulative effect adjustment for the adoption of ASU 2017-12 (See Note 1) | 0 | ||
Reclassified losses (gains) from accumulated other comprehensive income (loss), net of tax | 0 | 0 | |
Total other comprehensive (loss) | 70 | (26) | |
Ending balance | $ (32) | $ (102) | $ (76) |
Accumulated Other Comprehensi93
Accumulated Other Comprehensive Income (Reclassification Out AOCI) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||||||||
Interest (expense) | $ (500) | $ (311) | |||||||||
Income tax provision | $ (1,212) | $ (3) | $ (77) | $ (82) | $ (70) | $ (85) | $ (97) | $ (121) | $ (1,374) | (373) | (421) |
Amortization of excluded component (losses) | (15) | 0 | 0 | ||||||||
Total reclassification, net of tax | $ (81) | $ 988 | $ 1,101 | $ 932 | $ 429 | $ 171 | $ 598 | $ 801 | 2,940 | 1,999 | 1,602 |
Reclassification out of accumulated other comprehensive income | |||||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||||||||
Total reclassification, net of tax | 140 | 71 | 336 | ||||||||
Reclassification out of accumulated other comprehensive income | Gains (losses) related to cash-flow hedges: | |||||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||||||||
Income tax provision | 3 | 3 | 2 | ||||||||
Reclassification out of accumulated other comprehensive income | Gains (losses) related to cash-flow hedges: | Foreign exchange contracts | |||||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||||||||
Net product sales | 184 | 307 | 354 | ||||||||
Amortization of excluded component (losses) | (18) | 0 | 0 | ||||||||
Reclassification out of accumulated other comprehensive income | Gains (losses) related to cash-flow hedges: | Treasury rate lock agreements | |||||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||||||||
Interest (expense) | (5) | (5) | (4) | ||||||||
Reclassification out of accumulated other comprehensive income | Gains (losses) related to cash-flow hedges: | Interest rate swaps | |||||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||||||||
Interest (expense) | (1) | (2) | (1) | ||||||||
Reclassification out of accumulated other comprehensive income | Gains (losses) on available-for-sale marketable securities: | |||||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||||||||
Income tax provision | 14 | 126 | 8 | ||||||||
Interest and investment income, net | $ (37) | $ (358) | $ (23) |
Share-Based Compensation (Discu
Share-Based Compensation (Discussion of Compensation Plans) (Details) - USD ($) $ in Millions | Jun. 14, 2017 | Dec. 31, 2017 |
Share-Based Compensation | ||
Number of common shares in the share reserve | 275,300,000 | |
Additional shares authorized, post-split shares of common stock | 10,000,000 | |
Shares of common stock available for future share-based grants under all plans | 36,600,000 | |
Options | ||
Share-Based Compensation | ||
Award vesting period, maximum (in years) | 4 years | |
Award expiration period (in years) | 10 years | |
Additional award vesting period, retirement provision, maximum | 3 years | |
PSU | ||
Share-Based Compensation | ||
Performance measurement period for PSUs | 3 years | 3 years |
Compensation cost increase | $ 15 | |
Award vesting period, maximum (in years) | 2 years | |
Specified performance and market targets for revenue, weighting | 37.50% | |
Specified performance and market targets for earnings per share, weighting | 37.50% | |
Specified performance and market targets for relative total shareholder return, weighting | 25.00% | |
Restricted trading period | 1 year 1 day | |
PSU | Minimum | ||
Share-Based Compensation | ||
Performance based percentage target for PSUs granted | 0.00% | |
PSU | Maximum | ||
Share-Based Compensation | ||
Performance based percentage target for PSUs granted | 200.00% |
Share-Based Compensation (Compo
Share-Based Compensation (Components of Compensation Expense) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Stock-Based Compensation | |||
Total share-based compensation expense | $ 644 | $ 606 | $ 577 |
Tax benefit related to share-based compensation expense | 180 | 167 | 161 |
Reduction in net income | 464 | 439 | 416 |
Net proceeds from share-based compensation arrangements | 685 | 359 | 252 |
Non-qualified stock options | |||
Stock-Based Compensation | |||
Total share-based compensation expense | 347 | 357 | 346 |
Cost of goods sold | |||
Stock-Based Compensation | |||
Total share-based compensation expense | 29 | 33 | 32 |
Research and development | |||
Stock-Based Compensation | |||
Total share-based compensation expense | 268 | 253 | 251 |
Selling, general and administrative | |||
Stock-Based Compensation | |||
Total share-based compensation expense | 347 | 320 | 294 |
Accounting Standards Update 2016-09, Excess Tax Benefit Component | |||
Stock-Based Compensation | |||
Excess tax benefit from share-based compensation arrangements | $ 290 | $ 189 | $ 301 |
Share-Based Compensation (Assum
Share-Based Compensation (Assumptions) (Details) - Options - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-Based Compensation | |||
Unrecognized compensation cost | $ 553 | ||
Weighted-average period over which unrecognized compensation cost is expected to be recognized | 2 years 2 months | ||
Weighted-average grant date fair value of the stock options issued (in dollars per share) | $ 32.42 | $ 32.49 | $ 38.83 |
Assumptions used in the estimation of fair value of options granted | |||
Weighted average expected volatility | 27.00% | 32.00% | 34.00% |
Expected dividend yield | 0.00% | 0.00% | 0.00% |
Period of settlement of publicly traded options | 6 months | ||
Minimum | |||
Assumptions used in the estimation of fair value of options granted | |||
Risk-free interest rate | 1.70% | 1.03% | 1.17% |
Expected volatility | 24.00% | 29.00% | 31.00% |
Expected term (years) | 5 years 11 days | 5 years 15 days | 5 years 7 days |
Maximum | |||
Assumptions used in the estimation of fair value of options granted | |||
Risk-free interest rate | 2.22% | 2.08% | 1.72% |
Expected volatility | 30.00% | 35.00% | 38.00% |
Expected term (years) | 5 years 22 days | 5 years 22 days | 5 years 15 days |
Share-Based Compensation (Plan
Share-Based Compensation (Plan Activities) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Options (in Millions) | ||
Outstanding, beginning balnce (in shares) | 73,800 | |
Granted (in shares) | 11,500 | |
Exercised (in shares) | (15,600) | |
Forfeited (in shares) | (1,800) | |
Expired (in shares) | (100) | |
Outstanding, ending balance (in shares) | 67,800 | 73,800 |
Vested or expected to vest in the future (in shares) | 66,900 | |
Vested (in shares) | 41,100 | |
Weighted Average Exercise Price Per Option | ||
Outstanding, beginning balance (in dollars per share) | $ 70.62 | |
Granted (in dollars per share) | 118.80 | |
Exercised (in dollars per share) | 49.49 | |
Forfeited (in dollars per share) | 108 | |
Expired (in dollars per share) | 97.59 | |
Outstanding, ending balance (in dollars per share) | 82.53 | $ 70.62 |
Vested or expected to vest in the future (in dollars per share) | 82.07 | |
Vested (in dollars per share) | $ 63.58 | |
Weighted Average Remaining Contractual Term (Years) | ||
Outstanding, weighted average remaining (in years) | 6 years 1 month | 6 years 2 months |
Vested or expected to vest in the future (in years) | 6 years | |
Vested (in years) | 4 years 8 months | |
Aggregate Intrinsic Value (in Millions) | ||
Outstanding | $ 1,823 | $ 3,388 |
Vested or expected to vest in the future | 1,822 | |
Vested | $ 1,754 | |
Nonvested RSUs | ||
Share Equivalent | ||
Nonvested, beginning balance (in shares) | 7,100 | |
Granted (in shares) | 3,100 | |
Exercised (in shares) | (2,000) | |
Forfeited (in shares) | (500) | |
Nonvested, ending balance (in shares) | 7,700 | 7,100 |
Weighted Average Grant Date Fair Value | ||
Nonvested, beginning balance (in dollars per share) | $ 103 | |
Granted (in dollars per share) | 113.23 | |
Vested (in dollars per share) | 91.27 | |
Forfeited (in dollars per share) | 109.15 | |
Nonvested, ending balance (in dollars per share) | $ 109.55 | $ 103 |
Nonvested Performance-Based RSUs | ||
Share Equivalent | ||
Nonvested, beginning balance (in shares) | 463 | |
Granted (in shares) | 169 | |
Exercised (in shares) | (38) | |
Forfeited (in shares) | (36) | |
Nonvested, ending balance (in shares) | 558 | 463 |
Weighted Average Grant Date Fair Value | ||
Nonvested, beginning balance (in dollars per share) | $ 107.38 | |
Granted (in dollars per share) | 123.86 | |
Vested (in dollars per share) | 87.92 | |
Forfeited (in dollars per share) | 109.61 | |
Nonvested, ending balance (in dollars per share) | $ 116.27 | $ 107.38 |
Share-Based Compensation (Addit
Share-Based Compensation (Additional Information) (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Options | |||
Stock-based compensation | |||
Total fair value of shares vested | $ 346 | $ 335 | $ 267 |
Total intrinsic value of stock options exercised during the period | $ 1,200 | $ 747 | $ 994 |
Ratio of stock options to RSU's in calculating the number of RSU's for employees | 4 | ||
Unrecognized compensation cost | $ 553 | ||
Expected weighted-average period in years of compensation cost to be recognized | 2 years 2 months | ||
Nonvested RSUs | |||
Stock-based compensation | |||
Unrecognized compensation cost | $ 422 | ||
Expected weighted-average period in years of compensation cost to be recognized | 1 year 7 months | ||
Nonvested Performance-Based RSUs | |||
Stock-based compensation | |||
Unrecognized compensation cost | $ 25 | ||
Expected weighted-average period in years of compensation cost to be recognized | 1 year 4 months |
Employee Benefit Plans (401K Pl
Employee Benefit Plans (401K Plan) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Retirement Benefits [Abstract] | |||
Defined contribution plan, employer contribution limit percentage of compensation | 6.00% | ||
Defined contribution plan, cost recognized | $ 34 | $ 40 | $ 35 |
Employee Benefit Plans (Deferre
Employee Benefit Plans (Deferred Compensation Plan) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items] | ||
Deferred compensation liability, non-current | $ 240 | $ 215 |
Deferred Compensation, Excluding Share-based Payments and Retirement Benefits | ||
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items] | ||
Percentage of cash bonuses which the eligible participants can elect to defer | 100.00% | |
Deferred compensation liability, non-current | $ 156 | $ 125 |
Deferred Compensation, Excluding Share-based Payments and Retirement Benefits | Minimum | ||
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items] | ||
Employer match as a percentage of participant's base salary | 10.00% | |
Deferred Compensation, Excluding Share-based Payments and Retirement Benefits | Maximum | ||
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items] | ||
Percentage of base salary which the eligible participants can elect to defer | 90.00% | |
Employer match as a percentage of participant's base salary | 20.00% |
Employee Benefit Plans (Long-Te
Employee Benefit Plans (Long-Term Incentive Plan) (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017USD ($)performance_cycle | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Long-Term Incentive Plan | |||
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items] | |||
Performance period | 3 years | ||
Number of separate three-year performance cycles | performance_cycle | 3 | ||
Consecutive trading days | 30 days | ||
Estimated payout for the plan, current | $ 7 | ||
Plan related expense | $ 5 | $ 13 | $ 25 |
Long-Term Incentive Plan | Minimum | |||
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items] | |||
Payouts as percentage of the participant's salary | 0.00% | ||
Long-Term Incentive Plan | Maximum | |||
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items] | |||
Payouts as percentage of the participant's salary | 200.00% | ||
2016 Long-Term Incentive Plan | |||
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items] | |||
Percentage of non-GAAP net income as component of performance measures of the plans | 37.50% | ||
Percentage of total non-GAAP revenue as component of performance measures of the plans | 37.50% | ||
Percentage of relative shareholder return as component of performance measures of the plans | 25.00% | ||
2016 Long-Term Incentive Plan | Maximum | |||
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items] | |||
Potential payout, assuming maximum objectives are achieved | $ 13 | ||
2017 Long-Term Incentive Plan | |||
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items] | |||
Percentage of non-GAAP net income as component of performance measures of the plans | 0.00% | ||
Percentage of total non-GAAP revenue as component of performance measures of the plans | 0.00% | ||
Percentage of relative shareholder return as component of performance measures of the plans | 0.00% | ||
2017 Long-Term Incentive Plan | Maximum | |||
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items] | |||
Potential payout, assuming maximum objectives are achieved | $ 14 | ||
2018 Long-Term Incentive Plan | |||
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items] | |||
Percentage of non-GAAP net income as component of performance measures of the plans | 0.00% | ||
Percentage of total non-GAAP revenue as component of performance measures of the plans | 0.00% | ||
Percentage of relative shareholder return as component of performance measures of the plans | 0.00% | ||
2018 Long-Term Incentive Plan | Maximum | |||
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items] | |||
Potential payout, assuming maximum objectives are achieved | $ 12 |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2016 | |
Tax Cuts and Jobs Act of 2017 [Line Items] | ||||
Income tax expense | $ 1,269 | |||
Foreign earnings income tax | $ 1,890 | |||
Toll payment period | 8 years | |||
Current liability, foreign earnings | $ 1,732 | |||
Noncurrent liability, foreign earnings | 150 | |||
Remeasurement period adjustment (benefit) expense | (621) | |||
Valuation allowance | 134 | |||
Deferred Tax Liabilities, Undistributed Foreign Earnings | $ 0 | $ 317 | ||
Scenario, Forecast | ||||
Tax Cuts and Jobs Act of 2017 [Line Items] | ||||
Effective tax on foreign earnings | 13.125% | 10.50% |
Income Taxes (Income Before Tax
Income Taxes (Income Before Tax Provision) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income before income taxes: | |||
U.S. | $ 445 | $ 735 | $ 525 |
Non-U.S. | 3,869 | 1,637 | 1,498 |
Income before income taxes | $ 4,314 | $ 2,372 | $ 2,023 |
Income Taxes (Components of Tax
Income Taxes (Components of Tax Provision (Benefit)) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Taxes currently payable: | |||||||||||
Federal | $ 2,545 | $ 569 | $ 321 | ||||||||
State and local | 52 | 43 | 63 | ||||||||
Deferred income taxes | (1,331) | (343) | (29) | ||||||||
Total U.S. tax provision | 1,266 | 269 | 355 | ||||||||
International: | |||||||||||
Taxes currently payable | 107 | 106 | 71 | ||||||||
Deferred income taxes | 1 | (2) | (5) | ||||||||
Total international tax provision | 108 | 104 | 66 | ||||||||
Total provision | $ 1,212 | $ 3 | $ 77 | $ 82 | $ 70 | $ 85 | $ 97 | $ 121 | $ 1,374 | $ 373 | $ 421 |
Income Taxes (Deferred Tax Asse
Income Taxes (Deferred Tax Assets and Liabilities) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Assets | ||
NOL carryforwards | $ 249 | $ 133 |
Tax credit carryforwards | 11 | 14 |
Share-based compensation | 317 | 412 |
Other assets and liabilities | 38 | 60 |
Intangible assets | 333 | 808 |
Accrued and other expenses | 278 | 263 |
Subtotal | 1,226 | 1,690 |
Valuation allowance | (277) | (143) |
Total deferred taxes | 949 | 1,547 |
Liabilities | ||
Other assets and liabilities | (52) | (10) |
Intangible assets | (2,008) | (1,013) |
Unremitted earnings | 0 | (317) |
Unrealized (gains) losses on securities | (193) | (69) |
Subtotal | (2,253) | (1,409) |
Net deferred tax asset (liability) | $ 138 | |
Net deferred tax asset (liability) | $ (1,304) |
Income Taxes (Deferred Tax A106
Income Taxes (Deferred Tax Assets) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Deferred tax assets and liabilities classified on the company's balance sheet: | ||
Other non-current assets | $ 23 | $ 138 |
Deferred income tax liabilities | (1,327) | 0 |
Net deferred tax asset (liability) | $ (1,304) | |
Net deferred tax asset (liability) | $ 138 |
Income Taxes (Effective Tax Rat
Income Taxes (Effective Tax Rate Reconciliation) (Details) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Percentages | |||
U.S. statutory rate | 35.00% | 35.00% | 35.00% |
Foreign tax rate differences | (28.80%) | (21.10%) | (21.00%) |
State taxes, net of federal benefit | 0.60% | 0.80% | 1.20% |
Change in valuation allowance | 0.80% | 0.50% | 2.00% |
Acquisition and collaboration related differences | 2.10% | (0.70%) | 4.50% |
Changes in uncertain tax positions | 0.10% | (0.40%) | (0.50%) |
Stock compensation | (6.70%) | 0.00% | 0.00% |
2017 Tax Act | 29.40% | 0.00% | 0.00% |
Other | (0.70%) | 1.60% | (0.40%) |
Effective income tax rate | 31.80% | 15.70% | 20.80% |
Swiss Federal Tax Administration FTA | |||
Operating Loss Carryforwards [Line Items] | |||
Maximum statutory Swiss income tax rate (as a percent) | 15.60% | 15.60% | 17.00% |
Reduction in effective tax rates due to difference between maximum statutory Swiss income tax rate and the company's Swiss income tax rate under the tax holiday (as a percent) | 14.80% | 20.50% | 25.70% |
Income Taxes (NOL and Tax Credi
Income Taxes (NOL and Tax Credit Carryforwards) (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Operating Loss Carryforwards [Line Items] | |||||||||||
Deferred Tax Assets, Other Comprehensive Loss | $ 227 | $ 227 | |||||||||
Deferred tax liabilities, net | 1,304 | 1,304 | |||||||||
Effective income tax rate reconciliation, share-based compensation, excess tax benefit, amount | 290 | ||||||||||
Cumulative effect adjustment for the adoption | (30) | (30) | |||||||||
Net income | (81) | $ 988 | $ 1,101 | $ 932 | $ 429 | $ 171 | $ 598 | $ 801 | 2,940 | $ 1,999 | $ 1,602 |
State | |||||||||||
Operating Loss Carryforwards [Line Items] | |||||||||||
NOL carryforwards | 200 | 200 | |||||||||
Research | |||||||||||
Operating Loss Carryforwards [Line Items] | |||||||||||
Credit carryforwards | 12 | 12 | |||||||||
State NOL Expiring 2016 through 2035 | State | |||||||||||
Operating Loss Carryforwards [Line Items] | |||||||||||
NOL carryforwards | $ 1,100 | 1,100 | |||||||||
Accounting Standards Update 2016-09 | |||||||||||
Operating Loss Carryforwards [Line Items] | |||||||||||
Deferred tax liabilities, net | (17) | (17) | |||||||||
Retained Earnings | |||||||||||
Operating Loss Carryforwards [Line Items] | |||||||||||
Net income | $ 2,940 | 1,999 | $ 1,602 | ||||||||
Retained Earnings | Accounting Standards Update 2016-09 | |||||||||||
Operating Loss Carryforwards [Line Items] | |||||||||||
Cumulative effect adjustment for the adoption | $ 17 | $ 17 | |||||||||
Research And Development and Tax Credits | |||||||||||
Operating Loss Carryforwards [Line Items] | |||||||||||
Net income | $ 65 | ||||||||||
Basic and diluted earnings per share (usd per share) | $ 0.08 | ||||||||||
Tax Credits - Prior Year | |||||||||||
Operating Loss Carryforwards [Line Items] | |||||||||||
Net income | $ 55 |
Income Taxes (Stock Option Dedu
Income Taxes (Stock Option Deductions Benefit) (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2017 | Aug. 27, 2015 | |
Business Acquisition [Line Items] | ||||
Increase in additional paid-in capital on realization of stock option deduction benefits for income tax purposes | $ 185 | $ 302 | ||
Deferred income taxes recorded as a component of accumulated other comprehensive income resulting in a deferred income tax asset | $ 227 | |||
Deferred tax liabilities, other comprehensive income | $ 61 | $ 107 | ||
Deferred tax liability related to acquisition | $ 1,304 | |||
Receptos | ||||
Business Acquisition [Line Items] | ||||
Deferred tax liability related to acquisition | $ 2,500 |
Income Taxes (Unrecognized Tax
Income Taxes (Unrecognized Tax Benefits) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Unrecognized tax benefits: | ||
Balance at beginning of year | $ 414 | $ 326 |
Increases related to prior year tax positions | 67 | 0 |
Decreases related to prior year tax positions | 0 | (11) |
Increases related to current year tax positions | 426 | 108 |
Settlements | 0 | 0 |
Lapses of statutes of limitations | (11) | (9) |
Balance at end of year | 896 | 414 |
Unrecognized tax benefits that, if recognized, would have a net impact on the effective tax rate | 826 | |
Accrued interest related to uncertain tax positions | $ 60 | $ 40 |
Collaboration Agreements (Detai
Collaboration Agreements (Details) | Mar. 21, 2014 | Dec. 02, 2013product_candidate | Jul. 31, 2017collaborative_arrangement | Jul. 31, 2016program | May 31, 2016agreementsubsidiary | Sep. 30, 2015USD ($)program | Jun. 30, 2015USD ($) | Apr. 30, 2015USD ($)commercial_activitycompany | Sep. 30, 2014USD ($)Amino_Acid_Targetdomainresearch_target | Jan. 31, 2014USD ($)data_packageproduct_candidate | Dec. 31, 2013 | Apr. 30, 2013USD ($) | Dec. 31, 2012drug | Sep. 30, 2016 | Dec. 31, 2017USD ($)agreementdiscovery_stage_programcollaborative_arrangementextension | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Jan. 21, 2018USD ($)$ / shares |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||||||||||
Selling, general and administrative | $ 2,941,000,000 | $ 2,658,000,000 | $ 2,305,000,000 | ||||||||||||||||
Celgene | |||||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||||||||||
Codevelopment sharing of global development costs | 66.00% | ||||||||||||||||||
Profit share percentage | 66.00% | ||||||||||||||||||
Allocation of cost, as a percentage | 70.00% | ||||||||||||||||||
Program 2 | Celgene | |||||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||||||||||
Profit share percentage | 75.00% | ||||||||||||||||||
Acceleron Pharma Inc | |||||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||||||||||
Upfront fees | 0 | 0 | 0 | $ 70,000,000 | |||||||||||||||
Milestone payments made | $ 0 | $ 15,000,000 | 0 | 45,000,000 | |||||||||||||||
Percentage of equity investment ownership | 13.60% | 14.10% | |||||||||||||||||
Additional equity investments made | $ 28,000,000 | $ 32,000,000 | 0 | 93,000,000 | |||||||||||||||
Equity investment | 261,000,000 | 138,000,000 | |||||||||||||||||
Acceleron Pharma Inc | ACE-011 program | |||||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||||||||||
Upfront and milestone payments received | 367,000,000 | ||||||||||||||||||
Acceleron Pharma Inc | ACE-011 - discovery stage programs | |||||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||||||||||
Upfront and milestone payments received | $ 348,000,000 | ||||||||||||||||||
Number of programs | discovery_stage_program | 3 | ||||||||||||||||||
Acceleron Pharma Inc | ACE-536 program | |||||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||||||||||
Upfront and milestone payments received | $ 218,000,000 | ||||||||||||||||||
Acceleron Pharma Inc | ACE-536 first discovery stage program | |||||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||||||||||
Upfront and milestone payments received | 171,000,000 | ||||||||||||||||||
Acceleron Pharma Inc | ACE-536 second discovery stage program | |||||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||||||||||
Upfront and milestone payments received | 149,000,000 | ||||||||||||||||||
Acceleron Pharma Inc | ACE-536 each additional discovery stage program | |||||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||||||||||
Upfront and milestone payments received | 125,000,000 | ||||||||||||||||||
Agios Pharmaceuticals Inc | |||||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||||||||||
Potential milestone payments | $ 120,000,000 | ||||||||||||||||||
Amount of field base commercial activities | commercial_activity | 0.33 | ||||||||||||||||||
Number of subsidiaries entered into new collaboration agreement | subsidiary | 1 | ||||||||||||||||||
Number of programs governed by another agreement | agreement | 2 | ||||||||||||||||||
Initial term of agreement | 4 years | ||||||||||||||||||
Contract extensions | extension | 2 | ||||||||||||||||||
Additional agreement term | 1 year | ||||||||||||||||||
Additional years for contract extension | 4 years | ||||||||||||||||||
Agios Pharmaceuticals Inc | AG-881 | |||||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||||||||||
Contingent milestone payments to be made | $ 70,000,000 | ||||||||||||||||||
Number of companies in agreement sharing profits | company | 2 | ||||||||||||||||||
Agios Pharmaceuticals Inc | 2016 Collaboration Agreement | |||||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||||||||||
Profit share percentage | 50.00% | ||||||||||||||||||
Agios Pharmaceuticals Inc | 2016 Collaboration Agreement | Celgene | |||||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||||||||||
Profit share percentage | 50.00% | ||||||||||||||||||
Sutro Biopharma, Inc | |||||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||||||||||
Upfront fees | $ 0 | 0 | 0 | 99,000,000 | |||||||||||||||
Research and development, period | 3 years | ||||||||||||||||||
Number of ADC to select | drug | 1 | ||||||||||||||||||
Number of BAC to select | drug | 1 | ||||||||||||||||||
Collaboration agreement, number of projects | research_target | 6 | ||||||||||||||||||
Ownership percentage | 15.00% | ||||||||||||||||||
Collaboration agreement, performance evaluation | Amino_Acid_Target | 5 | ||||||||||||||||||
Number of binding domains | domain | 1 | ||||||||||||||||||
Milestone payments made | $ 10,000,000 | $ 35,000,000 | 0 | 0 | |||||||||||||||
Percentage of equity investment ownership | 15.40% | 15.40% | |||||||||||||||||
Additional equity investments made | $ 0 | $ 0 | 0 | 18,000,000 | |||||||||||||||
Equity investment | 18,000,000 | 18,000,000 | |||||||||||||||||
Sutro Biopharma, Inc | Collaborative agreement, research and manufacturing | |||||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||||||||||
Potential milestone payments | $ 75,000,000 | ||||||||||||||||||
Sutro Biopharma, Inc | Regulatory approval | |||||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||||||||||
Potential milestone payments | $ 275,000,000 | ||||||||||||||||||
bluebird | |||||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||||||||||
Upfront fees | 15,000,000 | 10,000,000 | 0 | 75,000,000 | |||||||||||||||
Contingent milestone payments to be made | $ 230,000,000 | ||||||||||||||||||
Codevelopment sharing of global development costs | 50.00% | ||||||||||||||||||
Milestone payments made | $ 0 | $ 0 | 0 | 0 | |||||||||||||||
Percentage of equity investment ownership | 1.90% | 1.60% | |||||||||||||||||
Additional equity investments made | $ 37,000,000 | $ 50,000,000 | 0 | 0 | |||||||||||||||
Equity investment | 171,000,000 | 41,000,000 | |||||||||||||||||
bluebird | Celgene | |||||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||||||||||
Codevelopment sharing of global development costs | 50.00% | ||||||||||||||||||
FORMA Therapeutics Holdings, LLC | |||||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||||||||||
Upfront fees | 246,000,000 | 71,000,000 | 59,000,000 | 278,000,000 | |||||||||||||||
Initial term of agreement | 3 years 6 months | 2 years 3 months | |||||||||||||||||
Milestone payments made | 25,000,000 | 0 | 0 | 0 | |||||||||||||||
Number of agreements entered into | collaborative_arrangement | 2 | ||||||||||||||||||
Additional equity investments made | $ 0 | 0 | 0 | 0 | |||||||||||||||
FORMA Therapeutics Holdings, LLC | Regulatory approval | |||||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||||||||||
Potential milestone payments | $ 315,000,000 | ||||||||||||||||||
Research and development, period | 4 years | ||||||||||||||||||
FORMA Therapeutics Holdings, LLC | Research and development payments | |||||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||||||||||
Upfront fees | $ 200,000,000 | ||||||||||||||||||
FORMA Therapeutics Holdings, LLC | License payments | |||||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||||||||||
Potential milestone payments | $ 430,000,000 | ||||||||||||||||||
Number of agreements entered into | agreement | 7 | ||||||||||||||||||
OncoMed | |||||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||||||||||
Upfront fees | $ 0 | 0 | 3,000,000 | 158,000,000 | |||||||||||||||
Codevelopment sharing of global development costs | 33.00% | ||||||||||||||||||
Milestone payments made | $ 0 | $ 0 | 70,000,000 | 0 | |||||||||||||||
Profit share percentage | 33.00% | ||||||||||||||||||
Percentage of equity investment ownership | 7.80% | 8.00% | |||||||||||||||||
Additional equity investments made | $ 0 | $ 15,000,000 | 0 | 22,000,000 | |||||||||||||||
Equity investment | $ 12,000,000 | 23,000,000 | |||||||||||||||||
OncoMed | Maximum | |||||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||||||||||
Number of programs | discovery_stage_program | 3 | ||||||||||||||||||
Number of anti-cancer stem cell products candidates from pipeline | product_candidate | 6 | ||||||||||||||||||
Worldwide licensing rights for Anti-CSC therapeutic candidates, term | 60 days | ||||||||||||||||||
OncoMed | RSPO-LGR CSC pathway or another CSC Pathway | Maximum | |||||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||||||||||
Number of programs | discovery_stage_program | 2 | ||||||||||||||||||
OncoMed | Anti-DLL4/VEGF | Maximum | |||||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||||||||||
Contingent milestone payments to be made | $ 505,000,000 | ||||||||||||||||||
OncoMed | Other four biological programs | |||||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||||||||||
Contingent milestone payments to be made | 440,000,000 | ||||||||||||||||||
NantBioScience | |||||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||||||||||
Upfront fees | $ 50,000,000 | 0 | 0 | 0 | 50,000,000 | ||||||||||||||
Milestone payments made | $ 0 | $ 0 | 0 | 0 | |||||||||||||||
Effective notice period required to be served for termination of agreement | 30 days | ||||||||||||||||||
Aggregate collaboration agreement payments | $ 75,000,000 | ||||||||||||||||||
Number of product candidates from pipeline | product_candidate | 2 | ||||||||||||||||||
Percentage of equity investment ownership | 14.00% | 12.90% | 12.90% | ||||||||||||||||
Potential future investment | $ 50,000,000 | ||||||||||||||||||
Collaboration agreement, agreement termination milestones, number of product candidates | product_candidate | 4 | ||||||||||||||||||
Collaboration agreement, agreement termination milestones, number of data packages for product candidates | data_package | 10 | ||||||||||||||||||
Collaboration agreement, agreement termination milestones, expiration period | 10 years | ||||||||||||||||||
Additional equity investments made | $ 0 | $ 0 | 0 | $ 90,000,000 | |||||||||||||||
Equity investment | $ 90,000,000 | 90,000,000 | |||||||||||||||||
MedImmune | |||||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||||||||||
Future cost responsibility, as a percentage | 75.00% | ||||||||||||||||||
Forecasted royalty rate | 50.00% | ||||||||||||||||||
Royalty decrease period | 4 years | ||||||||||||||||||
MedImmune | MEDI4736 | |||||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||||||||||
Future royalty rate | 70.00% | ||||||||||||||||||
Lycera | |||||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||||||||||
Potential milestone payments | $ 190,000,000 | ||||||||||||||||||
Upfront fees | $ 14,000,000 | 0 | 87,000,000 | ||||||||||||||||
Initial term of agreement | 3 years | ||||||||||||||||||
Milestone payments made | $ 0 | $ 0 | 0 | ||||||||||||||||
Percentage of equity investment ownership | 10.00% | 8.00% | |||||||||||||||||
Additional equity investments made | $ 3,000,000 | $ 0 | 10,000,000 | ||||||||||||||||
Equity investment | 13,000,000 | 10,000,000 | |||||||||||||||||
Juno Therapeutics | |||||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||||||||||
Upfront fees | $ 1,000,000,000 | 0 | 50,000,000 | 575,000,000 | |||||||||||||||
Initial term of agreement | 10 years | ||||||||||||||||||
Milestone payments made | $ 0 | $ 0 | 0 | ||||||||||||||||
Percentage of equity investment ownership | 9.70% | 9.70% | |||||||||||||||||
Additional equity investments made | $ 33,000,000 | $ 41,000,000 | 425,000,000 | ||||||||||||||||
Equity investment | 508,000,000 | 194,000,000 | |||||||||||||||||
Allocation of cost, as a percentage | 30.00% | ||||||||||||||||||
Juno Therapeutics | Research and development payments | |||||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||||||||||
Upfront fees | $ 575,000,000 | ||||||||||||||||||
Nurix | |||||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||||||||||
Number of programs | program | 2 | ||||||||||||||||||
Upfront fees | 0 | 0 | 150,000,000 | ||||||||||||||||
Ownership percentage | 11.00% | ||||||||||||||||||
Milestone payments made | $ 0 | $ 0 | 0 | ||||||||||||||||
Percentage of equity investment ownership | 10.30% | 10.50% | |||||||||||||||||
Additional equity investments made | $ 0 | $ 0 | 17,000,000 | ||||||||||||||||
Equity investment | 17,000,000 | 17,000,000 | |||||||||||||||||
First option to license future programs | 45 days | ||||||||||||||||||
Second option to license future programs | 4 years | ||||||||||||||||||
Nurix | License payments | |||||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||||||||||
Potential milestone payments | $ 405,000,000 | ||||||||||||||||||
Jounce | |||||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||||||||||
Upfront fees | 0 | 238,000,000 | |||||||||||||||||
Milestone payments made | $ 0 | $ 0 | |||||||||||||||||
Percentage of equity investment ownership | 10.70% | 11.40% | |||||||||||||||||
Additional equity investments made | $ 10,000,000 | $ 24,000,000 | |||||||||||||||||
Equity investment | 44,000,000 | 24,000,000 | |||||||||||||||||
Number of early stage programs | program | 4 | ||||||||||||||||||
Number of programs profit will be shared on | program | 3 | ||||||||||||||||||
Other Collaboration Arrangements | |||||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||||||||||
Upfront fees | 215,000,000 | 247,000,000 | 70,000,000 | ||||||||||||||||
Milestone payments made | 0 | 1,000,000 | 8,000,000 | ||||||||||||||||
Additional equity investments made | 7,000,000 | 8,000,000 | $ 65,000,000 | ||||||||||||||||
Equity investment | 91,000,000 | $ 80,000,000 | |||||||||||||||||
Other Collaboration Arrangements | Maximum | |||||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||||||||||
Contingent milestone payments to be made | 230,000,000 | ||||||||||||||||||
Jounce | |||||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||||||||||
Initial term of agreement | 4 years | ||||||||||||||||||
Additional agreement term | 3 years | ||||||||||||||||||
Jounce | Program 2 | |||||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||||||||||
Profit share percentage | 25.00% | ||||||||||||||||||
March 2014 Collaboration | FORMA Therapeutics Holdings, LLC | |||||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||||||||||
Upfront fees | $ 375,000,000 | ||||||||||||||||||
Number of agreements entered into | collaborative_arrangement | 2 | ||||||||||||||||||
JTX201 | Program 1 | Celgene | |||||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||||||||||
Profit share percentage | 40.00% | ||||||||||||||||||
JTX201 | Jounce | Program 1 | |||||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||||||||||
Profit share percentage | 60.00% | ||||||||||||||||||
Juno Therapeutics | Subsequent Event | |||||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||||||||||
Intended cash payment (usd per share) | $ / shares | $ 87 | ||||||||||||||||||
Intended cash payment for acquisition | $ 9,000,000,000 | ||||||||||||||||||
Noncontrolling interest, ownership percentage | 9.70% |
Collaboration Agreements (Sched
Collaboration Agreements (Schedule of Collaboration Agreements) (Details) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | ||||
Jun. 30, 2015 | Jan. 31, 2014 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||
Intangible Asset Balance | $ 8,436 | $ 10,392 | ||||
Acceleron | ||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||
Upfront Fees | 0 | 0 | $ 0 | $ 70 | ||
Milestones | 0 | 15 | 0 | 45 | ||
Extension/ Termination of Agreements | 0 | 0 | 0 | 0 | ||
Amortization of Prepaid Research and Development | 0 | 0 | 0 | 0 | ||
Equity Investments Made During Period | 28 | 32 | 0 | 93 | ||
Intangible Asset Balance | 0 | 0 | ||||
Equity Investment Balance | $ 261 | $ 138 | ||||
Percentage of Outstanding Equity | 13.60% | 14.10% | ||||
Agios | ||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||
Upfront Fees | $ 8 | $ 200 | 9 | 121 | ||
Milestones | 0 | 25 | 0 | 0 | ||
Extension/ Termination of Agreements | 0 | 0 | 0 | 60 | ||
Amortization of Prepaid Research and Development | 0 | 1 | 0 | 0 | ||
Equity Investments Made During Period | 31 | 0 | 0 | 89 | ||
Intangible Asset Balance | 0 | 0 | ||||
Equity Investment Balance | $ 335 | $ 219 | ||||
Percentage of Outstanding Equity | 12.00% | 12.40% | ||||
AstraZeneca | ||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||
Upfront Fees | $ 0 | $ 0 | 450 | |||
Milestones | 0 | 0 | 0 | |||
Extension/ Termination of Agreements | 0 | 0 | 0 | |||
Amortization of Prepaid Research and Development | 0 | 0 | 0 | |||
Equity Investments Made During Period | 0 | 0 | 0 | |||
Intangible Asset Balance | 0 | 0 | ||||
BeiGene | ||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||
Upfront Fees | 268 | |||||
Milestones | 0 | |||||
Extension/ Termination of Agreements | 0 | |||||
Amortization of Prepaid Research and Development | 0 | |||||
Equity Investments Made During Period | 174 | |||||
Intangible Asset Balance | 0 | |||||
Equity Investment Balance | $ 246 | |||||
Percentage of Outstanding Equity | 5.50% | |||||
bluebird | ||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||
Upfront Fees | $ 15 | 10 | 0 | 75 | ||
Milestones | 0 | 0 | 0 | 0 | ||
Extension/ Termination of Agreements | 0 | 0 | 0 | 0 | ||
Amortization of Prepaid Research and Development | 8 | 8 | 5 | 0 | ||
Equity Investments Made During Period | 37 | 50 | 0 | 0 | ||
Intangible Asset Balance | 4 | 12 | ||||
Equity Investment Balance | $ 171 | $ 41 | ||||
Percentage of Outstanding Equity | 1.90% | 1.60% | ||||
FORMA | ||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||
Upfront Fees | $ 246 | $ 71 | 59 | 278 | ||
Milestones | 25 | 0 | 0 | 0 | ||
Extension/ Termination of Agreements | 0 | 0 | 0 | 0 | ||
Amortization of Prepaid Research and Development | 0 | 0 | 0 | 0 | ||
Equity Investments Made During Period | 0 | 0 | 0 | 0 | ||
Intangible Asset Balance | 0 | 0 | ||||
Jounce | ||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||
Upfront Fees | 0 | 238 | ||||
Milestones | 0 | 0 | ||||
Extension/ Termination of Agreements | 0 | 0 | ||||
Amortization of Prepaid Research and Development | 0 | 0 | ||||
Equity Investments Made During Period | 10 | 24 | ||||
Intangible Asset Balance | 0 | 0 | ||||
Equity Investment Balance | $ 44 | $ 24 | ||||
Percentage of Outstanding Equity | 10.70% | 11.40% | ||||
Juno Therapeutics | ||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||
Upfront Fees | $ 1,000 | $ 0 | $ 50 | 575 | ||
Milestones | 0 | 0 | 0 | |||
Extension/ Termination of Agreements | 0 | 0 | 0 | |||
Amortization of Prepaid Research and Development | 0 | 0 | 0 | |||
Equity Investments Made During Period | 33 | 41 | 425 | |||
Intangible Asset Balance | 0 | 0 | ||||
Equity Investment Balance | $ 508 | $ 194 | ||||
Percentage of Outstanding Equity | 9.70% | 9.70% | ||||
Lycera | ||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||
Upfront Fees | $ 14 | $ 0 | 87 | |||
Milestones | 0 | 0 | 0 | |||
Extension/ Termination of Agreements | 0 | 0 | 0 | |||
Amortization of Prepaid Research and Development | 0 | 0 | 0 | |||
Equity Investments Made During Period | 3 | 0 | 10 | |||
Intangible Asset Balance | 3 | 3 | ||||
Equity Investment Balance | $ 13 | $ 10 | ||||
Percentage of Outstanding Equity | 10.00% | 8.00% | ||||
NantBioScience | ||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||
Upfront Fees | $ 50 | $ 0 | $ 0 | 0 | 50 | |
Milestones | 0 | 0 | 0 | 0 | ||
Extension/ Termination of Agreements | 0 | 0 | 0 | 0 | ||
Amortization of Prepaid Research and Development | 0 | 0 | 0 | 0 | ||
Equity Investments Made During Period | 0 | 0 | 0 | 90 | ||
Intangible Asset Balance | 0 | 0 | ||||
Equity Investment Balance | $ 90 | $ 90 | ||||
Percentage of Outstanding Equity | 14.00% | 12.90% | 12.90% | |||
NantBioScience | Selling, general and administrative | ||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||
Equity Investment Balance | 25 | |||||
Nurix | ||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||
Upfront Fees | $ 0 | $ 0 | 150 | |||
Milestones | 0 | 0 | 0 | |||
Extension/ Termination of Agreements | 0 | 0 | 0 | |||
Amortization of Prepaid Research and Development | 0 | 0 | 0 | |||
Equity Investments Made During Period | 0 | 0 | 17 | |||
Intangible Asset Balance | 0 | 0 | ||||
Equity Investment Balance | $ 17 | $ 17 | ||||
Percentage of Outstanding Equity | 10.30% | 10.50% | ||||
OncoMed | ||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||
Upfront Fees | $ 0 | $ 0 | 3 | 158 | ||
Milestones | 0 | 0 | 70 | 0 | ||
Extension/ Termination of Agreements | 0 | 0 | 0 | 0 | ||
Amortization of Prepaid Research and Development | 0 | 0 | 0 | 0 | ||
Equity Investments Made During Period | 0 | 15 | 0 | 22 | ||
Intangible Asset Balance | 0 | 0 | ||||
Equity Investment Balance | $ 12 | $ 23 | ||||
Percentage of Outstanding Equity | 7.80% | 8.00% | ||||
Sutro | ||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||
Upfront Fees | $ 0 | $ 0 | 0 | 99 | ||
Milestones | 10 | 35 | 0 | 0 | ||
Extension/ Termination of Agreements | 13 | 0 | 0 | 0 | ||
Amortization of Prepaid Research and Development | 4 | 17 | 5 | 3 | ||
Equity Investments Made During Period | 0 | 0 | 0 | $ 18 | ||
Intangible Asset Balance | 0 | 6 | ||||
Equity Investment Balance | $ 18 | $ 18 | ||||
Percentage of Outstanding Equity | 15.40% | 15.40% | ||||
Other Collaboration Arrangements | ||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||
Upfront Fees | $ 215 | $ 247 | 70 | |||
Milestones | 0 | 1 | 8 | |||
Extension/ Termination of Agreements | 7 | 9 | 18 | |||
Amortization of Prepaid Research and Development | 0 | 0 | 21 | |||
Equity Investments Made During Period | 7 | 8 | $ 65 | |||
Intangible Asset Balance | 5 | 1 | ||||
Equity Investment Balance | $ 91 | $ 80 |
Commitments and Contingencie113
Commitments and Contingencies (Details) | 12 Months Ended | ||
Dec. 31, 2017USD ($)payment | Dec. 31, 2016USD ($) | Oct. 31, 2013USD ($) | |
Product Liability Contingency [Line Items] | |||
Number of potential milestone payments | payment | 2 | ||
CVR milestone payment | $ 300,000,000 | ||
ABRAXANE | |||
Product Liability Contingency [Line Items] | |||
Nonfinancial liabilities | $ 42,000,000 | $ 45,000,000 | |
Net sales measurement period | 1 year | ||
ABRAXANE | Milestone One | |||
Product Liability Contingency [Line Items] | |||
Royalty rate | 2.50% | ||
ABRAXANE | Milestone One | Minimum | |||
Product Liability Contingency [Line Items] | |||
Revenue milestones | $ 1,000,000,000 | ||
ABRAXANE | Milestone One | Maximum | |||
Product Liability Contingency [Line Items] | |||
Revenue milestones | $ 2,000,000,000 | ||
ABRAXANE | Milestone Two | |||
Product Liability Contingency [Line Items] | |||
Royalty rate | 5.00% | ||
ABRAXANE | Milestone Two | Minimum | |||
Product Liability Contingency [Line Items] | |||
Revenue milestones | $ 2,000,000,000 | ||
ABRAXANE | Milestone Two | Maximum | |||
Product Liability Contingency [Line Items] | |||
Revenue milestones | $ 3,000,000,000 | ||
ABRAXANE | Milestone Three | |||
Product Liability Contingency [Line Items] | |||
Royalty rate | 10.00% | ||
ABRAXANE | Milestone Three | Minimum | |||
Product Liability Contingency [Line Items] | |||
Revenue milestones | $ 3,000,000,000 | ||
ABRAXANE | Termination date of December 31, 2025 if sales less than $1.0 billion | Minimum | |||
Product Liability Contingency [Line Items] | |||
Revenue milestones | 1,000,000,000 | ||
ABRAXANE | Termination date of December 31, 2030 or earlier if sales less than $1.0 billion | Minimum | |||
Product Liability Contingency [Line Items] | |||
Revenue milestones | $ 1,000,000,000 |
Commitments and Contingencie114
Commitments and Contingencies (Details 2) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Operating Leases | ||||
2,018 | $ 56 | $ 56 | ||
2,019 | 48 | 48 | ||
2,020 | 41 | 41 | ||
2,021 | 31 | 31 | ||
2,022 | 26 | 26 | ||
Thereafter | 33 | 33 | ||
Total minimum lease payments | 235 | 235 | ||
Total rental expense under operating leases | 69 | $ 70 | $ 66 | |
Lines of Credit: | ||||
Derivative contract notional amount | 10,300 | 10,300 | ||
Letters of credit and guarantees issued on behalf of subsidiaries | 224 | 224 | ||
Other Commitments: | ||||
Product supply contract obligation | 748 | 748 | ||
Commited investment | 47 | 47 | ||
Effect of Tax Cuts and Jobs Act of 2017 | ||||
Foreign earnings income tax | $ 1,890 | |||
Toll payment period | 8 years | |||
Current liability, foreign earnings | $ 1,732 | 1,732 | ||
Noncurrent liability, foreign earnings | $ 150 | $ 150 |
Commitments and Contingencie115
Commitments and Contingencies (Details 3) $ in Millions | Jun. 14, 2017plaintiff | Feb. 02, 2017USD ($) | Jun. 07, 2013 | Feb. 28, 2014lawsuitemployee | Dec. 31, 2012office | Sep. 30, 2017USD ($) | Jul. 13, 2017USD ($)state | Jun. 26, 2017lawsuitpatent |
Manufacturing Facility Repayment Obligation [Line Items] | ||||||||
Number of lawsuits | lawsuit | 3 | |||||||
Number of patents | patent | 3 | |||||||
Number of challenged patents | patent | 4 | |||||||
Offices investigating | office | 2 | |||||||
Number of civil qui tam lawsuit | lawsuit | 3 | |||||||
Number of former employees | employee | 3 | |||||||
Current settlement liabilities | $ | $ 315 | $ 315 | ||||||
Number of states involved in lawsuit | state | 28 | |||||||
Number of plaintiffs | plaintiff | 3 | |||||||
Children's Medical Center Corporation [Member] | ||||||||
Manufacturing Facility Repayment Obligation [Line Items] | ||||||||
Payments for legal settlements | $ | $ 199 | |||||||
Children's Medical Center Corporation [Member] | Revlimid Royalty | ||||||||
Manufacturing Facility Repayment Obligation [Line Items] | ||||||||
Royalty rate | 0.01 | |||||||
Children's Medical Center Corporation [Member] | Pomalyst Royalty | ||||||||
Manufacturing Facility Repayment Obligation [Line Items] | ||||||||
Royalty rate | 0.025 |
Geographic and Product Infor116
Geographic and Product Information (Revenue and Long-Lived Assets) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Operations by Geographic Area | |||||||||||
Total revenues | $ 3,483 | $ 3,287 | $ 3,271 | $ 2,962 | $ 2,980 | $ 2,983 | $ 2,754 | $ 2,512 | $ 13,003 | $ 11,229 | $ 9,256 |
Total long lived assets | 1,070 | 930 | 1,070 | 930 | |||||||
United States | |||||||||||
Operations by Geographic Area | |||||||||||
Total revenues | 8,324 | 7,010 | 5,604 | ||||||||
Total long lived assets | 768 | 667 | 768 | 667 | |||||||
Europe | |||||||||||
Operations by Geographic Area | |||||||||||
Total revenues | 3,327 | 3,046 | 2,624 | ||||||||
Total long lived assets | 296 | 251 | 296 | 251 | |||||||
All other | |||||||||||
Operations by Geographic Area | |||||||||||
Total revenues | 1,352 | 1,173 | $ 1,028 | ||||||||
Total long lived assets | $ 6 | $ 12 | $ 6 | $ 12 |
Geographic and Product Infor117
Geographic and Product Information (Revenue by Product) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Revenues by Product | |||||||||||
Total net product sales | $ 12,973 | $ 11,185 | $ 9,161 | ||||||||
Other revenue | 30 | 44 | 95 | ||||||||
Total revenue | $ 3,483 | $ 3,287 | $ 3,271 | $ 2,962 | $ 2,980 | $ 2,983 | $ 2,754 | $ 2,512 | 13,003 | 11,229 | 9,256 |
REVLIMID | |||||||||||
Revenues by Product | |||||||||||
Total net product sales | 8,187 | 6,974 | 5,801 | ||||||||
POMALYST/IMNOVID | |||||||||||
Revenues by Product | |||||||||||
Total net product sales | 1,614 | 1,311 | 984 | ||||||||
OTEZLA | |||||||||||
Revenues by Product | |||||||||||
Total net product sales | 1,279 | 1,017 | 472 | ||||||||
ABRAXANE | |||||||||||
Revenues by Product | |||||||||||
Total net product sales | 992 | 973 | 967 | ||||||||
IDHIFA | |||||||||||
Revenues by Product | |||||||||||
Total net product sales | 20 | 0 | 0 | ||||||||
VIDAZA | |||||||||||
Revenues by Product | |||||||||||
Total net product sales | 628 | 608 | 591 | ||||||||
azacitidine for injection | |||||||||||
Revenues by Product | |||||||||||
Total net product sales | 36 | 66 | 84 | ||||||||
THALOMID | |||||||||||
Revenues by Product | |||||||||||
Total net product sales | 132 | 152 | 185 | ||||||||
ISTODAX | |||||||||||
Revenues by Product | |||||||||||
Total net product sales | 76 | 80 | 69 | ||||||||
Other | |||||||||||
Revenues by Product | |||||||||||
Total net product sales | $ 9 | $ 4 | $ 8 |
Geographic and Product Infor118
Geographic and Product Information (Major Customers) (Details) - Customers' concentration risk | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
CVS Health Corp. | Percent of Total Revenue | |||
Major Customers | |||
Percentage of concentration risk | 12.50% | 12.00% | 10.70% |
CVS Health Corp. | Percent of Net Accounts Receivable | |||
Major Customers | |||
Percentage of concentration risk | 9.70% | 7.90% | |
McKesson Corp. | Percent of Total Revenue | |||
Major Customers | |||
Percentage of concentration risk | 12.00% | 10.30% | 8.50% |
McKesson Corp. | Percent of Net Accounts Receivable | |||
Major Customers | |||
Percentage of concentration risk | 9.60% | 9.10% | |
AmerisourceBergen Corp. | Percent of Total Revenue | |||
Major Customers | |||
Percentage of concentration risk | 10.00% | 8.50% | 8.10% |
AmerisourceBergen Corp. | Percent of Net Accounts Receivable | |||
Major Customers | |||
Percentage of concentration risk | 9.70% | 8.70% |
Quarterly Results of Operati119
Quarterly Results of Operations (Unaudited) (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Business Acquisition [Line Items] | |||||||||||
Total revenue | $ 3,483 | $ 3,287 | $ 3,271 | $ 2,962 | $ 2,980 | $ 2,983 | $ 2,754 | $ 2,512 | $ 13,003 | $ 11,229 | $ 9,256 |
Other income (expense), net | (324) | 48 | |||||||||
Gross profit | 3,360 | 3,165 | 3,148 | 2,839 | 2,864 | 2,861 | 2,633 | 2,389 | 12,512 | 10,747 | |
Income tax provision | 1,212 | 3 | 77 | 82 | 70 | 85 | 97 | 121 | 1,374 | 373 | 421 |
Net income | $ (81) | $ 988 | $ 1,101 | $ 932 | $ 429 | $ 171 | $ 598 | $ 801 | $ 2,940 | $ 1,999 | $ 1,602 |
Net income per share attributable to Celgene | |||||||||||
Basic (in dollars per share) | $ (0.10) | $ 1.26 | $ 1.41 | $ 1.20 | $ 0.55 | $ 0.22 | $ 0.77 | $ 1.03 | $ 3.77 | $ 2.57 | $ 2.02 |
Diluted (in dollars per share) | $ (0.10) | $ 1.21 | $ 1.36 | $ 1.15 | $ 0.53 | $ 0.21 | $ 0.75 | $ 0.99 | $ 3.64 | $ 2.49 | $ 1.94 |
Weighted average shares: | |||||||||||
Basic (in shares) | 773.5 | 784.1 | 780.4 | 779 | 776.8 | 775.8 | 775.6 | 780.6 | 779.2 | 777.2 | 792.2 |
Diluted (in shares) | 773.5 | 815.2 | 811.7 | 811.2 | 802.2 | 801.5 | 801.5 | 807.7 | 808.7 | 803.3 | 824.9 |
Income tax provision | $ 1,269 | ||||||||||
EngMab AG | |||||||||||
Weighted average shares: | |||||||||||
Research and development expense | $ 623 | ||||||||||
Scenario, Previously Reported | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Total revenue | $ 3,268 | $ 2,960 | |||||||||
Other income (expense), net | (76) | 26 | |||||||||
Income tax provision | 69 | 84 | |||||||||
Net income | $ 1,061 | $ 941 | |||||||||
Net income per share attributable to Celgene | |||||||||||
Basic (in dollars per share) | $ 1.36 | $ 1.21 | |||||||||
Diluted (in dollars per share) | $ 1.31 | $ 1.16 | |||||||||
Accounting Standards Update 2017-12 | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Total revenue | $ 3,271 | $ 2,962 | |||||||||
Other income (expense), net | (31) | 13 | |||||||||
Income tax provision | 77 | 82 | |||||||||
Net income | $ 1,101 | $ 932 | |||||||||
Net income per share attributable to Celgene | |||||||||||
Basic (in dollars per share) | $ 1.41 | $ 1.20 | |||||||||
Diluted (in dollars per share) | $ 1.36 | $ 1.15 | |||||||||
Accounting Standards Update 2016-09, Excess Tax Benefit Component | |||||||||||
Weighted average shares: | |||||||||||
Excess tax benefit from share-based compensation arrangements | $ 290 | $ 189 | $ 301 |
Subsequent Event (Details)
Subsequent Event (Details) - USD ($) $ / shares in Units, $ in Millions | Jan. 07, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Jan. 21, 2018 |
Subsequent Event [Line Items] | |||||||||||||
Total revenue | $ 3,483 | $ 3,287 | $ 3,271 | $ 2,962 | $ 2,980 | $ 2,983 | $ 2,754 | $ 2,512 | $ 13,003 | $ 11,229 | $ 9,256 | ||
Subsequent Event | Impact Biomedicines Inc | |||||||||||||
Subsequent Event [Line Items] | |||||||||||||
Intended cash payment for acquisition | $ 1,100 | ||||||||||||
Contingent milestones eligibility | 1,400 | ||||||||||||
Potential milestone payments | 4,500 | ||||||||||||
Subsequent Event | Juno Therapeutics | |||||||||||||
Subsequent Event [Line Items] | |||||||||||||
Intended cash payment for acquisition | $ 9,000 | ||||||||||||
Intended cash payment (usd per share) | $ 87 | ||||||||||||
Noncontrolling interest, ownership percentage | 9.70% | ||||||||||||
Minimum | Subsequent Event | Impact Biomedicines Inc | |||||||||||||
Subsequent Event [Line Items] | |||||||||||||
Total revenue | 1,000 | ||||||||||||
Maximum | Subsequent Event | Impact Biomedicines Inc | |||||||||||||
Subsequent Event [Line Items] | |||||||||||||
Total revenue | $ 5,000 |
Schedule II - Valuation and 121
Schedule II - Valuation and Qualifying Accounts (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at Beginning of Year | $ 49 | $ 47 | $ 42 |
Charged to Expense or Sales | 200 | 166 | 127 |
Deductions | 198 | 164 | 122 |
Balance at End of Year | 51 | 49 | 47 |
Allowance for doubtful accounts | |||
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at Beginning of Year | 15 | 18 | 20 |
Charged to Expense or Sales | (1) | 1 | 0 |
Deductions | (2) | 4 | 2 |
Balance at End of Year | 16 | 15 | 18 |
Allowance for customer discounts | |||
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at Beginning of Year | 16 | 12 | 12 |
Charged to Expense or Sales | 193 | 154 | 111 |
Deductions | 189 | 150 | 111 |
Balance at End of Year | 20 | 16 | 12 |
Subtotal | |||
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at Beginning of Year | 31 | 30 | 32 |
Charged to Expense or Sales | 192 | 155 | 111 |
Deductions | 187 | 154 | 113 |
Balance at End of Year | 36 | 31 | 30 |
Allowance for sales returns | |||
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at Beginning of Year | 18 | 17 | 10 |
Charged to Expense or Sales | 8 | 11 | 16 |
Deductions | 11 | 10 | 9 |
Balance at End of Year | $ 15 | $ 18 | $ 17 |