Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Mar. 31, 2014 | Apr. 21, 2014 | |
Document and Entity Information | ' | ' |
Entity Registrant Name | 'CELGENE CORP /DE/ | ' |
Entity Central Index Key | '0000816284 | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Filer Category | 'Large Accelerated Filer | ' |
Document Type | '10-Q | ' |
Document Period End Date | 31-Mar-14 | ' |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q1 | ' |
Amendment Flag | 'false | ' |
Entity Common Stock, Shares Outstanding | ' | 400,416,827 |
CONSOLIDATED_STATEMENTS_OF_INC
CONSOLIDATED STATEMENTS OF INCOME (USD $) | 3 Months Ended | |
In Millions, except Per Share data, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Revenue: | ' | ' |
Net product sales | $1,707.50 | $1,429.30 |
Collaborative agreements and other revenue | 1.9 | 7.1 |
Royalty revenue | 20.6 | 28.2 |
Total revenue | 1,730 | 1,464.60 |
Expenses: | ' | ' |
Cost of goods sold (excluding amortization of acquired intangible assets) | 86.1 | 80.5 |
Research and development | 713.7 | 452.4 |
Selling, general and administrative | 494.1 | 369 |
Amortization of acquired intangible assets | 65.7 | 65.7 |
Acquisition related charges, net | 8.6 | 33.2 |
Total costs and expenses | 1,368.20 | 1,000.80 |
Operating income | 361.8 | 463.8 |
Other income and (expense): | ' | ' |
Interest and investment income, net | 6.4 | 4.8 |
Interest (expense) | -29.3 | -17.9 |
Other income (expense), net | -6.6 | -2.3 |
Income before income taxes | 332.3 | 448.4 |
Income tax provision | 52.6 | 63.5 |
Net income | $279.70 | $384.90 |
Net income per common share: | ' | ' |
Basic (in dollars per share) | $0.69 | $0.92 |
Diluted (in dollars per share) | $0.66 | $0.89 |
Weighted average shares: | ' | ' |
Basic (in shares) | 405.7 | 417.9 |
Diluted (in shares) | 422.5 | 432.2 |
CONSOLIDATED_STATEMENTS_OF_COM
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Statement of Comprehensive Income [Abstract] | ' | ' |
Net income | $279.70 | $384.90 |
Other comprehensive income (loss): | ' | ' |
Foreign currency translation adjustments | 3 | -5.9 |
Net unrealized gains (losses) related to cash flow hedges: | ' | ' |
Unrealized holding gains (losses), net of tax expense (benefit) of ($3.7) and $0.2 for the three-months ended March 31, 2014 and 2013, respectively. | -14.9 | 74.9 |
Reclassification adjustment for (gains) losses included in net income, net of tax (expense) benefit of $0.3 and $3.4 for the three-months ended March 31, 2014 and 2013, respectively. | 1.6 | 3.8 |
Net unrealized gains (losses) on marketable securities available for sale: | ' | ' |
Unrealized holding gains (losses), net of tax expense (benefit) of $29.0 and $0 for the three-months ended March 31, 2014 and 2013, respectively. | 55.3 | -1.9 |
Reclassification adjustment for (gains) losses included in net income, net of tax (expense) benefit of $0.5 and $0 for the three-months ended March 31, 2014 and 2013, respectively. | 0.9 | 0.8 |
Total other comprehensive income (loss) | 45.9 | 71.7 |
Comprehensive income | $325.60 | $456.60 |
CONSOLIDATED_STATEMENTS_OF_COM1
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Net unrealized gains (losses) related to cash flow hedges: | ' | ' |
Unrealized holding gains (losses), tax expense (benefit) | ($3.70) | $0.20 |
Reclassification adjustment for (gains) losses included in net income, tax (expense) benefit | 0.3 | 3.4 |
Net unrealized gains (losses) on marketable securities available for sale: | ' | ' |
Unrealized holding gains (losses), tax expense (benefit) | 29 | 0 |
Reclassification adjustment for (gains) losses included in net income, tax (expense) benefit | $0.50 | $0 |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Current assets: | ' | ' |
Cash and cash equivalents | $2,396.60 | $3,234.40 |
Marketable securities available for sale | 2,713.50 | 2,452.60 |
Accounts receivable, net of allowances of $38.4 and $40.0 at March 31, 2014 and December 31, 2013, respectively | 1,072.50 | 1,061.40 |
Inventory | 347.8 | 340.4 |
Deferred income taxes | 25.5 | 25.3 |
Other current assets | 386.1 | 436.4 |
Total current assets | 6,942 | 7,550.50 |
Property, plant and equipment, net | 595.7 | 593.4 |
Intangible assets, net | 2,772.50 | 2,839.70 |
Goodwill | 2,041.20 | 2,041.20 |
Other assets | 353.1 | 353.4 |
Total assets | 12,704.50 | 13,378.20 |
Current liabilities: | ' | ' |
Short-term borrowings | 869.8 | 544.8 |
Accounts payable | 149.4 | 156.2 |
Accrued expenses | 1,166 | 1,001.10 |
Income taxes payable | 17 | 16 |
Current portion of deferred revenue | 30.6 | 27.7 |
Other current liabilities | 192.3 | 199.7 |
Total current liabilities | 2,425.10 | 1,945.50 |
Deferred revenue, net of current portion | 25.3 | 23.7 |
Income taxes payable | 245.2 | 235 |
Deferred income taxes | 750.8 | 804.9 |
Other non-current liabilities | 549.2 | 582.7 |
Long-term debt, net of discount | 4,224.30 | 4,196.50 |
Total liabilities | 8,219.90 | 7,788.30 |
Commitments and Contingencies (Note 14) | ' | ' |
Stockholders’ Equity: | ' | ' |
Preferred stock, $.01 par value per share, 5.0 million shares authorized; none outstanding at March 31, 2014 and December 31, 2013, respectively | 0 | 0 |
Common stock, $.01 par value per share, 575.0 million shares authorized; issued 512.5 million and 511.2 million shares at March 31, 2014 and December 31, 2013, respectively | 5.1 | 5.1 |
Common stock in treasury, at cost; 112.1 million and 101.5 million shares at March 31, 2014 and December 31, 2013, respectively | -9,319.20 | -7,662.10 |
Additional paid-in capital | 8,906.60 | 8,680.40 |
Retained earnings | 4,752.20 | 4,472.50 |
Accumulated other comprehensive income | 139.9 | 94 |
Total stockholders’ equity | 4,484.60 | 5,589.90 |
Total liabilities and stockholders’ equity | $12,704.50 | $13,378.20 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Millions, except Share data, unless otherwise specified | ||
Statement of Financial Position [Abstract] | ' | ' |
Accounts receivable, allowances (in dollars) | $38.40 | $40 |
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 | 575,000,000 | 575,000,000 |
Common stock, shares issued | 512,500,000 | 511,200,000 |
Common stock, treasury | 112,100,000 | 101,500,000 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Cash flows from operating activities: | ' | ' |
Net income | $279.70 | $384.90 |
Adjustments to reconcile net income to net cash provided by operating activities: | ' | ' |
Depreciation | 25.5 | 23.2 |
Amortization | 71.6 | 67.7 |
Deferred income taxes | -80.4 | -53.1 |
Impairment charges | 0 | 9.3 |
Change in value of contingent consideration | 8.6 | 33.2 |
Share-based compensation expense | 104.4 | 65.6 |
Share-based employee benefit plan expense | 7.4 | 7.6 |
Reclassification adjustment for cash flow hedges included in net income | 1.9 | 7.2 |
Unrealized change in value of derivative instruments | 4.4 | -33.8 |
Other, net | -1.1 | 5.8 |
Change in current assets and liabilities, excluding the effect of acquisitions: | ' | ' |
Accounts receivable | -9.8 | -87 |
Inventory | -7 | -25.8 |
Other operating assets | 29.9 | 35.7 |
Accounts payable and other operating liabilities | 111.5 | -82.3 |
Income tax payable | 11.3 | 7.7 |
Payment of contingent consideration | -5 | 0 |
Deferred revenue | 4.2 | 1.4 |
Net cash provided by operating activities | 557.1 | 367.3 |
Cash flows from investing activities: | ' | ' |
Proceeds from sales of marketable securities available for sale | 588.3 | 896 |
Purchases of marketable securities available for sale | -766.7 | -1,115.50 |
Purchases of intellectual property and other assets | -1 | -0.7 |
Capital expenditures | -24.7 | -25.4 |
Purchases of investment securities | -17.5 | -5.5 |
Other investing activities | 1.5 | -0.4 |
Net cash used in investing activities | -220.1 | -251.5 |
Cash flows from financing activities: | ' | ' |
Payment for treasury shares | -1,568.50 | -1,043.70 |
Proceeds from short-term borrowing | 1,460 | 1,422.90 |
Principal repayments on short-term borrowing | -1,135 | -1,369.60 |
Proceeds from sale of common equity put options | 1.2 | 0 |
Payment of contingent consideration | -15 | 0 |
Net proceeds from exercise of common stock options and warrants | 59.2 | 266.4 |
Excess tax benefit from share-based compensation arrangements | 29.6 | 36.6 |
Net cash used in financing activities | -1,168.50 | -687.4 |
Effect of currency rate changes on cash and cash equivalents | -6.3 | -23.2 |
Net decrease in cash and cash equivalents | -837.8 | -594.8 |
Cash and cash equivalents at beginning of period | 3,234.40 | 2,090.40 |
Cash and cash equivalents at end of period | 2,396.60 | 1,495.60 |
Supplemental schedule of non-cash investing and financing activity: | ' | ' |
Change in net unrealized (gain) loss on marketable securities available for sale | -84.3 | 2 |
Investment in NantBioScience, Inc. preferred equity | 90 | 0 |
Supplemental disclosure of cash flow information: | ' | ' |
Interest paid | 52.2 | 22.3 |
Income taxes paid | $96.60 | $76.60 |
Nature_of_Business_and_Basis_o
Nature of Business and Basis of Presentation | 3 Months Ended |
Mar. 31, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' |
Nature of Business and Basis of Presentation | ' |
Nature of Business and Basis of Presentation | |
Celgene Corporation, together with its subsidiaries (collectively “we,” “our,” “us,” “Celgene” or the “Company”) is a global biopharmaceutical company primarily engaged in the discovery, development and commercialization of innovative therapies designed to treat cancer and immune-inflammatory related diseases. We are dedicated to innovative research and development designed to bring new therapies to market and are involved in research in several scientific areas that may deliver proprietary next-generation therapies, targeting areas such as intracellular signaling pathways in cancer and immune cells, immunomodulation in cancer and autoimmune diseases and therapeutic application of cell therapies. | |
Our primary commercial stage products include REVLIMID®, ABRAXANE®, VIDAZA®, POMALYST®/IMNOVID®, THALOMID® (inclusive of Thalidomide CelgeneTM), azacitidine for injection (generic version of VIDAZA®), ISTODAX® and OTEZLA®. | |
On March 21, 2014, OTEZLA® was approved by the U.S. Food and Drug Administration (FDA) for the treatment of adults with active psoriatic arthritis. Launch activities for OTEZLA® commenced in March 2014 and we will begin recognizing revenue related to OTEZLA® during the second quarter of 2014. | |
Additional sources of revenue include royalties from Novartis Pharma AG (Novartis) on their sales of FOCALIN XR® and the entire RITALIN® family of drugs, the sale of services through our Celgene Cellular Therapeutics (CCT) subsidiary and other licensing agreements. | |
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. Certain prior year amounts have been reclassified to conform to the current year's presentation. | |
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, European credit risk, technological change and product liability. | |
Interim results may not be indicative of the results that may be expected for the full year. In the opinion of management, these unaudited consolidated financial statements include all normal and recurring adjustments considered necessary for a fair presentation of these interim unaudited consolidated financial statements. |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2014 | |
Accounting Policies [Abstract] | ' |
Summary of Significant Accounting Policies | ' |
Summary of Significant Accounting Policies | |
Our significant accounting policies are described in Note 1 of Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2013 (2013 Annual Report on Form 10-K). |
Earnings_Per_Share
Earnings Per Share | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Earnings Per Share [Abstract] | ' | |||||||
Earnings Per Share | ' | |||||||
Earnings Per Share | ||||||||
Three-Month Periods Ended March 31, | ||||||||
(Amounts in millions, except per share) | 2014 | 2013 | ||||||
Net income | $ | 279.7 | $ | 384.9 | ||||
Weighted-average shares: | ||||||||
Basic | 405.7 | 417.9 | ||||||
Effect of dilutive securities: | ||||||||
Options, restricted stock units and other incentives | 16.8 | 14.3 | ||||||
Diluted | 422.5 | 432.2 | ||||||
Net income per share: | ||||||||
Basic | $ | 0.69 | $ | 0.92 | ||||
Diluted | $ | 0.66 | $ | 0.89 | ||||
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 6.8 million and 2.0 million shares for the three-month periods ended March 31, 2014 and 2013, respectively. | ||||||||
Stock Split: In February 2014, our Board of Directors voted to recommend a two-for-one split of the Company’s common stock to be effected through an amendment to the Company’s Certificate of Incorporation. Implementation of the stock split is subject to stockholder approval of the amendment at the Annual Meeting of Stockholders, which is currently scheduled to take place on June 18, 2014. Per share information contained in this Quarterly Report on Form 10-Q has not been restated to reflect this recommended stock split as it is subject to stockholder approval. | ||||||||
Share Repurchase Program: In April 2014, our Board of Directors approved an increase of $4.000 billion to our authorized share repurchase program, bringing the total amount authorized during the period of April 2009 through April 2014 up to an aggregate of $13.500 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 repurchase 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 repurchase the shares covered by the option at the strike price of the put option. During the three-month period ended March 31, 2014, we sold a put option on $200.0 million notional amount of shares of our common stock which matured in March 2014 when the trading price of our stock was below the strike price of the put option. The financial impact of the option was a net gain of $2.4 million, which was recorded in other income (expense), net, and the repurchase of approximately 1.0 million shares of our common stock at an average cost of $140.45 per share, which reflected the market value of the shares on the dates the option expired. At March 31, 2014, we had no outstanding put options. In April 2014, we sold a put option on $200.0 million notional amount of shares of our common stock with a strike price of $132.78 and maturing in June 2014 for a premium of $4.0 million. | ||||||||
During the three-month period ended March 31, 2014, we have repurchased 10.7 million shares of common stock under the share repurchase program from all sources at a total cost of $1.661 billion. As of March 31, 2014, we had a remaining open-ended share repurchase authorization of $0.407 billion, which was increased by the Board of Directors in April 2014 to $4.407 billion. |
Accumulated_Other_Comprehensiv
Accumulated Other Comprehensive Income (Loss) | 3 Months Ended | |||||||||||||||||||
Mar. 31, 2014 | ||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | ' | |||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) | ' | |||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) | ||||||||||||||||||||
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 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 | Net Unrealized | Net Unrealized | Foreign | Total | ||||||||||||||||
Liability | Gains (Losses) From | Gains (Losses) | Currency | Accumulated | ||||||||||||||||
Marketable Securities | From Hedges | Translation | Other | |||||||||||||||||
Adjustment | Comprehensive | |||||||||||||||||||
Income (Loss) | ||||||||||||||||||||
Balance December 31, 2013 | $ | (6.9 | ) | $ | 137.3 | $ | (36.0 | ) | $ | (0.4 | ) | $ | 94 | |||||||
Other comprehensive income (loss) before reclassifications | — | 55.3 | (14.9 | ) | 3 | 43.4 | ||||||||||||||
Amounts reclassified from accumulated other comprehensive income | — | 0.9 | 1.6 | — | 2.5 | |||||||||||||||
Net current-period other comprehensive income (loss) | — | 56.2 | (13.3 | ) | 3 | 45.9 | ||||||||||||||
Balance March 31, 2014 | $ | (6.9 | ) | $ | 193.5 | $ | (49.3 | ) | $ | 2.6 | $ | 139.9 | ||||||||
Balance December 31, 2012 | $ | (10.1 | ) | $ | 4.2 | $ | (16.0 | ) | $ | (27.8 | ) | $ | (49.7 | ) | ||||||
Other comprehensive income (loss) before reclassifications | — | (1.9 | ) | 74.9 | (5.9 | ) | 67.1 | |||||||||||||
Amounts reclassified from accumulated other comprehensive income | — | 0.8 | 3.8 | — | 4.6 | |||||||||||||||
Net current-period other comprehensive income (loss) | — | (1.1 | ) | 78.7 | (5.9 | ) | 71.7 | |||||||||||||
Balance March 31, 2013 | $ | (10.1 | ) | $ | 3.1 | $ | 62.7 | $ | (33.7 | ) | $ | 22 | ||||||||
Gains (Losses) Reclassified Out of Accumulated | ||||||||||||||||||||
Other Comprehensive Income | ||||||||||||||||||||
Accumulated Other Comprehensive Income Components | Affected Line Item in the Consolidated Statements of Income | Three-Month Periods Ended March 31, | ||||||||||||||||||
2014 | 2013 | |||||||||||||||||||
Gains (losses) from cash-flow hedges: | ||||||||||||||||||||
Foreign exchange contracts | Net product sales | $ | (1.0 | ) | $ | (6.4 | ) | |||||||||||||
Treasury rate lock agreements | Interest (expense) | (0.9 | ) | (0.8 | ) | |||||||||||||||
Income tax benefit (expense) | 0.3 | 3.4 | ||||||||||||||||||
Gains (losses) from available-for-sale marketable securities: | ||||||||||||||||||||
Realized income (loss) on sales of marketable securities | Interest and investment income, net | (1.4 | ) | (0.8 | ) | |||||||||||||||
Income tax benefit (expense) | 0.5 | — | ||||||||||||||||||
Total reclassification, net of tax | $ | (2.5 | ) | $ | (4.6 | ) |
Financial_Instruments_and_Fair
Financial Instruments and Fair Value Measurement | 3 Months Ended | |||||||||||||||
Mar. 31, 2014 | ||||||||||||||||
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 March 31, 2014 and the valuation techniques we utilized to determine such fair value. Fair values determined based on Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities. Our Level 1 assets consist of marketable equity securities. Fair values determined based on 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 mortgage-backed securities (MBS), non-U.S. government, agency and Supranational securities, global corporate debt securities, asset backed securities, foreign currency forward contracts, purchased foreign currency options and interest rate swap contracts. Fair values determined based on 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 1 liability relates to our publicly traded Contingent Value Rights (CVRs). See Note 18 of Notes to Consolidated Financial Statements included in our 2013 Annual Report on Form 10-K for a description of the CVRs. Our Level 2 liabilities relate to foreign currency forward contracts and interest rate swap contracts, including forward starting interest rate swap contracts. Our Level 3 liabilities consist of contingent consideration related to undeveloped product rights resulting from the acquisition of Gloucester Pharmaceuticals, Inc. (Gloucester) and contingent consideration related to the undeveloped product rights and the technology platform acquired from the Avila Therapeutics, Inc. (Avila) acquisition. The maximum remaining potential payments related to the contingent consideration from the acquisitions of Gloucester and Avila are estimated to be $120.0 million and $575.0 million, respectively. | ||||||||||||||||
Balance at | Quoted Price in | Significant | Significant | |||||||||||||
31-Mar-14 | Active Markets for | Other Observable | Unobservable | |||||||||||||
Identical Assets | Inputs | Inputs | ||||||||||||||
(Level 1) | (Level 2) | (Level 3) | ||||||||||||||
Assets: | ||||||||||||||||
Available-for-sale securities | $ | 2,713.50 | $ | 551.4 | $ | 2,162.10 | $ | — | ||||||||
Cash equivalents | 50 | — | 50 | — | ||||||||||||
Total assets | $ | 2,763.50 | $ | 551.4 | $ | 2,212.10 | $ | — | ||||||||
Liabilities: | ||||||||||||||||
Forward currency contracts | $ | (19.9 | ) | $ | — | $ | (19.9 | ) | $ | — | ||||||
Contingent value rights | (121.6 | ) | (121.6 | ) | — | — | ||||||||||
Interest rate swaps | (35.3 | ) | — | (35.3 | ) | — | ||||||||||
Other acquisition related contingent consideration | (213.7 | ) | — | — | (213.7 | ) | ||||||||||
Total liabilities | $ | (390.5 | ) | $ | (121.6 | ) | $ | (55.2 | ) | $ | (213.7 | ) | ||||
Balance at | Quoted Price in | Significant | Significant | |||||||||||||
December 31, 2013 | Active Markets for | Other Observable | Unobservable | |||||||||||||
Identical Assets | Inputs | Inputs | ||||||||||||||
(Level 1) | (Level 2) | (Level 3) | ||||||||||||||
Assets: | ||||||||||||||||
Available-for-sale securities | $ | 2,452.60 | $ | 433.1 | $ | 2,019.50 | $ | — | ||||||||
Cash equivalents | 20 | — | 20 | — | ||||||||||||
Total assets | $ | 2,472.60 | $ | 433.1 | $ | 2,039.50 | $ | — | ||||||||
Liabilities: | ||||||||||||||||
Forward currency contracts | $ | (9.2 | ) | $ | — | $ | (9.2 | ) | $ | — | ||||||
Contingent value rights | (118.1 | ) | (118.1 | ) | — | — | ||||||||||
Interest rate swaps | (49.6 | ) | — | (49.6 | ) | — | ||||||||||
Other acquisition related contingent consideration | (228.5 | ) | — | — | (228.5 | ) | ||||||||||
Total liabilities | $ | (405.4 | ) | $ | (118.1 | ) | $ | (58.8 | ) | $ | (228.5 | ) | ||||
There were no security transfers between Levels 1 and 2 during the three-month periods ended March 31, 2014 and 2013. The following table represents a roll-forward of the fair value of Level 3 instruments (significant unobservable inputs): | ||||||||||||||||
Three-Month Periods Ended March 31, | ||||||||||||||||
2014 | 2013 | |||||||||||||||
Liabilities: | ||||||||||||||||
Balance at beginning of period | $ | (228.5 | ) | $ | (198.1 | ) | ||||||||||
Amounts acquired or issued | — | — | ||||||||||||||
Net change in fair value | (5.2 | ) | (3.4 | ) | ||||||||||||
Settlements | 20 | — | ||||||||||||||
Transfers in and/or out of Level 3 | — | — | ||||||||||||||
Balance at end of period | $ | (213.7 | ) | $ | (201.5 | ) | ||||||||||
Level 3 liabilities outstanding as of March 31, 2014 and March 31, 2013 primarily consisted of contingent consideration related to the acquisition of Avila. The $14.8 million net decrease in the fair value of Level 3 liabilities in 2014 was primarily due to a $20.0 million milestone payment related to our acquisition of Avila. |
Derivative_Instruments_and_Hed
Derivative Instruments and Hedging Activities | 3 Months Ended | ||||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ' | ||||||||||||||||||
Derivative Instruments and Hedging Activities | ' | ||||||||||||||||||
Derivative Instruments and Hedging Activities | |||||||||||||||||||
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. | |||||||||||||||||||
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. We manage our anticipated transaction exposure principally with foreign currency forward contracts and occasionally foreign currency put and call 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 to 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 at March 31, 2014 and December 31, 2013 had settlement dates within 36 months. These foreign currency forward contracts are designated as cash flow hedges and, to the extent effective, any unrealized gains or losses on them are reported in other comprehensive income (loss) (OCI) and reclassified to operations in the same periods during which the underlying hedged transactions affect earnings. Any ineffectiveness on these foreign currency forward contracts is reported in other income (expense), net. Foreign currency forward contracts entered into to hedge forecasted revenue and expenses were as follows at March 31, 2014 and December 31, 2013: | |||||||||||||||||||
Notional Amount | |||||||||||||||||||
Foreign Currency | 31-Mar-14 | 31-Dec-13 | |||||||||||||||||
Australian Dollar | $ | 41.7 | $ | — | |||||||||||||||
British Pound | 307.8 | 279.4 | |||||||||||||||||
Canadian Dollar | 22.7 | — | |||||||||||||||||
Euro | 3,335.00 | 3,318.20 | |||||||||||||||||
Japanese Yen | 601.9 | 559.1 | |||||||||||||||||
Total | $ | 4,309.10 | $ | 4,156.70 | |||||||||||||||
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 March 31, 2014, 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 income (expense), net in the current period. The aggregate notional amount of the foreign currency forward non-designated hedging contracts outstanding at March 31, 2014 and December 31, 2013 were $817.7 million and $878.5 million, respectively. | |||||||||||||||||||
Interest Rate Risk Management | |||||||||||||||||||
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 treasury rate locks or forward starting swaps are reported in OCI and are recognized in income over the life of the anticipated fixed-rate notes. | |||||||||||||||||||
Forward Starting Interest Rate Swaps: During the three months ended March 31, 2014, we entered into forward starting swaps that were designated as cash flow hedges, with an aggregate notional value of $500.0 million, and effective dates in November 2014, with $100.0 million maturing in five years and $400.0 million maturing in ten years to hedge against changes in interest rates that could impact an anticipated issuance of debt. In April 2014 we accelerated our planned debt issuance date to May 2014, which will result in hedge ineffectiveness in the forward starting swaps due to the effective dates of the swaps being in November 2014. The hedge ineffectiveness will be recognized on the Consolidated Statements of Income as other income (expense), net. | |||||||||||||||||||
The following table summarizes the notional amounts of our outstanding forward starting swap contracts at March 31, 2014 and December 31, 2013: | |||||||||||||||||||
Notional Amount | |||||||||||||||||||
31-Mar-14 | 31-Dec-13 | ||||||||||||||||||
Forward starting swap contracts entered into as cash flow hedges: | |||||||||||||||||||
Maturing in five years | $ | 200 | $ | 100 | |||||||||||||||
Maturing in ten years | 600 | 200 | |||||||||||||||||
Total | $ | 800 | $ | 300 | |||||||||||||||
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 interest rates. Since the specific terms and notional amount of the swap are intended to match those of the debt being hedged, it is assumed to be a highly effective hedge and all changes in fair value of the swap are recorded on the Consolidated Balance Sheets with no net impact recorded in income. Any net interest payments made or received on interest rate swap contracts are recognized as interest expense. We may terminate the hedging relationship of certain swap contracts by settling the contracts or by entering into offsetting contracts. At the time a hedging relationship is terminated, accumulated gains or losses associated with the swap contract are measured and recorded as a reduction or increase of current and future interest expense associated with the previously hedged notes. | |||||||||||||||||||
We have entered into swap contracts that were designated as hedges of our fixed rate notes due in 2015, 2017, 2018, 2020, 2022 and 2023 and also terminated the hedging relationship by settling certain of those swap contracts during 2013 and 2014. The settlement of swap contracts resulted in the receipt of net proceeds of $7.0 million and $2.8 million in 2014 and 2013, respectively, which is accounted for as a reduction of current and future interest expense associated with these notes. See Note 10 for additional details related to reductions of current and future interest expense. | |||||||||||||||||||
The following table summarizes the notional amounts of our outstanding swap contracts at March 31, 2014 and December 31, 2013: | |||||||||||||||||||
Notional Amount | |||||||||||||||||||
31-Mar-14 | 31-Dec-13 | ||||||||||||||||||
Interest rate swap contracts entered into as fair value hedges of the following fixed-rate senior notes: | |||||||||||||||||||
2.450% senior notes due 2015 | $ | 200 | $ | 300 | |||||||||||||||
1.900% senior notes due 2017 | 200 | 300 | |||||||||||||||||
2.300% senior notes due 2018 | 200 | 200 | |||||||||||||||||
3.950% senior notes due 2020 | 500 | 500 | |||||||||||||||||
3.250% senior notes due 2022 | 850 | 850 | |||||||||||||||||
4.000% senior notes due 2023 | 100 | 150 | |||||||||||||||||
Total | $ | 2,050.00 | $ | 2,300.00 | |||||||||||||||
The following tables summarize the fair value and presentation in the Consolidated Balance Sheets for derivative instruments as of March 31, 2014 and December 31, 2013: | |||||||||||||||||||
31-Mar-14 | |||||||||||||||||||
Asset Derivatives | Liability Derivatives | ||||||||||||||||||
Instrument | Balance Sheet Location | Fair Value | Balance Sheet Location | Fair Value | |||||||||||||||
Derivatives designated as hedging instruments: | |||||||||||||||||||
Other current assets | $ | 48.1 | Other current assets | $ | 27.6 | ||||||||||||||
Foreign exchange contracts* | |||||||||||||||||||
Other current liabilities | 29.8 | Other current liabilities | 57.5 | ||||||||||||||||
Other non-current assets | 13.6 | Other non-current assets | 3.4 | ||||||||||||||||
Other non-current liabilities | 29.6 | Other non-current liabilities | 53.3 | ||||||||||||||||
Other current assets | 14.6 | Other current assets | — | ||||||||||||||||
Interest rate swap agreements | |||||||||||||||||||
Other non-current liabilities | — | Other non-current liabilities | 51.4 | ||||||||||||||||
Derivatives not designated as hedging instruments: | |||||||||||||||||||
Foreign exchange contracts* | Other current assets | 6.7 | Other current assets | 0.9 | |||||||||||||||
Other current liabilities | 2.5 | Other current liabilities | 7.5 | ||||||||||||||||
Interest rate swap agreements | Other non-current assets | 1.5 | Other non-current assets | — | |||||||||||||||
Total | $ | 146.4 | $ | 201.6 | |||||||||||||||
31-Dec-13 | |||||||||||||||||||
Asset Derivatives | Liability Derivatives | ||||||||||||||||||
Instrument | Balance Sheet Location | Fair Value | Balance Sheet Location | Fair Value | |||||||||||||||
Derivatives designated as hedging instruments: | |||||||||||||||||||
Other current assets | $ | 63.6 | Other current assets | $ | 24.9 | ||||||||||||||
Foreign exchange contracts* | |||||||||||||||||||
Other current liabilities | 41.5 | Other current liabilities | 84.7 | ||||||||||||||||
Other non-current assets | 60.6 | Other non-current assets | 41.9 | ||||||||||||||||
Other non-current liabilities | 4.3 | Other non-current liabilities | 25.6 | ||||||||||||||||
Other current assets | 17.1 | Other current assets | — | ||||||||||||||||
Interest rate swap agreements | |||||||||||||||||||
Other non-current liabilities | — | Other non-current liabilities | 68.3 | ||||||||||||||||
Derivatives not designated as hedging instruments: | |||||||||||||||||||
Foreign exchange contracts* | Other current assets | 11.3 | Other current assets | 0.7 | |||||||||||||||
Other current liabilities | 6 | Other current liabilities | 18.7 | ||||||||||||||||
Interest rate swap agreements | Other current assets | 0.1 | Other current assets | — | |||||||||||||||
Other non-current assets | 1.5 | Other non-current assets | — | ||||||||||||||||
Total | $ | 206 | $ | 264.8 | |||||||||||||||
* 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. | |||||||||||||||||||
The following tables summarize the effect of derivative instruments designated as cash-flow hedging instruments on the Consolidated Statements of Income for the three-month periods ended March 31, 2014 and 2013: | |||||||||||||||||||
Three-Month Period Ended March 31, 2014 | |||||||||||||||||||
Amount of | Location of | Amount of | Location of | Amount of | |||||||||||||||
Gain/(Loss) | Gain/(Loss) | Gain/(Loss) | Gain/(Loss) | Gain/(Loss) | |||||||||||||||
Recognized in OCI | Reclassified from | Reclassified from | Recognized in | Recognized in | |||||||||||||||
on Derivative (1) | Accumulated OCI | Accumulated OCI | Income on | Income on | |||||||||||||||
into Income | into Income | Derivative | Derivative | ||||||||||||||||
Instrument | (Effective Portion) | (Effective Portion) | (Effective Portion) | (Ineffective Portion | (Ineffective Portion | ||||||||||||||
and Amount Excluded | and Amount Excluded | ||||||||||||||||||
From Effectiveness | From Effectiveness | ||||||||||||||||||
Testing) | Testing) | ||||||||||||||||||
Foreign exchange contracts | $ | (8.9 | ) | Net product sales | $ | (1.0 | ) | Other income, net | $ | (3.5 | ) | (2 | ) | ||||||
Treasury rate lock agreements | $ | — | Interest expense | $ | (0.9 | ) | |||||||||||||
Interest rate swap agreements | $ | (9.7 | ) | Interest expense | $ | — | |||||||||||||
(1) Net losses of $15.2 million are expected to be reclassified from Accumulated OCI into income in the next 12 months. | |||||||||||||||||||
(2) The amount of net losses recognized in income represents $0.3 million in losses related to the ineffective portion of the hedging relationships and $3.2 million of losses related to amounts excluded from the assessment of hedge effectiveness. | |||||||||||||||||||
Three-Month Period Ended March 31, 2013 | |||||||||||||||||||
Amount of | Location of | Amount of | Location of | Amount of | |||||||||||||||
Gain/(Loss) | Gain/(Loss) | Gain/(Loss) | Gain/(Loss) | Gain/(Loss) | |||||||||||||||
Recognized in OCI | Reclassified from | Reclassified from | Recognized in | Recognized in | |||||||||||||||
on Derivative | Accumulated OCI | Accumulated OCI | Income on | Income on | |||||||||||||||
into Income | into Income | Derivative | Derivative | ||||||||||||||||
Instrument | (Effective Portion) | (Effective Portion) | (Effective Portion) | (Ineffective Portion | (Ineffective Portion | ||||||||||||||
and Amount Excluded | and Amount Excluded | ||||||||||||||||||
From Effectiveness | From Effectiveness | ||||||||||||||||||
Testing) | Testing) | ||||||||||||||||||
Foreign exchange contracts | $ | 75 | Net product sales | $ | (6.4 | ) | Other income, net | $ | 3.5 | -1 | |||||||||
Treasury rate lock agreements | $ | — | Interest expense | $ | (0.8 | ) | |||||||||||||
(1) The amount of net gains recognized in income represents $2.0 million in gains related to the ineffective portion of the hedging relationships and $1.5 million of gains related to amounts excluded from the assessment of hedge effectiveness. | |||||||||||||||||||
The following table summarizes the effect of derivative instruments designated as fair value hedging instruments on the Consolidated Statements of Income for the three-month periods ended March 31, 2014 and 2013: | |||||||||||||||||||
Amount of Gain (Loss) Recognized in | |||||||||||||||||||
Income on Derivative | |||||||||||||||||||
Location of Gain (Loss) Recognized in Income on Derivative | Three-Month Periods Ended March 31, | ||||||||||||||||||
Instrument | 2014 | 2013 | |||||||||||||||||
Interest rate swap agreements | Interest expense | $ | 10.4 | $ | 6.9 | ||||||||||||||
The following table summarizes the effect of derivative instruments not designated as hedging instruments on the Consolidated Statements of Income for the three-month periods ended March 31, 2014 and 2013: | |||||||||||||||||||
Amount of Gain (Loss) Recognized in | |||||||||||||||||||
Income on Derivative | |||||||||||||||||||
Location of Gain (Loss) Recognized in Income on Derivative | Three-Month Periods Ended March 31, | ||||||||||||||||||
Instrument | 2014 | 2013 | |||||||||||||||||
Foreign exchange contracts | Other income (expense), net | $ | (3.3 | ) | $ | 38.7 | |||||||||||||
Put options on our common stock | Other income (expense), net | $ | 2.4 | $ | — | ||||||||||||||
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 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. |
Cash_Cash_Equivalents_and_Mark
Cash, Cash Equivalents and Marketable Securities Available-for-Sale | 3 Months Ended | ||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||
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 | |||||||||||||||||
Money market funds of $1.091 billion and $1.697 billion at March 31, 2014 and December 31, 2013, respectively, were recorded at cost, which approximates fair value and are included in cash and cash equivalents. 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 at March 31, 2014 and December 31, 2013 were as follows: | |||||||||||||||||
31-Mar-14 | Amortized Cost | Gross Unrealized Gain | Gross Unrealized Loss | Estimated Fair Value | |||||||||||||
U.S. Treasury securities | $ | 711.4 | $ | 0.6 | $ | (0.5 | ) | $ | 711.5 | ||||||||
U.S. government-sponsored agency securities | 199 | 0.2 | (0.2 | ) | 199 | ||||||||||||
U.S. government-sponsored agency MBS | 611.7 | 0.5 | (5.6 | ) | 606.6 | ||||||||||||
Non-U.S. government, agency and Supranational securities | 19.9 | — | — | 19.9 | |||||||||||||
Corporate debt - global | 433 | 1.3 | (0.7 | ) | 433.6 | ||||||||||||
Asset backed securities | 191.7 | — | (0.2 | ) | 191.5 | ||||||||||||
Marketable equity securities | 247.5 | 304.1 | (0.2 | ) | 551.4 | ||||||||||||
Total available-for-sale marketable securities | $ | 2,414.20 | $ | 306.7 | $ | (7.4 | ) | $ | 2,713.50 | ||||||||
December 31, 2013 | Amortized Cost | Gross Unrealized Gain | Gross Unrealized Loss | Estimated Fair Value | |||||||||||||
U.S. Treasury securities | $ | 795.2 | $ | 0.3 | $ | (0.4 | ) | $ | 795.1 | ||||||||
U.S. government-sponsored agency securities | 208.9 | 0.2 | (0.2 | ) | 208.9 | ||||||||||||
U.S. government-sponsored agency MBS | 450.8 | 0.1 | (6.9 | ) | 444 | ||||||||||||
Non-U.S. government, agency and Supranational securities | 10.4 | — | — | 10.4 | |||||||||||||
Corporate debt - global | 379.2 | 1.1 | (0.6 | ) | 379.7 | ||||||||||||
Asset backed securities | 181.6 | — | (0.2 | ) | 181.4 | ||||||||||||
Marketable equity securities | 212.9 | 220.2 | — | 433.1 | |||||||||||||
Total available-for-sale marketable securities | $ | 2,239.00 | $ | 221.9 | $ | (8.3 | ) | $ | 2,452.60 | ||||||||
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. Non-U.S. government, agency and Supranational securities consist of direct obligations of highly rated governments of nations other than the United States and obligations of sponsored agencies and other entities that are guaranteed or supported by highly rated governments of nations other than the United States. 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. Marketable equity securities consist of investments in equity securities that have become publicly traded. The increase in net unrealized gains in marketable equity securities during the three-month period ended March 31, 2014 primarily reflects the increase in market value for certain equity investments subsequent to December 31, 2013. Net unrealized losses in marketable debt securities were essentially the same at the end of both periods. | |||||||||||||||||
Duration periods of available-for-sale debt securities at March 31, 2014 were as follows: | |||||||||||||||||
Amortized | Fair | ||||||||||||||||
Cost | Value | ||||||||||||||||
Duration of one year or less | $ | 468.4 | $ | 468.2 | |||||||||||||
Duration of one through three years | 1,441.00 | 1,440.20 | |||||||||||||||
Duration of three through five years | 211.4 | 208.6 | |||||||||||||||
Duration of over five years | 45.9 | 45.1 | |||||||||||||||
Total | $ | 2,166.70 | $ | 2,162.10 | |||||||||||||
Inventory
Inventory | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Inventory Disclosure [Abstract] | ' | |||||||
Inventory | ' | |||||||
Inventory | ||||||||
A summary of inventories by major category at March 31, 2014 and December 31, 2013 follows: | ||||||||
31-Mar-14 | 31-Dec-13 | |||||||
Raw materials | $ | 152.4 | $ | 147.4 | ||||
Work in process | 122 | 99.6 | ||||||
Finished goods | 73.4 | 93.4 | ||||||
Total | $ | 347.8 | $ | 340.4 | ||||
Intangible_Assets_and_Goodwill
Intangible Assets and Goodwill | 3 Months Ended | ||||||||||||||
Mar. 31, 2014 | |||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | ||||||||||||||
Intangible Assets and Goodwill | ' | ||||||||||||||
Intangible Assets and Goodwill | |||||||||||||||
Intangible Assets: Our intangible assets consist of developed product rights obtained primarily from the Pharmion Corp. (Pharmion), Gloucester and Abraxis BioScience, Inc. (Abraxis) acquisitions, IPR&D product rights from the Gloucester and Avila acquisitions and technology obtained primarily from the Avila acquisition. Also included are contract-based licenses and other miscellaneous intangibles. The amortization periods related to our finite-lived intangible assets range from one to seventeen years. | |||||||||||||||
The following summary of intangible assets by category includes intangibles currently being amortized and intangibles not yet subject to amortization: | |||||||||||||||
31-Mar-14 | Gross Carrying Value | Accumulated Amortization | Intangible Assets, Net | Weighted Average Life (Years) | |||||||||||
Amortizable intangible assets: | |||||||||||||||
Acquired developed product rights | $ | 3,405.90 | $ | (1,079.5 | ) | $ | 2,326.40 | 13 | |||||||
Technology | 333.7 | (99.3 | ) | 234.4 | 7 | ||||||||||
Licenses | 66.2 | (15.0 | ) | 51.2 | 16.5 | ||||||||||
Other | 42.5 | (19.9 | ) | 22.6 | 8.6 | ||||||||||
3,848.30 | (1,213.7 | ) | 2,634.60 | 12.5 | |||||||||||
Non-amortized intangible assets: | |||||||||||||||
Acquired IPR&D product rights | 137.9 | — | 137.9 | ||||||||||||
Total intangible assets | $ | 3,986.20 | $ | (1,213.7 | ) | $ | 2,772.50 | ||||||||
31-Dec-13 | Gross Carrying Value | Accumulated Amortization | Intangible Assets, Net | Weighted Average Life (Years) | |||||||||||
Amortizable intangible assets: | |||||||||||||||
Acquired developed product rights | $ | 3,405.90 | $ | (1,026.4 | ) | $ | 2,379.50 | 13 | |||||||
Technology | 333.7 | (87.4 | ) | 246.3 | 7 | ||||||||||
Licenses | 66.2 | (13.9 | ) | 52.3 | 16.5 | ||||||||||
Other | 42.5 | (18.8 | ) | 23.7 | 8.6 | ||||||||||
3,848.30 | (1,146.5 | ) | 2,701.80 | 12.5 | |||||||||||
Non-amortized intangible assets: | |||||||||||||||
Acquired IPR&D product rights | 137.9 | — | 137.9 | ||||||||||||
Total intangible assets | $ | 3,986.20 | $ | (1,146.5 | ) | $ | 2,839.70 | ||||||||
There were no additions or deletions to the gross carrying value of intangible assets during the three-month period ended March 31, 2014. | |||||||||||||||
Amortization expense was $67.1 million and $66.9 million for the three-month periods ended March 31, 2014 and 2013, respectively. Assuming no changes in the gross carrying amount of intangible assets, the amortization of intangible assets for years 2014 through 2018 is estimated to be in the range of approximately $255.0 million to $265.0 million annually. | |||||||||||||||
Goodwill: At March 31, 2014, our goodwill related to the 2012 acquisition of Avila, the 2010 acquisitions of Abraxis and Gloucester, the 2008 acquisition of Pharmion and the 2004 acquisition of Penn T Limited. | |||||||||||||||
The carrying value of goodwill was $2.041 billion on March 31, 2014 and December 31, 2013. |
Debt
Debt | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Debt Disclosure [Abstract] | ' | |||||||
Debt | ' | |||||||
Debt | ||||||||
Senior Notes: Summarized below are the carrying values of our senior notes at March 31, 2014 and December 31, 2013: | ||||||||
31-Mar-14 | 31-Dec-13 | |||||||
2.450% senior notes due 2015 | $ | 511.9 | $ | 513.9 | ||||
1.900% senior notes due 2017 | 500.4 | 499.9 | ||||||
2.300% senior notes due 2018 | 400 | 399 | ||||||
3.950% senior notes due 2020 | 490.5 | 484.6 | ||||||
3.250% senior notes due 2022 | 974.6 | 956.6 | ||||||
4.000% senior notes due 2023 | 700.7 | 696.3 | ||||||
5.700% senior notes due 2040 | 249.6 | 249.6 | ||||||
5.250% senior notes due 2043 | 396.6 | 396.6 | ||||||
Total long-term debt | $ | 4,224.30 | $ | 4,196.50 | ||||
At March 31, 2014, the fair value of our outstanding Senior Notes was $4.356 billion and represented a Level 2 measurement within the fair value measurement hierarchy. | ||||||||
During 2012, we entered into treasury rate locks in anticipation of issuing the fixed-rate notes that were issued in August 2012. As of March 31, 2014, a balance of $29.7 million in losses remained in OCI related to treasury rate locks and will be recognized as interest expense over the life of the 2017 notes and the 2022 notes. | ||||||||
At March 31, 2014, 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 6. Our swap contracts outstanding at March 31, 2014 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 March 31, 2014, we had a balance of $33.0 million of unamortized gains recorded as a component of our debt as a result of past swap contract settlements, including $3.6 million related to the settlement of swap contracts during the three months ended March 31, 2014. As of December 31, 2013, we had a balance of $32.1 million of unamortized gains recorded as a component of our debt as a result of past swap contract settlements. | ||||||||
Commercial Paper: The carrying value of Commercial Paper as of March 31, 2014 and December 31, 2013 was $869.8 million and $544.8 million, respectively, and approximated its fair value. The effective interest rate on our outstanding Commercial Paper at March 31, 2014 was 0.3%. | ||||||||
Senior Unsecured Credit Facility: In September 2011, we entered into a senior unsecured revolving credit facility (Credit Facility) providing for revolving credit. The Credit Facility is currently at an aggregate maximum amount of $1.500 billion with an expiration date of April 18, 2018. Subject to certain conditions, we have the right to increase the amount of the Credit Facility (but in no event more than one time per annum), up to a maximum aggregate amount of $1.750 billion. | ||||||||
Amounts may be borrowed under the Credit Facility for working capital, capital expenditures and other corporate purposes. The Credit Facility serves as backup liquidity for our Commercial Paper borrowings. As of March 31, 2014 and December 31, 2013 there were no outstanding borrowings under 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 March 31, 2014. |
ShareBased_Compensation
Share-Based Compensation | 3 Months Ended | |||||||||||
Mar. 31, 2014 | ||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | |||||||||||
Share-Based Compensation | ' | |||||||||||
Share-Based Compensation | ||||||||||||
We have a stockholder-approved stock incentive plan, the 2008 Stock Incentive Plan (Amended and Restated as of April 17, 2013) (Plan) which provides for the granting of options, restricted stock awards (RSUs), stock appreciation rights, performance awards (PSUs) and other share-based awards to our employees and officers. 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. | ||||||||||||
The following table summarizes the components of share-based compensation expense in the Consolidated Statements of Income for the three-month periods ended March 31, 2014 and 2013: | ||||||||||||
Three-Month Periods Ended | ||||||||||||
March 31, | ||||||||||||
2014 | 2013 | |||||||||||
Cost of goods sold (excluding amortization of acquired intangible assets) | $ | 6.1 | $ | 2.8 | ||||||||
Research and development | 47 | 27 | ||||||||||
Selling, general and administrative | 51.3 | 35.8 | ||||||||||
Total share-based compensation expense | 104.4 | 65.6 | ||||||||||
Tax benefit related to share-based compensation expense | 30 | 17.9 | ||||||||||
Reduction in income | $ | 74.4 | $ | 47.7 | ||||||||
We utilize share-based compensation in the form of stock options, RSUs and PSUs. The following table summarizes the activity for stock options, RSUs and PSUs for the three-month period ended March 31, 2014 (in millions unless otherwise noted): | ||||||||||||
Stock | Restricted Stock | Performance- | ||||||||||
Options | Units | Based Restricted | ||||||||||
Stock Units | ||||||||||||
(in thousands) | ||||||||||||
Outstanding at December 31, 2013 | 39.6 | 5.1 | 58 | |||||||||
Changes during the Year: | ||||||||||||
Granted | 2.3 | 0.1 | — | |||||||||
Exercised / Released | (1.2 | ) | (0.1 | ) | (12 | ) | ||||||
Expired | (0.2 | ) | (0.1 | ) | — | |||||||
Outstanding at March 31, 2014 | 40.5 | 5 | 46 | |||||||||
Total compensation cost related to unvested awards not yet recognized and the weighted-average periods over which the awards are expected to be recognized at March 31, 2014 were as follows (dollars in millions): | ||||||||||||
Stock | Restricted Stock | Performance- | ||||||||||
Options | Units | Based Restricted | ||||||||||
Stock Units | ||||||||||||
Unrecognized compensation cost | $ | 490.8 | $ | 215.6 | $ | 3.2 | ||||||
Expected weighted-average period in years of compensation cost to be recognized | 2.2 | 1.3 | 2 | |||||||||
Income_Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2014 | |
Income Tax Disclosure [Abstract] | ' |
Income Taxes | ' |
Income Taxes | |
We regularly evaluate the likelihood of the realization of our deferred tax assets and reduce the carrying amount of those deferred tax assets by a valuation allowance to the extent we believe a portion will not be realized. We consider many factors when assessing the likelihood of future realization of our deferred tax assets, including recent cumulative earnings experience by taxing jurisdiction, expectations of future taxable income, the carryforward periods available to us for tax reporting purposes and other relevant factors. Significant judgment is required in making this assessment. | |
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 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 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. These unrecognized tax benefits relate primarily to issues common among multinational corporations. Virtually all of these unrecognized tax benefits, if recognized, would impact the effective income tax rate. We account for interest and potential penalties related to uncertain tax positions as part of our provision for income taxes. For the three-month period ended March 31, 2014 gross unrecognized tax benefits decreased by $2.3 million, exclusive of interest, primarily as a result of ongoing examinations related to tax positions taken in prior years. Increases to the amount of unrecognized tax benefits since January 1, 2014 of approximately $12.5 million relate primarily to current year operations. The liability for unrecognized tax benefits is expected to increase in the next 12 months relating to operations occurring in that period. Any settlements of examinations with taxing authorities or statute of limitations expirations would likely result in a significant decrease in our unrecognized tax benefits. 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 | 3 Months Ended | ||||||||||||
Mar. 31, 2014 | |||||||||||||
Collaboration Agreements [Abstract] | ' | ||||||||||||
Collaboration Agreements | ' | ||||||||||||
Collaboration Agreements | |||||||||||||
From time to time, 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 product 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, option payments for the purchase or license of additional rights, development, regulatory and commercial performance milestone payments, cost sharing arrangements, royalty payments and profit sharing. Certain of these arrangements obligate us to make additional 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. We do not consider any individual arrangement to be material. See Note 17 of Notes to Consolidated Financial Statements included in our 2013 Annual Report on Form 10-K for a description of certain other collaboration agreements entered into prior to January 1, 2014. The following is a brief description of significant developments in the relationships between Celgene and our collaboration partners during the three months ended March 31, 2014: | |||||||||||||
FORMA Therapeutics Holdings, LLC: On April 19, 2013, we entered into a collaboration agreement with FORMA Therapeutics Holdings, LLC (FORMA) under which the parties will 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 was launched with an upfront payment that enables us to evaluate selected targets and lead assets in protein homeostasis pathways during the pre-clinical phase. Based on such evaluation, we will 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 $200.0 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 will be responsible for all further global clinical development for each licensed candidate. FORMA is eligible to receive up to an additional $315.0 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 $430.0 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 will 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 will enter into a pre-negotiated license agreement and the collaboration will continue 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, would expire 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. On October 7, 2013, we entered into the first ex-US license with FORMA and paid the applicable upfront payment under such license. | |||||||||||||
On March 21, 2014, we entered into a second collaboration arrangement with FORMA, 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. We agreed to pay an upfront payment of $225.0 million. 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 1 clinical trials. FORMA will retain U.S. rights to all such licensed assets, including responsibility for manufacturing and commercialization. | |||||||||||||
Under this collaboration arrangement, we also have an option to enter into up to two additional collaborations with terms of two years each for additional payments totaling approximately $375.0 million. If we exercise our option to enter into both of these additional collaborations, 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. | |||||||||||||
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) $50.0 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, the collaboration will continue until the earliest to occur of: (a) Celgene licensing four NantBioScience product candidates; (b) NantBioScience presenting data packages for ten product candidates; and (c) the date which is ten years after the effective date. Regardless of any termination of the collaboration, the 14 percent preferred equity ownership in NantBioScience and the assumption of the $50.0 million in contingent, matching contributions by the parent company of NantBioScience remain in effect. We performed a valuation of the components of the transaction and allocated the consideration transferred as follows: $50.0 million for the collaboration agreement upfront expense; $25.0 million related to the settlement of contingent matching contributions, and; $90.0 million related to the equity ownership in NantBioScience. | |||||||||||||
In addition to the collaboration arrangements described above, we entered into a new collaborative arrangement during the three months ended March 31, 2014 that includes the potential for future milestone payments of up to an aggregate $12.0 million related to the attainment of specified developmental milestones over a period of several years. Our obligation to fund these efforts is contingent upon our continued involvement in the programs and/or the lack of any adverse events which could cause the discontinuance of the programs. | |||||||||||||
A financial summary of the period activity related to our collaboration agreements is presented below1: | |||||||||||||
Three-Month Periods Ended March 31, | |||||||||||||
Research and Development Expense | Selling, General and Administrative Expense | ||||||||||||
Upfront Fees | Milestones | Extension of Agreements | Amortization of Prepaid R&D and Intangibles | Equity Investments Made During Period | |||||||||
Acceleron2 | 2014 | $— | $— | $— | $— | $— | $15.00 | ||||||
2013 | — | 10 | — | — | — | — | |||||||
bluebird | 2014 | — | — | — | — | — | — | ||||||
2013 | 74.7 | — | — | — | — | — | |||||||
Epizyme | 2014 | — | — | — | — | — | 9.9 | ||||||
2013 | — | — | — | — | — | — | |||||||
FORMA | 2014 | 225 | — | — | — | — | — | ||||||
2013 | — | — | — | — | — | — | |||||||
NantBioScience | 2014 | 50 | — | — | — | 25 | 90 | ||||||
Other Collaboration Arrangements | 2014 | 34 | — | — | 3.8 | — | 20.9 | ||||||
2013 | 21.1 | — | — | 0.8 | — | 4 | |||||||
A financial summary of the period-end balances related to our collaboration agreements is presented below: | |||||||||||||
Balances as of: | Intangible Asset Balance | Equity Investment Balance | Percentage of Outstanding Equity | ||||||||||
Acceleron2 | 31-Mar-14 | $— | $121.20 | 11% | |||||||||
31-Dec-13 | — | 127.2 | 11% | ||||||||||
bluebird | 31-Mar-14 | 0.2 | — | N/A | |||||||||
31-Dec-13 | 0.2 | — | N/A | ||||||||||
Epizyme | 31-Mar-14 | — | 83.7 | 11% | |||||||||
31-Dec-13 | — | 69.4 | 12% | ||||||||||
FORMA | 31-Mar-14 | 0.2 | — | N/A | |||||||||
31-Dec-13 | 0.2 | — | N/A | ||||||||||
NantBioScience | 31-Mar-14 | — | 90 | 14% | |||||||||
Other Collaboration Arrangements | 31-Mar-14 | 57.5 | 366.4 | N/A | |||||||||
31-Dec-13 | 61.3 | 254.6 | N/A | ||||||||||
1 Activity and balances are presented specifically for notable new collaborations and for those collaborations which we have described in detail in our 2013 Annual Report on Form 10-K if there has been new activity during the periods presented. Amounts related to collaborations that are not specifically described are presented in the aggregate as Other Collaboration Arrangements. | |||||||||||||
2 We agreed to purchase 1.1 million shares of Acceleron common stock for $47.1 million on April 2, 2014. Immediately following this additional investment, it is expected that we will beneficially own approximately 14.8% of the outstanding shares of Acceleron's common stock. The closing of this transaction is subject to customary closing conditions including expiration of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. |
Commitments_and_Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2014 | |
Commitments and Contingencies Disclosure [Abstract] | ' |
Commitments and Contingencies | ' |
Commitments and Contingencies | |
Collaboration Arrangements: We have entered into certain research and development collaboration agreements 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 our 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 and uncertainty of these arrangements and any future potential payments, no amounts have been recorded in our accompanying Consolidated Balance Sheets at March 31, 2014 and December 31, 2013. See Note 13 for additional details related to collaboration arrangements. | |
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
Legal Proceedings | 3 Months Ended |
Mar. 31, 2014 | |
Legal Proceedings | ' |
Legal Proceedings | ' |
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, inquires, 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, we are subject 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 future results of operations, (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®: We received Notice Letters, dated August 30, 2010 and June 12, 2012 from Natco Pharma Limited of India (Natco) notifying us of Natco’s Abbreviated New Drug Application (ANDA), which contain Paragraph IV certifications against certain of Celgene’s patents that are listed in the FDA Approved Drug Products With Therapeutic Equivalence Evaluations (the “Orange Book”) for REVLIMID® (lenalidomide). Natco’s Notice Letters were sent in connection with its filing of an ANDA seeking permission from the FDA to market a generic version of 25mg, 15mg, 10mg and 5mg REVLIMID® capsules. We filed separate infringement actions (which were subsequently consolidated) in the United States District Court for the District of New Jersey against Natco, Natco’s U.S. partner, Arrow International Limited (Arrow), and Arrow’s parent company, Watson Laboratories, Inc. (Watson, a wholly-owned subsidiary of Actavis, Inc. and formerly known as Watson Pharmaceuticals, Inc.) (Natco, Arrow and Watson are collectively referred to hereinafter as “Natco”). In its answer and counterclaim, Natco asserts that our patents are invalid, unenforceable and/or not infringed by Natco’s proposed generic products. As a result of the filing of our actions, the FDA cannot grant final approval of Natco’s ANDA until the earlier of (i) a decision of the court that each of the patents is not infringed, invalid or unenforceable, or (ii) December 12, 2014. | |
The patents in dispute include United States Patent Nos. 5,635,517; 6,045,501; 6,315,720; 6,555,554; 6,561,976; 6,561,977; 6,755,784; 7,119,106; 7,465,800; 6,281,230; 7,189,740; 7,968,569; 8,288,415; 8,315,886 and 8,404,717, plus three non-Orange Book listed patents, United States Patent Nos. 7,977,357;8,193,219 and 8,431,598. | |
On April 14, 2014, the court extended the close of fact discovery to June 20, 2014. Claim construction was fully briefed on April 8, 2014, and the claim construction hearing is scheduled for May 15, 2014. No trial date has been set. | |
We believe that Natco’s defenses and counterclaims are unlikely to be sustained and we intend to vigorously assert our patent rights. Although there can be no assurance as to the ultimate outcome of this proceeding, we currently expect that it will not have a material adverse effect on our financial condition or results of operations. However, if Natco is successful in challenging all the patents in dispute or if the court rules that certain of our key patent claims are invalid or not infringed, such events could have a material adverse effect on our financial condition and results of operations. | |
We received a third Notice Letter from Natco dated April 3, 2014, notifying us of Natco’s Paragraph IV certifications against five patents, including United States Patent Nos. 8,404,717 (already in suit), 8,530,498; 8,589,188; 8,626,531; and 8,648,095. We are reviewing the Notice Letter and its implications and considering our response. | |
ABRAXANE®: On December 14, 2011, Cephalon, Inc. and Acusphere, Inc. filed a complaint against us in the United States District Court for the District of Massachusetts, alleging, among other things, that the making, using, selling, offering to sell and importing of ABRAXANE® brand drug infringes claims of United States Patent No. RE40,493. Plaintiffs are seeking damages and injunctive relief. On December 3, 2013, the court issued an order construing certain claim terms. Based on that order, on March 18, 2014, the parties agreed to a judgment of noninfringement in Celgene’s favor. On April 15, 2014, plaintiffs’ filed a Notice of Appeal to the United States Court of Appeals for the Federal Circuit seeking a review of the lower court’s construction of certain claim terms. On April 22, 2014 we filed a Notice of Cross-Appeal seeking review of certain terms defined in the lower court’s order. | |
THALOMID® and REVLIMID®: On October 2, 2013, Andrulis Pharmaceuticals Corporation (Andrulis) filed a lawsuit against us in the United States District Court for the District of Delaware claiming infringement of U.S. Patent No. 6,140,346 (“the ‘346 patent”). Andrulis alleges that we are liable for infringement of one or more claims of the ‘346 patent, which covers the use of THALOMID® (and, as asserted by Andrulis, REVLIMID®) in combination with an alkylating agent (e.g., melphalan) to treat cancers. Andrulis is seeking an unspecified amount of damages, attorneys’ fees and injunctive relief. We disagree with Andrulis’ allegations and intend to vigorously defend against this infringement suit. On November 25, 2013, we filed a motion to dismiss Andrulis’ complaint. Andrulis’ motion seeking leave to file an amended complaint was granted on December 30, 2013. We filed a motion to dismiss Andrulis’ amended complaint on January 30, 2014. On April 11, 2014, the court denied our motion in part and granted our motion in part, dismissing two of Andrulis' four infringement claims without leave to amend. We filed an answer to the remaining claims on April 25, 2014. We do not expect the ultimate outcome of this lawsuit to have a material adverse effect on our financial condition or results of operations. | |
ISTODAX® (romidepsin): We received a Notice Letter dated March 17, 2014 from Fresenius Kabi USA, LLC (Fresenius) notifying us of Fresenius’s ANDA that seeks approval from the FDA to market a generic version of romidepsin for injection. The Notice Letter contains Paragraph IV certifications against U.S. Patent Nos. 7,608,280 and 7,611,724 that are listed in the Orange Book for ISTODAX®. We are reviewing the Notice Letter and its implications and considering our response. | |
Non-Patent Related Proceedings: | |
In 2009, we received a Civil Investigative Demand (CID) from the U.S. Federal Trade Commission (FTC) seeking documents and other information relating to requests by manufacturers of generic drugs to purchase our patented REVLIMID® and THALOMID® brand drugs in order for the FTC to evaluate whether there may be reason to believe that we have engaged in unfair methods of competition. In 2010, the State of Connecticut issued a subpoena referring to the same issues raised by the 2009 CID. Also in 2010, we received a second CID from the FTC relating to this matter. We continue to cooperate with the FTC and State of Connecticut investigations. | |
On April 3, 2014, Mylan Pharmaceuticals Inc. (Mylan) filed a lawsuit against us in the United States District Court for the District of New Jersey alleging that we violated various federal and state antitrust and unfair competition laws by allegedly refusing to sell samples of our THALOMID® and REVLIMID® brand drugs so that Mylan can conduct the bioequivalence testing needed to submit ANDAs to the FDA for approval to market generic versions of these products. Mylan is seeking injunctive relief, damages and declaratory judgment. Our answer to Mylan’s complaint is due on May 25, 2014. An initial scheduling conference in this matter will be held on June 3, 2014. We intend to vigorously defend against Mylan’s claims. | |
In 2011, the United States Attorney’s Office for the Central District of California informed us that they were investigating possible off-label marketing and improper payments to physicians in connection with the sales of THALOMID® and REVLIMID®. In 2012, we learned that two other United States Attorneys’ offices (the Northern District of Alabama and the Eastern District of Texas) and various state Attorneys General were conducting related investigations. In February 2014, three civil qui tam actions related to those investigations brought by three former Celgene employees on behalf of the federal and various state governments under the federal false claims act and similar state laws were unsealed after the United States Department of Justice (DOJ) declined to intervene in any of these actions. The DOJ retains the right to intervene in these actions at any time. Additionally, while several states have similarly declined to intervene in some of these actions, they also retain the right to intervene in the future. The plaintiffs in the Northern District of Alabama and Eastern District of Texas actions have voluntarily dismissed their cases. We intend to vigorously defend against the remaining Central District of California action and on April 25, 2014, we filed a motion to dismiss the complaint in that action. | |
Other Proceedings: | |
On June 7, 2013, Children's Medical Center Corporation (CMCC) filed a lawsuit against us in the Superior Court of the Commonwealth of Massachusetts alleging that our obligation to pay a 1% royalty on REVLIMID® net sales revenue and a 2.5% royalty on POMALYST®/IMNOVID® net sales revenue under a license agreement entered into in December 2002 extended beyond February 28, 2013 and that our failure to make royalty payments to CMCC subsequent to February 28, 2013 breached the license agreement. CMCC is seeking unspecified damages and a declaration that the license agreement remains in full force and effect. In July 2013, we removed these proceedings to the United States District Court for the District of Massachusetts. On August 5, 2013, we filed an answer to CMCC’s complaint and a counterclaim for declaratory judgment that our obligations to pay royalties have expired. On August 26, 2013, CMCC filed an answer to our counterclaim. A scheduling conference was held on February 11, 2014 and the court ordered fact discovery to be completed by December 15, 2014. No trial date has as yet been set by the court. We intend to vigorously defend against CMCC's claims. As of March 31, 2014, we consider the range of reasonably possible loss relating to this lawsuit to be between zero and $47.3 million, with the high end of the range being the royalty payments on REVLIMID® we would have made to CMCC under the license agreement through March 31, 2014, if our obligation to pay royalties remained in effect. CMCC contends that our royalty obligation continues on net sales of REVLIMID®, as well as POMALYST®/IMNOVID®, at least until May 2016 and if CMCC prevails, we may be obligated to continue to pay royalties on sales for periods after March 31, 2014. |
Subsequent_Event
Subsequent Event | 3 Months Ended |
Mar. 31, 2014 | |
Subsequent Events [Abstract] | ' |
Subsequent Event | ' |
Subsequent Event | |
Nogra Pharma Limited (Nogra): On April 23, 2014, we entered into a license agreement with Nogra Pharma Limited, pursuant to which Nogra granted us an exclusive, royalty-bearing license in its intellectual property relating to GED-0301, an antisense oligonucleotide targeting Smad7, to develop and commercialize products containing GED-0301 for the treatment of Crohn’s disease and other indications. The development and application of the intellectual property covered under the license agreement will be managed by a joint committee composed of members from each of Nogra and us. Under the terms of the license agreement, we are obligated to make an upfront payment of $710.0 million. In addition, we have the obligation to pay designated amounts when certain development, regulatory and sales milestone events occur, as well as tiered royalties on sales of licensed products, with such amounts being variable and contingent on various factors. The maximum aggregate amount payable for development and regulatory milestones is approximately $815.0 million, which covers such milestones relating to Crohn’s disease and other indications. Starting from global annual net sales levels of $500.0 million, aggregate tiered sales milestones could total a maximum of $1,050.0 million if annual net sales reach $4,000.0 million. | |
The license agreement will become effective upon the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. The license agreement may be terminated (i) at our discretion upon 180 days’ written notice to Nogra, provided that such termination will not become effective before the third anniversary of the effective date of the license agreement, and (ii) by either party upon material breach of the other party, subject to cure periods. Upon the expiration of our royalty payment obligations under the license agreement, on a country-by-country and licensed product-by-licensed product basis, the license granted under the license agreement will become fully paid-up, irrevocable, perpetual, and non-terminable with respect to such licensed product in such country. |
Earnings_Per_Share_Tables
Earnings Per Share (Tables) | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Earnings Per Share [Abstract] | ' | |||||||
Schedule of earnings per share | ' | |||||||
Three-Month Periods Ended March 31, | ||||||||
(Amounts in millions, except per share) | 2014 | 2013 | ||||||
Net income | $ | 279.7 | $ | 384.9 | ||||
Weighted-average shares: | ||||||||
Basic | 405.7 | 417.9 | ||||||
Effect of dilutive securities: | ||||||||
Options, restricted stock units and other incentives | 16.8 | 14.3 | ||||||
Diluted | 422.5 | 432.2 | ||||||
Net income per share: | ||||||||
Basic | $ | 0.69 | $ | 0.92 | ||||
Diluted | $ | 0.66 | $ | 0.89 | ||||
Accumulated_Other_Comprehensiv1
Accumulated Other Comprehensive Income (Loss) (Tables) | 3 Months Ended | |||||||||||||||||||
Mar. 31, 2014 | ||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [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 | Net Unrealized | Net Unrealized | Foreign | Total | ||||||||||||||||
Liability | Gains (Losses) From | Gains (Losses) | Currency | Accumulated | ||||||||||||||||
Marketable Securities | From Hedges | Translation | Other | |||||||||||||||||
Adjustment | Comprehensive | |||||||||||||||||||
Income (Loss) | ||||||||||||||||||||
Balance December 31, 2013 | $ | (6.9 | ) | $ | 137.3 | $ | (36.0 | ) | $ | (0.4 | ) | $ | 94 | |||||||
Other comprehensive income (loss) before reclassifications | — | 55.3 | (14.9 | ) | 3 | 43.4 | ||||||||||||||
Amounts reclassified from accumulated other comprehensive income | — | 0.9 | 1.6 | — | 2.5 | |||||||||||||||
Net current-period other comprehensive income (loss) | — | 56.2 | (13.3 | ) | 3 | 45.9 | ||||||||||||||
Balance March 31, 2014 | $ | (6.9 | ) | $ | 193.5 | $ | (49.3 | ) | $ | 2.6 | $ | 139.9 | ||||||||
Balance December 31, 2012 | $ | (10.1 | ) | $ | 4.2 | $ | (16.0 | ) | $ | (27.8 | ) | $ | (49.7 | ) | ||||||
Other comprehensive income (loss) before reclassifications | — | (1.9 | ) | 74.9 | (5.9 | ) | 67.1 | |||||||||||||
Amounts reclassified from accumulated other comprehensive income | — | 0.8 | 3.8 | — | 4.6 | |||||||||||||||
Net current-period other comprehensive income (loss) | — | (1.1 | ) | 78.7 | (5.9 | ) | 71.7 | |||||||||||||
Balance March 31, 2013 | $ | (10.1 | ) | $ | 3.1 | $ | 62.7 | $ | (33.7 | ) | $ | 22 | ||||||||
Schedule of gains (losses) reclassified out of accumulated other comprehensive income | ' | |||||||||||||||||||
Gains (Losses) Reclassified Out of Accumulated | ||||||||||||||||||||
Other Comprehensive Income | ||||||||||||||||||||
Accumulated Other Comprehensive Income Components | Affected Line Item in the Consolidated Statements of Income | Three-Month Periods Ended March 31, | ||||||||||||||||||
2014 | 2013 | |||||||||||||||||||
Gains (losses) from cash-flow hedges: | ||||||||||||||||||||
Foreign exchange contracts | Net product sales | $ | (1.0 | ) | $ | (6.4 | ) | |||||||||||||
Treasury rate lock agreements | Interest (expense) | (0.9 | ) | (0.8 | ) | |||||||||||||||
Income tax benefit (expense) | 0.3 | 3.4 | ||||||||||||||||||
Gains (losses) from available-for-sale marketable securities: | ||||||||||||||||||||
Realized income (loss) on sales of marketable securities | Interest and investment income, net | (1.4 | ) | (0.8 | ) | |||||||||||||||
Income tax benefit (expense) | 0.5 | — | ||||||||||||||||||
Total reclassification, net of tax | $ | (2.5 | ) | $ | (4.6 | ) |
Financial_Instruments_and_Fair1
Financial Instruments and Fair Value Measurement (Tables) | 3 Months Ended | |||||||||||||||
Mar. 31, 2014 | ||||||||||||||||
Fair Value Disclosures [Abstract] | ' | |||||||||||||||
Assets and liabilities measured at fair value on recurring basis | ' | |||||||||||||||
Balance at | Quoted Price in | Significant | Significant | |||||||||||||
31-Mar-14 | Active Markets for | Other Observable | Unobservable | |||||||||||||
Identical Assets | Inputs | Inputs | ||||||||||||||
(Level 1) | (Level 2) | (Level 3) | ||||||||||||||
Assets: | ||||||||||||||||
Available-for-sale securities | $ | 2,713.50 | $ | 551.4 | $ | 2,162.10 | $ | — | ||||||||
Cash equivalents | 50 | — | 50 | — | ||||||||||||
Total assets | $ | 2,763.50 | $ | 551.4 | $ | 2,212.10 | $ | — | ||||||||
Liabilities: | ||||||||||||||||
Forward currency contracts | $ | (19.9 | ) | $ | — | $ | (19.9 | ) | $ | — | ||||||
Contingent value rights | (121.6 | ) | (121.6 | ) | — | — | ||||||||||
Interest rate swaps | (35.3 | ) | — | (35.3 | ) | — | ||||||||||
Other acquisition related contingent consideration | (213.7 | ) | — | — | (213.7 | ) | ||||||||||
Total liabilities | $ | (390.5 | ) | $ | (121.6 | ) | $ | (55.2 | ) | $ | (213.7 | ) | ||||
Balance at | Quoted Price in | Significant | Significant | |||||||||||||
December 31, 2013 | Active Markets for | Other Observable | Unobservable | |||||||||||||
Identical Assets | Inputs | Inputs | ||||||||||||||
(Level 1) | (Level 2) | (Level 3) | ||||||||||||||
Assets: | ||||||||||||||||
Available-for-sale securities | $ | 2,452.60 | $ | 433.1 | $ | 2,019.50 | $ | — | ||||||||
Cash equivalents | 20 | — | 20 | — | ||||||||||||
Total assets | $ | 2,472.60 | $ | 433.1 | $ | 2,039.50 | $ | — | ||||||||
Liabilities: | ||||||||||||||||
Forward currency contracts | $ | (9.2 | ) | $ | — | $ | (9.2 | ) | $ | — | ||||||
Contingent value rights | (118.1 | ) | (118.1 | ) | — | — | ||||||||||
Interest rate swaps | (49.6 | ) | — | (49.6 | ) | — | ||||||||||
Other acquisition related contingent consideration | (228.5 | ) | — | — | (228.5 | ) | ||||||||||
Total liabilities | $ | (405.4 | ) | $ | (118.1 | ) | $ | (58.8 | ) | $ | (228.5 | ) | ||||
Roll-forward of fair value of Level 3 instruments (significant unobservable inputs), liabilities | ' | |||||||||||||||
Three-Month Periods Ended March 31, | ||||||||||||||||
2014 | 2013 | |||||||||||||||
Liabilities: | ||||||||||||||||
Balance at beginning of period | $ | (228.5 | ) | $ | (198.1 | ) | ||||||||||
Amounts acquired or issued | — | — | ||||||||||||||
Net change in fair value | (5.2 | ) | (3.4 | ) | ||||||||||||
Settlements | 20 | — | ||||||||||||||
Transfers in and/or out of Level 3 | — | — | ||||||||||||||
Balance at end of period | $ | (213.7 | ) | $ | (201.5 | ) |
Derivative_Instruments_and_Hed1
Derivative Instruments and Hedging Activities (Tables) | 3 Months Ended | ||||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||||
Derivative Instruments and Hedging Activities | ' | ||||||||||||||||||
Schedule of fair value and balance sheet location of derivative instruments | ' | ||||||||||||||||||
The following tables summarize the fair value and presentation in the Consolidated Balance Sheets for derivative instruments as of March 31, 2014 and December 31, 2013: | |||||||||||||||||||
31-Mar-14 | |||||||||||||||||||
Asset Derivatives | Liability Derivatives | ||||||||||||||||||
Instrument | Balance Sheet Location | Fair Value | Balance Sheet Location | Fair Value | |||||||||||||||
Derivatives designated as hedging instruments: | |||||||||||||||||||
Other current assets | $ | 48.1 | Other current assets | $ | 27.6 | ||||||||||||||
Foreign exchange contracts* | |||||||||||||||||||
Other current liabilities | 29.8 | Other current liabilities | 57.5 | ||||||||||||||||
Other non-current assets | 13.6 | Other non-current assets | 3.4 | ||||||||||||||||
Other non-current liabilities | 29.6 | Other non-current liabilities | 53.3 | ||||||||||||||||
Other current assets | 14.6 | Other current assets | — | ||||||||||||||||
Interest rate swap agreements | |||||||||||||||||||
Other non-current liabilities | — | Other non-current liabilities | 51.4 | ||||||||||||||||
Derivatives not designated as hedging instruments: | |||||||||||||||||||
Foreign exchange contracts* | Other current assets | 6.7 | Other current assets | 0.9 | |||||||||||||||
Other current liabilities | 2.5 | Other current liabilities | 7.5 | ||||||||||||||||
Interest rate swap agreements | Other non-current assets | 1.5 | Other non-current assets | — | |||||||||||||||
Total | $ | 146.4 | $ | 201.6 | |||||||||||||||
31-Dec-13 | |||||||||||||||||||
Asset Derivatives | Liability Derivatives | ||||||||||||||||||
Instrument | Balance Sheet Location | Fair Value | Balance Sheet Location | Fair Value | |||||||||||||||
Derivatives designated as hedging instruments: | |||||||||||||||||||
Other current assets | $ | 63.6 | Other current assets | $ | 24.9 | ||||||||||||||
Foreign exchange contracts* | |||||||||||||||||||
Other current liabilities | 41.5 | Other current liabilities | 84.7 | ||||||||||||||||
Other non-current assets | 60.6 | Other non-current assets | 41.9 | ||||||||||||||||
Other non-current liabilities | 4.3 | Other non-current liabilities | 25.6 | ||||||||||||||||
Other current assets | 17.1 | Other current assets | — | ||||||||||||||||
Interest rate swap agreements | |||||||||||||||||||
Other non-current liabilities | — | Other non-current liabilities | 68.3 | ||||||||||||||||
Derivatives not designated as hedging instruments: | |||||||||||||||||||
Foreign exchange contracts* | Other current assets | 11.3 | Other current assets | 0.7 | |||||||||||||||
Other current liabilities | 6 | Other current liabilities | 18.7 | ||||||||||||||||
Interest rate swap agreements | Other current assets | 0.1 | Other current assets | — | |||||||||||||||
Other non-current assets | 1.5 | Other non-current assets | — | ||||||||||||||||
Total | $ | 206 | $ | 264.8 | |||||||||||||||
* 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. | |||||||||||||||||||
Cash flow hedges | ' | ||||||||||||||||||
Derivative Instruments and Hedging Activities | ' | ||||||||||||||||||
Schedule of effect of derivative instruments designated as hedging instruments on Consolidated Statements of Income | ' | ||||||||||||||||||
The following tables summarize the effect of derivative instruments designated as cash-flow hedging instruments on the Consolidated Statements of Income for the three-month periods ended March 31, 2014 and 2013: | |||||||||||||||||||
Three-Month Period Ended March 31, 2014 | |||||||||||||||||||
Amount of | Location of | Amount of | Location of | Amount of | |||||||||||||||
Gain/(Loss) | Gain/(Loss) | Gain/(Loss) | Gain/(Loss) | Gain/(Loss) | |||||||||||||||
Recognized in OCI | Reclassified from | Reclassified from | Recognized in | Recognized in | |||||||||||||||
on Derivative (1) | Accumulated OCI | Accumulated OCI | Income on | Income on | |||||||||||||||
into Income | into Income | Derivative | Derivative | ||||||||||||||||
Instrument | (Effective Portion) | (Effective Portion) | (Effective Portion) | (Ineffective Portion | (Ineffective Portion | ||||||||||||||
and Amount Excluded | and Amount Excluded | ||||||||||||||||||
From Effectiveness | From Effectiveness | ||||||||||||||||||
Testing) | Testing) | ||||||||||||||||||
Foreign exchange contracts | $ | (8.9 | ) | Net product sales | $ | (1.0 | ) | Other income, net | $ | (3.5 | ) | (2 | ) | ||||||
Treasury rate lock agreements | $ | — | Interest expense | $ | (0.9 | ) | |||||||||||||
Interest rate swap agreements | $ | (9.7 | ) | Interest expense | $ | — | |||||||||||||
(1) Net losses of $15.2 million are expected to be reclassified from Accumulated OCI into income in the next 12 months. | |||||||||||||||||||
(2) The amount of net losses recognized in income represents $0.3 million in losses related to the ineffective portion of the hedging relationships and $3.2 million of losses related to amounts excluded from the assessment of hedge effectiveness. | |||||||||||||||||||
Three-Month Period Ended March 31, 2013 | |||||||||||||||||||
Amount of | Location of | Amount of | Location of | Amount of | |||||||||||||||
Gain/(Loss) | Gain/(Loss) | Gain/(Loss) | Gain/(Loss) | Gain/(Loss) | |||||||||||||||
Recognized in OCI | Reclassified from | Reclassified from | Recognized in | Recognized in | |||||||||||||||
on Derivative | Accumulated OCI | Accumulated OCI | Income on | Income on | |||||||||||||||
into Income | into Income | Derivative | Derivative | ||||||||||||||||
Instrument | (Effective Portion) | (Effective Portion) | (Effective Portion) | (Ineffective Portion | (Ineffective Portion | ||||||||||||||
and Amount Excluded | and Amount Excluded | ||||||||||||||||||
From Effectiveness | From Effectiveness | ||||||||||||||||||
Testing) | Testing) | ||||||||||||||||||
Foreign exchange contracts | $ | 75 | Net product sales | $ | (6.4 | ) | Other income, net | $ | 3.5 | -1 | |||||||||
Treasury rate lock agreements | $ | — | Interest expense | $ | (0.8 | ) | |||||||||||||
(1) The amount of net gains recognized in income represents $2.0 million in gains related to the ineffective portion of the hedging relationships and $1.5 million of gains related to amounts excluded from the assessment of hedge effectiveness. | |||||||||||||||||||
Fair value hedges | ' | ||||||||||||||||||
Derivative Instruments and Hedging Activities | ' | ||||||||||||||||||
Schedule of effect of derivative instruments 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 three-month periods ended March 31, 2014 and 2013: | |||||||||||||||||||
Amount of Gain (Loss) Recognized in | |||||||||||||||||||
Income on Derivative | |||||||||||||||||||
Location of Gain (Loss) Recognized in Income on Derivative | Three-Month Periods Ended March 31, | ||||||||||||||||||
Instrument | 2014 | 2013 | |||||||||||||||||
Foreign exchange contracts | Other income (expense), net | $ | (3.3 | ) | $ | 38.7 | |||||||||||||
Put options on our common stock | Other income (expense), net | $ | 2.4 | $ | — | ||||||||||||||
The following table summarizes the effect of derivative instruments designated as fair value hedging instruments on the Consolidated Statements of Income for the three-month periods ended March 31, 2014 and 2013: | |||||||||||||||||||
Amount of Gain (Loss) Recognized in | |||||||||||||||||||
Income on Derivative | |||||||||||||||||||
Location of Gain (Loss) Recognized in Income on Derivative | Three-Month Periods Ended March 31, | ||||||||||||||||||
Instrument | 2014 | 2013 | |||||||||||||||||
Interest rate swap agreements | Interest expense | $ | 10.4 | $ | 6.9 | ||||||||||||||
Foreign currency forward contracts | ' | ||||||||||||||||||
Derivative Instruments and Hedging Activities | ' | ||||||||||||||||||
Schedule of notional amount of derivative contracts | ' | ||||||||||||||||||
Foreign currency forward contracts entered into to hedge forecasted revenue and expenses were as follows at March 31, 2014 and December 31, 2013: | |||||||||||||||||||
Notional Amount | |||||||||||||||||||
Foreign Currency | 31-Mar-14 | 31-Dec-13 | |||||||||||||||||
Australian Dollar | $ | 41.7 | $ | — | |||||||||||||||
British Pound | 307.8 | 279.4 | |||||||||||||||||
Canadian Dollar | 22.7 | — | |||||||||||||||||
Euro | 3,335.00 | 3,318.20 | |||||||||||||||||
Japanese Yen | 601.9 | 559.1 | |||||||||||||||||
Total | $ | 4,309.10 | $ | 4,156.70 | |||||||||||||||
Foreign currency option contracts | ' | ||||||||||||||||||
Derivative Instruments and Hedging Activities | ' | ||||||||||||||||||
Schedule of notional amount of derivative contracts | ' | ||||||||||||||||||
The following table summarizes the notional amounts of our outstanding forward starting swap contracts at March 31, 2014 and December 31, 2013: | |||||||||||||||||||
Notional Amount | |||||||||||||||||||
31-Mar-14 | 31-Dec-13 | ||||||||||||||||||
Forward starting swap contracts entered into as cash flow hedges: | |||||||||||||||||||
Maturing in five years | $ | 200 | $ | 100 | |||||||||||||||
Maturing in ten years | 600 | 200 | |||||||||||||||||
Total | $ | 800 | $ | 300 | |||||||||||||||
Interest rate swap contracts | ' | ||||||||||||||||||
Derivative Instruments and Hedging Activities | ' | ||||||||||||||||||
Schedule of notional amount of derivative contracts | ' | ||||||||||||||||||
The following table summarizes the notional amounts of our outstanding swap contracts at March 31, 2014 and December 31, 2013: | |||||||||||||||||||
Notional Amount | |||||||||||||||||||
31-Mar-14 | 31-Dec-13 | ||||||||||||||||||
Interest rate swap contracts entered into as fair value hedges of the following fixed-rate senior notes: | |||||||||||||||||||
2.450% senior notes due 2015 | $ | 200 | $ | 300 | |||||||||||||||
1.900% senior notes due 2017 | 200 | 300 | |||||||||||||||||
2.300% senior notes due 2018 | 200 | 200 | |||||||||||||||||
3.950% senior notes due 2020 | 500 | 500 | |||||||||||||||||
3.250% senior notes due 2022 | 850 | 850 | |||||||||||||||||
4.000% senior notes due 2023 | 100 | 150 | |||||||||||||||||
Total | $ | 2,050.00 | $ | 2,300.00 | |||||||||||||||
Cash_Cash_Equivalents_and_Mark1
Cash, Cash Equivalents and Marketable Securities Available-for-Sale (Tables) | 3 Months Ended | ||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||
Cash, Cash Equivalents, and Short-term Investments [Abstract] | ' | ||||||||||||||||
Schedule of available-for-sale securities by major security type and class | ' | ||||||||||||||||
31-Mar-14 | Amortized Cost | Gross Unrealized Gain | Gross Unrealized Loss | Estimated Fair Value | |||||||||||||
U.S. Treasury securities | $ | 711.4 | $ | 0.6 | $ | (0.5 | ) | $ | 711.5 | ||||||||
U.S. government-sponsored agency securities | 199 | 0.2 | (0.2 | ) | 199 | ||||||||||||
U.S. government-sponsored agency MBS | 611.7 | 0.5 | (5.6 | ) | 606.6 | ||||||||||||
Non-U.S. government, agency and Supranational securities | 19.9 | — | — | 19.9 | |||||||||||||
Corporate debt - global | 433 | 1.3 | (0.7 | ) | 433.6 | ||||||||||||
Asset backed securities | 191.7 | — | (0.2 | ) | 191.5 | ||||||||||||
Marketable equity securities | 247.5 | 304.1 | (0.2 | ) | 551.4 | ||||||||||||
Total available-for-sale marketable securities | $ | 2,414.20 | $ | 306.7 | $ | (7.4 | ) | $ | 2,713.50 | ||||||||
December 31, 2013 | Amortized Cost | Gross Unrealized Gain | Gross Unrealized Loss | Estimated Fair Value | |||||||||||||
U.S. Treasury securities | $ | 795.2 | $ | 0.3 | $ | (0.4 | ) | $ | 795.1 | ||||||||
U.S. government-sponsored agency securities | 208.9 | 0.2 | (0.2 | ) | 208.9 | ||||||||||||
U.S. government-sponsored agency MBS | 450.8 | 0.1 | (6.9 | ) | 444 | ||||||||||||
Non-U.S. government, agency and Supranational securities | 10.4 | — | — | 10.4 | |||||||||||||
Corporate debt - global | 379.2 | 1.1 | (0.6 | ) | 379.7 | ||||||||||||
Asset backed securities | 181.6 | — | (0.2 | ) | 181.4 | ||||||||||||
Marketable equity securities | 212.9 | 220.2 | — | 433.1 | |||||||||||||
Total available-for-sale marketable securities | $ | 2,239.00 | $ | 221.9 | $ | (8.3 | ) | $ | 2,452.60 | ||||||||
Schedule of duration periods of available-for-sale debt securities | ' | ||||||||||||||||
Amortized | Fair | ||||||||||||||||
Cost | Value | ||||||||||||||||
Duration of one year or less | $ | 468.4 | $ | 468.2 | |||||||||||||
Duration of one through three years | 1,441.00 | 1,440.20 | |||||||||||||||
Duration of three through five years | 211.4 | 208.6 | |||||||||||||||
Duration of over five years | 45.9 | 45.1 | |||||||||||||||
Total | $ | 2,166.70 | $ | 2,162.10 | |||||||||||||
Inventory_Tables
Inventory (Tables) | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Inventory Disclosure [Abstract] | ' | |||||||
Summary of inventories by major category | ' | |||||||
A summary of inventories by major category at March 31, 2014 and December 31, 2013 follows: | ||||||||
31-Mar-14 | 31-Dec-13 | |||||||
Raw materials | $ | 152.4 | $ | 147.4 | ||||
Work in process | 122 | 99.6 | ||||||
Finished goods | 73.4 | 93.4 | ||||||
Total | $ | 347.8 | $ | 340.4 | ||||
Intangible_Assets_and_Goodwill1
Intangible Assets and Goodwill (Tables) | 3 Months Ended | ||||||||||||||
Mar. 31, 2014 | |||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | ||||||||||||||
Schedule of intangible assets by category | ' | ||||||||||||||
The following summary of intangible assets by category includes intangibles currently being amortized and intangibles not yet subject to amortization: | |||||||||||||||
31-Mar-14 | Gross Carrying Value | Accumulated Amortization | Intangible Assets, Net | Weighted Average Life (Years) | |||||||||||
Amortizable intangible assets: | |||||||||||||||
Acquired developed product rights | $ | 3,405.90 | $ | (1,079.5 | ) | $ | 2,326.40 | 13 | |||||||
Technology | 333.7 | (99.3 | ) | 234.4 | 7 | ||||||||||
Licenses | 66.2 | (15.0 | ) | 51.2 | 16.5 | ||||||||||
Other | 42.5 | (19.9 | ) | 22.6 | 8.6 | ||||||||||
3,848.30 | (1,213.7 | ) | 2,634.60 | 12.5 | |||||||||||
Non-amortized intangible assets: | |||||||||||||||
Acquired IPR&D product rights | 137.9 | — | 137.9 | ||||||||||||
Total intangible assets | $ | 3,986.20 | $ | (1,213.7 | ) | $ | 2,772.50 | ||||||||
31-Dec-13 | Gross Carrying Value | Accumulated Amortization | Intangible Assets, Net | Weighted Average Life (Years) | |||||||||||
Amortizable intangible assets: | |||||||||||||||
Acquired developed product rights | $ | 3,405.90 | $ | (1,026.4 | ) | $ | 2,379.50 | 13 | |||||||
Technology | 333.7 | (87.4 | ) | 246.3 | 7 | ||||||||||
Licenses | 66.2 | (13.9 | ) | 52.3 | 16.5 | ||||||||||
Other | 42.5 | (18.8 | ) | 23.7 | 8.6 | ||||||||||
3,848.30 | (1,146.5 | ) | 2,701.80 | 12.5 | |||||||||||
Non-amortized intangible assets: | |||||||||||||||
Acquired IPR&D product rights | 137.9 | — | 137.9 | ||||||||||||
Total intangible assets | $ | 3,986.20 | $ | (1,146.5 | ) | $ | 2,839.70 | ||||||||
Debt_Tables
Debt (Tables) | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Debt Disclosure [Abstract] | ' | |||||||
Carrying values of the senior notes | ' | |||||||
Summarized below are the carrying values of our senior notes at March 31, 2014 and December 31, 2013: | ||||||||
31-Mar-14 | 31-Dec-13 | |||||||
2.450% senior notes due 2015 | $ | 511.9 | $ | 513.9 | ||||
1.900% senior notes due 2017 | 500.4 | 499.9 | ||||||
2.300% senior notes due 2018 | 400 | 399 | ||||||
3.950% senior notes due 2020 | 490.5 | 484.6 | ||||||
3.250% senior notes due 2022 | 974.6 | 956.6 | ||||||
4.000% senior notes due 2023 | 700.7 | 696.3 | ||||||
5.700% senior notes due 2040 | 249.6 | 249.6 | ||||||
5.250% senior notes due 2043 | 396.6 | 396.6 | ||||||
Total long-term debt | $ | 4,224.30 | $ | 4,196.50 | ||||
ShareBased_Compensation_Tables
Share-Based Compensation (Tables) | 3 Months Ended | |||||||||||
Mar. 31, 2014 | ||||||||||||
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 three-month periods ended March 31, 2014 and 2013: | ||||||||||||
Three-Month Periods Ended | ||||||||||||
March 31, | ||||||||||||
2014 | 2013 | |||||||||||
Cost of goods sold (excluding amortization of acquired intangible assets) | $ | 6.1 | $ | 2.8 | ||||||||
Research and development | 47 | 27 | ||||||||||
Selling, general and administrative | 51.3 | 35.8 | ||||||||||
Total share-based compensation expense | 104.4 | 65.6 | ||||||||||
Tax benefit related to share-based compensation expense | 30 | 17.9 | ||||||||||
Reduction in income | $ | 74.4 | $ | 47.7 | ||||||||
Summary of activity for stock options, RSUs and PSUs | ' | |||||||||||
The following table summarizes the activity for stock options, RSUs and PSUs for the three-month period ended March 31, 2014 (in millions unless otherwise noted): | ||||||||||||
Stock | Restricted Stock | Performance- | ||||||||||
Options | Units | Based Restricted | ||||||||||
Stock Units | ||||||||||||
(in thousands) | ||||||||||||
Outstanding at December 31, 2013 | 39.6 | 5.1 | 58 | |||||||||
Changes during the Year: | ||||||||||||
Granted | 2.3 | 0.1 | — | |||||||||
Exercised / Released | (1.2 | ) | (0.1 | ) | (12 | ) | ||||||
Expired | (0.2 | ) | (0.1 | ) | — | |||||||
Outstanding at March 31, 2014 | 40.5 | 5 | 46 | |||||||||
Schedule of total compensation cost related to nonvested awards not yet recognized and weighted-average periods over which awards are expected to be recognized | ' | |||||||||||
Total compensation cost related to unvested awards not yet recognized and the weighted-average periods over which the awards are expected to be recognized at March 31, 2014 were as follows (dollars in millions): | ||||||||||||
Stock | Restricted Stock | Performance- | ||||||||||
Options | Units | Based Restricted | ||||||||||
Stock Units | ||||||||||||
Unrecognized compensation cost | $ | 490.8 | $ | 215.6 | $ | 3.2 | ||||||
Expected weighted-average period in years of compensation cost to be recognized | 2.2 | 1.3 | 2 | |||||||||
Collaboration_Agreements_Table
Collaboration Agreements (Tables) | 3 Months Ended | ||||||||||||
Mar. 31, 2014 | |||||||||||||
Collaboration Agreements [Abstract] | ' | ||||||||||||
Schedule of Collaboration Agreements | ' | ||||||||||||
is presented below1: | |||||||||||||
Three-Month Periods Ended March 31, | |||||||||||||
Research and Development Expense | Selling, General and Administrative Expense | ||||||||||||
Upfront Fees | Milestones | Extension of Agreements | Amortization of Prepaid R&D and Intangibles | Equity Investments Made During Period | |||||||||
Acceleron2 | 2014 | $— | $— | $— | $— | $— | $15.00 | ||||||
2013 | — | 10 | — | — | — | — | |||||||
bluebird | 2014 | — | — | — | — | — | — | ||||||
2013 | 74.7 | — | — | — | — | — | |||||||
Epizyme | 2014 | — | — | — | — | — | 9.9 | ||||||
2013 | — | — | — | — | — | — | |||||||
FORMA | 2014 | 225 | — | — | — | — | — | ||||||
2013 | — | — | — | — | — | — | |||||||
NantBioScience | 2014 | 50 | — | — | — | 25 | 90 | ||||||
Other Collaboration Arrangements | 2014 | 34 | — | — | 3.8 | — | 20.9 | ||||||
2013 | 21.1 | — | — | 0.8 | — | 4 | |||||||
A financial summary of the period-end balances related to our collaboration agreements is presented below: | |||||||||||||
Balances as of: | Intangible Asset Balance | Equity Investment Balance | Percentage of Outstanding Equity | ||||||||||
Acceleron2 | 31-Mar-14 | $— | $121.20 | 11% | |||||||||
31-Dec-13 | — | 127.2 | 11% | ||||||||||
bluebird | 31-Mar-14 | 0.2 | — | N/A | |||||||||
31-Dec-13 | 0.2 | — | N/A | ||||||||||
Epizyme | 31-Mar-14 | — | 83.7 | 11% | |||||||||
31-Dec-13 | — | 69.4 | 12% | ||||||||||
FORMA | 31-Mar-14 | 0.2 | — | N/A | |||||||||
31-Dec-13 | 0.2 | — | N/A | ||||||||||
NantBioScience | 31-Mar-14 | — | 90 | 14% | |||||||||
Other Collaboration Arrangements | 31-Mar-14 | 57.5 | 366.4 | N/A | |||||||||
31-Dec-13 | 61.3 | 254.6 | N/A | ||||||||||
1 Activity and balances are presented specifically for notable new collaborations and for those collaborations which we have described in detail in our 2013 Annual Report on Form 10-K if there has been new activity during the periods presented. Amounts related to collaborations that are not specifically described are presented in the aggregate as Other Collaboration Arrangements. | |||||||||||||
2 We agreed to purchase 1.1 million shares of Acceleron common stock for $47.1 million on April 2, 2014. Immediately following this additional investment, it is expected that we will beneficially own approximately 14.8% of the outstanding shares of Acceleron's common stock. The closing of this transaction is subject to customary closing conditions including expiration of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended |
Nature_of_Business_and_Basis_o1
Nature of Business and Basis of Presentation (Details) | 3 Months Ended |
Mar. 31, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' |
Maximum Equity Ownership Percentage, Investments | 50.00% |
Earnings_Per_Share_Details
Earnings Per Share (Details) (USD $) | 0 Months Ended | 3 Months Ended | 0 Months Ended | 1 Months Ended | 61 Months Ended | 1 Months Ended | ||||
Feb. 12, 2014 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2014 | Apr. 28, 2014 | Apr. 28, 2014 | Apr. 28, 2014 | Apr. 28, 2014 | Apr. 29, 2014 | |
Put Option | Put Option | Subsequent Event | Subsequent Event | Subsequent Event | Subsequent Event | Subsequent Event | ||||
Other Income (Expense) | Put Option | Put Option | ||||||||
Earnings Per Share [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net income | ' | $279,700,000 | $384,900,000 | ' | ' | ' | ' | ' | ' | ' |
Weighted average shares: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Basic (in shares) | ' | 405,700,000 | 417,900,000 | ' | ' | ' | ' | ' | ' | ' |
Effect of dilutive securities: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Options, restricted stock units and other incentives | ' | 16,800,000 | 14,300,000 | ' | ' | ' | ' | ' | ' | ' |
Diluted (in shares) | ' | 422,500,000 | 432,200,000 | ' | ' | ' | ' | ' | ' | ' |
Net income per share attributable to Celgene: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Basic (in dollars per share) | ' | $0.69 | $0.92 | ' | ' | ' | ' | ' | ' | ' |
Diluted (in dollars per share) | ' | $0.66 | $0.89 | ' | ' | ' | ' | ' | ' | ' |
Anti-dilutive securities | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Antidilutive securities excluded from computation of earnings per share (in shares) | ' | 6,800,000 | 2,000,000 | ' | ' | ' | ' | ' | ' | ' |
Stockholders' Equity Note, Stock Split, Conversion Ratio | 2 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Approved common share repurchase amount | ' | ' | ' | ' | ' | ' | 4,000,000,000 | 13,500,000,000 | ' | ' |
Shares repurchased under share repurchase program (in shares) | ' | 10,700,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Shares repurchased under share repurchase program | ' | 1,661,000,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Remaining authorized repurchase amount under stock purchase program | ' | 407,000,000 | ' | ' | ' | 4,407,000,000 | ' | ' | ' | ' |
Notional amount | ' | ' | ' | 200,000,000 | ' | ' | ' | ' | ' | 200,000,000 |
Gain on put option premium | ' | ' | ' | ' | 2,400,000 | ' | ' | ' | ' | ' |
Shares repurchased to cover put option | ' | ' | ' | 1,000,000 | ' | ' | ' | ' | ' | ' |
Shares repurchased to cover put option, average cost per share (in dollars per share) | ' | ' | ' | $140.45 | ' | ' | ' | ' | ' | ' |
Put options outstanding | ' | ' | ' | 0 | ' | ' | ' | ' | ' | ' |
Strike price (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | ' | 132.78 |
Put option premium | ' | ' | ' | ' | ' | ' | ' | ' | $4,000,000 | ' |
Accumulated_Other_Comprehensiv2
Accumulated Other Comprehensive Income (Loss) (Details) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ' | ' |
Balance at the beginning of the period | $94 | ($49.70) |
Other comprehensive income before reclassifications | 43.4 | 67.1 |
Amounts reclassified from accumulated other comprehensive income | 2.5 | 4.6 |
Total other comprehensive income (loss) | 45.9 | 71.7 |
Balance at the end of the period | 139.9 | 22 |
Pension Liability | ' | ' |
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ' | ' |
Balance at the beginning of the period | -6.9 | -10.1 |
Other comprehensive income before reclassifications | 0 | 0 |
Amounts reclassified from accumulated other comprehensive income | 0 | 0 |
Total other comprehensive income (loss) | 0 | 0 |
Balance at the end of the period | -6.9 | -10.1 |
Net Unrealized Gains (Losses) From Marketable Securities | ' | ' |
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ' | ' |
Balance at the beginning of the period | 137.3 | 4.2 |
Other comprehensive income before reclassifications | 55.3 | -1.9 |
Amounts reclassified from accumulated other comprehensive income | 0.9 | 0.8 |
Total other comprehensive income (loss) | 56.2 | -1.1 |
Balance at the end of the period | 193.5 | 3.1 |
Net Unrealized Gains (Losses) From Hedges | ' | ' |
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ' | ' |
Balance at the beginning of the period | -36 | -16 |
Other comprehensive income before reclassifications | -14.9 | 74.9 |
Amounts reclassified from accumulated other comprehensive income | 1.6 | 3.8 |
Total other comprehensive income (loss) | -13.3 | 78.7 |
Balance at the end of the period | -49.3 | 62.7 |
Foreign Currency Translation Adjustment | ' | ' |
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ' | ' |
Balance at the beginning of the period | -0.4 | -27.8 |
Other comprehensive income before reclassifications | 3 | -5.9 |
Amounts reclassified from accumulated other comprehensive income | 0 | 0 |
Total other comprehensive income (loss) | 3 | -5.9 |
Balance at the end of the period | $2.60 | ($33.70) |
Accumulated_Other_Comprehensiv3
Accumulated Other Comprehensive Income (Loss) (Details 2) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Other Comprehensive Income (Loss) | ' | ' |
Net product sales | $1,707.50 | $1,429.30 |
Interest (expense) | -29.3 | -17.9 |
Income tax benefit (expense) | -52.6 | -63.5 |
Interest and investment income, net | 6.4 | 4.8 |
Net income | 279.7 | 384.9 |
Gains (Losses) Reclassified Out of Accumulated Other Comprehensive Income | ' | ' |
Other Comprehensive Income (Loss) | ' | ' |
Net income | -2.5 | -4.6 |
Gains (losses) from cash-flow hedges: | Gains (Losses) Reclassified Out of Accumulated Other Comprehensive Income | ' | ' |
Other Comprehensive Income (Loss) | ' | ' |
Income tax benefit (expense) | 0.3 | 3.4 |
Gains (losses) from cash-flow hedges: | Gains (Losses) Reclassified Out of Accumulated Other Comprehensive Income | Foreign exchange contracts | ' | ' |
Other Comprehensive Income (Loss) | ' | ' |
Net product sales | -1 | -6.4 |
Gains (losses) from cash-flow hedges: | Gains (Losses) Reclassified Out of Accumulated Other Comprehensive Income | Treasury rate lock agreements | ' | ' |
Other Comprehensive Income (Loss) | ' | ' |
Interest (expense) | -0.9 | -0.8 |
Gains (losses) from available-for-sale marketable securities: | Gains (Losses) Reclassified Out of Accumulated Other Comprehensive Income | ' | ' |
Other Comprehensive Income (Loss) | ' | ' |
Income tax benefit (expense) | 0.5 | 0 |
Interest and investment income, net | ($1.40) | ($0.80) |
Financial_Instruments_and_Fair2
Financial Instruments and Fair Value Measurement (Details) (USD $) | 3 Months Ended | 3 Months Ended | |||||||||||
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 |
Recurring basis | Recurring basis | Recurring basis | Recurring basis | Recurring basis | Recurring basis | Recurring basis | Recurring basis | Gloucester Pharmaceuticals, Inc. | Avila Therapeutics, Inc. | Avila Therapeutics, Inc. | |||
Fair Value | Fair Value | Quoted Price in Active Markets for Identical Assets (Level 1) | Quoted Price in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Significant Unobservable Inputs (Level 3) | Maximum | Maximum | ||||
Fair Value of assets and liabilities | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Potential milestone payment | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $120 | ' | $575 |
Net decrease during period | 14.8 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Change in value of contingent consideration | -8.6 | -33.2 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 20 | ' |
Assets: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Available-for-sale securities | ' | ' | 2,713.50 | 2,452.60 | 551.4 | 433.1 | 2,162.10 | 2,019.50 | ' | ' | ' | ' | ' |
Cash equivalents | ' | ' | 50 | 20 | ' | ' | 50 | 20 | ' | ' | ' | ' | ' |
Total assets | ' | ' | 2,763.50 | 2,472.60 | 551.4 | 433.1 | 2,212.10 | 2,039.50 | ' | ' | ' | ' | ' |
Liabilities: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Forward currency contracts | ' | ' | -19.9 | -9.2 | ' | ' | -19.9 | -9.2 | ' | ' | ' | ' | ' |
Contingent value rights | ' | ' | -121.6 | -118.1 | -121.6 | -118.1 | ' | ' | ' | ' | ' | ' | ' |
Interest rate swaps | ' | ' | ' | -49.6 | ' | ' | ' | -49.6 | ' | ' | ' | ' | ' |
Interest rate swaps | ' | ' | -35.3 | ' | ' | ' | -35.3 | ' | ' | ' | ' | ' | ' |
Other acquisition related contingent consideration | ' | ' | -213.7 | -228.5 | ' | ' | ' | ' | -213.7 | -228.5 | ' | ' | ' |
Total liabilities | ' | ' | ($390.50) | ($405.40) | ($121.60) | ($118.10) | ($55.20) | ($58.80) | ($213.70) | ($228.50) | ' | ' | ' |
Financial_Instruments_and_Fair3
Financial Instruments and Fair Value Measurement (Details 2) (USD $) | 3 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | |
Fair Value Disclosures [Abstract] | ' | ' |
Amount of transfer of assets out of Level 1 into Level 2 | $0 | $0 |
Amount of transfer of assets out of Level 2 into Level 1 | 0 | 0 |
Amount of transfer of liabilities out of Level 1 into Level 2 | 0 | 0 |
Amount of transfer of liabilities out of Level 2 into Level 1 | 0 | 0 |
Roll forward of fair value of Level 3 instruments (significant unobservable inputs), Liabilities: | ' | ' |
Balance at beginning of period | -228,500,000 | -198,100,000 |
Amounts acquired or issued | 0 | 0 |
Net change in fair value | -5,200,000 | -3,400,000 |
Settlements | 20,000,000 | 0 |
Transfers in and/or out of Level 3 | 0 | 0 |
Balance at end of period | ($213,700,000) | ($201,500,000) |
Derivative_Instruments_and_Hed2
Derivative Instruments and Hedging Activities (Details) (USD $) | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | 2.450% senior notes due 2015 | 2.450% senior notes due 2015 | 1.900% senior notes due 2017 | 1.900% senior notes due 2017 | 2.300% senior notes due 2018 | 3.950% senior notes due 2020 | 3.950% senior notes due 2020 | 3.250% senior notes due 2022 | 3.250% senior notes due 2022 | 4.000% senior notes due 2023 | 4.000% senior notes due 2023 | Foreign currency forward contracts | Forward Starting Swap Contracts | Forward Starting Swap Contracts | Forward Starting Swap Contracts | Forward Starting Swap Contracts | Forward Starting Swap Contracts | Forward Starting Swap Contracts | Designated as hedging instruments | Designated as hedging instruments | Designated as hedging instruments | Designated as hedging instruments | Designated as hedging instruments | Designated as hedging instruments | Designated as hedging instruments | Designated as hedging instruments | Designated as hedging instruments | Designated as hedging instruments | Designated as hedging instruments | Designated as hedging instruments | Designated as hedging instruments | Designated as hedging instruments | Designated as hedging instruments | Designated as hedging instruments | Designated as hedging instruments | Designated as hedging instruments | Designated as hedging instruments | Designated as hedging instruments | Designated as hedging instruments | Designated as hedging instruments | Designated as hedging instruments | Designated as hedging instruments | Designated as hedging instruments | Designated as hedging instruments | Designated as hedging instruments | Designated as hedging instruments | Designated as hedging instruments | Not designated as hedging instruments | Not designated as hedging instruments |
Senior Notes | Senior Notes | Senior Notes | Senior Notes | Senior Notes | Senior Notes | Cash flow hedges | Cash flow hedges | Cash flow hedges | Cash flow hedges | Cash flow hedges | Cash flow hedges | Foreign currency forward contracts | Foreign currency forward contracts | Foreign currency forward contracts | Foreign currency forward contracts | Foreign currency forward contracts | Foreign currency forward contracts | Foreign currency forward contracts | Foreign currency forward contracts | Foreign currency forward contracts | Foreign currency forward contracts | Foreign currency forward contracts | Foreign currency forward contracts | Interest rate swap contracts | Interest rate swap contracts | Interest rate swap contracts | Interest rate swap contracts | Interest rate swap contracts | Interest rate swap contracts | Interest rate swap contracts | Interest rate swap contracts | Interest rate swap contracts | Interest rate swap contracts | Interest rate swap contracts | Interest rate swap contracts | Interest rate swap contracts | Interest rate swap contracts | Interest rate swap contracts | Interest rate swap contracts | Interest rate swap contracts | Foreign currency forward contracts | Foreign currency forward contracts | |||||||
5 year maturity | 5 year maturity | 10 year maturity | 10 year maturity | Australian Dollar | Australian Dollar | British Pound | British Pound | Canadian Dollar | Canadian Dollar | Euro | Euro | Japanese Yen | Japanese Yen | 5 year maturity | 10 year maturity | 2.450% senior notes due 2015 | 2.450% senior notes due 2015 | 1.900% senior notes due 2017 | 1.900% senior notes due 2017 | 2.300% senior notes due 2018 | 2.300% senior notes due 2018 | 3.950% senior notes due 2020 | 3.950% senior notes due 2020 | 3.250% senior notes due 2022 | 3.250% senior notes due 2022 | 4.000% senior notes due 2023 | 4.000% senior notes due 2023 | ||||||||||||||||||||||
Senior Notes | Senior Notes | Senior Notes | Senior Notes | Senior Notes | Senior Notes | Senior Notes | Senior Notes | Senior Notes | Senior Notes | Senior Notes | Senior Notes | ||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Period to settlement dates of derivatives is within this period | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '3 years | ' | ' | ' | ' | ' | ' | '36 months | '36 months | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Summary of Derivative Instruments | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Notional amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $800 | $300 | $200 | $100 | $600 | $200 | $4,309.10 | $4,156.70 | $41.70 | $0 | $307.80 | $279.40 | $22.70 | $0 | $3,335 | $3,318.20 | $601.90 | $559.10 | $2,050 | ' | $2,300 | ' | ' | $200 | $300 | $200 | $300 | $200 | $200 | $500 | $500 | $850 | $850 | $100 | $150 | $817.70 | $878.50 |
Notional amount entered into during period | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 500 | ' | ' | 100 | 400 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Derivative term | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '5 years | '10 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest rate (as a percent) | 2.45% | 2.45% | 1.90% | 1.90% | 2.30% | 3.95% | 3.95% | 3.25% | 3.25% | 4.00% | 4.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Proceeds from settlement of interest rate swap contracts | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $7 | $2.80 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Derivative_Instruments_and_Hed3
Derivative Instruments and Hedging Activities (Details 2) (USD $) | 3 Months Ended | ||||
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2013 | ||
Fair value of derivative instruments | ' | ' | ' | ||
Asset Derivative | $146.40 | ' | $206 | ||
Liability Derivative | 201.6 | ' | 264.8 | ||
Designated as hedging instruments | Foreign exchange contracts | ' | ' | ' | ||
Summary of fair value and presentation in the consolidated balance sheets for derivative instruments | ' | ' | ' | ||
Notional amount | 4,309.10 | ' | 4,156.70 | ||
Designated as hedging instruments | Foreign exchange contracts | Other current assets | ' | ' | ' | ||
Fair value of derivative instruments | ' | ' | ' | ||
Asset Derivative | 48.1 | [1] | ' | 63.6 | [1] |
Liability Derivative | 27.6 | [1] | ' | 24.9 | [1] |
Designated as hedging instruments | Foreign exchange contracts | Other current liabilities | ' | ' | ' | ||
Fair value of derivative instruments | ' | ' | ' | ||
Asset Derivative | 29.8 | [1] | ' | ' | |
Asset Derivative | ' | ' | 41.5 | [1] | |
Liability Derivative | 57.5 | [1] | ' | 84.7 | [1] |
Designated as hedging instruments | Foreign exchange contracts | Other non-current assets | ' | ' | ' | ||
Fair value of derivative instruments | ' | ' | ' | ||
Asset Derivative | 13.6 | [1] | ' | 60.6 | [1] |
Liability Derivative | 3.4 | [1] | ' | 41.9 | [1] |
Designated as hedging instruments | Foreign exchange contracts | Other non-current liabilities | ' | ' | ' | ||
Fair value of derivative instruments | ' | ' | ' | ||
Asset Derivative | 29.6 | [1] | ' | 4.3 | [1] |
Liability Derivative | 53.3 | [1] | ' | ' | |
Liability Derivative | ' | ' | 25.6 | [1] | |
Designated as hedging instruments | Interest rate swap agreements | ' | ' | ' | ||
Summary of fair value and presentation in the consolidated balance sheets for derivative instruments | ' | ' | ' | ||
Notional amount | 2,050 | ' | 2,300 | ||
Proceeds from settlement of interest rate swap contracts | 7 | 2.8 | ' | ||
Designated as hedging instruments | Interest rate swap agreements | Other current assets | ' | ' | ' | ||
Fair value of derivative instruments | ' | ' | ' | ||
Asset Derivative | 14.6 | ' | 17.1 | ||
Designated as hedging instruments | Interest rate swap agreements | Other non-current liabilities | ' | ' | ' | ||
Fair value of derivative instruments | ' | ' | ' | ||
Liability Derivative | 51.4 | ' | 68.3 | ||
Not designated as hedging instruments | Foreign exchange contracts | ' | ' | ' | ||
Summary of fair value and presentation in the consolidated balance sheets for derivative instruments | ' | ' | ' | ||
Notional amount | 817.7 | ' | 878.5 | ||
Not designated as hedging instruments | Foreign exchange contracts | Other current assets | ' | ' | ' | ||
Fair value of derivative instruments | ' | ' | ' | ||
Asset Derivative | 6.7 | [1] | ' | 11.3 | [1] |
Liability Derivative | 0.9 | [1] | ' | 0.7 | [1] |
Not designated as hedging instruments | Foreign exchange contracts | Other current liabilities | ' | ' | ' | ||
Fair value of derivative instruments | ' | ' | ' | ||
Asset Derivative | 2.5 | [1] | ' | 6 | [1] |
Liability Derivative | 7.5 | [1] | ' | 18.7 | [1] |
Not designated as hedging instruments | Interest rate swap agreements | Other current assets | ' | ' | ' | ||
Fair value of derivative instruments | ' | ' | ' | ||
Asset Derivative | ' | ' | 0.1 | ||
Not designated as hedging instruments | Interest rate swap agreements | Other non-current assets | ' | ' | ' | ||
Fair value of derivative instruments | ' | ' | ' | ||
Asset Derivative | $1.50 | [1] | ' | $1.50 | |
[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. |
Derivative_Instruments_and_Hed4
Derivative Instruments and Hedging Activities (Details 3) (USD $) | 3 Months Ended | |||
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | ||
Effect of derivative instruments on Consolidated Statements of Income | ' | ' | ||
Gains (losses) expected to be reclassified from accumulated OCI into operations in the next 12 months | $15.20 | ' | ||
Not designated as hedging instruments | Foreign exchange contracts | Other income, net | ' | ' | ||
Effect of derivative instruments on Consolidated Statements of Income | ' | ' | ||
Amount of Gain/(Loss) Recognized in OCI on Derivative (Effective Portion) | -3.3 | 38.7 | ||
Not designated as hedging instruments | Treasury rate locks | Other income, net | ' | ' | ||
Effect of derivative instruments on Consolidated Statements of Income | ' | ' | ||
Amount of Gain/(Loss) Recognized in OCI on Derivative (Effective Portion) | 2.4 | 0 | ||
Designated as hedging instruments | Foreign exchange contracts | Other income, net | ' | ' | ||
Effect of derivative instruments on Consolidated Statements of Income | ' | ' | ||
Gains (losses) on ineffective portion | -0.3 | -2 | ||
Gains (losses) related to amounts excluded from assessment of hedge effectiveness | -3.2 | 1.5 | ||
Designated as hedging instruments | Cash flow hedges | Foreign exchange contracts | ' | ' | ||
Effect of derivative instruments on Consolidated Statements of Income | ' | ' | ||
Amount of Gain/(Loss) Recognized in OCI on Derivative (Effective Portion) | -8.9 | 75 | ||
Designated as hedging instruments | Cash flow hedges | Foreign exchange contracts | Net product sales | ' | ' | ||
Effect of derivative instruments on Consolidated Statements of Income | ' | ' | ||
Amount of Gain/(Loss) Reclassified from Accumulated OCI into Income (Effective Portion) | -1 | -6.4 | ||
Designated as hedging instruments | Cash flow hedges | Foreign exchange contracts | Other income, net | ' | ' | ||
Effect of derivative instruments on Consolidated Statements of Income | ' | ' | ||
Amount of Gain/(Loss) Recognized in Income on Derivative | -3.5 | [1] | 3.5 | [2] |
Designated as hedging instruments | Cash flow hedges | Interest rate swap contracts | ' | ' | ||
Effect of derivative instruments on Consolidated Statements of Income | ' | ' | ||
Amount of Gain/(Loss) Recognized in OCI on Derivative (Effective Portion) | 0 | ' | ||
Designated as hedging instruments | Cash flow hedges | Treasury rate locks | ' | ' | ||
Effect of derivative instruments on Consolidated Statements of Income | ' | ' | ||
Amount of Gain/(Loss) Recognized in OCI on Derivative (Effective Portion) | 0 | 0 | ||
Designated as hedging instruments | Cash flow hedges | Treasury rate locks | Interest expense | ' | ' | ||
Effect of derivative instruments on Consolidated Statements of Income | ' | ' | ||
Amount of Gain/(Loss) Reclassified from Accumulated OCI into Income (Effective Portion) | -0.9 | -0.8 | ||
Designated as hedging instruments | Fair value hedges | Interest rate swap contracts | Interest expense | ' | ' | ||
Effect of derivative instruments on Consolidated Statements of Income | ' | ' | ||
Amount of Gain/(Loss) Recognized in Income on Derivative | $10.40 | $6.90 | ||
[1] | The amount of net losses recognized in income represents $0.3 million in losses related to the ineffective portion of the hedging relationships and $3.2 million of losses related to amounts excluded from the assessment of hedge effectiveness. | |||
[2] | The amount of net gains recognized in income represents $2.0 million in gains related to the ineffective portion of the hedging relationships and $1.5 million of gains related to amounts excluded from the assessment of hedge effectiveness. |
Cash_Cash_Equivalents_and_Mark2
Cash, Cash Equivalents and Marketable Securities Available-for-Sale (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Cash and cash equivalents | ' | ' |
Money market funds | $1,091 | $1,697 |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Amortized Cost | 2,414.20 | 2,239 |
Gross Unrealized Gain | 306.7 | 221.9 |
Gross Unrealized Loss | -7.4 | -8.3 |
Estimated Fair Value | 2,713.50 | 2,452.60 |
U.S. Treasury securities | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Amortized Cost | 711.4 | 795.2 |
Gross Unrealized Gain | 0.6 | 0.3 |
Gross Unrealized Loss | -0.5 | -0.4 |
Estimated Fair Value | 711.5 | 795.1 |
U.S. government-sponsored agency securities | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Amortized Cost | 199 | 208.9 |
Gross Unrealized Gain | 0.2 | 0.2 |
Gross Unrealized Loss | -0.2 | -0.2 |
Estimated Fair Value | 199 | 208.9 |
U.S. government-sponsored agency MBS | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Amortized Cost | 611.7 | 450.8 |
Gross Unrealized Gain | 0.5 | 0.1 |
Gross Unrealized Loss | -5.6 | -6.9 |
Estimated Fair Value | 606.6 | 444 |
Non-U.S. government, agency and Supranational securities | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Amortized Cost | 19.9 | 10.4 |
Gross Unrealized Gain | 0 | 0 |
Gross Unrealized Loss | 0 | 0 |
Estimated Fair Value | 19.9 | 10.4 |
Corporate debt - global | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Amortized Cost | 433 | 379.2 |
Gross Unrealized Gain | 1.3 | 1.1 |
Gross Unrealized Loss | -0.7 | -0.6 |
Estimated Fair Value | 433.6 | 379.7 |
Asset backed securities | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Amortized Cost | 191.7 | 181.6 |
Gross Unrealized Gain | 0 | 0 |
Gross Unrealized Loss | -0.2 | -0.2 |
Estimated Fair Value | 191.5 | 181.4 |
Marketable equity securities | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Amortized Cost | 247.5 | 212.9 |
Gross Unrealized Gain | 304.1 | 220.2 |
Gross Unrealized Loss | -0.2 | 0 |
Estimated Fair Value | $551.40 | $433.10 |
Cash_Cash_Equivalents_and_Mark3
Cash, Cash Equivalents and Marketable Securities Available-for-Sale (Details 2) (USD $) | Mar. 31, 2014 |
In Millions, unless otherwise specified | |
Amortized Cost | ' |
Duration of one year or less | $468.40 |
Duration of one through three years | 1,441 |
Duration of three through five years | 211.4 |
Duration of over five years | 45.9 |
Total | 2,166.70 |
Fair Value | ' |
Duration of one year or less | 468.2 |
Duration of one through three years | 1,440.20 |
Duration of three through five years | 208.6 |
Duration of over five years | 45.1 |
Total | $2,162.10 |
Inventory_Details
Inventory (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Inventory Disclosure [Abstract] | ' | ' |
Raw materials | $152.40 | $147.40 |
Work in process | 122 | 99.6 |
Finished goods | 73.4 | 93.4 |
Total | $347.80 | $340.40 |
Intangible_Assets_and_Goodwill2
Intangible Assets and Goodwill (Details) (USD $) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2013 | |
Intangible Assets By Category | ' | ' | ' |
Gross Carrying Value | $3,848,300,000 | ' | $3,848,300,000 |
Accumulated Amortization | -1,213,700,000 | ' | -1,146,500,000 |
Intangible Assets, Net | 2,634,600,000 | ' | 2,701,800,000 |
Weighted Average Life (Years) | '12 years 6 months | ' | '12 years 6 months |
Total intangible assets | ' | ' | ' |
Gross Carrying Value | 3,986,200,000 | ' | 3,986,200,000 |
Intangible Assets, Net | 2,772,500,000 | ' | 2,839,700,000 |
Amortization of acquired intangible assets | 67,100,000 | 66,900,000 | ' |
Summary of changes in carrying value of goodwill | ' | ' | ' |
Goodwill | 2,041,200,000 | ' | 2,041,200,000 |
Acquired developed product rights | ' | ' | ' |
Intangible Assets By Category | ' | ' | ' |
Gross Carrying Value | 3,405,900,000 | ' | 3,405,900,000 |
Accumulated Amortization | -1,079,500,000 | ' | -1,026,400,000 |
Intangible Assets, Net | 2,326,400,000 | ' | 2,379,500,000 |
Weighted Average Life (Years) | '13 years | ' | '13 years |
Technology | ' | ' | ' |
Intangible Assets By Category | ' | ' | ' |
Gross Carrying Value | 333,700,000 | ' | 333,700,000 |
Accumulated Amortization | -99,300,000 | ' | -87,400,000 |
Intangible Assets, Net | 234,400,000 | ' | 246,300,000 |
Weighted Average Life (Years) | '7 years | ' | '7 years |
Licenses | ' | ' | ' |
Intangible Assets By Category | ' | ' | ' |
Gross Carrying Value | 66,200,000 | ' | 66,200,000 |
Accumulated Amortization | -15,000,000 | ' | -13,900,000 |
Intangible Assets, Net | 51,200,000 | ' | 52,300,000 |
Weighted Average Life (Years) | '16 years 6 months | ' | '16 years 6 months |
Other | ' | ' | ' |
Intangible Assets By Category | ' | ' | ' |
Gross Carrying Value | 42,500,000 | ' | 42,500,000 |
Accumulated Amortization | -19,900,000 | ' | -18,800,000 |
Intangible Assets, Net | 22,600,000 | ' | 23,700,000 |
Weighted Average Life (Years) | '8 years 7 months 6 days | ' | '8 years 7 months 6 days |
Acquired IPR&D product rights | ' | ' | ' |
Non-amortized intangible assets: | ' | ' | ' |
Carrying Value | 137,900,000 | ' | 137,900,000 |
Minimum | ' | ' | ' |
Intangible Assets By Category | ' | ' | ' |
Weighted Average Life (Years) | '1 year | ' | ' |
Total intangible assets | ' | ' | ' |
Amortization | 255,000,000 | ' | ' |
Maximum | ' | ' | ' |
Intangible Assets By Category | ' | ' | ' |
Weighted Average Life (Years) | '17 years | ' | ' |
Total intangible assets | ' | ' | ' |
Amortization | $265,000,000 | ' | ' |
Debt_Details
Debt (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Carrying values of the entity's senior notes | ' | ' |
Long-term debt | $4,224.30 | $4,196.50 |
Senior notes, fair value | 4,356 | ' |
Interest rate swap contracts | Designated as hedging instruments | ' | ' |
Carrying values of the entity's senior notes | ' | ' |
Gains recorded as reduction of debt | 33 | 32.1 |
2.450% senior notes due 2015 | ' | ' |
Carrying values of the entity's senior notes | ' | ' |
Long-term debt | 511.9 | 513.9 |
Interest rate (as a percent) | 2.45% | ' |
2012 issued notes | Treasury rate locks | ' | ' |
Carrying values of the entity's senior notes | ' | ' |
Losses recorded to AOCI | 29.7 | ' |
1.900% senior notes due 2017 | ' | ' |
Carrying values of the entity's senior notes | ' | ' |
Long-term debt | 500.4 | 499.9 |
Interest rate (as a percent) | 1.90% | ' |
3.250% senior notes due 2022 | ' | ' |
Carrying values of the entity's senior notes | ' | ' |
Long-term debt | 974.6 | 956.6 |
Interest rate (as a percent) | 3.25% | ' |
2.300% senior notes due 2018 | ' | ' |
Carrying values of the entity's senior notes | ' | ' |
Long-term debt | 400 | 399 |
Interest rate (as a percent) | 2.30% | ' |
4.000% senior notes due 2023 | ' | ' |
Carrying values of the entity's senior notes | ' | ' |
Long-term debt | 700.7 | 696.3 |
Interest rate (as a percent) | 4.00% | ' |
5.250% senior notes due 2043 | ' | ' |
Carrying values of the entity's senior notes | ' | ' |
Long-term debt | 396.6 | 396.6 |
Interest rate (as a percent) | 5.25% | ' |
3.950% senior notes due 2020 | ' | ' |
Carrying values of the entity's senior notes | ' | ' |
Long-term debt | 490.5 | 484.6 |
Interest rate (as a percent) | 3.95% | ' |
3.950% senior notes due 2020 | Interest rate swap contracts | Designated as hedging instruments | ' | ' |
Carrying values of the entity's senior notes | ' | ' |
Gains recorded as reduction of debt | 3.6 | ' |
5.700% senior notes due 2040 | ' | ' |
Carrying values of the entity's senior notes | ' | ' |
Long-term debt | $249.60 | $249.60 |
Interest rate (as a percent) | 5.70% | ' |
Debt_Details_2
Debt (Details 2) (USD $) | 1 Months Ended | ||
Sep. 30, 2011 | Mar. 31, 2014 | Dec. 31, 2013 | |
Time_Per_Annum | |||
Commercial Paper | ' | ' | ' |
Debt | ' | ' | ' |
Effective interest rate (as a percent) | ' | 0.30% | ' |
Commercial Paper Carrying Value | ' | ' | ' |
Debt | ' | ' | ' |
Amount outstanding | ' | $869,800,000 | $544,800,000 |
Senior Unsecured Credit Facility | ' | ' | ' |
Debt | ' | ' | ' |
Maximum borrowing capacity | 1,500,000,000 | ' | ' |
Maximum number of credit facility increases | 1 | ' | ' |
Maximum borrowing capacity, subject to certain conditions | 1,750,000,000 | ' | ' |
Outstanding uncommitted facility | ' | $0 | $0 |
ShareBased_Compensation_Detail
Share-Based Compensation (Details) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Stock-Based Compensation | ' | ' |
Total share-based compensation expense | $104.40 | $65.60 |
Tax benefit related to share-based compensation expense | 30 | 17.9 |
Reduction in income | 74.4 | 47.7 |
Cost of goods sold (excluding amortization of acquired intangible assets) | ' | ' |
Stock-Based Compensation | ' | ' |
Total share-based compensation expense | 6.1 | 2.8 |
Research and development | ' | ' |
Stock-Based Compensation | ' | ' |
Total share-based compensation expense | 47 | 27 |
Selling, general and administrative | ' | ' |
Stock-Based Compensation | ' | ' |
Total share-based compensation expense | $51.30 | $35.80 |
ShareBased_Compensation_Detail1
Share-Based Compensation (Details 2) (USD $) | 3 Months Ended |
In Millions, except Share data, unless otherwise specified | Mar. 31, 2014 |
Stock Options | ' |
Stock option activity | ' |
Outstanding at the beginning of the Period (in shares) | 39,600,000 |
Granted (in shares) | 2,300,000 |
Exercised/Released (in shares) | -1,200,000 |
Expired (in shares) | -200,000 |
Outstanding at the end of the period (in shares) | 40,500,000 |
Compensation cost and expected weighted-average period related to nonvested awards | ' |
Unrecognized compensation cost | $490.80 |
Expected weighted-average period in years of compensation cost to be recognized | '2 years 2 months 12 days |
Restricted Stock Units | ' |
Restricted and Performance-Based Restricted Stock Units | ' |
Nonvested at the beginning of the period, Share Equivalent | 5,100,000 |
Granted, Share Equivalent | 100,000 |
Exercised, Share Equivalent | -100,000 |
Nonvested at the end of the period, Share Equivalent | 5,000,000 |
Compensation cost and expected weighted-average period related to nonvested awards | ' |
Unrecognized compensation cost | 215.6 |
Expected weighted-average period in years of compensation cost to be recognized | '1 year 3 months 18 days |
Performance- Based Restricted Stock Units (in thousands) | ' |
Restricted and Performance-Based Restricted Stock Units | ' |
Nonvested at the beginning of the period, Share Equivalent | 58,000 |
Granted, Share Equivalent | 0 |
Exercised, Share Equivalent | -12,000 |
Nonvested at the end of the period, Share Equivalent | 46,000 |
Compensation cost and expected weighted-average period related to nonvested awards | ' |
Unrecognized compensation cost | $3.20 |
Expected weighted-average period in years of compensation cost to be recognized | '2 years |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 3 Months Ended |
In Millions, unless otherwise specified | Mar. 31, 2014 |
Income Tax Disclosure [Abstract] | ' |
Unrecognized Tax Benefits, Decreases Resulting from Settlements with Taxing Authorities | $2.30 |
Increases to the amount of unrecognized tax benefits | $12.50 |
Collaboration_Agreements_Detai
Collaboration Agreements (Details) (USD $) | 3 Months Ended | 0 Months Ended | 3 Months Ended | 12 Months Ended | 0 Months Ended | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||||||||
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 21, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 21, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | ||||||
Research and Development Payments FORMA | Regulatory Approval Milestone FORMA | License Payments FORMA | FORMA | FORMA | FORMA | FORMA | NantBioScience | NantBioScience | Other Collaboration Arrangements | Other Collaboration Arrangements | |||||||||
Maximum | product_candidate | data_package | |||||||||||||||||
Collaborative_Arrangement | data_package | product_candidate | |||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Potential milestone payments | ' | ' | $200 | $315 | $430 | ' | ' | ' | ' | ' | ' | $12 | ' | ||||||
research and development period | ' | ' | ' | ' | ' | ' | '4 years | ' | ' | ' | ' | ' | ' | ||||||
Collaboration agreement term | ' | ' | ' | ' | ' | '3 years 6 months | ' | ' | ' | ' | ' | ' | ' | ||||||
Upfront Fees | ' | ' | ' | ' | ' | 225 | 225 | [1] | 0 | [1] | ' | ' | 50 | [1] | 34 | [1] | 21.1 | [1] | |
Number of additional agreement | ' | ' | ' | ' | ' | ' | ' | ' | 2 | ' | ' | ' | ' | ||||||
Term of additional agreement | ' | ' | ' | ' | ' | '2 years | ' | ' | ' | ' | ' | ' | ' | ||||||
Payment to exercise additional agreements | ' | ' | ' | ' | ' | 375 | ' | ' | ' | ' | ' | ' | ' | ||||||
Aggregate collaboration agreement payments | ' | ' | ' | ' | ' | ' | ' | ' | ' | 75 | ' | ' | ' | ||||||
Number of product candidates from pipeline | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2 | ' | ' | ' | ||||||
Ownership percentage | ' | ' | ' | ' | ' | ' | ' | ' | ' | 14.00% | 14.00% | ' | ' | ||||||
Potential future investment | ' | ' | ' | ' | ' | ' | ' | ' | ' | 50 | 50 | ' | ' | ||||||
Effective notice period required to be served for termination of agreement | ' | ' | ' | ' | ' | ' | ' | ' | ' | '30 days | ' | ' | ' | ||||||
Number of product candidates | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4 | 4 | ' | ' | ||||||
Number of data packages for product candidates | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10 | 10 | ' | ' | ||||||
Expiration period | ' | ' | ' | ' | ' | ' | ' | ' | ' | '10 years | ' | ' | ' | ||||||
Percentage of Outstanding Equity | ' | ' | ' | ' | ' | ' | ' | ' | ' | 14.00% | [1] | 14.00% | [1] | ' | ' | ||||
Selling, general and administrative | 494.1 | 369 | ' | ' | ' | ' | 0 | [1] | 0 | [1] | ' | ' | 25 | [1] | 0 | [1] | 0 | [1] | |
Equity Investments Made During Period | ' | ' | ' | ' | ' | ' | $0 | [1] | $0 | [1] | ' | ' | $90 | [1] | $20.90 | [1] | $4 | [1] | |
[1] | Activity and balances are presented specifically for notable new collaborations and for those collaborations which we have described in detail in our 2013 Annual Report on Form 10-K if there has been new activity during the periods presented. Amounts related to collaborations that are not specifically described are presented in the aggregate as Other Collaboration Arrangements |
Collaboration_Agreements_Detai1
Collaboration Agreements (Details 2) (USD $) | 3 Months Ended | 3 Months Ended | 12 Months Ended | 3 Months Ended | 12 Months Ended | 3 Months Ended | 12 Months Ended | 0 Months Ended | 3 Months Ended | 12 Months Ended | 3 Months Ended | 12 Months Ended | |||||||||||||||
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Apr. 02, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 21, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | |||||||||||
Acceleron | Acceleron | Acceleron | bluebird | bluebird | Epizyme | Epizyme | FORMA | FORMA | FORMA | NantBioScience | Other Collaboration Arrangements | Other Collaboration Arrangements | |||||||||||||||
Subsequent Event | |||||||||||||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||||
Upfront Fees | ' | ' | ' | $0 | [1],[2] | $0 | [1],[2] | ' | $0 | [2] | $74.70 | [2] | $0 | [2] | $0 | [2] | $225 | $225 | [2] | $0 | [2] | $50 | [2] | $34 | [2] | $21.10 | [2] |
Milestones | ' | ' | ' | 0 | [1],[2] | 10 | [1],[2] | ' | 0 | [2] | 0 | [2] | 0 | [2] | 0 | [2] | ' | 0 | [2] | 0 | [2] | 0 | [2] | 0 | [2] | 0 | [2] |
Extension of Agreements | ' | ' | ' | 0 | [1],[2] | 0 | [1],[2] | ' | 0 | [2] | 0 | [2] | 0 | [2] | 0 | [2] | ' | 0 | [2] | 0 | [2] | 0 | [2] | 0 | [2] | 0 | [2] |
Amortization of Prepaid R&D and Intangibles | ' | ' | ' | 0 | [1],[2] | 0 | [1],[2] | ' | 0 | [2] | 0 | [2] | 0 | [2] | 0 | [2] | ' | 0 | [2] | 0 | [2] | 0 | [2] | 3.8 | [2] | 0.8 | [2] |
Selling, General and Administrative Expense | 494.1 | 369 | ' | 0 | [1],[2] | 0 | [1],[2] | ' | 0 | [2] | 0 | [2] | 0 | [2] | 0 | [2] | ' | 0 | [2] | 0 | [2] | 25 | [2] | 0 | [2] | 0 | [2] |
Equity Investments Made During Period | ' | ' | ' | 15 | [1],[2] | 0 | [1],[2] | ' | 0 | [2] | 0 | [2] | 9.9 | [2] | 0 | [2] | ' | 0 | [2] | 0 | [2] | 90 | [2] | 20.9 | [2] | 4 | [2] |
Intangible Asset Balance | 2,772.50 | ' | 2,839.70 | 0 | [1],[2] | 0 | [1],[2] | ' | 0.2 | [2] | 0.2 | [2] | 0 | [2] | 0 | [2] | ' | 0.2 | [2] | 0.2 | [2] | 0 | [2] | 57.5 | [2] | 61.3 | [2] |
Equity Investment Balance | ' | ' | ' | 121.2 | [1],[2] | 127.2 | [1],[2] | ' | 0 | [2] | 0 | [2] | 83.7 | [2] | 69.4 | [2] | ' | 0 | [2] | 0 | [2] | 90 | [2] | 366.4 | [2] | 254.6 | [2] |
Percentage of Outstanding Equity | ' | ' | ' | 11.00% | [1],[2] | 11.00% | [1],[2] | 14.80% | ' | ' | 11.00% | [2] | 12.00% | [2] | ' | ' | ' | 14.00% | [2] | ' | ' | ||||||
Stock expected to be purchased of equity method investment (in shares) | ' | ' | ' | ' | ' | 1.1 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||||
Stock expected to be purchased of equity method investment | ' | ' | ' | ' | ' | $47.10 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||||
[1] | agreed to purchase 1.1 million shares of Acceleron common stock for $47.1 million on April 2, 2014. Immediately following this additional investment, it is expected that we will beneficially own approximately 14.8% of the outstanding shares of Acceleron's common stock. The closing of this transaction is subject to customary closing conditions including expiration of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. | ||||||||||||||||||||||||||
[2] | Activity and balances are presented specifically for notable new collaborations and for those collaborations which we have described in detail in our 2013 Annual Report on Form 10-K if there has been new activity during the periods presented. Amounts related to collaborations that are not specifically described are presented in the aggregate as Other Collaboration Arrangements |
Legal_Proceedings_Details
Legal Proceedings (Details) (USD $) | 1 Months Ended | 0 Months Ended | |||
Feb. 28, 2014 | Dec. 31, 2013 | Jun. 07, 2013 | Jun. 07, 2013 | Apr. 11, 2014 | |
Litigation Related to Sales of THALOMID and REVLIMID | Children's Medical Center Corporation | Children's Medical Center Corporation | Children's Medical Center Corporation | Subsequent Event | |
lawsuit | revlimid royalty | pomalyst royalty | Andrulis Pharmaceuticals Corporation Patent Infringement | ||
plaintiff | lawsuit | ||||
Loss Contingencies [Line Items] | ' | ' | ' | ' | ' |
Claims dismissed | ' | ' | ' | ' | 2 |
Patents allegedly infringed | ' | ' | ' | ' | 4 |
Number of civil qui tam actions | 3 | ' | ' | ' | ' |
Number of plaintiffs | 3 | ' | ' | ' | ' |
Royalty rate | ' | ' | 0.01 | 0.025 | ' |
Range of possible loss, minimum | ' | $0 | ' | ' | ' |
Range of possible loss, maximum | ' | $47,300,000 | ' | ' | ' |
Subsequent_Event_Details
Subsequent Event (Details) (Subsequent Event, Nogra, USD $) | 0 Months Ended |
Apr. 23, 2014 | |
Subsequent Event [Line Items] | ' |
Upfront Fees | $710,000,000 |
Maximum aggregate payable for development and regulatory milestones | 815,000,000 |
Maximum milestone payments | 1,050,000,000 |
Effective notice period required to be served for termination of agreement | '180 days |
Minimum | ' |
Subsequent Event [Line Items] | ' |
Global Annual Net Sales Level for Milestone Payments | 500,000,000 |
Maximum | ' |
Subsequent Event [Line Items] | ' |
Global Annual Net Sales Level for Milestone Payments | $4,000,000,000 |