UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

~~Form~~ FORM 10-Q

(Mark One)



þ☑	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, ~~2019~~2020

ORor



¨☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission ~~file number~~ File Number: 001-37702

Amgen Inc.

(Exact name of registrant as specified in its charter)



Delaware		95-3540776
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

One Amgen Center Drive ~~Thousand Oaks, California~~		91320-1799
Thousand Oaks
California
(Address of principal executive offices)		(Zip Code)

~~(805)~~ (805) 447-1000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:



Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, $0.0001 par value	AMGN	The NASDAQ Global Select Market
1.250% Senior Notes Due 2022	AMGN22	New York Stock Exchange
2.00% Senior Notes Due 2026	AMGN26	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or Section 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.Yes þ☑ No ¨☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).Yes þ☑ No ¨☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.



Large accelerated filerþ	☑	Accelerated filer¨	☐	Non-accelerated filer¨	☐
Smaller reporting company¨	☐	Emerging growth company¨	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.¨☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).Yes ¨☐

No þ☑

As of April ~~24, 2019,~~27, 2020, the registrant had ~~609,935,682~~588,247,399shares of common stock, $0.0001 par value, outstanding.

AMGEN INC.

INDEX

PART I — FINANCIAL INFORMATION



Item 1.	FINANCIAL STATEMENTS

AMGEN INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In millions, except per-share data)

(Unaudited)


	Three months ended March 31,						Three months ended March 31,
	2019			2018			2020		2019
Revenues:
Product sales	$	5,286		$	5,343		$	5,894	$	5,286
Other revenues	271			211			267		271
Total revenues	5,557			5,554			6,161		5,557

Operating expenses:
Cost of sales	1,055			944			1,513		1,055
Research and development	879			760			952		879
Selling, general and administrative	1,154			1,127			1,316		1,154
Other	(3		)	(3		)	25		(3		)
Total operating expenses	3,085			2,828			3,806		3,085

Operating income	2,472			2,726			2,355		2,472

Interest expense, net	343			338			346		343
Interest and other income, net	185			231			11		185

Income before income taxes	2,314			2,619			2,020		2,314

Provision for income taxes	322			308			195		322

Net income	$	1,992		$	2,311		$	1,825	$	1,992

Earnings per share:
Basic	$	3.20		$	3.27		$	3.09	$	3.20
Diluted	$	3.18		$	3.25		$	3.07	$	3.18

Shares used in calculation of earnings per share:
Basic	622			707			590		622
Diluted	626			711			594		626

See accompanying notes.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Three months ended
March 31,
2019 2018
Net income $ 1,992
$ 2,311
Other comprehensive income (loss), net of reclassification adjustments and taxes:
(Losses) gains on foreign currency translation (13 ) 29
Gains on cash flow hedges 45
6
Gains (losses) on available-for-sale securities 221
(343 )
Other —
2
Other comprehensive income (loss), net of taxes 253
(306 )
Comprehensive income $ 2,245
$ 2,005



	Three months ended March 31,
	2020			2019
Net income	$	1,825		$	1,992
Other comprehensive (loss) income, net of reclassification adjustments and taxes:
Losses on foreign currency translation	(52		)	(13		)
(Losses) gains on cash flow hedges	(61		)	45
(Losses) gains on available-for-sale securities	(19		)	221
Other	(2		)	—
Other comprehensive (loss) income, net of taxes	(134		)	253
Comprehensive income	$	1,691		$	2,245

See accompanying notes.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions, except per-share data)

See accompanying notes.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In millions, except per-share data)



	Number of shares of common stock		Common stock and additional paid-in capital			Accumulated deficit			Accumulated other comprehensive loss			Total
Balance as of December 31, 2019	591.4		$	31,531		$	(21,330	)	$	(528	)	$	9,673
Cumulative effect of changes in accounting principles, net of tax	—		—			(2		)	—			(2		)
Net income	—		—			1,825			—			1,825
Other comprehensive loss, net of taxes	—		—			—			(134		)	(134		)
Dividends declared on common stock ($1.60 per share)	—		—			(938		)	—			(938		)
Issuance of common stock in connection with the Company’s equity award programs	0.9		10			—			—			10
Stock-based compensation expense	—		52			—			—			52
Tax impact related to employee stock-based compensation expense	—		(68		)	—			—			(68		)
Repurchases of common stock	(4.3	)	—			(933		)	—			(933		)
Balance as of March 31, 2020	588.0		$	31,525		$	(21,378	)	$	(662	)	$	9,485



	Number of shares of common stock		Common stock and additional paid-in capital			Accumulated deficit			Accumulated other comprehensive loss			Total
Balance as of December 31, 2018	629.6		$	31,246		$	(17,977	)	$	(769	)	$	12,500
Net income	—		—			1,992			—			1,992
Other comprehensive income, net of taxes	—		—			—			253			253
Dividends declared on common stock ($1.45 per share)	—		—			(879		)	—			(879		)
Issuance of common stock in connection with the Company’s equity award programs	0.7		6			—			—			6
Stock-based compensation expense	—		64			—			—			64
Tax impact related to employee stock-based compensation expense	—		(73		)	—			—			(73		)
Repurchases of common stock	(15.9	)	—			(3,031		)	—			(3,031		)
Balance as of March 31, 2019	614.4		$	31,243		$	(19,895	)	$	(516	)	$	10,832

Number
of shares
of common
stock

Common
stock and
additional
paid-in capital

Accumulated
deficit

Accumulated
other
comprehensive
loss
Total
Balance as of December 31, 2017 722.2
$ 30,992
$ (5,072 ) $ (679 ) $ 25,241
Cumulative effect of changes in accounting principles, net of taxes —
—
38
(9 ) 29
Net income —
—
2,311
—
2,311
Other comprehensive loss, net of taxes —
—
—
(306 ) (306 )
Dividends declared on common stock ($1.32 per share) —
—
(877 ) —
(877 )
Issuance of common stock in connection with the Company’s equity award programs 0.6
5
—
—
5
Stock-based compensation expense —
61
—
—
61
Tax impact related to employee stock-based compensation expense —
(57 ) —
—
(57 )
Repurchases of common stock (56.4 ) —
(10,787 ) —
(10,787 )
Balance as of March 31, 2018 666.4
$ 31,001
$ (14,387 ) $ (994 ) $ 15,620

See accompanying notes.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

See accompanying notes.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, ~~2019~~2020

1. Summary of significant accounting policies

Amgen Inc. (including its subsidiaries, referred to as “Amgen,” “the Company,” “we,” “our” or “us”) is a global biotechnology pioneer that discovers, develops, manufactures and delivers innovative human therapeutics. We operate in ~~one~~1 business segment: human therapeutics.

Basis of presentation

The financial information for the three months ended March 31, ~~2019~~2020 and ~~2018,~~2019, is unaudited but includes all adjustments (consisting of only normal, recurring adjustments unless otherwise indicated), which Amgen considers necessary for a fair presentation of its condensed consolidated results of operations for those periods. Interim results are not necessarily indicative of results for the full fiscal year.

The condensed consolidated financial statements should be read in conjunction with our consolidated financial statements and the notes thereto contained in our Annual Report on Form 10-K for the year ended December 31, ~~2018.~~2019.

Principles of consolidation

The condensed consolidated financial statements include the accounts of Amgen as well as its majority-owned subsidiaries. We do not have any significant interests in anyvariable interest entities. All material intercompany transactions and balances have been eliminated in consolidation.

The preparation of condensed consolidated financial statements in conformity with U.S. generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results may differ from those estimates.

Property, plant and equipment, net

Property, plant and equipment is recorded at historical cost, net of accumulated depreciation and amortization of ~~$7.9~~$8.5 billion and ~~$7.8~~$8.4 billion as of March 31, ~~2019~~2020 and December 31, ~~2018,~~2019, respectively.

~~Leases~~Equity method investments

~~Adoption~~The equity method of ~~new lease standard~~accounting is used for equity investments that give us the ability to exert significant influence, but not control, over an investee based on such factors as our ownership percentage, voting and other shareholder rights, board of director representation and the existence of other collaborative or business relationships. The equity method of accounting requires us to allocate the difference between the fair value of securities acquired and our proportionate share of the carrying value of the underlying assets (the basis difference) to various items and amortize such differences over their useful lives. Our share of the investees’ earnings or losses and amortization of basis differences, if any, are recorded one quarter in arrears in Interest and other income, net, in the Condensed Consolidated Statements of Income.

We record impairment losses on our equity method investments if we deem the impairment to be other-than-temporary. We deem an impairment to be other-than-temporary based on various factors including, but not limited to, the length of time the fair value is below the carrying value, volatility of the security price and our intent and ability to retain the investment to allow for a recovery in fair value.

Recent accounting pronouncements

In ~~February~~June 2016, the Financial Accounting Standards Board (FASB) issued a new accounting standard that amends the guidance for the accounting and disclosure of leases. This new standard requires that lessees recognize the assets and liabilities that arise from leases on the balance sheet, including leases classified as operating leases, and disclose qualitative and quantitative information about leasing arrangements. The FASB subsequently issued additional amendments to address issues arising from the implementation of the new lease standard. We adopted this standard as of January 1, 2019, using the modified-retrospective method. This approach provides a method for recording existing leases at adoption. We used the adoption date as our date of initial application, and thus comparative-period financial information is not presented for periods prior to the adoption date. In addition, we elected the package of practical expedients permitted under the transition guidance within the new standard, which, among other things, allowed us to carry forward the historical lease classification.

Adoption of the new standard resulted in total lease liabilities of $510 million and right-of-use (ROU) assets of $439 million as of January 1, 2019. The difference between the initial lease liabilities and the ROU assets is related primarily to previously existing lease liabilities. The standard did not materially impact our Condensed Consolidated Statements of Income and had no impact on our Condensed Consolidated Statements of Cash Flows. Our accounting policies under the new standard are described below. See Note 8, Leases.

~~Lease recognition~~

At inception of a contract, we determine whether an arrangement is or contains a lease. For all leases, we determine the classification as either operating or financing. Operating leases are included in Other assets, Accrued liabilities and Other noncurrent liabilities in our Condensed Consolidated Balance Sheets.

ROU assets represent our right to use an underlying asset for the lease term, and lease liabilities represent our obligation to make lease payments under the lease. Lease recognition occurs at the commencement date and lease liability amounts are based on the present value of lease payments over the lease term. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Because most of our leases do not provide information to determine an implicit interest rate, we use our incremental borrowing rate in determining the present value of lease payments. ROU assets also include any lease payments made prior to the commencement date and exclude lease incentives received. Operating lease expense is recognized on a straight-line basis over the lease term.

We have lease agreements with both lease and nonlease components, which are generally accounted for together as a single lease component. In addition, for certain vehicle and equipment leases, we apply a portfolio approach to determine the lease term and discount rate.

~~Other recent accounting pronouncements~~

~~In June 2016, the FASB~~ issued a new accounting standard that amends the guidance for measuring and recording credit losses on financial assets measured at amortized cost by replacing the incurred-loss model with an expected-loss model. Accordingly, these financial assets will be presented at the net amount expected to be collected. This new standard also requires that credit losses related to available-for-sale debt securities be recorded as an allowance through net income rather than by reducing the carrying amount under the current, other-than-temporary-impairment model. We adopted this standard as of January 1, 2020, using a modified-retrospective approach. Adoption of the standard did not have a material impact on our condensed consolidated financial statements.

In March 2020, the FASB issued a new accounting standard to ease the financial reporting burdens of the expected market transition from the London Interbank Offered Rate (LIBOR) and other interbank offered rates to alternative reference rates, commonly referred to as reference rate reform. The new standard provides temporary optional expedients and exceptions to current GAAP guidance on contract modifications and hedge accounting. Specifically, a modification to transition to an alternative reference rate is treated as an event that does not require contract remeasurement or reassessment of a previous accounting treatment. Moreover, for all types of hedging relationships, an entity may change the reference rate without having to dedesignate the hedging relationship. The standard is generally effective for ~~interim~~all contract modifications made and ~~annual periods beginning on January 1, 2020, but may be adopted earlier. With certain exceptions, adjustments are to be applied using~~hedging relationships evaluated through December 31, 2022, as a ~~modified-retrospective approach by reflecting adjustments through a cumulative-effect impact on retained earnings as~~result of ~~the beginning of the fiscal year of adoption.~~reference rate reform. We are currently evaluating the impact that this new standard will have on our condensed consolidated financial statements.

We operate in ~~one~~1 business segment: human therapeutics. Therefore, results of our operations are reported on a consolidated basis for purposes of segment reporting, consistent with internal management reporting. Revenues by product and by geographic area, based on customers’ locations, are presented below. Rest-of-world (ROW) revenues relate to products that are sold primarily in Europe.

Revenues were as follows (in millions):

Prolia^® (denosumab)

Otezla^® (apremilast)

Repatha^®(evolocumab)

3. Income taxes

The effective tax rates for the three months ended March 31, 2020 and 2019, were 9.7% and ~~2018, were~~ 13.9% ~~and 11.8%~~, respectively.

The ~~increase~~decrease in our effective tax rate for the three months ended March 31, ~~2019,~~2020, was due primarily to ~~a prior-year tax benefit associated with intercompany sales under U.S. corporate tax reform.~~amortization related to the Otezla^® acquisition, changes in jurisdictional mix of earnings and certain favorable items in the quarter. The effective tax rates differ from the federal statutory rate primarily as a result of foreign earnings from the Company’s operations conducted in Puerto Rico, a territory of the United States that is treated as a foreign jurisdiction for U.S. tax purposes and ~~that is~~are subject to tax incentive grants through ~~2035; these~~2035. In addition, the Company’s operations conducted in Singapore are subject to a tax incentive grant through 2034. These earnings are also subject to U.S. tax at a reduced rate of 10.5% ~~rate.~~.

The U.S. territory of Puerto Rico imposes an excise tax on the gross intercompany purchase price of goods and services from our manufacturer in Puerto Rico. The rate of 4% is effective through December 31, 2027. We account for the excise tax as a manufacturing cost that is capitalized in inventory and expensed in cost of sales when the related products are sold. For U.S. income tax purposes, the excise tax results in foreign tax credits that are generally recognized in our provision for income taxes when the excise tax is incurred.

One or more of our legal entities file income tax returns in the U.S. federal jurisdiction, various U.S. state jurisdictions and certain foreign jurisdictions. Our income tax returns are routinely examined by ~~the~~ tax authorities in those jurisdictions. Significant disputes may arise with tax authorities involving issues ofregarding the timing and amount of deductions, the use of tax credits and allocations of income and expenses among various tax jurisdictions because of differing interpretations of tax laws, regulations and ~~the interpretation of the~~ relevant facts. As previously disclosed, we received a Revenue Agent Report (RAR) from the Internal Revenue Service (IRS) for the years 2010, 2011 and 2012. The RAR proposes to make significant adjustments that relate primarily to the allocation of profits between certain of our entities in the United States and the U.S. territory of Puerto Rico. In November 2017, we received a modified RAR that revised the IRS’s ~~calculation~~calculations but continued to propose substantial adjustments. We disagree with the proposed adjustments and calculations and are pursuing resolution with the IRS administrative appeals office, which currently has jurisdiction over the matter. If we deem necessary, we will vigorously contest the proposed adjustments through the judicial process. In addition, in April, we received draft notice of proposed adjustments (NOPAs) from the IRS for the years 2013, 2014 and 2015, which are similar to the proposed adjustments for the years 2010, 2011 and 2012 that relate primarily to the allocation of profits between certain of our entities in the United States and the U.S. territory of Puerto Rico. We disagree with the proposed adjustments and calculations and intend to contest them. We are also currently under examination by a number of other state and foreign tax jurisdictions.

Final resolution of ~~this~~these complex ~~matter~~matters is not likely within the next 12 months and could have a material impact on our condensed consolidated financial statements. We believe our accrual for income tax liabilities is appropriate based on past experience, interpretations of tax law and judgments about potential actions by tax authorities; however, due to the complexity of the provision for income taxes, the ultimate resolution of any tax matters may result in payments substantially greater or less than amounts accrued. We are no longer subject to U.S. federal income tax examinations for years ended on or before December 31, 2009. ~~In addition, we are currently under examination by a number of other state and foreign tax jurisdictions.~~

During the three months ended March 31, ~~2019,~~2020, the gross amounts of our unrecognized tax benefits (UTBs) increased ~~$90~~$50 million as a result of tax positions taken during the current year. Substantially all of the UTBs as of March 31, ~~2019,~~2020, if recognized, would affect our effective tax rate.

4. Earnings per share

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

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



	Three months ended March 31,
	2020		2019
Income (Numerator):
Net income for basic and diluted EPS	$	1,825	$	1,992

Shares (Denominator):
Weighted-average shares for basic EPS	590		622
Effect of dilutive securities	4		4
Weighted-average shares for diluted EPS	594		626

Basic EPS	$	3.09	$	3.20
Diluted EPS	$	3.07	$	3.18

Three months ended
March 31,
2019 2018
Income (Numerator):
Net income for basic and diluted EPS $ 1,992
$ 2,311

Shares (Denominator):
Weighted-average shares for basic EPS 622
707
Effect of dilutive securities 4
4
Weighted-average shares for diluted EPS 626
711

Basic EPS $ 3.20
$ 3.27
Diluted EPS $ 3.18
$ 3.25

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

5. Collaborations

On January 2, 2020, we closed our strategic collaboration with BeiGene, Ltd. (BeiGene) to expand our oncology presence in China. Under the collaboration, BeiGene will commercialize XGEVA^®, KYPROLIS^® and BLINCYTO^®(blinatumomab) in China, and Amgen will share profits and losses equally during the initial product-specific commercialization periods; thereafter, product rights may revert to Amgen, and Amgen will pay royalties to BeiGene on sales in China.

In addition, we will jointly develop a portion of our oncology portfolio with BeiGene sharing in global research and development (R&D) costs by providing cash and development services up to $1.25 billion. Upon regulatory approval, BeiGene will assume commercialization rights in China for a specified period, and Amgen and BeiGene will share profits equally until certain of these product rights revert to Amgen. Upon return of the product rights, Amgen will pay royalties to BeiGene on sales in China for a specified period. For product sales outside of China, Amgen will also pay BeiGene royalties.

For the three months ended March 31, 2020, costs recovered from BeiGene for oncology product candidates were $57 million and were recorded in R&D expense in the Condensed Consolidated Statements of Income. For the three months ended March 31, 2020, no profit share payments or product sales were recorded between Amgen and BeiGene. In connection with this collaboration, we acquired an ownership interest in BeiGene. See Note 6, Investments.

6. Investments

Available-for-sale investments

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


Types of securities as of March 31, 2019	Amortized cost		Gross unrealized gains		Gross unrealized losses			Fair values
Types of securities as of March 31, 2020										Amortized cost		Gross unrealized gains		Gross unrealized losses		Fair values
U.S. Treasury notes	$	2,709	$	—	$	(27	)	$	2,682	$	173	$	3	$	—	$	176
U.S. Treasury bills	3,475		—		—			3,475		900		—		—		900
Other government-related debt securities:
U.S.	112		—		(1		)	111
Foreign and other	964		4		(10		)	958
Corporate debt securities:
Financial	2,771		1		(22		)	2,750		12		—		—		12
Industrial	2,481		4		(27		)	2,458		12		—		—		12
Other	572		1		(7		)	566		—		—		—		—
Residential-mortgage-backed securities	1,404		—		(22		)	1,382		—		—		—		—
Other mortgage- and asset-backed securities	478		—		(11		)	467
Money market mutual funds	4,375		—		—			4,375		5,762		—		—		5,762
Other short-term interest-bearing securities	6,428		—		—			6,428		432		—		—		432
Total interest-bearing securities	$	25,769	$	10	$	(127	)	$	25,652	$	7,291	$	3	$	—	$	7,294



Types of securities as of December 31, 2019	Amortized cost		Gross unrealized gains		Gross unrealized losses		Fair values
U.S. Treasury notes	$	359	$	1	$	—	$	360
U.S. Treasury bills	—		—		—		—
Corporate debt securities:
Financial	1,108		13		—		1,121
Industrial	824		10		—		834
Other	195		3		—		198
Residential-mortgage-backed securities	181		1		—		182
Money market mutual funds	5,250		—		—		5,250
Other short-term interest-bearing securities	289		—		—		289
Total interest-bearing securities	$	8,206	$	28	$	—	$	8,234

Types of securities as of December 31, 2018
Amortized
cost

Gross
unrealized
gains

Gross
unrealized
losses

Fair
values
U.S. Treasury notes $ 2,710
$ —
$ (47 ) $ 2,663
U.S. Treasury bills 8,191
—
—
8,191
Other government-related debt securities:
U.S. 112
—
(2 ) 110
Foreign and other 972
1
(41 ) 932
Corporate debt securities:
Financial 2,778
—
(81 ) 2,697
Industrial 2,603
—
(99 ) 2,504
Other 583
—
(21 ) 562
Residential-mortgage-backed securities 1,458
—
(36 ) 1,422
Other mortgage- and asset-backed securities 483
—
(14 ) 469
Money market mutual funds 5,659
—
—
5,659
Other short-term interest-bearing securities 3,515
—
—
3,515
Total interest-bearing securities $ 29,064
$ 1
$ (341 ) $ 28,724

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



Condensed Consolidated Balance Sheets locations	March 31, 2020		December 31, 2019
Cash and cash equivalents	$	6,969	$	5,360
Marketable securities	325		2,874
Total interest-bearing securities	$	7,294	$	8,234

Condensed Consolidated Balance Sheets locations March 31,
2019 December 31,
2018
Cash and cash equivalents $ 6,709
$ 6,365
Marketable securities 18,943
22,359
Total interest-bearing securities $ 25,652
$ 28,724

Cash and cash equivalents in the above table excludes bank account cash of ~~$649~~$718 million and ~~$580~~$677 million as of March 31, ~~2019~~2020 and December 31, ~~2018,~~2019, respectively.

The fair values of interest-bearing securities by contractual maturity, except for ~~mortgage- and asset-backed~~residential-mortgage-backed securities that do not have a single maturity date, were as follows (in millions):



Contractual maturities	March 31, 2020		December 31, 2019
Maturing in one year or less	$	7,165	$	5,629
Maturing after one year through three years	129		2,304
Maturing after three years through five years	—		119
Residential mortgage-backed securities	—		182
Total interest-bearing securities	$	7,294	$	8,234

Contractual maturities March 31,
2019 December 31,
2018
Maturing in one year or less $ 14,357
$ 17,424
Maturing after one year through three years 4,600
3,356
Maturing after three years through five years 3,987
5,168
Maturing after five years through ten years 859
885
Mortgage- and asset-backed securities 1,849
1,891
Total interest-bearing securities $ 25,652
$ 28,724

For the three months ended March 31, ~~2019~~2020 and ~~2018,~~2019, realized gains on interest-bearing securities were $1$37 million and ~~$17~~$1 million, respectively, and realized losses on interest-bearing securities were $5$4 million and ~~$151~~$5 million, respectively. Realized gains and losses on interest-bearing securities are recorded in Interest and other income, net, in the Condensed Consolidated Statements of Income. The cost of securities sold is based on the specific-identification method.

The fair values and gross unrealized losses of interest-bearing securities in an unrealized loss position aggregated by type and length of time that the securities have been in a continuous loss position were as follows (in millions):

Less than 12 months 12 months or more
Types of securities as of March 31, 2019 Fair values Unrealized losses Fair values Unrealized losses
U.S. Treasury notes $ 1,190
$ (11 ) $ 1,452
$ (16 )
Other government-related debt securities:
U.S. —
—
111
(1 )
Foreign and other 410
(6 ) 307
(4 )
Corporate debt securities:
Financial 1,783
(14 ) 822
(8 )
Industrial 1,516
(20 ) 634
(7 )
Other 454
(6 ) 36
(1 )
Residential-mortgage-backed securities 558
(9 ) 809
(13 )
Other mortgage- and asset-backed securities 17
—
450
(11 )
Total $ 5,928
$ (66 ) $ 4,621
$ (61 )

Less than 12 months 12 months or more
Types of securities as of December 31, 2018 Fair values Unrealized losses Fair values Unrealized losses
U.S. Treasury notes $ 1,219
$ (21 ) $ 1,444
$ (26 )
Other government-related debt securities:
U.S. —
—
110
(2 )
Foreign and other 631
(31 ) 240
(10 )
Corporate debt securities:
Financial 1,968
(59 ) 718
(22 )
Industrial 1,898
(81 ) 529
(18 )
Other 529
(20 ) 28
(1 )
Residential-mortgage-backed securities 576
(14 ) 840
(22 )
Other mortgage- and asset-backed securities 17
—
451
(14 )
Total $ 6,838
$ (226 ) $ 4,360
$ (115 )

The primary objective of our investment portfolio is to ~~enhance overall returns in an efficient manner while maintaining~~maintain safety of principal, prudent levels of liquidity and acceptable levels of risk. Our investment policy limits interest-bearing security investments to certain types of debt and money market instruments issued by institutions with primarily investment-grade credit ratings, and it places restrictions on maturities and concentration by asset class and issuer.

We review our available-for-sale investments for other-than-temporary declines in fair value below our cost basis each quarter and whenever events or changes in circumstances indicate that the cost basis of an asset may not be recoverable. The evaluation is based on a number of factors, including the length of time and the extent to which the fair value has been below our cost basis as well as adverse conditions related specifically to the security, such as any changes to the credit rating of the security and the intent to sell or whether we will more likely than not be required to sell the security before recovery of its amortized cost basis. Our assessment of whether a security is other-than-temporarily impaired could change in the future based on new developments or changes in assumptions related to that particular security. As of March 31, 2020 and December 31, 2019, aggregated gross unrealized losses onof available-for-sale investments were ~~due primarily to higher interest rates than at the time the securities were purchased. As~~not material, and accordingly, no allowance for credit losses was recorded as of March 31, ~~2019 and December 31, 2018, we believe the cost bases for our available-for-sale investments were recoverable in all material respects.~~2020.

Equity securities

We held investments in equity securities with readily determinable fair values of ~~$246~~$220 million and ~~$176~~$303 million as of March 31, ~~2019~~2020 and December 31, ~~2018,~~2019, respectively, which are included in Other assets in the Condensed Consolidated Balance Sheets. Gains and losses recognized on equity securities with readily determinable fair values, including gains and losses recognized on sales, were not material for the three months ended March 31, ~~2019~~2020 and ~~2018.~~2019.

~~As of March 31, 2019 and December 31, 2018, respectively, we~~We held investments of ~~$185~~$183 million and ~~$222~~$176 million in equity securities without readily determinable fair values as of March 31, 2020 and December 31, 2019, respectively, which are included in Other assets in the Condensed Consolidated Balance Sheets. Adjustments to the carrying values of these securities were not material for the three months ended March 31, ~~2019~~2020 and ~~2018.~~2019.

Equity method investments

Limited ~~partnership investments~~partnerships

We held limited partnership investments of ~~$275~~$331 million and ~~$285~~$320 million as of March 31, ~~2019~~2020 and December 31, ~~2018,~~2019, respectively, which are included in Other assets in the Condensed Consolidated Balance Sheets. These investments, primarily investment funds of early-stage biotechnology companies, are accounted for by using the equity method of accounting and measured by using our proportionate share of the net asset values of the underlying investments held by the limited partnerships as a practical expedient. These investments are typically redeemable only through distributions upon liquidation of the underlying assets. As of March 31, ~~2019,~~2020, unfunded additional commitments to be made for these investments during the next several years ~~for these investments~~ were not material. Gains and losses recognized on our limited partnership investments were not material for the three months ended March 31, ~~2019~~2020 and ~~2018.~~2019.

BeiGene

On January 2, 2020, we acquired a 20.5% ownership interest in BeiGene for $2.8 billion, of which $2.6 billion was attributed to the fair value of equity securities upon closing, with the remainder attributed to prepaid R&D. Our equity investment in BeiGene is included in Other assets in the Condensed Consolidated Balance Sheets. The fair value of equity securities acquired exceeded our proportionate share of the carrying value of the underlying net assets of BeiGene by approximately $2.4 billion. This investment is accounted for by using the equity method of accounting, which requires us to identify and allocate amounts to the items that give rise to the basis difference and to amortize these items over their useful lives. This amortization, along with our share of the results of operations of BeiGene, will be recognized in Interest and other income, net, in our Condensed Consolidated Statements of Income. Recognition will occur one quarter in arrears, beginning in the second quarter of 2020. The basis difference was allocated to finite-lived intangible assets, indefinite-lived intangible assets, equity-method goodwill and related deferred taxes. The finite-lived intangible assets will be amortized over a period ranging from 8 to 15 years.

As of March 31, 2020, the carrying and fair values of our approximately 20.5% ownership interest in BeiGene totaled $2.6 billion and $2.0 billion, respectively. As of March 31, 2020, we believe the carrying value of our equity investment in BeiGene is fully recoverable. See Note 1, Summary of significant accounting policies, for factors considered in determining our conclusion. For information on a collaboration agreement we entered into with BeiGene in connection with this investment, see Note 5, Collaborations.

6.7. Inventories

Inventories consisted of the following (in millions):



	March 31, 2020		December 31, 2019
Raw materials	$	446	$	358
Work in process	2,192		2,227
Finished goods	1,044		999
Total inventories	$	3,682	$	3,584

March 31,
2019 December 31,
2018
Raw materials $ 276
$ 257
Work in process 1,770
1,660
Finished goods 970
1,023
Total inventories $ 3,016
$ 2,940

7.8. Goodwill and other intangible assets

Goodwill

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



	Three months ended March 31, 2020
Beginning balance	$	14,703
Currency translation adjustment	(20		)
Ending balance	$	14,683

Three months ended
March 31, 2019
Beginning balance $ 14,699
Currency translation adjustment (7 )
Ending balance $ 14,692

Other intangible assets

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



	March 31, 2020							December 31, 2019
	Gross carrying amounts		Accumulated amortization			Other intangible assets, net		Gross carrying amounts		Accumulated amortization			Other intangible assets, net
Finite-lived intangible assets:
Developed-product-technology rights	$	25,549	$	(8,876	)	$	16,673	$	25,575	$	(8,322	)	$	17,253
Licensing rights	3,746		(2,494		)	1,252		3,761		(2,398		)	1,363
Marketing-related rights	1,375		(979		)	396		1,382		(965		)	417
Research and development technology rights	1,269		(967		)	302		1,273		(947		)	326
Total finite-lived intangible assets	31,939		(13,316		)	18,623		31,991		(12,632		)	19,359
Indefinite-lived intangible assets:
In-process research and development	30		—			30		54		—			54
Total other intangible assets	$	31,969	$	(13,316	)	$	18,653	$	32,045	$	(12,632	)	$	19,413

March 31, 2019 December 31, 2018

Gross
carrying
amounts

Accumulated
amortization

Other intangible
assets, net

Gross
carrying
amounts

Accumulated
amortization

Other intangible
assets, net
Finite-lived intangible assets:
Developed-product-technology rights $ 12,559
$ (7,639 ) $ 4,920
$ 12,573
$ (7,479 ) $ 5,094
Licensing rights 3,693
(2,064 ) 1,629
3,772
(2,032 ) 1,740
Marketing-related rights 1,211
(947 ) 264
1,297
(1,019 ) 278
Research and development technology rights 1,145
(889 ) 256
1,148
(872 ) 276
Total finite-lived intangible assets 18,608
(11,539 ) 7,069
18,790
(11,402 ) 7,388
Indefinite-lived intangible assets:
In-process research and development 55
—
55
55
—
55
Total other intangible assets $ 18,663
$ (11,539 ) $ 7,124
$ 18,845
$ (11,402 ) $ 7,443

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

In-process research and development (IPR&D) consists of R&D projects acquired in a business combination that are not complete at the time of acquisition due to remaining technological risks and/or lack of receipt of required regulatory approvals. We review IPR&D projects for impairment annually, whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable and upon the establishment of technological feasibility or regulatory approval.

During the three months ended March 31, ~~2019~~2020 and ~~2018,~~2019, we recognized amortization associated with our finite-lived intangible assets of $709 million and $315 million, respectively. Amortization of intangible assets is included primarily in Cost of sales in the Condensed Consolidated Statements of ~~Income, of $315 million and $320 million, respectively.~~Income. The total estimated amortization for our finite-lived intangible assets for the remaining nine months ending December 31, ~~2019,~~2020, and the years ending December 31, ~~2020,~~ 2021, 2022, 2023, 2024 and ~~2024,~~2025, are ~~$1.0~~$2.1 billion, ~~$1.2~~$2.6 billion, ~~$1.0~~$2.5 billion, ~~$0.9~~$2.4 billion, ~~$0.9~~$2.4 billion and ~~$0.8~~$2.2 billion, respectively.

~~8. Leases~~

On January 1, 2019, we adopted a new accounting standard that amends the guidance for the accounting and reporting of leases. Certain required disclosures have been made on a prospective basis in accordance with the guidance of the standard. See Note 1, Summary of significant accounting policies.

We lease certain facilities and equipment related primarily to administrative, R&D and sales and marketing activities. Leases with lease terms of 12 months or less are expensed on a straight-line basis over the lease term and are not recorded in the Condensed Consolidated Balance Sheets.

Most leases include one or more options to renew, with renewal terms that can extend the lease term up to seven years. The exercise of lease renewal options is at our sole discretion. In addition, some of our lease agreements include rental payments adjusted periodically for inflation. Our lease agreements neither contain any residual value guarantees nor impose any significant restrictions or covenants. We sublease certain real estate to third parties. Our sublease portfolio consists of operating leases from former R&D and administrative space.

~~The following table summarizes information related to our leases, which are all classified as operating, included in our Condensed Consolidated Balance Sheets (in millions):~~

Condensed Consolidated Balance Sheets locations March 31, 2019
Assets:
Other assets $ 417
Liabilities:
Accrued liabilities $ 120
Other noncurrent liabilities 368
Total lease liabilities $ 488

~~The components of net lease costs were as follows (in millions):~~

Lease costs Three months ended March 31, 2019
Operating⁽¹⁾
$ 48
Sublease income (8 )
Total net lease costs $ 40

^____________


⁽¹⁾	~~Includes short-term leases and variable lease costs, which were not material for the three months ended March 31, 2019.~~

~~Maturities of lease liabilities as of March 31, 2019, were as follows (in millions):~~

Maturity dates Operating leases
Remaining nine months ending December 31, 2019 $ 135
2020 133
2021 107
2022 63
2023 48
Thereafter 41
Total lease payments⁽¹⁾
527
Less imputed interest (39 )
Present value of lease liabilities $ 488

^____________


⁽¹⁾	~~Includes future rental commitments for abandoned leases of $204 million. We expect to receive total future rental income of $166 million related to noncancelable subleases for abandoned facilities.~~

~~The weighted-average remaining lease term and weighted-average discount rate of our leases were 4.5 years and 3.32%, respectively, as of March 31, 2019.~~

~~Cash and noncash information related to our leases was as follows (in millions):~~

Three months ended March 31, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases $ 34
ROU assets obtained in exchange for lease obligations:
Operating leases $ 8

9. Financing arrangements

Our borrowings consisted of the following (in millions):



	March 31, 2020			December 31, 2019
4.50% notes due 2020 (4.50% 2020 Notes)	$	—		$	300
2.125% notes due 2020 (2.125% 2020 Notes)	750			750
Floating Rate Notes due 2020	300			300
2.20% notes due 2020 (2.20% 2020 Notes)	700			700
3.45% notes due 2020 (3.45% 2020 Notes)	—			900
4.10% notes due 2021 (4.10% 2021 Notes)	—			1,000
1.85% notes due 2021 (1.85% 2021 Notes)	—			750
3.875% notes due 2021 (3.875% 2021 Notes)	1,450			1,750
1.25% €1,250 million notes due 2022 (1.25% 2022 euro Notes)	1,379			1,402
2.70% notes due 2022 (2.70% 2022 Notes)	500			500
2.65% notes due 2022 (2.65% 2022 Notes)	1,500			1,500
3.625% notes due 2022 (3.625% 2022 Notes)	750			750
0.41% CHF700 million bonds due 2023 (0.41% 2023 Swiss franc Bonds)	728			725
2.25% notes due 2023 (2.25% 2023 Notes)	750			750
3.625% notes due 2024 (3.625% 2024 Notes)	1,400			1,400
1.90% notes due 2025 (1.90% 2025 Notes)	500			—
3.125% notes due 2025 (3.125% 2025 Notes)	1,000			1,000
2.00% €750 million notes due 2026 (2.00% 2026 euro Notes)	827			841
2.60% notes due 2026 (2.60% 2026 Notes)	1,250			1,250
5.50% £475 million notes due 2026 (5.50% 2026 pound sterling Notes)	590			630
2.20% notes due 2027 (2.20% 2027 Notes)	750			—
3.20% notes due 2027 (3.20% 2027 Notes)	1,000			1,000
4.00% £700 million notes due 2029 (4.00% 2029 pound sterling Notes)	869			928
2.45% notes due 2030 (2.45% 2030 Notes)	1,250			—
6.375% notes due 2037 (6.375% 2037 Notes)	552			552
6.90% notes due 2038 (6.90% 2038 Notes)	291			291
6.40% notes due 2039 (6.40% 2039 Notes)	466			466
3.15% notes due 2040 (3.15% 2040 Notes)	1,250			—
5.75% notes due 2040 (5.75% 2040 Notes)	412			412
4.95% notes due 2041 (4.95% 2041 Notes)	600			600
5.15% notes due 2041 (5.15% 2041 Notes)	974			974
5.65% notes due 2042 (5.65% 2042 Notes)	487			487
5.375% notes due 2043 (5.375% 2043 Notes)	261			261
4.40% notes due 2045 (4.40% 2045 Notes)	2,250			2,250
4.563% notes due 2048 (4.563% 2048 Notes)	1,415			1,415
3.375% notes due 2050 (3.375% 2050 Notes)	1,250			—
4.663% notes due 2051 (4.663% 2051 Notes)	3,541			3,541
Other notes due 2097	100			100
Unamortized bond discounts, premiums and issuance costs, net	(892		)	(868		)
Fair value adjustments	648			296
Total carrying value of debt	31,848			29,903
Less current portion	(1,840		)	(2,953		)
Total long-term debt	$	30,008		$	26,950

March 31,
2019 December 31,
2018
5.70% notes due 2019 (5.70% 2019 Notes) $ —
$ 1,000
1.90% notes due 2019 (1.90% 2019 Notes) 700
700
Floating Rate Notes due 2019 550
550
2.20% notes due 2019 (2.20% 2019 Notes) 1,400
1,400
2.125% €675 million notes due 2019 (2.125% 2019 euro Notes) 757
774
4.50% notes due 2020 (4.50% 2020 Notes) 300
300
2.125% notes due 2020 (2.125% 2020 Notes) 750
750
Floating Rate Notes due 2020 300
300
2.20% notes due 2020 (2.20% 2020 Notes) 700
700
3.45% notes due 2020 (3.45% 2020 Notes) 900
900
4.10% notes due 2021 (4.10% 2021 Notes) 1,000
1,000
1.85% notes due 2021 (1.85% 2021 Notes) 750
750
3.875% notes due 2021 (3.875% 2021 Notes) 1,750
1,750
1.25% €1,250 million notes due 2022 (1.25% 2022 euro Notes) 1,402
1,433
2.70% notes due 2022 (2.70% 2022 Notes) 500
500
2.65% notes due 2022 (2.65% 2022 Notes) 1,500
1,500
3.625% notes due 2022 (3.625% 2022 Notes) 750
750
0.41% CHF700 million bonds due 2023 (0.41% 2023 Swiss franc Bonds) 703
713
2.25% notes due 2023 (2.25% 2023 Notes) 750
750
3.625% notes due 2024 (3.625% 2024 Notes) 1,400
1,400
3.125% notes due 2025 (3.125% 2025 Notes) 1,000
1,000
2.00% €750 million notes due 2026 (2.00% 2026 euro Notes) 841
860
2.60% notes due 2026 (2.60% 2026 Notes) 1,250
1,250
5.50% £475 million notes due 2026 (5.50% 2026 pound sterling Notes) 619
606
3.20% notes due 2027 (3.20% 2027 Notes)
1,000
1,000
4.00% £700 million notes due 2029 (4.00% 2029 pound sterling Notes) 912
893
6.375% notes due 2037 (6.375% 2037 Notes) 552
552
6.90% notes due 2038 (6.90% 2038 Notes) 291
291
6.40% notes due 2039 (6.40% 2039 Notes) 466
466
5.75% notes due 2040 (5.75% 2040 Notes) 412
412
4.95% notes due 2041 (4.95% 2041 Notes) 600
600
5.15% notes due 2041 (5.15% 2041 Notes) 974
974
5.65% notes due 2042 (5.65% 2042 Notes) 487
487
5.375% notes due 2043 (5.375% 2043 Notes) 261
261
4.40% notes due 2045 (4.40% 2045 Notes) 2,250
2,250
4.563% notes due 2048 (4.563% 2048 Notes) 1,415
1,415
4.663% notes due 2051 (4.663% 2051 Notes) 3,541
3,541
Other notes due 2097 100
100
Unamortized bond discounts, premiums and issuance costs, net (886 ) (896 )
Fair value adjustments 77
(53 )
Total carrying value of debt 33,024
33,929
Less current portion (3,705 ) (4,419 )
Total long-term debt $ 29,319
$ 29,510

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

Debt issuances and repayments

During the three months ended March 31, 2020, we issued $5.0 billion of debt, consisting of the 1.90% 2025 Notes, the 2.20% 2027 Notes, the 2.45% 2030 Notes, the 3.15% 2040 Notes and the 3.375% 2050 Notes. In the event of a change-in-control triggering event, as defined in the terms of the notes, we may be required to purchase all or a portion of these notes at a price equal to 101% of the principal amount of the notes plus accrued and unpaid interest. In addition, these notes may be redeemed at any time at our option, in whole or in part, at the principal amount of the notes being redeemed plus accrued and unpaid interest and a “make-whole” amount, which are defined by the terms of the notes. The notes may be redeemed without payment of make-whole amounts if redemption occurs during specified periods of time immediately prior to the maturity of the notes. Such time periods range from one month to six months prior to maturity.

A portion of the proceeds from the issuance of these notes were used to redeem the 3.45% 2020 Notes, the 4.10% 2021 Notes, the 1.85% 2021 Notes and $300 million aggregate principal amount of our 3.875% 2021 Notes. In connection with the redemption of these notes, we paid a total of $50 million in make-whole amounts plus associated accrued and unpaid interest, all of which was recognized in Interest expense, net, in the Condensed Consolidated Statements of Income during the three months ended March 31, 2020. In addition to these redemptions, the 4.50% 2020 Notes matured and were repaid during the three months ended March 31, 2020.

Interest rate swaps

In connection with the redemption of certain of the notes discussed above, associated interest rate swap contracts with an aggregate notional value of $2.2 billion were terminated. Additionally, due to historically low interest rates, during the three months ended March 31, 2020, we terminated interest rate swaps with an aggregate notional amount of $5.2 billion that hedged the 3.625% 2024 Notes, 2.60% 2026 Notes, 4.663% 2051 Notes and portions of our 3.625% 2022 Notes and 3.125% 2025 Notes, which resulted in the receipt of $576 million of cash and reduced counterparty credit risk. Immediately following termination of these contracts, we entered into new interest rate swap agreements at then-current interest rates on the same $5.2 billion principal amount of notes. See Note 12, Derivative instruments.

The effective interest rates on notes for which we have entered into interest rate swap contracts and the related notional amounts of these contracts were as follows (dollar amounts in millions):



	March 31, 2020			December 31, 2019
Notes	Notional amounts		Effective interest rates	Notional amounts		Effective interest rates
3.45% 2020 Notes	$	—	LIBOR + 1.1%	$	900	LIBOR + 1.1%
4.10% 2021 Notes	—		LIBOR + 1.7%	1,000		LIBOR + 1.7%
3.875% 2021 Notes	1,450		LIBOR + 2.0%	1,750		LIBOR + 2.0%
3.625% 2022 Notes	750		LIBOR + 2.7%	750		LIBOR + 1.6%
3.625% 2024 Notes	1,400		LIBOR + 3.2%	1,400		LIBOR + 1.4%
3.125% 2025 Notes	1,000		LIBOR + 1.8%	1,000		LIBOR + 0.9%
2.60% 2026 Notes	1,250		LIBOR + 1.8%	1,250		LIBOR + 0.3%
4.663% 2051 Notes⁽¹⁾	1,500		LIBOR + 2.6%	1,500		LIBOR + 0.0%
Total notional amounts	$	7,350		$	9,550

^____________


⁽¹⁾	Excludes an additional 1.5% of interest for the difference between the coupon rate paid to note holders and the fixed rate received under the interest rate swap contracts.

10. Stockholders’ equity

Stock repurchase program

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



	2020			2019
	Shares	Dollars		Shares	Dollars
First quarter	4.3	$	933	15.9	$	3,031

2019 2018
Shares Dollars Shares Dollars
First quarter 15.9
$ 3,031
56.4
$ 10,787

In December 2019, our Board of Directors increased the amount authorized under our stock repurchase program by an additional $4.0 billion. As of March 31, ~~2019, $2.1~~2020, $5.5 billion of ~~authority~~authorization remained available under our stock repurchase program.

Dividends

In March 2020, the Board of Directors declared a quarterly cash dividend of $1.60 per share, which will be paid in June 2020. In December 2019, the Board of Directors declared a quarterly cash dividend of ~~$1.45 per share, which will be paid in June 2019. In December 2018, the Board of Directors declared a quarterly cash dividend of $1.45~~$1.60 per share, which was paid in March ~~2019.~~2020.

Accumulated other comprehensive income (loss)

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



	Foreign currency translation			Cash flow hedges			Available-for-sale securities			Other			AOCI
Balance as of December 31, 2019	$	(718	)	$	175		$	22		$	(7	)	$	(528	)
Foreign currency translation adjustments	(52		)	—			—			—			(52		)
Unrealized (losses) gains	—			(162		)	8			—			(154		)
Reclassification adjustments to income	—			84			(33		)	—			51
Other	—			—			—			(2		)	(2		)
Income taxes	—			17			6			—			23
Balance as of March 31, 2020	$	(770	)	$	114		$	3		$	(9	)	$	(662	)

Foreign
currency
translation

Cash flow
hedges

Available-for-sale
securities
Other AOCI
Balance as of December 31, 2018 $ (670 ) $ 241
$ (338 ) $ (2 ) $ (769 )
Foreign currency translation adjustments (13 ) —
—
—
(13 )
Unrealized gains —
30
218
—
248
Reclassification adjustments to income —
28
4
—
32
Income taxes —
(13 ) (1 ) —
(14 )
Balance as of March 31, 2019 $ (683 ) $ 286
$ (117 ) $ (2 ) $ (516 )

Reclassifications out of AOCI and into earnings were as follows (in millions):



	Three months ended March 31,
Components of AOCI	2020			2019			Condensed Consolidated Statements of Income locations
Cash flow hedges:
Foreign currency contract gains	$	49		$	14		Product sales
Cross-currency swap contract losses	(133		)	(42		)	Interest and other income, net
	(84		)	(28		)	Income before income taxes
	18			6			Provision for income taxes
	$	(66	)	$	(22	)	Net income
Available-for-sale securities:
Net realized gains (losses)	$	33		$	(4	)	Interest and other income, net
	(7		)	—			Provision for income taxes
	$	26		$	(4	)	Net income

Three months ended March 31,
Components of AOCI 2019 2018
Condensed Consolidated
Statements of Income locations
Cash flow hedges:
Foreign currency contract gains (losses) $ 14
$ (34 ) Product sales
Cross-currency swap contract (losses) gains (42 ) 164
Interest and other income, net
(28 ) 130
Income before income taxes
6
(28 ) Provision for income taxes
$ (22 ) $ 102
Net income
Available-for-sale securities:
Net realized losses $ (4 ) $ (134 ) Interest and other income, net
—
1
Provision for income taxes
$ (4 ) $ (133 ) Net income



		Three months ended March 31,

11. Fair value measurement

To estimate the fair value of our financial assets and liabilities, we use valuation approaches within a hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing an asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the inputs that market participants would use in pricing an asset or liability and are developed based on the best information available in the circumstances. The fair value hierarchy is divided into three levels based on the source of inputs as follows:



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

The availability of observable inputs can vary among the various types of financial assets and liabilities. To the extent that the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. In certain cases, the inputs used for measuring fair value may fall into different levels of the fair value hierarchy. In such cases, for financial statement disclosure purposes, the level in the fair value hierarchy within which the fair value measurement is categorized is based on the lowest level of input used that is significant to the overall fair value measurement.

The fair values of each major class of the Company’s financial assets and liabilities measured at fair value on a recurring basis were as follows (in millions):



	Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)

Fair value measurement as of March 31, 2020, using:							Total
Assets:
Available-for-sale securities:
U.S. Treasury notes	$	176	$	—	$	—	$	176
U.S. Treasury bills	900		—		—		900
Corporate debt securities:
Financial	—		12		—		12
Industrial	—		12		—		12
Other	—		—		—		—
Residential-mortgage-backed securities	—		—		—		—
Money market mutual funds	5,762		—		—		5,762
Other short-term interest-bearing securities	—		432		—		432
Equity securities	220		—		—		220
Derivatives:
Foreign currency contracts	—		375		—		375
Cross-currency swap contracts	—		10		—		10
Interest rate swap contracts	—		89		—		89
Total assets	$	7,058	$	930	$	—	$	7,988

Liabilities:
Derivatives:
Foreign currency contracts	$	—	$	5	$	—	$	5
Cross-currency swap contracts	—		657		—		657
Interest rate swap contracts	—		23		—		23
Contingent consideration obligations	—		—		60		60
Total liabilities	$	—	$	685	$	60	$	745

Quoted prices in
active markets for
identical assets
(Level 1)
Significant
other observable
inputs
(Level 2)

Significant
unobservable
inputs
(Level 3)

Fair value measurement as of March 31, 2019, using: Total
Assets:
Interest-bearing securities:
U.S. Treasury notes $ 2,682
$ —
$ —
$ 2,682
U.S. Treasury bills 3,475
—
—
3,475
Other government-related debt securities:
U.S. —
111
—
111
Foreign and other —
958
—
958
Corporate debt securities:
Financial —
2,750
—
2,750
Industrial —
2,458
—
2,458
Other —
566
—
566
Residential-mortgage-backed securities —
1,382
—
1,382
Other mortgage- and asset-backed securities —
467
—
467
Money market mutual funds 4,375
—
—
4,375
Other short-term interest-bearing securities —
6,428
—
6,428
Equity securities 246
—
—
246
Derivatives:
Foreign currency contracts —
238
—
238
Cross-currency swap contracts —
143
—
143
Interest rate swap contracts —
94
—
94
Total assets $ 10,778
$ 15,595
$ —
$ 26,373

Liabilities:
Derivatives:
Foreign currency contracts $ —
$ 8
$ —
$ 8
Cross-currency swap contracts —
429
—
429
Interest rate swap contracts —
54
—
54
Contingent consideration obligations —
—
66
66
Total liabilities $ —
$ 491
$ 66
$ 557



	Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)

Fair value measurement as of December 31, 2019, using:							Total
Assets:
Available-for-sale securities:
U.S. Treasury notes	$	360	$	—	$	—	$	360
U.S. Treasury bills	—		—		—		—
Corporate debt securities:
Financial	—		1,121		—		1,121
Industrial	—		834		—		834
Other	—		198		—		198
Residential-mortgage-backed securities	—		182		—		182
Money market mutual funds	5,250		—		—		5,250
Other short-term interest-bearing securities	—		289		—		289
Equity securities	303		—		—		303
Derivatives:
Foreign currency contracts	—		224		—		224
Cross-currency swap contracts	—		66		—		66
Interest rate swap contracts	—		259		—		259
Total assets	$	5,913	$	3,173	$	—	$	9,086

Liabilities:
Derivatives:
Foreign currency contracts	$	—	$	31	$	—	$	31
Cross-currency swap contracts	—		315		—		315
Interest rate swap contracts	—		—		—		—
Contingent consideration obligations	—		—		61		61
Total liabilities	$	—	$	346	$	61	$	407

Quoted prices in
active markets for
identical assets
(Level 1)

Significant
other observable
inputs
(Level 2)

Significant
unobservable
inputs
(Level 3)

Fair value measurement as of December 31, 2018, using: Total
Assets:
Interest-bearing securities:
U.S. Treasury notes $ 2,663
$ —
$ —
$ 2,663
U.S. Treasury bills 8,191
—
—
8,191
Other government-related debt securities:
U.S. —
110
—
110
Foreign and other —
932
—
932
Corporate debt securities:
Financial —
2,697
—
2,697
Industrial —
2,504
—
2,504
Other —
562
—
562
Residential-mortgage-backed securities —
1,422
—
1,422
Other mortgage- and asset-backed securities —
469
—
469
Money market mutual funds 5,659
—
—
5,659
Other short-term interest-bearing securities —
3,515
—
3,515
Equity securities 176
—
—
176
Derivatives:
Foreign currency contracts —
182
—
182
Cross-currency swap contracts —
170
—
170
Interest rate swap contracts —
56
—
56
Total assets $ 16,689
$ 12,619
$ —
$ 29,308

Liabilities:
Derivatives:
Foreign currency contracts $ —
$ 26
$ —
$ 26
Cross-currency swap contracts —
401
—
401
Interest rate swap contracts —
149
—
149
Contingent consideration obligations —
—
72
72
Total liabilities $ —
$ 576
$ 72
$ 648

Interest-bearing and equity securities

The fair values of our U.S. Treasury securities, money market mutual funds and equity securities are based on quoted market prices in active markets, with no valuation adjustment.

~~Most~~As of March 31, 2020, our ~~other government-related and~~ corporate debt securities are investment grade and have maturity dates of~~five~~three years or less from the balance sheet date. Our ~~other government-related~~corporate debt securities portfolio ~~is composed of securities with~~has weighted-average credit ratings of A–BBB or equivalent by Standard & Poor’s Financial Services LLC (S&P), BBB+ by Moody’s Investors Service, Inc. (Moody’s)~~, or~~ and A– by Fitch Ratings, Inc. (Fitch)~~; and our corporate debt securities portfolio has weighted-average credit ratings of A– or equivalent by Fitch and BBB+ or equivalent by S&P or Moody’s.~~. We estimate the fair values of these securities by taking into consideration valuations obtained from third-party pricing services. The pricing services use industry-standard valuation models, including both income- and market-based approaches, for which all significant inputs are observable either directly or indirectly to estimate fair value. The inputs include reported trades of and broker-dealer quotes on the same or similar securities; issuer credit spreads; benchmark securities; and other observable inputs.

Our residential-mortgage-, other-mortgage- and asset-backed-securities portfolio is composed entirely of senior tranches with credit ratings of AAA by S&P, Moody’s or Fitch. We estimate the fair values of these securities by taking into consideration valuations obtained from third-party pricing services. The pricing services use industry-standard valuation models, including both income- and market-based approaches, for which all significant inputs are observable either directly or indirectly to estimate fair value. The inputs include reported trades of and broker-dealer quotes on the same or similar securities; issuer credit spreads; benchmark securities; prepayment or default projections based on historical data; and other observable inputs.

We value our other short-term interest-bearing securities at amortized cost, which approximates fair value given their near-term maturity dates.

Derivatives

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

Our cross-currency swap contracts are with counterparties that have minimum credit ratings of A– or equivalent by S&P, Moody’s or Fitch. We estimate the fair values of these contracts by taking into consideration valuations obtained from a third-party valuation service that uses an income-based industry-standard valuation model for which all significant inputs are observable either directly or indirectly. These inputs include foreign currency exchange rates, LIBOR, swap rates, obligor credit default swap rates and cross-currency-basis swap spreads. See Note 12, Derivative instruments.

Our interest rate swap contracts are with counterparties that have minimum credit ratings of A– or equivalent by S&P, Moody’s or Fitch. We estimate the fair values of these contracts by using an income-based industry-standard valuation model for which all significant inputs are observable either directly or indirectly. These inputs include LIBOR, swap rates and obligor credit default swap rates. See Note 12, Derivative instruments.

~~Contingent consideration obligations~~

As a result of our business acquisitions, we have incurred contingent consideration obligations. The contingent consideration obligations are recorded at their fair values by using probability-adjusted discounted cash flows, and we revalue these obligations each reporting period until the related contingencies have been resolved. The fair value measurements of these obligations are based on significant unobservable inputs related to licensing rights and product candidates acquired in business combinations, and they are reviewed quarterly by management in our R&D and commercial sales organizations. These inputs include, as applicable, estimated probabilities and the timing of achieving specified regulatory and commercial milestones as well as estimated annual sales. Significant changes that increase or decrease the probabilities of achieving the related regulatory and commercial events or that shorten or lengthen the time required to achieve such events or that increase or decrease estimated annual sales would result in corresponding increases or decreases in the fair values of the obligations, as applicable. Changes in the fair values of contingent consideration obligations are recognized in Other operating expenses in the Condensed Consolidated Statements of Income. Changes in the carrying amounts of contingent consideration obligations for the three months ended March 31, 2019 and 2018 were not material.

During the three months ended March 31, ~~2019~~2020 and ~~2018, there were no transfers of assets or liabilities between fair value measurement levels, and~~2019, there were no material remeasurements to the fair values of assets and liabilities that are not measured at fair value on a recurring basis.

Summary of the fair values of other financial instruments

Cash equivalents

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

Borrowings

We estimated the fair values of our borrowings by using Level 2 inputs. As of March 31, ~~2019~~2020 and December 31, ~~2018,~~2019, the aggregate fair values of our borrowings were ~~$34.8~~$35.8 billion and ~~$35.0~~$33.7 billion, respectively, and the carrying values were ~~$33.0~~$31.8 billion and ~~$33.9~~$29.9 billion, respectively.

12. Derivative instruments

The Company is exposed to foreign currency exchange rate and interest rate risks related to its business operations. To reduce our risks related to such exposures, we use or have used certain derivative instruments, including foreign currency forward, foreign currency option, cross-currency swap, forward interest rate and interest rate swap contracts. We do not use derivatives for speculative trading purposes.

Cash flow hedges

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

As of ~~both~~ March 31, ~~2019~~2020 and December 31, ~~2018,~~2019, we had outstanding foreign currency forward contracts with aggregate notional amounts of ~~$4.5~~$4.9 billion and ~~outstanding foreign currency option contracts with aggregate notional amounts of $21 million.~~$5.0 billion, respectively. We have designated these foreign currency forward ~~and foreign currency option~~ contracts, which are primarily euro based, as cash flow hedges. Accordingly, we report the unrealized gains and losses on these contracts in AOCI in the Condensed Consolidated Balance Sheets, and we reclassify them to Product sales in the Condensed Consolidated Statements of Income in the same periods during which the hedged transactions affect earnings.

To hedge our exposure to foreign currency exchange rate risk associated with certain of our long-term debt denominated in foreign currencies, we enter into cross-currency swap contracts. Under the terms of such contracts, we paid euros, pounds sterling and Swiss francs and received U.S. dollars for the notional amounts at the inception of the contracts; and based on these notional amounts, we exchange interest payments at fixed rates over the lives of the contracts by paying U.S. dollars and receiving euros, pounds sterling and Swiss francs. In addition, we will pay U.S. dollars to and receive euros, pounds sterling and Swiss francs from the counterparties at the maturities of the contracts for these same notional amounts. The terms of these contracts correspond to the related hedged debt, thereby effectively converting the interest payments and principal repayment on the debt from euros, pounds sterling and Swiss francs to U.S. dollars. We have designated these cross-currency swap contracts as cash flow hedges. Accordingly, the unrealized gains and losses on these contracts are reported in AOCI in the Condensed Consolidated Balance Sheets and reclassified to Interest and other income, net, in the Condensed Consolidated Statements of Income in the same periods during which the hedged debt affects earnings.

The notional amounts and interest rates of our cross-currency swaps as of March 31, ~~2019,~~2020, were as follows (notional amounts in millions):



	Foreign currency				U.S. dollars
Hedged notes	Notional amounts		Interest rates		Notional amounts		Interest rates
1.25% 2022 euro Notes	€	1,250	1.3	%	$	1,388	3.2	%
0.41% 2023 Swiss franc Bonds	CHF	700	0.4	%	$	704	3.4	%
2.00% 2026 euro Notes	€	750	2.0	%	$	833	3.9	%
5.50% 2026 pound sterling Notes	£	475	5.5	%	$	747	6.0	%
4.00% 2029 pound sterling Notes	£	700	4.0	%	$	1,111	4.5	%

Foreign currency U.S. dollars
Hedged notes Notional amounts Interest rates Notional amounts Interest rates
2.125% 2019 euro Notes € 675
2.1 % $ 864
2.6 %
1.25% 2022 euro Notes € 1,250
1.3 % $ 1,388
3.2 %
0.41% 2023 Swiss franc Bonds CHF 700
0.4 % $ 704
3.4 %
2.00% 2026 euro Notes € 750
2.0 % $ 833
3.9 %
5.50% 2026 pound sterling Notes £ 475
5.5 % $ 747
6.0 %
4.00% 2029 pound sterling Notes £ 700
4.0 % $ 1,111
4.5 %

In connection with the anticipated issuance of long-term fixed-rate debt, we occasionally enter into forward interest rate contracts in order to hedge the variability in cash flows due to changes in the applicable U.S. Treasury rate between the time we enter into these contracts and the time the related debt is issued. Gains and losses on forward interest rate contracts, which are designated as cash flow hedges, are recognized in AOCI in the Condensed Consolidated Balance Sheets and are amortized into Interest expense, net, in the Condensed Consolidated Statements of Income over the lives of the associated debt issuances. Amounts recognized in connection with forward interest rate swaps during the three months ended March 31, ~~2019,~~2020, and amounts expected to be recognized during the subsequent 12 months are not material.

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



	Three months ended March 31,
Derivatives in cash flow hedging relationships	2020			2019
Foreign currency contracts	$	239		$	85
Cross-currency swap contracts	(401		)	(55		)
Total unrealized (losses) gains	$	(162	)	$	30

Three months ended
March 31,
Derivatives in cash flow hedging relationships 2019 2018
Foreign currency contracts $ 85
$ (89 )
Cross-currency swap contracts (55 ) 238
Total unrealized gains $ 30
$ 149

The locations in the Condensed Consolidated Statements of Income and the gains and losses reclassified out of AOCI and into earnings for our derivative instruments designated as cash flow hedges were as follows (in millions):

Three months ended
March 31,
Derivatives in cash flow hedging relationships Condensed Consolidated Statements of Income locations 2019 2018
Foreign currency contracts Product sales $ 14
$ (34 )
Cross-currency swap contracts Interest and other income, net (42 ) 164
Total realized (losses) gains $ (28 ) $ 130

No portions of our cash flow hedge contracts were excluded from the assessment of hedge effectiveness. As of March 31, 2019, we expected to reclassify $83 million of net losses on our foreign currency and cross-currency swap contracts out of AOCI and into earnings during the next 12 months.

Fair value hedges

To achieve a desired mix of fixed-rate and floating-rate debt, we entered into interest rate swap contracts that qualified for and were designated as fair value hedges. These interest rate swap contracts effectively convert fixed-rate coupons to floating-rate LIBOR-based coupons over the terms of the related hedge contracts. As of March 31, ~~2019~~2020 and December 31, ~~2018,~~2019, we had interest rate swap contracts with aggregate notional amounts of ~~$10.95~~$7.4 billion and $9.6 billion, respectively, that hedge certain portions of our long-term debt issuances.

Interest rate swaps with an aggregate notional value of $2.2 billion were terminated during the three months ended March 31, 2020, in connection with the redemption of certain of our notes. The termination of these interest rate swaps resulted in a gain of $17 million recognized in Interest expense, net, in the Condensed Consolidated Statements of Income. Additionally, we terminated $5.2 billion aggregate notional amount of interest rate swaps, which resulted in the receipt of $576 million from the counterparties that was included in Net cash provided by operating activities in the Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2020. This amount will be recognized in Interest expense, net, in the Condensed Consolidated Statements of Income over the remaining life of the underlying notes. Immediately following the termination of these interest rate swap contracts, we entered into new interest rate swap agreements at then-current interest rates on the same $5.2 billion principal amount of notes. See Note 9, Financing arrangements, for information on our interest rate swaps.

For interest rate swap contracts that qualify for and are designated as fair value hedges, we recognize in Interest expense, net, in the Condensed Consolidated Statements of Income the unrealized gain or loss on the derivative resulting from the change in fair value during the period, as well as the offsetting unrealized loss or gain of the hedged item resulting from the change in fair value during the period attributable to the hedged risk. If a hedging relationship involving an interest rate swap contract is terminated, the gain or loss realized on contract termination is recorded as an adjustment to the carrying value of the debt and amortized into Interest expense, net, over the remaining life of the previously hedged debt.

~~Net unrealized gains and losses on our outstanding interest rate swap contracts were as follows (in millions):~~

Three months ended
March 31,
Derivatives in fair value hedging relationships 2019 2018
Net unrealized gains (losses) recognized on interest rate swap contracts $ 133
$ (164 )
Net unrealized (losses) gains recognized on related hedged debt $ (133 ) $ 164

The hedged liabilities and related cumulative-basis adjustments for fair value hedges of those liabilities were recorded in the Condensed Consolidated Balance Sheets as follows (in millions):


	Carrying amounts of hedged liabilities⁽¹⁾				Cumulative amounts of fair value hedging adjustments related to the carrying amounts of the hedged liabilities⁽²⁾						Carrying amounts of hedged liabilities⁽¹⁾				Cumulative amounts of fair value hedging adjustments related to the carrying amounts of the hedged liabilities⁽²⁾
Condensed Consolidated Balance Sheets locations	March 31, 2019		December 31, 2018		March 31, 2019			December 31, 2018			March 31, 2020		December 31, 2019		March 31, 2020		December 31, 2019
Current portion of long-term debt	$	1,398	$	2,396	$	(2	)	$	(3	)	$	90	$	903	$	90	$	4
Long-term debt	$	9,494	$	9,361	$	79		$	(50	)	$	7,784	$	8,814	$	558	$	292

^____________

⁽¹⁾

Current portion of long-term debt includes ~~$1.0 billion of carrying value with discontinued hedging relationships as of December 31, 2018. Long-term debt includes $137~~$90 million of carrying value with discontinued hedging relationships as of March 31, ~~2019~~2020. Long-term debt includes $592 million and $136 million of carrying value with discontinued hedging relationships as of March 31, 2020 and December 31, ~~2018.~~2019, respectively.

⁽²⁾

Current portion of long-term debt includes ~~$3 million of hedging adjustments on discontinued hedging relationships as of December 31, 2018. Long-term debt includes $37~~$90 million of hedging adjustments on discontinued hedging relationships as of March 31, ~~2019~~2020. Long-term debt includes $492 million and $36 million of hedging adjustments on discontinued hedging relationships as of March 31, 2020 and December 31, ~~2018.~~2019, respectively.

Impact of hedging transactions

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


	Three months ended March 31, 2019								Three months ended March 31, 2020
	Product sales		Interest and other income, net			Interest (expense), net			Product sales		Interest and other income, net			Interest (expense), net
Total amounts recorded in income and (expense) line items presented in the Condensed Consolidated Statements of Income	$	5,286	$	185		$	(343	)	$	5,894	$	11		$	(346	)
The effects of cash flow and fair value hedging:
Gains (losses) on cash flow hedging relationships reclassified out of AOCI:
Foreign currency contracts	$	14	$	—		$	—		$	49	$	—		$	—
Cross-currency swap contracts	$	—	$	(42	)	$	—		$	—	$	(133	)	$	—
Gains (losses) on fair value hedging relationships—interest rate swap agreements:
Hedged items⁽¹⁾	$	—	$	—		$	(130	)	$	—	$	—		$	210
Derivatives designated as hedging instruments	$	—	$	—		$	133		$	—	$	—		$	(190	)



	Three months ended March 31, 2019
	Product sales		Interest and other income, net			Interest (expense), net
Total amounts recorded in income and (expense) line items presented in the Condensed Consolidated Statements of Income	$	5,286	$	185		$	(343	)
The effects of cash flow and fair value hedging:
Gains (losses) on cash flow hedging relationships reclassified out of AOCI:
Foreign currency contracts	$	14	$	—		$	—
Cross-currency swap contracts	$	—	$	(42	)	$	—
(Losses) gains on fair value hedging relationships—interest rate swap agreements:
Hedged items⁽¹⁾	$	—	$	—		$	(130	)
Derivatives designated as hedging instruments	$	—	$	—		$	133

No portions of our cash flow hedge contracts were excluded from the assessment of hedge effectiveness. As of March 31, 2020, we expected to reclassify $162 million of net gains on our foreign currency and cross-currency swap contracts out of AOCI and into earnings during the next 12 months.

Derivatives not designated as hedges

To reduce our exposure to foreign currency fluctuations in certain assets and liabilities denominated in foreign currencies, we enter into foreign currency forward contracts that are not designated as hedging transactions. ~~These~~Most of these exposures are hedged on a month-to-month basis. As of March 31, ~~2019~~2020 and December 31, ~~2018,~~2019, the total notional amounts of these foreign currency forward contracts were ~~$891 million~~$0.8 billion and ~~$737 million,~~$1.2 billion, respectively. Gains and losses recognized in earnings for our derivative instruments not designated as hedging instruments were not material for the three months ended March 31, ~~2019~~2020 and ~~2018.~~2019.

The fair values of derivatives included in the Condensed Consolidated Balance Sheets were as follows (in millions):

Condensed Consolidated

Balance Sheets locations

Condensed Consolidated

Balance Sheets locations



	Derivative assets			Derivative liabilities
December 31, 2019	Condensed Consolidated Balance Sheets locations	Fair values		Condensed Consolidated Balance Sheets locations	Fair values
Derivatives designated as hedging instruments:
Foreign currency contracts	Other current assets/ Other assets	$	223	Accrued liabilities/ Other noncurrent liabilities	$	31
Cross-currency swap contracts	Other current assets/ Other assets	66		Accrued liabilities/ Other noncurrent liabilities	315
Interest rate swap contracts	Other current assets/ Other assets	259		Accrued liabilities/ Other noncurrent liabilities	—
Total derivatives designated as hedging instruments		548			346
Derivatives not designated as hedging instruments:
Foreign currency contracts	Other current assets	1		Accrued liabilities	—
Total derivatives not designated as hedging instruments		1			—
Total derivatives		$	549		$	346

Derivative assets Derivative liabilities
December 31, 2018
Condensed Consolidated
Balance Sheets locations
Fair values Condensed Consolidated
Balance Sheets locations Fair values
Derivatives designated as hedging instruments:
Foreign currency contracts Other current assets/ Other assets $ 181
Accrued liabilities/ Other noncurrent liabilities $ 26
Cross-currency swap contracts Other current assets/ Other assets 170
Accrued liabilities/ Other noncurrent liabilities 401
Interest rate swap contracts Other current assets/ Other assets 56
Accrued liabilities/ Other noncurrent liabilities 149
Total derivatives designated as hedging instruments 407
576
Derivatives not designated as hedging instruments:
Foreign currency contracts Other current assets 1
Accrued liabilities —
Total derivatives not designated as hedging instruments 1
—
Total derivatives $ 408
$ 576

Our derivative contracts that were in liability positions as of March 31, ~~2019,~~2020, contain certain credit-risk-related contingent provisions that would be triggered if (i) we were to undergo a change in control and (ii) our or the surviving entity’s creditworthiness deteriorates, which is generally defined as having either a credit rating that is below investment grade or a materially weaker creditworthiness after the change in control. If these events were to occur, the counterparties would have the right but not the obligation to close the contracts under early-termination provisions. In such circumstances, the counterparties could request immediate settlement of these contracts for amounts that approximate the then current fair values of the contracts. In addition, our derivative contracts are not subject to any type of master netting arrangement, and amounts due either to or from a counterparty under the contracts may be offset against other amounts due either to or from the same counterparty only if an event of default or termination, as defined, were to occur.

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

13. Contingencies and commitments

In the ordinary course of business, we are involved in various legal proceedings, government investigations and other matters that are complex in nature and have outcomes that are difficult to predict. See our Annual Report on Form 10-K for the year ended December 31, ~~2018,~~2019, Part I, Item 1A. Risk Factors—Our business may be affected by litigation and government investigations. We describe our legal proceedings and other matters that are significant or that we believe could become significant in this footnote.

We record accruals for loss contingencies to the extent that we conclude it is probable that a liability has been incurred and the amount of the related loss can be reasonably estimated. We evaluate, on a quarterly basis, developments in legal proceedings and other matters that could cause an increase or decrease in the amount of the liability that has been accrued previously.

Our legal proceedings involve various aspects of our business and a variety of claims, some of which present novel factual allegations and/or unique legal theories. In each of the matters described in this filing, or in Note ~~20,~~19, Contingencies and commitments, to the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, ~~2018,~~2019, in which we could incur a liability, our opponents seek an award of a not-yet-quantified amount of damages or an amount that is not material. In addition, a number of the matters pending against us are at very early stages of the legal process, which in complex proceedings of the sort we face often extend for several years. As a result, none of the matters described in this filing, or in Note ~~20,~~19, Contingencies and commitments, to the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, ~~2018,~~2019, in which we could incur a liability, have progressed sufficiently through discovery and/or the development of important factual information and legal issues to enable us to estimate a range of possible loss, if any, or such amounts are not material. While it is not possible to accurately predict or determine the eventual outcomes of these matters, an adverse determination in one or more of these matters currently pending could have a material adverse effect on our consolidated results of operations, financial position or cash flows.

Certain recent developments concerning our legal proceedings and other matters are discussed below:

~~Novartis Breach of Contract Action~~Abbreviated New Drug Application (ANDA) Patent Litigation

KYPROLIS^® (carfilzomib) ANDA Patent Litigation

Onyx Therapeutics, Inc. v. Cipla Limited, et al.

On ~~April 4, 2019, Amgen filed a lawsuit in~~March 30, 2020, the U.S. District Court for the ~~Southern~~District of Delaware (the Delaware District Court) issued an order advising the parties in the litigation that, due to the recent and current challenges, the court does not anticipate issuing its post-trial opinion until approximately on or before May 8, 2020.

Otezla^® (apremilast) ANDA Patent Litigation

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

On February 14, 2020, the U.S. District Court for the District of New ~~York against Novartis Pharma AG (Novartis) seeking a declaratory judgment that Novartis materially breached two collaboration agreements related to~~Jersey (the New Jersey District Court) granted the ~~development~~motion by Amgen and ~~commercialization of Aimovig~~^® ~~(erenumab-aooe) due to Novartis’ affiliate Sandoz Gmbh (Sandoz) entering into a contract manufacturing agreement with Alder BioPharmaceuticals, Inc. (Alder) related to eptinezumab,~~Celgene Corp. (Celgene) and issued an ~~expected direct competitor to Aimovig~~^® ~~and entrant~~order substituting Amgen for Celgene as plaintiff in the ~~calcitonin gene-related peptide (CGRP)-related migraine therapy market. Amgen seeks to terminate its collaboration agreements with Novartis~~consolidated action and ~~also seeks damages from Novartis for breach of contract and negligent misrepresentation.~~

~~Also on April 4, 2019, Novartis initiated a separate lawsuit against Amgen~~all related actions, terminating Celgene as plaintiff in the ~~same court seeking declaratory~~consolidated action and all related actions, and amending the case caption in the consolidated action and all related actions to reflect Amgen as the sole plaintiff.

On March 25, 2020, based on a joint request by Amgen and Unichem Laboratories, Ltd. (Unichem), the New Jersey District Court entered a consent judgment ~~that Novartis, alternatively, did not materially breach~~and injunction prohibiting the ~~collaboration agreements~~making, using, selling, offering to sell, or ~~even if it did breach~~importing of Unichem’s apremilast product during the ~~collaboration agreements, such breach was not material~~term of the U.S. Patent Nos. 6,962,940 (the ’940 Patent); 7,427,638 (the ’638 Patent); 7,659,302 (the ’302 Patent); 7,893,101 (the ’101 Patent); 8,455,536 (the ’536 Patent); 9,018,243 (the ’243 Patent); 9,724,330 (the ’330 Patent); and ~~has been cured, and that Amgen may not terminate the collaboration agreements.~~10,092,541 (the ’541 Patent), unless authorized pursuant to a confidential settlement agreement. On April ~~8, 2019,~~3, 2020, based on a joint request by Amgen ~~answered Novartis’ complaint~~ and ~~filed counterclaims seeking~~Annora Pharma Private Ltd. and Hetero USA Inc. (collectively, Hetero), the New Jersey District Court entered a ~~declaratory~~consent judgment ~~that Novartis materially breached~~and injunction prohibiting the ~~collaboration agreements due~~making, using, selling, offering to ~~its affiliate Sandoz entering into~~sell, or importing of Hetero’s apremilast product during the ~~contract manufacturing agreement with Alder. In its counterclaim, Amgen seeks~~term of the ’940 Patent; U.S. Patent No. 7,208,516; the ’638 Patent; the ’302 Patent; the ’101 Patent; the ’536 Patent; U.S. Patent No. 8,802,717; the ’243 Patent; the ’330 Patent; U.S. Patent No. 9,872,854 and the ’541 Patent, unless authorized pursuant to ~~terminate its collaboration agreements with Novartis and also seeks damages from Novartis for breach of contract and negligent misrepresentation.~~a confidential settlement agreement. Trial in the consolidated action is scheduled to commence in May 2021.

Sensipar^®(cinacalcet) ANDA Patent Litigation

Amgen Inc. v. Amneal Pharmaceuticals LLC, et al. (formerly, Amgen Inc. v. Aurobindo Pharma Ltd. et al.) ~~ANDA Patent Litigation~~Consolidated Case

On ~~March 19, 2019,~~February 13, 2020, Amgen filed an emergency motion for an injunction pending appeal, seeking an order from the U.S. District Court for the District of Delaware (the Delaware District Court) enjoining defendant Piramal Healthcare UK Limited (Piramal) from making, using, selling, offering for sale or importing its generic cinacalcet product. Amgen’s motion follows an announcement that Slate Run Pharmaceuticals LLC (Slate Run), in partnership with Piramal, had begun selling Piramal’s generic cinacalcet product at risk notwithstanding the appeals pending atpetitioned the U.S. Court of Appeals for the Federal Circuit (the Federal Circuit Court)~~. On April 15, 2019, the Delaware District Court signed an order enjoining Piramal and Slate Run from selling their generic cinacalcet product until certain events occur related~~ to ~~a decision by the Federal Circuit Court on the parties’ appeal. The order has no effect on the product that Piramal and Slate Run have already sold to third parties.~~

On March 21, 2019, defendants Sun Pharma Global FZE, Sun Pharmaceutical Industries, Ltd. and Sun Pharmaceutical Industries, Inc. (collectively, Sun) filed a motion to enforce the settlement agreement entered between Amgen and Sun, contending that Sun’s generic cinacalcet product should not be held off the U.S. market.

On March 26, 2019, the Delaware District Court denied the joint motion for indicative ruling of Watson Laboratories, Inc. and Actavis Pharma, Inc. (collectively, Watson) and Amgen, which had asked the court to vacate its final judgment of noninfringement as to Watson and to enter a proposed consent judgment of infringement and validity of Amgen’s U.S. Patent No. 9,375,405 and an injunction prohibiting the making, having made, using, selling, offering to sell or distributing Watson’s generic cinacalcet product in the United States, or importing Watson’s generic cinacalcet product into the United States, consistent with a confidential settlement agreement entered into by the parties. On April 10, 2019, Amgen filed an appeal to the Federal Circuit Court. On April 29, 2019, the Federal Circuit Court lifted the stay ofrehear Amgen’s appeal of the judgment of noninfringement ~~as to Watson and consolidated it with Amgen’s appeal of the Delaware District Court’s denial of the joint motion for indicative ruling.~~

~~Cipla Ltd. v. Amgen Inc.~~

On March 11, 2019, following an announcement by Cipla Limited and Cipla USA, Inc. (collectively, Cipla) that it had begun selling its generic cinacalcet product in the United States, Amgen filed in the Delaware District Court a counterclaim and related motion for preliminary injunction in Cipla’s lawsuit seeking a declaration that provisions of its February 2018 settlement agreement with Amgen have been triggered by the at-risk launch of a generic cinacalcet product by Teva Pharmaceutical Industries Ltd. (Teva), an affiliate of Watson. Amgen’s motion seeks to prohibit Cipla from making, having made, using, selling, offering to sell or distributing its generic cinacalcet product in breach of such settlement agreement. On April 2, 2019, the Delaware District Court held a hearing on Amgen’s motion for preliminary injunction.

~~Sensipar~~^® ~~Antitrust Class Actions~~

From February 21, 2019, to April 10, 2019, four plaintiffs filed putative class action lawsuits against Amgen and various entities affiliated with Teva alleging anticompetitive conduct in connection with settlements between Amgen and manufacturers of generic cinacalcet product. Two of those actions were brought in the Delaware District Court, captioned ~~UFCW Local 1500 Welfare Fund v. Amgen Inc., et al.~~ ~~(February 21, 2019) (Local 1500) and~~ ~~Cesar Castillo, Inc. v. Amgen Inc., et al.~~ ~~(February 26, 2019) (Castillo). The third action was brought in the U.S. District Court for the District of New Jersey (the New Jersey District Court), captioned~~ ~~Teamsters Local 237 Welfare Fund, et al. v. Amgen Inc., et al.~~ ~~(March 14, 2019) (Local 237) and the fourth action was brought in the U.S. District Court for the Eastern District of Pennsylvania (the Eastern Pennsylvania District Court), captioned~~ ~~KPH Healthcare Services, Inc. a/k/a Kinney Drugs, Inc. v. Amgen Inc., et al~~ ~~(April 10, 2019) (KPH). Each of the lawsuits is brought on behalf of a putative class of direct or indirect purchasers of Sensipar~~^® ~~and alleges that the plaintiffs have overpaid for Sensipar~~^® as a result of Amgen’s conduct that allegedly improperly delayed market entry by manufacturers of generic cinacalcet products. The lawsuits focus predominantly on the settlement among Amgen, Watson and Teva of the parties’ patent infringement litigation. Each of the lawsuits seeks, among other things, treble damages, equitable relief and attorneys’ fees and costs. On April 10, 2019, the plaintiff in the KPH lawsuit filed a motion seeking to have the four lawsuits consolidated and designated as a multidistrict litigation (MDL) in the Eastern Pennsylvania District Court, and the plaintiff in the Local 1500 lawsuit filed a motion seeking to have the four lawsuits, along with ~~Cipla Ltd. v. Amgen Inc., consolidated and designated as a MDL in the Delaware District Court.~~

~~Sanofi / Regeneron Repatha~~^® ~~(evolocumab) Patent Litigation~~

On February 25, 2019, a jury of the Delaware District Court unanimously upheld the validity of claims 7 and 15 of U.S. Patent No. 8,829,165 (the ’165 Patent) and claim 7 of U.S. Patent No. 8,859,741 (the ’741 Patent) in our infringement action against Sanofi, Sanofi-Aventis U.S. LLC and Aventisub LLC, formerly doing business as Aventis Pharmaceuticals Inc. (collectively, Sanofi) and Regeneron Pharmaceuticals, Inc. (Regeneron). The jury also found that claims 19 and 29 of the ’165 Patent meet the enablement requirement, but are invalid for failure to meet the written description requirement. On March 18, 2019, Sanofi and Regeneron filed post-trial motions seeking to reverse judgment as a matter of law or for a new trial with respect to ~~claims 7~~Piramal Healthcare UK Limited, and 15 of the ’165 Patent and claim 7 of the ’741 Patent, and Amgen filed a motion for a permanent injunction. The Delaware District Court has scheduled hearing dates on Amgen’s motion for a permanent injunction for June 6, 13 and 21, 2019.

~~KYPROLIS~~^® ~~(carfilzomib) ANDA Patent Litigation~~

On March 4, 2019, the Delaware District Court entered an order on a stipulation between Onyx Therapeutics, Inc. and Breckenridge Pharmaceutical, Inc. (Breckenridge), providing that Breckenridge infringes the asserted claims of U.S. Patent Nos. 7,417,042; 7,737,112 and 8,207,125, and consolidated this lawsuit against Breckenridge into the existing consolidated case, ~~Onyx Therapeutics, Inc. v. Cipla Limited, et al., for all purposes. Trial in the consolidated case is scheduled to commence on May 6, 2019.~~

~~Bioepis ENBREL (etanercept) Patent Litigation~~

On April 30, 2019, Immunex Corporation and Amgen Manufacturing, Limited (collectively, Amgen), along with Hoffmann-La Roche Inc. (Roche), filed a lawsuit in the New Jersey District Court against Samsung Bioepis Co., Ltd. (Bioepis). This lawsuit stems from Bioepis’s submission of an application for U.S. Food and Drug Administration (FDA) licensure of an etanercept product as biosimilar to Amgen’s ENBREL. Amgen and Roche have asserted infringement of five patents: U.S. Patent Nos. 8,063,182 (the ’182 Patent); 8,163,522 (the ’522 Patent); 7,915,225 (the ’225 Patent); 8,119,605 (the ’605 Patent); and 8,722,631 (the ’631 Patent). By their complaint, Amgen and Roche seek an injunction to prohibit Bioepis from commercializing its biosimilar etanercept product in the United States prior to the expiry of such patents.

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

~~Apotex NEUPOGEN~~^® ~~/ Neulasta~~^® ~~Patent Litigation~~

On April 5, 2019, the U.S. District Court for the Southern District of Florida (the Florida District Court) denied the motion of Apotex Inc. and Apotex Corporation (collectively, Apotex) to dismiss Amgen’s complaint for failure to state a claim. On April 18, 2019, Apotex answered the complaint including counterclaims seeking declaratory judgments of noninfringement and invalidity.

~~Coherus Neulasta~~^® ~~Patent Litigation~~

A hearing on Amgen’s Federal Circuit Court appeal of the final judgment dismissing Amgen’s lawsuit against Coherus BioSciences, Inc. (Coherus) for infringement of Amgen’s U.S. Patent No. 8,273,707 is scheduled for May 8, 2019.

As previously disclosed, we are also engaged in a separate lawsuit in the Ventura County Superior Court in which we have alleged that Coherus and others misappropriated our confidential information and trade secrets through the hiring of former Amgen employees and that the defendants have used such information to develop and market UDENYCA^TM~~, as biosimilar to Amgen’s Neulasta~~^®. On March 27, 2019, the Ventura County Superior Court ordered Howard Weiser dismissed from the lawsuit based on a joint request regarding settlement filed on behalf of Amgen and Mr. Weiser. Trial in the misappropriation and trade secret litigation began on April 22, 2019.

~~Pfizer NEUPOGEN~~^® ~~Patent Litigation~~

On March 22, 2019, Amgen filed an amended complaint against Pfizer Inc. and Hospira Inc. (collectively, Pfizer) in the Delaware District Court narrowing the patent claims at issue in the infringement dispute and adding a request for damages. On April 11, 2019, Pfizer answered Amgen’s amended complaint including counterclaims seeking declaratory judgments of noninfringement and invalidity.

~~Sandoz NEUPOGEN~~^®~~/ Neulasta~~^® ~~Patent Litigation~~

On February 21, 2019, Sandoz Inc. (Sandoz) filed a new lawsuit in the U.S. District Court for the Northern District of California (the California Northern District Court) against Amgen Inc. and Amgen Manufacturing, Limited seeking a judgment of noninfringement and invalidity of the ’997 Patent. The lawsuit stems from Sandoz filing applications under the Biologics Price Competition and Innovation Act for the FDA licensure of filgrastim and pegfilgrastim products as biosimilar to NEUPOGEN^® ~~and Neulasta~~^®~~, respectively. On April 24, 2019, Amgen filed a motion to dismiss the lawsuit for failure to state a claim.~~

~~Patent Trial and Appeal Board Patent Challenges~~

On March 7, 2019, Kashiv Biosciences, LLC, formerly known as Adello Biologics, LLC (Kashiv), filed petitions seeking to institute inter partes review (IPR) proceedings before the U.S. Patent and Trademark Office’s Patent Trial and Appeal Board (PTAB) to challenge the patentability of each claim of U.S. Patent Nos. 8,940,878 (the ’878 Patent) and 9,643,997 (the ’997 Patent). The ’878 Patent is also among the patents at issue in the previously-disclosed litigation between Amgen Inc. and Amgen Manufacturing, Limited (collectively, Amgen) and Kashiv, Amneal Pharmaceuticals LLC and Amneal Pharmaceuticals ~~Inc. (the Kashiv NEUPOGEN~~^® ~~litigation)~~of New York, LLC (collectively, Amneal) petitioned the Federal Circuit Court for panel rehearing of the court’s opinion vacating and inremanding the ~~previously-disclosed litigations between Amgen~~judgment of noninfringement with respect to Amneal. On April 15, 2020, the Federal Circuit Court denied each of Amgen’s and Amneal’s petitions. On April 22, 2020, the Federal Circuit Court issued a mandate returning the case to the Delaware District Court.

ENBREL (etanercept) Patent Litigation

Immunex Corporation, et al. v. Sandoz Inc., et al.

On March 4, 2020, the Federal Circuit Court heard oral argument on the appeal by Sandoz Inc., Sandoz International GmbH and Sandoz GmbH ~~(the Sandoz NEUPOGEN~~from final judgment upholding the validity of U.S. Patent Nos. 8,063,182 and 8,163,522.

Repatha^® ~~litigation) and between Amgen and Sandoz Inc., Sandoz International GmbH, Sandoz GmbH and Lek Pharmaceuticals d.d. (the Sandoz Neulasta~~^® ~~litigation). The ’997~~ (evolocumab) Patent ~~is also among the patents at issue~~Litigation

Patent Disputes in the ~~Kashiv~~ International Region

A two-day hearing before the Technical Board of Appeal of the European Patent Office, which was scheduled to begin on March 24, 2020, has been rescheduled to begin on October 28, 2020.

As previously disclosed, we are also involved in and expect future involvement in additional disputes regarding our proprotein convertase subtilisin/kexin type 9 (PCSK9) patents in other jurisdictions and regions, including matters filed against us and that we have filed in the United Kingdom, Germany, France and Japan.

On April 24, 2020, the Supreme Court of Japan declined to hear Sanofi K.K.’s appeals making final the Japanese High Court’s decisions that PRALUENT^® infringes Amgen’s valid patent rights in Japan.

NEUPOGEN^® (filgrastim)/Neulasta^®~~litigation,~~(pegfilgrastim) Patent Litigation

Apotex PTAB Challenge

On March 24, 2020, the ~~Pfizer NEUPOGEN~~^®Federal Circuit Court vacated the decision by the Patent ~~Litigation,~~Trial and Appeal Board (PTAB) of the ~~new Sandoz NEUPOGEN~~^®~~/ Neulasta~~^®U.S. Patent ~~Litigation~~ and Trademark Office and remanded the ~~previously-disclosed litigation between~~ case to the PTAB for proceeding consistent with the Federal Circuit Court’s decision in ArthrexInc. v. Smith & Nephew, Inc., 941 F.3d 1320 (Fed. Cir. 2019).

Amgen ~~and Mylan~~ Inc., ~~Mylan Pharmaceuticals~~et al. v. Pfizer Inc. et al.

On February 18, 2020, the Delaware District Court entered an amended scheduling order moving the trial on the infringement of our U.S. Patent No. 9,643,997 to May 17, 2021, to enable Amgen Inc. and its wholly owned subsidiary, Amgen Manufacturing, Limited (collectively Amgen), to seek additional discovery into the defenses of Pfizer Inc. (Pfizer) and Hospira Inc. (Hospira).

On April 24, 2020, Amgen filed a separate lawsuit in the Delaware District Court against Hospira and Pfizer for infringement of U.S. Patent No. 10,577,392 (the ’392 Patent) and seeks, among other remedies, damages and injunctive relief to prohibit Hospira and Pfizer from infringing the ’392 Patent by the manufacture, import and sale of Pfizer’s NIVESTYM^TM biosimilar filgrastim product, which was launched in the U.S. in October 2018.

Amgen Inc., ~~Mylan GmbH,~~et al. v. Hospira Inc. et al.

On March 4, 2020, Hospira and ~~Mylan N.V.~~Pfizer filed a motion requesting the Delaware District Court to dismiss the complaint by Amgen Inc. and its wholly owned subsidiary, Amgen Manufacturing, Limited, alleging non-infringement of U.S. Patent No. 8,273,707. The ~~deadline for~~motion has been fully briefed.

Fresenius PTAB Challenge

On March 30, 2020, Amgen ~~to file a~~filed its preliminary response to ~~these IPR petitions is June 14, 2019, after which the PTAB will have three months to render~~ a ~~decision regarding whether~~petition to institute ~~PTAB trial proceedings on the ’878 and ’997 Patents.~~

~~In a separate challenge, on April 14, 2019, Fresenius Kabi USA, LLC and Fresenius Kabi SwissBiosim GmbH filed a petition seeking to institute IPR proceedings~~inter partes review before the PTAB to challenge the patentability of U.S. Patent No. 9,856,287 ~~(the ’287 Patent). The ’287 Patent is also the subject of the Apotex NEUPOGEN~~^® ~~/ Neulasta~~^® ~~Patent Litigation~~filed by Fresenius Kabi USA, LLC and ~~is among the patents at issue in the Kashiv NEUPOGEN~~^® ~~litigation. The patent owner preliminary response to the IPR petition is due July 17, 2019, after which~~Fresenius Kabi SwissBioSim GmbH, and the PTAB will have ~~three~~3 months to render a decision ~~regarding~~on whether to institute ~~PTAB~~ trial ~~proceedings~~proceedings.

EPOGEN^® (epoetin alfa) Patent Litigation

Amgen Inc., et al. v. Hospira, Inc.

The Federal Circuit Court denied petition for rehearing en banc by Hospira and issued the mandate on March 23, 2020 affirming the ~~’287 Patent.~~

~~In a separate challenge, on April 19, 2019, the PTAB granted Apotex and Kashiv’s previously-disclosed petition to institute post grant review proceedings on the ’287 Patent, challenging claims~~final judgment of the ~~’287~~Delaware District Court that Amgen’s U.S. Patent ~~as unpatentable.~~No. 5,856,298 is valid and infringed by Hospira, that Amgen’s ~~response to the petition~~U.S. Patent No. 5,756,349 is ~~due July 11, 2019.~~

~~AMJEVITA~~^TM ~~(adalimumab-atto) / AMGEVITA~~^TM~~Patent Litigation~~

~~On April 18, 2019, Amgen responded to the lawsuit filed by Coherus, denying patent infringement and seeking judgment that the patents-in-suit are invalid, unenforceable and/or~~ not infringed by ~~Amgen.~~Hospira, and awarding Amgen $70 million in damages for Hospira’s infringement. On April 17, 2020, Amgen acknowledged satisfaction of judgment upon receipt of $83 million in damages, interest and cost.

Litigation relating to our Biosimilar Products

KANJINTI^® (trastuzumab-anns) Patent Litigation

Genentech, Inc. v. Amgen Inc.

On March 6, 2020, the Federal Circuit Court affirmed the District Court’s denial of Genentech Inc.’s (Genentech) motion for a preliminary injunction. On March 9, 2020, the Delaware District Court entered a Markman order construing a term of U.S. Patent No. 8,574,869 (the ’869 Patent). On March 16, 2020, the Delaware District Court signed a joint stipulation and order vacating the April 20, 2020 trial date. On April 17, 2020, the Delaware District Court rescheduled the jury trial to begin on February 22, 2021.

MVASI^TM®(bevacizumab-awwb) Patent Litigation

~~On March 29, 2019,~~ Genentech, Inc. ~~(Genentech)~~ and City of Hope v. Amgen Inc.

On February 19, 2020, Genentech filed ~~a third lawsuit against Amgen~~its second amended complaint in the Delaware District Court, ~~alleging infringement of 14 patents. All but 2~~adding additional claims for legal and declaratory relief with respect to patents already in suit. On March 4, 2020, Amgen filed its second amended affirmative answer and counterclaims, adding affirmative defenses and counterclaims that the ’869 Patent is unenforceable for inequitable conduct and unclean hands.On March 9, 2020, the Delaware District Court entered a Markman order construing a term of the 14 patents asserted in this lawsuit have already been the subject of litigation pending among these parties in this court relating to Amgen’s submission of the application that led to the FDA licensure of MVASI^TM ~~as biosimilar to Genentech’s Avastin~~^® ~~(bevacizumab). Among other remedies,~~ ’869 Patent.

Genentech, Inc. and City of Hope ~~are seeking~~v. Immunex Rhode Island Corp. and Amgen Inc.

Argument before the Federal Circuit Court on Genentech’s appeal of the Delaware District Court’s denial of Genentech’s motions for injunctive ~~relief.~~relief has been scheduled for June 3, 2020.

~~Humira~~^® ~~Biosimilar Antitrust Class Actions~~Breach of Contract Action

~~From March~~Cipla Ltd. et al. v. Amgen Inc.

On February 6, 2020, Amgen’s motion was transferred to the U.S. Magistrate Judge for the District of Delaware for a recommendation. A hearing on the motion was held on April 28, 2020.

Novartis Pharma AG v. Amgen Inc.

On February 18, ~~2019, to April 19, 2019, ten purported class actions against Amgen, along with AbbVie Inc. and AbbVie Biotechnology Ltd. (collectively, AbbVie), were~~2020, Novartis Pharma AG filed in the U.S. District Court for the ~~Northern~~Southern District of ~~Illinois. The cases are captioned:~~ ~~UFCW Local 1500 Welfare Fund v. AbbVie Inc., et al.~~ ~~(March 18, 2019) (Local 1500);~~ ~~Fraternal Order of Police, Miami Lodge 20, Insurance Trust Fund v. AbbVie Inc., et al.~~ ~~(March 20, 2019);~~ ~~Mayor~~New York its answer and ~~City Council of Baltimore v. AbbVie Inc., et al.~~ ~~(March 22, 2019);~~ ~~PipeTrades Services MN Welfare Fund v. AbbVie Inc., et al.~~ ~~(March 29, 2019);~~ ~~St. Paul Electrical Workers’ Health Plan v. AbbVie Inc., et al.~~ ~~(March 29, 2019);~~ ~~Welfare Plan of the International Union of Operating Engineers Locals 137, 137A, 137B, 137C, and 137R v. AbbVie Inc., et al.~~ ~~(April 1, 2019);~~ ~~Law Enforcement Health Benefits, Inc. v. AbbVie, Inc., et al.~~ ~~(April 9, 2019) (Law Enforcement);~~ ~~Kentucky Laborers District Council Health and Welfare Fund v. AbbVie, Inc., et al.~~ ~~(April 16, 2019);~~ ~~Sheet Metal Workers’ Local Union No. 28 Welfare Fund v. AbbVie, Inc., et al.~~ ~~(April 19, 2019) (Sheet Metal Workers’); and~~ ~~Locals 302 & 612 of The International Union of Operating Engineers-Employers Construction Industry Health And Security Trust Fund v. AbbVie Inc., et al.~~ ~~(April 25, 2019) (Construction Industry) (collectively, Humira~~^®affirmative defenses to Amgen’s second amended counterclaims.

Antitrust Class ~~Actions). In each of the Humira~~Action

Sensipar^® Antitrust Class Actions

On February 6, 2020, the ~~plaintiffs bring federal antitrust claims along with various state law claims under state common law and state antitrust, consumer protection, and unfair competition statutes. In each case,~~motions in the ~~plaintiffs specifically allege that AbbVie has unlawfully monopolized the alleged market for Humira~~^® ~~and biosimilars of Humira~~^®~~, including by creating an allegedly unlawful so-called patent thicket around Humira~~^®~~. In the Local 1500, Sheet Metal Workers’ and Construction Industry cases, the plaintiffs further allege that AbbVie entered into allegedly unlawful market division agreements with~~class action lawsuits against Amgen and ~~other companies that had developed Humira~~^® ~~biosimilars, including Samsung Bioepis Co., Ltd., Mylan Inc., Mylan Pharmaceuticals, Inc., Sandoz, Inc., Fresenius Kabi USA, LLC, Pfizer Inc. and Momenta Pharmaceuticals, Inc., in connection~~various entities affiliated with ~~the settlement of patent litigation relating~~Teva Pharmaceutical Industries Limited were transferred to ~~Humira~~^®~~, whereby Amgen and the other defendants that have developed Humira~~^® ~~biosimilars were permitted to market those products in Europe as early as October 2018, while remaining off the market in the United States until 2023. In each of the Humira~~^® Antitrust Class Actions other than the Local 1500 and Construction Industry cases, the plaintiffs allege that AbbVie and Amgen entered into an allegedly unlawful settlement agreement under which Amgen allegedly agreed to delay its entry into the U.S. ~~market with AMGEVITA~~^TM~~, its Humira~~^® ~~biosimilar, in exchange for an alleged promise of exclusivity as the sole Humira~~^® ~~biosimilar in that market for five months, beginning in January 2023. In each of the Humira~~^® Antitrust Class Actions, plaintiffs seek injunctive relief, treble damages and attorney’s fees on behalf of a putative class of third-party payers and/or consumers that have indirectly purchased, paid for or provided reimbursement for Humira^® ~~in the United States. Defendants’ responses to the first six complaints were stayed by the court and a status hearing is set for May 2, 2019.~~

~~U.S. Attorney’s Office~~Magistrate Judge for the District of ~~Massachusetts~~-~~Patient Assistance Investigation~~Delaware for a recommendation. A hearing on the motions was held on April 28, 2020.

~~On April 25, 2019, Amgen,~~The multidistrict litigation panel certified its conditional transfer order on February 6, 2020 transferring the additional class action lawsuit brought in the U.S. ~~Department~~District Court for the Southern District of ~~Justice and~~Florida, captioned MSP Recovery Claims v. Amgen Inc., et al.,to the Office of Inspector General (OIG) of the U.S. Department of Health and Human Services entered into a settlement agreement. Under that agreement, Amgen agreed to pay $24.75 million to resolve the government’s allegations relating to Amgen’s support of independent charitable organizations that provide patients with financial assistance to access their medicines. Additionally, Amgen and OIG entered into a Corporate Integrity Agreement that requires Amgen to maintain its corporate compliance program and to undertake a set of defined corporate integrity obligations for a period of five years.Delaware District Court.



Item 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) is intended to assist the reader in understanding Amgen’s business. MD&A is provided as a supplement to and should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, ~~2018.~~2019. Our results of operations discussed in MD&A are presented in conformity with GAAP. Amgen operates in one business segment: human therapeutics. Therefore, our results of operations are discussed on a consolidated basis.

Forward-looking statements

This report and other documents we file with the Securities and Exchange Commission (SEC) contain forward-looking statements that are based on current expectations, estimates, forecasts and projections about us, our future performance, our business, our beliefs and our management’s assumptions. In addition, we, or others on our behalf, may make forward-looking statements in press releases, written statements or our communications and discussions with investors and analysts in the normal course of business through meetings, webcasts, phone calls and conference calls. Such words as “expect,” “anticipate,” “outlook,” “could,” “target,” “project,” “intend,” “plan,” “believe,” “seek,” “estimate,” “should,” “may,” “assume” and “continue” as well as variations of such words and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and they involve certain risks, uncertainties and assumptions that are difficult to predict. We describe our respective risks, uncertainties and assumptions that could affect the outcome or results of operations in Item 1A. Risk Factors in Part II herein and in Part I, Item 1A. Risk Factors of our Annual Report on Form 10-K for the year ended December 31, ~~2018.~~2019. We have based our forward-looking statements on our management’s beliefs and assumptions based on information available to our management at the time the statements are made. We caution you that actual outcomes and results may differ materially from what is expressed, implied or forecasted by our forward-looking statements. Reference is made in particular to forward-looking statements regarding product sales, regulatory activities, clinical trial results, reimbursement, expenses, EPS, liquidity and capital resources, trends, planned dividends, stock repurchases, collaborations and ~~restructuring plans.~~effects of pandemics. Except as required under the federal securities laws and the rules and regulations of the SEC, we do not have any intention or obligation to update publicly any forward-looking statements after the distribution of this report, whether as a result of new information, future events, changes in assumptions or otherwise.

Amgen is a ~~highly focused~~ biotechnology company committed to unlocking the potential of biology for patients suffering from serious ~~illness.~~illnesses. A biotechnology pioneer since 1980, Amgen has grown to be one of the world’s leading independent biotechnology companies, has reached millions of patients around the world and is developing a pipeline of medicines with breakaway potential. In 2020, we are celebrating our 40th anniversary, continuing our history of focusing on innovative medicines that have the potential to be first-in-class molecules and that have a large-effect size on serious diseases.

Our principal products—those with the most significant annual commercial sales—are ENBREL, ~~Neulasta~~Prolia^®,~~Prolia~~Neulasta^®, XGEVA^®, Otezla^®, Aranesp^®, KYPROLIS^®and Repatha^®~~, EPOGEN~~^® ~~and Sensipar~~^®~~/Mimpara~~^®. We also market a number of other products, including Nplate^® (romiplostim), Vectibix^® (panitumumab), ~~Repatha~~Parsabiv^®(etelcalcetide), ~~Parsabiv~~EPOGEN^® ~~(etelcalcetide)~~,Sensipar^®/Mimpara^®, KANJINTI^®, MVASI^®, EVENITY^®(romosozumab-aqqg),BLINCYTO^®, AMGEVITA^TM(adalimumab),Aimovig^®(erenumab-aooe), NEUPOGEN^®, ~~BLINCYTO~~IMLYGIC^® ~~(blinatumomab), Aimovig~~ (talimogene laherparepvec) and Corlanor^®~~, AMGEVITA~~^TM~~, KANJINTI~~^TM ~~(biosimilar trastuzumab), EVENITY~~^TM ~~(romosozumab-aqqg), Corlanor~~ (ivabradine).

A novel strain of coronavirus (COVID-19) was declared a global pandemic by the World Health Organization on March 11, 2020. We have been carefully monitoring the COVID-19 pandemic and its impact on our global operations. We have taken appropriate steps to minimize the risk to our employees. Our employees have been working remotely with the exception of certain essential staff that continue to report to Amgen locations. The essential staff are primarily at our manufacturing sites, working in accordance with applicable government health and safety protocols and guidance issued in response to the COVID-19 pandemic, and are being paid a labor premium during this period. To date, our remote working arrangements have not significantly impacted our ability to maintain critical business operations. Further, we currently do not expect disruptions or shortages of our supply of medicine.

Since the beginning of the COVID-19 pandemic, we have seen changes in demand trends for some of our products, including lower demand for certain products as continuing patient access to those products has been impacted by COVID-19. For example, near the end of March, we began to observe a decline in sales of Prolia^® ~~(ivabradine)~~, as elderly patients vulnerable to COVID-19 avoided doctors’ offices. To respond to COVID-19, we are managing our clinical development on a case-by-case basis. Patients who are already enrolled in studies continue to receive study drug, including through direct-to-patient shipments. For those studies that have the potential for significant benefit in a serious or life-threatening condition and ~~IMLYGIC~~where site resources allow new patients to be enrolled safely and monitored closely, we are allowing enrollment to continue. For those clinical trials where there is uncertainty with regard to the trial sites’ ability to ensure subject safety or data integrity at the present time, we have temporarily paused enrollment. We remain focused on supporting our active clinical sites in providing care for these patients and providing investigational drug supply. In addition, our R&D organization is supporting efforts to combat the pandemic in a number of ways including: (i) conducting a population-based study by our subsidiary deCODE Genetics in partnership with the Icelandic government, (ii) entering into a collaboration with Adaptive Biotechnologies to discover and develop antibody therapies for prevention or treatment options and (iii) joining a public-private partnership between leading companies in our industry and U.S. government health agencies to develop a strategy for a coordinated research response to the COVID-19 pandemic. Further, we anticipate that Otezla^® ~~(talimogene laherparepvec).~~ will be investigated as a potential immunomodulatory treatment in adult patients with COVID-19 in upcoming platform trials.

We continue to believe that existing funds, cash generated from operations and existing sources of and access to financing are adequate to satisfy our needs for working capital, capital expenditures and debt service requirements as well as to engage in the capital return and other business initiatives that we plan to strategically pursue. To respond to some of the challenges experienced in the healthcare community as a result of the pandemic, we recently extended credit terms with certain customers for a subset of our products globally. For a discussion of the risks presented by the COVID-19 pandemic to our results, see Risk Factors in Part II, Item 1A of this Form 10-Q.

Significant developments

Following is a summary of selected significant developments affecting our business that have occurred since the filing of our Annual Report on Form 10-K for the year ended December 31, ~~2018.~~2019. For additional developments or for a more comprehensive discussion of certain developments discussed below, see our Annual Report on Form 10-K for the year ended December 31, ~~2018.~~2019.

~~Products/Pipeline~~

~~Repatha~~^®Establishment of wholly-owned affiliate in Japan

~~In April 2019, we and UCB, our global collaboration partner in the development of EVENITY~~^TM~~, announced that the FDA approved EVENITY~~^TM ~~for the treatment of osteoporosis in postmenopausal women at high risk for fracture.~~

Selected financial information

The following is an overview of our results of operations (in millions, except percentages and per-share data):

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

Total product sales decreased for the three months ended March 31, 2019, driven primarily by a decline in net selling price and unfavorable changes in inventory, offset partially by higher unit demand. In 2019, we expect a lower net selling price compared with 2018.

~~Other revenues~~ increased for the three months ended March 31, ~~2019,~~2020, driven primarily by sales from Otezla^®, acquired in November 2019 and recently launched biosimilar products, offset partially by a decline in net selling price. For the remainder of 2020, we expect net selling price to continue to decline primarily on our legacy products. Further, since the beginning of the COVID-19 pandemic, we have seen changes in demand trends for some of our products, including lower demand for certain products as patient access to those products has been impacted by the pandemic. We expect this trend to continue to some extent through at least the duration of the pandemic. As discussed above, in response to the challenges being experienced by the healthcare community as a result of COVID-19, we have extended credit terms with certain customers for a subset of our products globally. In addition, a number of insurance plans (commercial and governmental) have been required to or have voluntarily covered 90-day prescription fills for a number of medicines including some of our products that are used in chronic conditions. As a result, there is increased uncertainty around the timing and magnitude of our sales during the COVID-19 pandemic.

Other revenues decreased slightly for the three months ended March 31, 2020, driven primarily by lower profit share payments, offset partially by higher royalties.

Operating expenses increased for the three months ended March 31, ~~2019,~~2020, driven primarily by ~~higher~~acquisition related expenses and the first full quarter of commercial-related support for Otezla^®. For the remainder of 2020, we expect to continue to see the effects of our acquisition of Otezla^® on our operating expenses, including increases to Cost of sales, ~~and~~ R&D ~~expense.~~and Selling, general and administrative (SG&A) expenses.

Although changes in foreign currency exchange rates result in increases or decreases in our reported international product sales, the benefit or detriment that such movements have on our international product sales is offset partially by corresponding increases or decreases in our international operating expenses and our related foreign currency hedging activities. Our hedging activities seek to offset the impacts, both positive and negative, that foreign currency exchange rate changes may have on our net income by hedging our net foreign currency exposure, primarily with respect to product sales denominated in euros. The net impact from changes in foreign currency exchange rates was not material for the three months ended March 31, ~~2019~~2020 and ~~2018.~~2019.

Results of operations

Product sales

Worldwide product sales were as follows (dollar amounts in millions):


	Three months ended March 31,						Three months ended March 31,
	2019		2018		Change		2020		2019		Change
ENBREL	$	1,151	$	1,105	4	%	$	1,153	$	1,151	—	%
Prolia^®							654		592		10	%
Neulasta^®	1,021		1,155		(12	)%	609		1,021		(40	)%
Prolia^®	592		494		20	%
XGEVA^®	471		445		6	%	481		471		2	%
Otezla^®							479		—		*
Aranesp^®	414		454		(9	)%	422		414		2	%
KYPROLIS^®	245		222		10	%	280		245		14	%
EPOGEN^®	219		244		(10	)%
Sensipar^®/Mimpara^®	213		497		(57	)%
Repatha^®							229		141		62	%
Other products	960		727		32	%	1,587		1,251		27	%
Total product sales	$	5,286	$	5,343	(1	)%	$	5,894	$	5,286	12	%

* Change in excess of 100%.

Future sales of our products will depend in part on the factors discussed below and in the following sections of our Annual Report on Form 10-K for the year ended December 31, ~~2018:~~2019: (i) Item 1. Business—Marketing, Distribution and Selected Marketed Products, (ii) Item 1A. Risk Factors and (iii) Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Overview, and Results of Operations—Product ~~Sales.~~Sales, as well as in our Quarterly Report on Form 10-Q for the period ended March 31, 2020, in Part II, Item 1A. Risk Factors.

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

The slight increase in ENBREL sales for the three months ended March 31, ~~2019,~~2020, was driven ~~primarily~~ by favorable ~~impacts from~~ changes ~~in accounting estimates of~~to estimated sales deductions and ~~product returns and a slight increase in net selling price,~~inventory, offset ~~partially~~ by ~~unfavorable changes in inventory.~~

~~In 2019, we expect~~ lower unit demand ~~compared with 2018.~~and net selling price. For the remainder of 2020, we expect the trend of lower unit demand to continue.

In April 2019, the ~~FDA~~U.S. Food and Drug Administration (FDA) approved a second biosimilar version of ~~ENBREL. Other companies are also developing proposed biosimilar versions of ENBREL. Further,~~ENBREL, and we are involved in patent litigations with the two companies seeking to market their FDA-approved biosimilar versions of ENBREL. See Note 13, Contingencies and commitments, to the condensed consolidated financial statements and Note ~~20,~~19, Contingencies and commitments, to the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, ~~2018. These~~2019. Other companies are also developing purposed biosimilar versions of ENBREL. Companies with approved biosimilar versions of ENBREL may seek to enter the U.S. market if we are not successful in our litigations, or even earlier.

~~Neulasta~~Prolia^®

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

Three months ended
March 31,
2019 2018 Change
Neulasta^®— U.S.
$ 893
$ 1,009
(11 )%
Neulasta^®— ROW
128
146
(12 )%
Total Neulasta^®
$ 1,021
$ 1,155
(12 )%



	Three months ended March 31,
	2020		2019		Change
Prolia^® — U.S.	$	422	$	390	8	%
Prolia^® — ROW	232		202		15	%
Total Prolia^®	$	654	$	592	10	%

The ~~decrease~~increase in global ~~Neulasta~~Prolia^®sales for the three months ended March 31, ~~2019,~~2020, was driven ~~primarily by lower net selling price and, to a lesser extent, changes in inventory. Neulasta~~^® ~~sales in 2019 included a $98 million order from the U.S. government.~~

~~Our final material U.S. patent for Neulasta~~^® ~~expired in October 2015. Therefore, we face increased competition in the United States, which has had and will continue to have a material adverse impact on sales of Neulasta~~^®~~. Biosimilar versions of Neulasta~~^® have been approved and launched and other biosimilar versions may also receive approval in the near future. For a discussion of ongoing patent litigations with these and other companies that are developing proposed biosimilar versions of Neulasta^®, see Note 13, Contingencies and commitments, to the condensed consolidated financial statements and Note 20, Contingencies and commitments, to the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2018.

~~In addition, supplementary protection certificates issued by certain countries, including France, Germany, Italy, Spain and the United Kingdom, that are related to our European patent for Neulasta~~^® ~~expired in August 2017. In 2019, we expect European sales to decline with the launch of multiple long-acting biosimilar competitors.~~

~~Neulasta~~^® sales have been and will continue to be affected by the development of new protocols, tests and/or treatments for cancer and/or new treatment alternatives, including those that have reduced and may continue to reduce the use of myelosuppressive regimens in some patients.

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

Three months ended
March 31,
2019 2018 Change
Prolia^® — U.S.
$ 390
$ 320
22 %
Prolia^® — ROW
202
174
16 %
Total Prolia^®
$ 592
$ 494
20 %

~~The increase in global Prolia~~^®~~sales for the three months ended March 31, 2019, was driven primarily~~ by higher unit demand. Prolia^®, which has a six-month dosing interval, has exhibited a historical sales pattern with the first and third quarters of a year representing lower sales than the second and fourth quarters of a year. However, disruptions in patient visits as a result of the COVID-19 pandemic have begun to impact near-term demand, which may result in changes to the historical sales pattern.

~~XGEVA~~Neulasta^®

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

Three months ended
March 31,
2019 2018 Change
XGEVA^® — U.S.
$ 356
$ 332
7 %
XGEVA^® — ROW
115
113
2 %
Total XGEVA^®
$ 471
$ 445
6 %



	Three months ended March 31,
	2020		2019		Change
Neulasta^®— U.S.	$	534	$	893	(40	)%
Neulasta^®— ROW	75		128		(41	)%
Total Neulasta^®	$	609	$	1,021	(40	)%

The ~~increase~~decrease in global ~~XGEVA~~Neulasta^®sales for the three months ended March 31, ~~2019,~~2020, was driven ~~primarily by higher unit demand.~~

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

Three months ended
March 31,
2019 2018 Change
Aranesp^® — U.S.
$ 182
$ 225
(19 )%
Aranesp^® — ROW
232
229
1 %
Total Aranesp^®
$ 414
$ 454
(9 )%

~~The decrease in global Aranesp~~^® ~~sales for the three months ended March 31, 2019, was driven primarily~~ by the impact of biosimilar competition on unit ~~demand.~~

~~Aranesp~~demand and lower net selling price. Neulasta^® ~~faces competition~~ sales included a $98 million order from ~~a long-acting product. Aranesp~~^®~~also faces competition from a biosimilar version of EPOGEN~~^®~~, which was approved~~the U.S. government in the ~~second~~first quarter of ~~2018 and launched in the fourth quarter of 2018. Other biosimilar versions of EPOGEN~~^® ~~may also receive approval. In 2019, we expect sales~~2019.

We face increased competition in the United States ~~to decline at~~and Europe as a ~~faster rate than in 2018 due to short- and long- acting competition.~~

~~KYPROLIS~~result of launches of biosimilar versions of Neulasta^®

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

Three months ended
March 31,
2019 2018 Change
KYPROLIS^® — U.S.
$ 154
$ 137
12 %
KYPROLIS^® — ROW
91
85
7 %
Total KYPROLIS^®
$ 245
$ 222
10 %

~~The increase in global KYPROLIS~~^®~~sales for the three months ended March 31, 2019, was driven primarily by higher unit demand.~~

~~We are engaged in litigation with a number of companies challenging our material patents relating to KYPROLIS~~^® and seeking to market generic carfilzomib products, one of which has been tentatively approved by the FDA. See Note 13, Contingencies and commitments, to the condensed consolidated financial statements. These companies may seek to enter the U.S. market at risk as soon as their products are approved by the FDA, which could occur following the expiry of the stay of regulatory approval under the Hatch-Waxman Act that currently prevents the FDA from granting final approval before January 2020.

~~Total EPOGEN~~^® ~~sales were as follows (dollar amounts in millions):~~

Three months ended
March 31,
2019 2018 Change
EPOGEN^® — U.S.
$ 219
$ 244
(10 )%

~~The decrease in EPOGEN~~^® sales for the three months ended March 31, 2019, was driven primarily by a decline in net selling price due to our contract with DaVita Inc. In 2019, we expect a lower net selling price compared with 2018.



		Page No.
PART I - FINANCIAL INFORMATION		1
Item 1.	FINANCIAL STATEMENTS	1
	CONDENSED CONSOLIDATED STATEMENTS OF INCOME	1
	CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME	2
	CONDENSED CONSOLIDATED BALANCE SHEETS	3
	CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY	4
	CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS	5
	NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS	6
Item 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	2826
Item 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	37
Item 4.	CONTROLS AND PROCEDURES	37
PART II - OTHER INFORMATION		38
Item 1.	LEGAL PROCEEDINGS	38
Item 1A.	RISK FACTORS	38
Item 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	3841
Item 6.	EXHIBITS	3841
INDEX TO EXHIBITS		3942
SIGNATURES		4447


	March 31, 2019			December 31, 2018			March 31, 2020			December 31, 2019
	(Unaudited)						(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	7,358		$	6,945		$	7,687		$	6,037
Marketable securities	18,943			22,359			325			2,874
Trade receivables, net	3,771			3,580			5,009			4,057
Inventories	3,016			2,940			3,682			3,584
Other current assets	2,063			1,794			2,110			1,888
Total current assets	35,151			37,618			18,813			18,440

Property, plant and equipment, net	4,892			4,958			4,879			4,928
Intangible assets, net	7,124			7,443			18,653			19,413
Goodwill	14,692			14,699			14,683			14,703
Other assets	2,138			1,698			4,641			2,223
Total assets	$	63,997		$	66,416		$	61,669		$	59,707

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	1,091		$	1,207		$	1,338		$	1,371
Accrued liabilities	7,910			7,862			8,649			8,511
Current portion of long-term debt	3,705			4,419			1,840			2,953
Total current liabilities	12,706			13,488			11,827			12,835

Long-term debt	29,319			29,510			30,008			26,950
Long-term deferred tax liabilities	811			864			427			606
Long-term tax liabilities	8,869			8,770			8,111			8,037
Other noncurrent liabilities	1,460			1,284			1,811			1,606

Contingencies and commitments

Stockholders’ equity:
Common stock and additional paid-in capital; $0.0001 par value; 2,750.0 shares authorized; outstanding — 614.4 shares in 2019 and 629.6 shares in 2018	31,243			31,246
Common stock and additional paid-in capital; $0.0001 par value; 2,750.0 shares authorized; outstanding — 588.0 shares in 2020 and 591.4 shares in 2019							31,525			31,531
Accumulated deficit	(19,895		)	(17,977		)	(21,378		)	(21,330		)
Accumulated other comprehensive loss	(516		)	(769		)	(662		)	(528		)
Total stockholders’ equity	10,832			12,500			9,485			9,673
Total liabilities and stockholders’ equity	$	63,997		$	66,416		$	61,669		$	59,707


	Three months ended March 31,						Three months ended March 31,
	2019			2018			2020			2019
Cash flows from operating activities:
Net income	$	1,992		$	2,311		$	1,825		$	1,992
Depreciation, amortization and other	495			471			897			495
Deferred income taxes	(50		)	(72		)	(84		)	(50		)
Other items, net	24			98			107			24
Changes in operating assets and liabilities, net of acquisition:
Trade receivables, net	(207		)	(384		)	(955		)	(207		)
Inventories	(28		)	(107		)	(113		)	(28		)
Other assets	(249		)	(135		)	319			(249		)
Accounts payable	(112		)	(278		)	(25		)	(112		)
Accrued income taxes, net	277			353			137			277
Long-term tax liabilities	100			63			74			100
Other liabilities	(397		)	407			(48		)	(397		)
Net cash provided by operating activities	1,845			2,727			2,134			1,845
Cash flows from investing activities:
Purchases of marketable securities	(6,898		)	(2,732		)	(129		)	(6,898		)
Proceeds from sales of marketable securities	125			16,694			2,574			125
Proceeds from maturities of marketable securities	10,455			900			113			10,455
Cash acquired in acquisition, net of cash paid	—			197
Purchases of property, plant and equipment	(116		)	(155		)	(142		)	(116		)
Purchases of equity method investments							(2,645		)	(5		)
Other	(11		)	2			(1		)	(6		)
Net cash provided by investing activities	3,555			14,906
Net cash (used in) provided by investing activities							(230		)	3,555
Cash flows from financing activities:
Net proceeds from issuance of debt							4,963			—
Repayment of debt	(1,000		)	—			(3,250		)	(1,000		)
Repurchases of common stock	(3,032		)	(10,697		)	(961		)	(3,032		)
Dividends paid	(901		)	(951		)	(945		)	(901		)
Other	(54		)	(44		)	(61		)	(54		)
Net cash used in financing activities	(4,987		)	(11,692		)	(254		)	(4,987		)
Increase in cash and cash equivalents	413			5,941			1,650			413
Cash and cash equivalents at beginning of period	6,945			3,800			6,037			6,945
Cash and cash equivalents at end of period	$	7,358		$	9,741		$	7,687		$	7,358


⁽¹⁾	Hedging gains and losses, which are included in product sales, were not material for the three months ended March 31, ~~2019~~2020 and ~~2018.~~2019.



	Less than 12 months					12 months or more
Types of securities as of March 31, 2019	Fair values		Unrealized losses			Fair values		Unrealized losses
U.S. Treasury notes	$	1,190	$	(11	)	$	1,452	$	(16	)
Other government-related debt securities:
U.S.	—		—			111		(1		)
Foreign and other	410		(6		)	307		(4		)
Corporate debt securities:
Financial	1,783		(14		)	822		(8		)
Industrial	1,516		(20		)	634		(7		)
Other	454		(6		)	36		(1		)
Residential-mortgage-backed securities	558		(9		)	809		(13		)
Other mortgage- and asset-backed securities	17		—			450		(11		)
Total	$	5,928	$	(66	)	$	4,621	$	(61	)



Lease costs	Three months ended March 31, 2019
Operating⁽¹⁾	$	48
Sublease income	(8		)
Total net lease costs	$	40



Maturity dates	Operating leases
Remaining nine months ending December 31, 2019	$	135
2020	133
2021	107
2022	63
2023	48
Thereafter	41
Total lease payments⁽¹⁾	527
Less imputed interest	(39		)
Present value of lease liabilities	$	488



	Three months ended March 31, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	34
ROU assets obtained in exchange for lease obligations:
Operating leases	$	8



	March 31, 2019			December 31, 2018
5.70% notes due 2019 (5.70% 2019 Notes)	$	—		$	1,000
1.90% notes due 2019 (1.90% 2019 Notes)	700			700
Floating Rate Notes due 2019	550			550
2.20% notes due 2019 (2.20% 2019 Notes)	1,400			1,400
2.125% €675 million notes due 2019 (2.125% 2019 euro Notes)	757			774
4.50% notes due 2020 (4.50% 2020 Notes)	300			300
2.125% notes due 2020 (2.125% 2020 Notes)	750			750
Floating Rate Notes due 2020	300			300
2.20% notes due 2020 (2.20% 2020 Notes)	700			700
3.45% notes due 2020 (3.45% 2020 Notes)	900			900
4.10% notes due 2021 (4.10% 2021 Notes)	1,000			1,000
1.85% notes due 2021 (1.85% 2021 Notes)	750			750
3.875% notes due 2021 (3.875% 2021 Notes)	1,750			1,750
1.25% €1,250 million notes due 2022 (1.25% 2022 euro Notes)	1,402			1,433
2.70% notes due 2022 (2.70% 2022 Notes)	500			500
2.65% notes due 2022 (2.65% 2022 Notes)	1,500			1,500
3.625% notes due 2022 (3.625% 2022 Notes)	750			750
0.41% CHF700 million bonds due 2023 (0.41% 2023 Swiss franc Bonds)	703			713
2.25% notes due 2023 (2.25% 2023 Notes)	750			750
3.625% notes due 2024 (3.625% 2024 Notes)	1,400			1,400
3.125% notes due 2025 (3.125% 2025 Notes)	1,000			1,000
2.00% €750 million notes due 2026 (2.00% 2026 euro Notes)	841			860
2.60% notes due 2026 (2.60% 2026 Notes)	1,250			1,250
5.50% £475 million notes due 2026 (5.50% 2026 pound sterling Notes)	619			606
3.20% notes due 2027 (3.20% 2027 Notes)	1,000			1,000
4.00% £700 million notes due 2029 (4.00% 2029 pound sterling Notes)	912			893
6.375% notes due 2037 (6.375% 2037 Notes)	552			552
6.90% notes due 2038 (6.90% 2038 Notes)	291			291
6.40% notes due 2039 (6.40% 2039 Notes)	466			466
5.75% notes due 2040 (5.75% 2040 Notes)	412			412
4.95% notes due 2041 (4.95% 2041 Notes)	600			600
5.15% notes due 2041 (5.15% 2041 Notes)	974			974
5.65% notes due 2042 (5.65% 2042 Notes)	487			487
5.375% notes due 2043 (5.375% 2043 Notes)	261			261
4.40% notes due 2045 (4.40% 2045 Notes)	2,250			2,250
4.563% notes due 2048 (4.563% 2048 Notes)	1,415			1,415
4.663% notes due 2051 (4.663% 2051 Notes)	3,541			3,541
Other notes due 2097	100			100
Unamortized bond discounts, premiums and issuance costs, net	(886		)	(896		)
Fair value adjustments	77			(53		)
Total carrying value of debt	33,024			33,929
Less current portion	(3,705		)	(4,419		)
Total long-term debt	$	29,319		$	29,510



	Three months ended March 31,
Derivatives in fair value hedging relationships	2019			2018
Net unrealized gains (losses) recognized on interest rate swap contracts	$	133		$	(164	)
Net unrealized (losses) gains recognized on related hedged debt	$	(133	)	$	164


Period	Total number of shares purchased	Average price paid per share ⁽¹⁾		Total number of shares purchased as part of publicly announced program	Maximum dollar value that may yet be purchased under the program⁽²⁾		Total number of shares purchased	Average price paid per share ⁽¹⁾		Total number of shares purchased as part of publicly announced program	Maximum dollar value that may yet be purchased under the program⁽²⁾
January 1 - 31	6,172,485	$	196.80	6,172,485	$	3,899,713,218	1,362,200	$	233.67	1,362,200	$	6,155,729,344
February 1 - 28	4,566,600	$	187.66	4,566,600	$	3,042,730,429
February 1 - 29							1,707,100	$	220.32	1,707,100	$	5,779,612,845
March 1 - 31	5,116,400	$	187.58	5,116,400	$	2,082,993,130	1,184,327	$	201.66	1,184,327	$	5,540,776,983
Total	15,855,485	$	191.19	15,855,485			4,253,627	$	219.40	4,253,627


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


⁽²⁾	In December ~~2018,~~2019, our Board of Directors increased the amount authorized under our stock repurchase program by an additional ~~$3.6~~$4.0 billion.



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

2.2		Amendment No. 1 to the Asset Purchase Agreement, dated October 17, 2019, by and between Amgen Inc. and Celgene Corporation. (Filed as an exhibit to Form 8-K on October 17, 2019 and incorporated herein by reference.)

2.3		Amendment No. 2 to the Asset Purchase Agreement, dated October 17, 2019, by and between Amgen Inc. and Celgene Corporation.(Filed as an exhibit to Form 10-K for the year ended December 31, 2019 on February 12, 2020 and incorporated herein by reference.)

2.4		Letter Agreement, dated November 21, 2019, by and between Amgen Inc. and the parties named therein re: Treatment of Certain Product Inventory in connection with Amgen’s acquisition of Otezla®. (Filed as an exhibit to Form 10-K for the year ended December 31, 2019 on February 12, 2020 and incorporated herein by reference.)

2.5		Irrevocable Guarantee, dated August 25, 2019, by and between Amgen Inc. and Bristol-Myers Squibb Company. (Filed as an exhibit to Form 8-K on August 26, 2019 and incorporated herein by reference.)

3.1		Restated Certificate of Incorporation of Amgen Inc. (As Restated March 6, 2013.) (Filed as an exhibit to Form 10-Q for the quarter ended March 31, 2013 on May 3, 2013 and incorporated herein by reference.)

3.2		Amended and Restated Bylaws of Amgen Inc. (As Amended and Restated February 15, 2016.) (Filed as an exhibit to Form 8-K on February 17, 2016 and incorporated herein by reference.)

4.1		Form of stock certificate for the common stock, par value $.0001 of the Company. (Filed as an exhibit to Form 10-Q for the quarter ended March 31, 1997 on May 14, 1997 and incorporated herein by reference.)

4.2		Form of Indenture, dated January 1, 1992. (Filed as an exhibit to Form S-3 Registration Statement filed on December 19, 1991 and incorporated herein by reference.)

4.3		Agreement of Resignation, Appointment and Acceptance dated February 15, 2008. (Filed as an exhibit to Form 10-K for the year ended December 31, 2007 on February 28, 2008 and incorporated herein by reference.)

4.4		First Supplemental Indenture, dated February 26, 1997. (Filed as an exhibit to Form 8-K on March 14, 1997 and incorporated herein by reference.)

4.5		8-1/8% Debentures due April 1, 2097. (Filed as an exhibit to Form 8-K on April 8, 1997 and incorporated herein by reference.)

4.6		Officer’s Certificate of Amgen Inc., dated April 8, 1997, establishing a series of securities entitled “8 1/8% Debentures due April 1, 2097.” (Filed as an exhibit to Form 8-K on April 8, 1997 and incorporated herein by reference.)

4.7		Indenture, dated August 4, 2003. (Filed as an exhibit to Form S-3 Registration Statement on August 4, 2003 and incorporated herein by reference.)

4.8		Corporate Commercial Paper - Master Note between and among Amgen Inc., as Issuer, Cede & Co., as Nominee of The Depository Trust Company, and Citibank, N.A., as Paying Agent. (Filed as an exhibit to Form 10-Q for the quarter ended March 31, 1998 on May 13, 1998 and incorporated herein by reference.)

4.9		Officers’ Certificate of Amgen Inc., dated May 30, 2007, including ~~forms~~form of the Company’s ~~Senior Floating Rate Notes due 2008, 5.85% Senior Notes due 2017 and~~ 6.375% Senior Notes due 2037. (Filed as an exhibit to Form 8-K on May 30, 2007 and incorporated herein by reference.)

4.10		Officers’ Certificate of Amgen Inc., dated May 23, 2008, including ~~forms~~form of the Company’s ~~6.15% Senior Notes due 2018 and~~ 6.90% Senior Notes due ~~2038.~~2038. (Filed as exhibit to Form 8-K on May 23, 2008 and incorporated herein by reference.)

4.11		Officers’ Certificate of Amgen Inc., dated January 16, 2009, including ~~forms~~form of the Company’s ~~5.70% Senior Notes due 2019 and~~ 6.40% Senior Notes due 2039. (Filed as exhibit to Form 8-K on January 16, 2009 and incorporated herein by reference.)

4.12		Officers’ Certificate of Amgen Inc., dated March 12, 2010, including ~~forms~~form of the Company’s ~~4.50% Senior Notes due 2020 and~~ 5.75% Senior Notes due 2040. (Filed as exhibit to Form 8-K on March 12, 2010 and incorporated herein by reference.)

4.13		Officers’ Certificate of Amgen Inc., dated September 16, 2010, including ~~forms~~form of the Company’s ~~3.45% Senior Notes due 2020 and~~ 4.95% Senior Notes due 2041. (Filed as an exhibit to Form 8-K on September 17, 2010 and incorporated herein by reference.)

~~4.14~~		~~Officers’ Certificate of Amgen Inc., dated June 30, 2011, including forms of the Company’s 2.30% Senior Notes due 2016, 4.10% Senior Notes due 2021 and 5.65% Senior Notes due 2042.~~ ~~(Filed as an exhibit to Form 8-K on June 30, 2011 and incorporated herein by reference.)~~

~~4.15~~		Officers’ Certificate of Amgen Inc., dated November 10, 2011, including forms of the Company’s 1.875% Senior Notes due 2014, 2.50% Senior Notes due 2016, 3.875% Senior Notes due 2021 and 5.15% Senior Notes due 2041. ~~(Filed as an exhibit to Form 8-K on November 10, 2011 and incorporated herein by reference.)~~

~~4.16~~		~~Officers’ Certificate of Amgen Inc., dated December 5, 2011, including forms of the Company’s 4.375% Senior Notes due 2018 and 5.50% Senior Notes due 2026.~~ ~~(Filed as an exhibit to Form 8-K on December 5, 2011 and incorporated herein by reference.)~~



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

4.15		Officers’ Certificate of Amgen Inc., dated November 10, 2011, including forms of the Company’s 3.875% Senior Notes due 2021 and 5.15% Senior Notes due 2041. (Filed as an exhibit to Form 8-K on November 10, 2011 and incorporated herein by reference.)

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

4.17		Officers’ Certificate of Amgen Inc., dated May 15, 2012, including forms of the Company’s ~~2.125% Senior Notes due 2017,~~ 3.625% Senior Notes due 2022 and 5.375% Senior Notes due 2043. (Filed as an exhibit to Form 8-K on May 15, 2012 and incorporated herein by reference.)

4.18		Officers’ Certificate of Amgen Inc., dated September 13, 2012, including ~~forms~~form of the Company’s ~~2.125% Senior Notes due 2019 and~~ 4.000% Senior Notes due 2029. (Filed as an exhibit to Form 8-K on September 13, 2012 and incorporated herein by reference.)

4.19		Indenture, dated May 22, 2014, between Amgen Inc. and The Bank of New York Mellon Trust Company, N.A., as Trustee. (Filed as an exhibit to Form 8-K on May 22, 2014 and incorporated herein by reference.)

4.20		Officers’ Certificate of Amgen Inc., dated May 22, 2014, including ~~forms~~form of the Company’s ~~Senior Floating Rate Notes due 2017, Senior Floating Rate Notes due 2019, 1.250% Senior Notes due 2017, 2.200% Senior Notes due 2019 and~~ 3.625% Senior Notes due 2024. (Filed as an exhibit to Form 8-K on May 22, 2014 and incorporated herein by reference.)

4.21		Officer’s Certificate of Amgen Inc., dated May 1, 2015, including forms of the Company’s 2.125% Senior Notes due 2020, 2.700% Senior Notes due 2022, 3.125% Senior Notes due 2025 and 4.400% Senior Notes due 2045. (Filed as an exhibit on Form 8-K on May 1, 2015 and incorporated herein by reference.)

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

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

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

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

4.26		Officer’s Certificate of Amgen Inc., dated as of August 19, 2016, including forms of the Company’s ~~1.850% Senior Notes due 2021,~~ 2.250% Senior Notes due 2023 and 2.600% Senior Notes due 2026. (Filed as an exhibit to Form 8-K on August 19, 2016 and incorporated herein by reference.)

4.27		Officer’s Certificate of Amgen Inc., dated as of May 11, 2017 including forms of the Company’s Senior Floating Rate Notes due ~~2019, Senior Floating Rate Notes due~~ 2020, ~~1.900% Senior Notes due 2019,~~ 2.200% Senior Notes due 2020 and 2.650% Senior Notes due 2022. (Filed as an exhibit to Form 8-K on May 11, 2017 and incorporated herein by reference.)

4.28		Officer’s Certificate of Amgen Inc., dated as of November 2, 2017, including in the form of the Company’s 3.200% Senior Notes due 2027. (Filed as an exhibit to Form 8-K on November 2, 2017 and incorporated herein by reference.)

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

10.1+		Amgen Inc. Amended and Restated 2009 Equity Incentive Plan. (Filed as Appendix C to the Definitive Proxy Statement on Schedule 14A on April 8, 2013 and incorporated herein by reference.)

10.2+		First Amendment to Amgen Inc. Amended and Restated 2009 Equity Incentive Plan, effective March 4, 2015. (Filed as an exhibit to Form 10-Q for the quarter ended March 31, 2015 on April 27, 2015 and incorporated herein by reference.)

10.3+		Second Amendment to Amgen Inc. Amended and Restated 2009 Equity Incentive Plan, effective March 2, 2016. (Filed as an exhibit to Form 10-Q for the quarter ended March 31, 2016 on May 2, 2016 and incorporated herein by reference.)



10.4+		Form of Grant of Stock Option Agreement for the Amgen Inc. Amended and Restated 2009 Equity Incentive Plan. (As Amended on December ~~7, 2018.~~10, 2019.) (Filed as an exhibit to Form 10-K for the year ended December 31, ~~2018~~2019 on February ~~13, 2019~~12, 2020 and incorporated herein by reference.)

10.5+		Form of Restricted Stock Unit Agreement for the Amgen Inc. Amended and Restated 2009 Equity Incentive Plan. (As Amended on December ~~7, 2018.~~10, 2019.) (Filed as an exhibit to Form 10-K for the year ended December 31, ~~2018~~2019 on February ~~13, 2019~~12, 2020 and incorporated herein by reference.)

10.6+		Amgen Inc. 2009 Performance Award Program. (As Amended on December 12, 2017.) (Filed as an exhibit to Form 10-K for the year ended December 31, 2017 on February 13, 2018 and incorporated herein by reference.)



10.7+		Form of Performance Unit Agreement for the Amgen Inc. 2009 Performance Award Program. (As Amended on December ~~7, 2018.~~10, 2019.) (Filed as an exhibit to Form 10-K for the year ended December 31, ~~2018~~2019 on February ~~13, 2019~~12, 2020 and incorporated herein by reference.)

10.8+		Amgen Inc. 2009 Director Equity Incentive Program. (As Amended on ~~October 24, 2017.~~December 11, 2019.) (Filed as an exhibit to Form 10-K for the year ended December 31, ~~2017~~2019 on February ~~13, 2018~~12, 2020 and incorporated herein by reference.)

10.9+		Form of Grant of Non-Qualified Stock Option Agreement for the Amgen Inc. 2009 Director Equity Incentive Program. (Filed as an exhibit to Form 8-K on May 8, 2009 and incorporated herein by reference.)

10.10+		Form of Restricted Stock Unit Agreement for the Amgen Inc. 2009 Director Equity Incentive Program. (As Amended on ~~October 24, 2017.~~December 11, 2019.) (Filed as an exhibit to Form 10-K for the year ended December 31, ~~2017~~2019 on February ~~13, 2018~~12, 2020 and incorporated herein by reference.)

10.11+		Form of Cash-Settled Restricted Stock Unit Agreement for the Amgen 2009 Director Equity Incentive Program. (As Amended on December 11, 2019.) (Filed as an exhibit to Form 10-K for the year ended December 31, ~~2017~~2019 on February ~~13, 2018~~12, 2020 and incorporated herein by reference.)

10.12+		Amgen Inc. Supplemental Retirement Plan. (As Amended and Restated effective October 16, 2013.) (Filed as an exhibit to Form 10-K for the year ended December 31, 2013 on February 24, 2014 and incorporated herein by reference.)

10.13+		First Amendment to the Amgen Inc. Supplemental Retirement Plan, effective October 14, 2016. (Filed as an exhibit to Form 10-Q for the quarter ended September 30, 2016 on October 28, 2016 and incorporated herein by reference.)

10.14+		Second Amendment to the Amgen Inc. Supplemental Retirement Plan (As Amended and Restated effective October 23, 2019.) (Filed as an exhibit to Form 10-K for the year ended December 31, 2019 on February 12, 2020 and incorporated herein by reference.)

10.15+		Amended and Restated Amgen Change of Control Severance Plan. (As Amended and Restated effective December 9, 2010 and subsequently amended effective March 2, 2011.) (Filed as an exhibit to Form 10-Q for the quarter ended March 31, 2011 on May 10, 2011 and incorporated herein by reference.)

~~10.15+~~10.16+		Amgen Inc. Executive Incentive Plan. (As Amended and Restated effective January 1, 2009.) (Filed as an exhibit to Form 10-Q for the quarter ended September 30, 2008 on November 7, 2008 and incorporated herein by reference.)

~~10.16+~~10.17+		First Amendment to the Amgen Inc. Executive Incentive Plan, effective December 13, 2012. (Filed as an exhibit to Form 10-K for the year ended December 31, 2012 on February 27, 2013 and incorporated herein by reference.)

~~10.17+~~10.18+		Second Amendment to the Amgen Inc. Executive Incentive Plan, effective January 1, 2017. (Filed as an exhibit to Form 10-Q for the quarter ended March 31, 2017 on April 27, 2017 and incorporated herein by reference.)

~~10.18+~~10.19+		Amgen Nonqualified Deferred Compensation Plan. (As Amended and Restated effective October 16, 2013.) (Filed as an exhibit to Form 10-K for the year ended December 31, 2013 on February 24, 2014 and incorporated herein by reference.)

~~10.19+~~10.20+		First Amendment to the Amgen Nonqualified Deferred Compensation Plan, effective October 14, 2016. (Filed as an exhibit to Form 10-Q for the quarter ended September 30, 2016 on October 28, 2016 and incorporated herein by reference.)

~~10.20+~~10.21+		Second Amendment to the Amgen Nonqualified Deferred Compensation Plan (As Amended and Restated effective January 1, 2020.) (Filed as an exhibit to Form 10-K for the year ended December 31, 2019 on February 12, 2020 and incorporated herein by reference.)

10.22+		Agreement between Amgen Inc. and David W. Meline, effective July 21, 2014. (Filed as an exhibit to Form 10-Q for the quarter ended September 30, 2014 on October 29, 2014 and incorporated herein by reference.)

~~10.21+~~

10.23+		Agreement between Amgen Inc. and Jonathan Graham, dated May 11, 2015. (Filed as an exhibit to Form 10-Q/A for the quarter ended June 30, 2015 on August 6, 2015 and incorporated herein by reference.)

~~10.22+~~10.24+		~~Agreement between Amgen Inc. and Lori Johnston, dated October 25, 2016.~~ ~~(Filed as an exhibit to Form 10-K for the year ended December 31, 2016 on February 14, 2017 and incorporated herein by reference.)~~

~~10.23+~~		Agreement between Amgen Inc. and Murdo Gordon, dated July 25, 2018. (Filed as an exhibit to Form 10-Q for the quarter ended September 30, 2018 on October 31, 2018 and incorporated herein by reference.)

~~10.24~~10.25+*†		Agreement between Amgen Inc. and Peter Griffith, dated October 18, 2019.

10.26		Second Amended and Restated Credit Agreement, dated ~~July 30, 2014,~~December 12, 2019, among Amgen Inc., the Banks therein named, Citibank, N.A., as administrative agent, and JPMorgan Chase Bank, N.A., as syndication agent ~~(the “Credit Agreement”)~~. (Filed as an exhibit to Form 8-K on ~~July 30, 2014~~December 12, 2019 and incorporated herein by reference.)

~~10.25~~10.27		~~Amendment No. 1 to the Credit Agreement, dated March 9, 2018, among Amgen Inc., the Banks therein named, and Citibank, N.A., as administrative agent.~~ ~~(Filed as an exhibit to Form 10-Q for the quarter ended March 31, 2018 on April 25, 2018 and incorporated herein by reference.)~~



~~10.26~~		Collaboration and License Agreement between Amgen Inc. and Celltech R&D Limited dated May 10, 2002 (portions of the exhibit have been omitted pursuant to a request for confidential treatment) and Amendment No. 1, effective June 9, 2003, to Collaboration and License Agreement between Amgen Inc. and Celltech R&D Limited (portions of the exhibit have been omitted pursuant to a request for confidential treatment). (Filed as an exhibit to Form 10-K/A for the year ended December 31, 2012 on July 31, 2013 and incorporated herein by reference.)

~~10.27~~10.28		Amendment No. 2 to Collaboration and License Agreement, effective November 14, 2016, between Amgen Inc. and Celltech R&D Limited (portions of the exhibit have been omitted pursuant to a request for confidential treatment). (Filed as an exhibit to Form 10-K for the year ended December 31, 2016 on February 14, 2017 and incorporated herein by reference.)

~~10.28~~10.29		Letter Agreement, dated June 25, 2019, by and between Amgen Inc. and UCB Celltech (portions of the exhibit have been omitted because they are both (i) not material and (ii) would be competitively harmful if publicly disclosed). (Filed as an exhibit to Form 10-Q for the quarter ended June 30, 2019 on July 31, 2019 and incorporated herein by reference.)

10.30		Collaboration Agreement, dated April 22, 1994, by and between Bayer Corporation (formerly Miles, Inc.) and Onyx Pharmaceuticals, Inc.(Filed as an exhibit to Form 10-Q for the quarter ended March 31, 2011 by Onyx Pharmaceuticals, Inc. on May 10, 2011 and incorporated herein by reference.)

~~10.29~~10.31		Amendment to Collaboration Agreement, dated April 24, 1996, by and between Bayer Corporation and Onyx Pharmaceuticals, Inc. (Filed as an exhibit to Form 10-Q for the quarter ended March 31, 2006 by Onyx Pharmaceuticals, Inc. on May 10, 2006 and incorporated herein by reference.)

~~10.30~~10.32		Amendment to Collaboration Agreement, dated February 1, 1999, by and between Bayer Corporation and Onyx Pharmaceuticals, Inc. (Filed as an exhibit to Form 10-Q for the quarter ended March 31, 2006 by Onyx Pharmaceuticals, Inc. on May 10, 2006 and incorporated herein by reference.)

~~10.31~~10.33		Settlement Agreement and Release, dated October 11, 2011, by and between Bayer Corporation, Bayer AG, Bayer HealthCare LLC and Bayer Pharma AG and Onyx Pharmaceuticals, Inc. (Filed as an exhibit to Form 10-K for the year ended December 31, 2011 by Onyx Pharmaceuticals, Inc. on February 27, 2012 and incorporated herein by reference.)

~~10.32~~10.34		Fourth Amendment to Collaboration Agreement, dated October 11, 2011, by and between Bayer Corporation and Onyx Pharmaceuticals, Inc. (Filed as an exhibit to Form 10-K for the year ended December 31, 2011 by Onyx Pharmaceuticals, Inc. on February 27, 2012 and incorporated herein by reference.)

~~10.33~~10.35		Side Letter Regarding Collaboration Agreement, dated May 29, 2015, by and between Bayer HealthCare LLC and Onyx Pharmaceuticals, Inc. (Filed as an exhibit to Form 10-Q for the quarter ended June 30, 2015 on August 5, 2015 and incorporated herein by reference.)

~~10.34~~10.36*		Side Letter Regarding Collaboration Agreement and Stivarga Agreement, dated February 13, 2020, by and between Onyx Pharmaceuticals, Inc. and Bayer HealthCare LLC.

10.37		Sourcing and Supply Agreement, dated January 6, 2017, by and between Amgen USA Inc., a wholly owned subsidiary of Amgen Inc., and DaVita Inc. (portions of the exhibit have been omitted pursuant to a request for confidential treatment). (Filed as an exhibit to Form 10-Q for the quarter ended March 31, 2017 on April 27, 2017 and incorporated herein by reference.)

~~10.35~~10.38		Exclusive License and Collaboration Agreement, dated August 28, 2015, by and between Amgen Inc. and Novartis Pharma AG (portions of the exhibit have been omitted pursuant to a request for confidential treatment). (Filed as an exhibit to Form 10-Q for the quarter ended June 30, 2017 on July 26, 2017 and incorporated herein by reference.)

~~10.36~~

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

~~10.37~~10.40		Amendment No. 2 to the Exclusive License and Collaboration Agreement, dated April 21, 2017, by and between Amgen Inc. and Novartis Pharma AG (portions of the exhibit have been omitted pursuant to a request for confidential treatment). (Filed as an exhibit to Form 10-Q for the quarter ended June 30, 2017 on July 26, 2017 and incorporated herein by reference.)

~~10.38~~10.41		Collaboration Agreement, dated April 21, 2017, by and between Amgen Inc. and Novartis Pharma AG (portions of the exhibit have been omitted pursuant to a request for confidential treatment). (Filed as an exhibit to Form 10-Q for the quarter ended June 30, 2017 on July 26, 2017 and incorporated herein by reference.)

~~10.39~~10.42		Amendment No. 1 to the Collaboration Agreement, dated March 20, 2018, by and between Novartis Pharma AG and Amgen Inc. (portions of the exhibit have been omitted pursuant to a request for confidential treatment). (Filed as an exhibit to Form 10-Q for the quarter ended March 31, 2018 on April 25, 2018 and incorporated herein by reference.)

10.43		Collaboration Agreement, dated October 31, 2019, by and between Amgen Inc. and BeiGene Switzerland GmbH, a wholly-owned subsidiary of BeiGene, Ltd. (portions of the exhibit have been omitted because they are both (i) not material and (ii) would be competitively harmful if publicly disclosed). (Filed as an exhibit to Form 10-K for the year ended December 31, 2019 on February 12, 2020 and incorporated herein by reference.)

10.44		Guarantee, dated as of October 31, 2019, made by and among BeiGene, Ltd. and Amgen Inc. (Filed as an exhibit to Form 10-K for the year ended December 31, 2019 on February 12, 2020 and incorporated herein by reference.)

10.45		Share Purchase Agreement, dated October 31, 2019, by and between Amgen Inc. and BeiGene, Ltd. (portions of the exhibit have been omitted because they are both (i) not material and (ii) would be competitively harmful if publicly disclosed). (Filed as an exhibit to Schedule 13D on January 8, 2020 and incorporated herein by reference.)

10.46		Amendment No. 1 to Share Purchase Agreement, dated December 6, 2019, by and among BeiGene, Ltd. and Amgen Inc. (Filed as an exhibit to Schedule 13D on January 8, 2020 and incorporated herein by reference.)

10.47*		Amendment No. 2 to Share Purchase Agreement, dated March 17, 2020, by and among BeiGene, Ltd. and Amgen Inc.

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

32**		Section 1350 Certifications.



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

101.SCH*		XBRL Taxonomy Extension Schema Document.

101.CAL*		XBRL Taxonomy Extension Calculation Linkbase Document.

101.DEF*		XBRL Taxonomy Extension Definition Linkbase Document.

101.LAB*		XBRL Taxonomy Extension Label Linkbase Document.

101.PRE*		XBRL Taxonomy Extension Presentation Linkbase Document.

104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).



		Amgen Inc.
		(Registrant)

Date:	April 30, ~~2019~~2020	By:	/S/ ~~DAVID W. MELINE~~PETER H. GRIFFITH
			~~David W. Meline~~Peter H. Griffith
			Executive Vice President and Chief Financial Officer
			(Principal Financial and Accounting Officer)