Item 1. FINANCIAL STATEMENTS

145K characters. Original on sec.gov · Markdown

Item 1. FINANCIAL STATEMENTS

AMGEN INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In millions, except per-share data)

(Unaudited)

Three months ended June 30,Six months ended June 30,
2025202420252024
Revenues:
Product sales$8,771$8,041$16,644$15,159
Other revenues408347684676
Total revenues9,1798,38817,32815,835
Operating expenses:
Cost of sales3,0113,2365,9796,436
Research and development1,7441,4473,2302,790
Selling, general and administrative1,6911,7853,3783,593
Other7711907116
Total operating expenses6,5236,47913,49412,935
Operating income2,6561,9093,8342,900
Other income (expense):
Interest expense, net(694)(808)(1,417)(1,632)
Other (expense) income, net(394)(307)1,124(542)
Income before income taxes1,5687943,541726
Provision for income taxes1364837993
Net income$1,432$746$3,162$633
Earnings per share:
Basic$2.66$1.39$5.88$1.18
Diluted$2.65$1.38$5.84$1.17
Weighted-average shares used in calculation of earnings per share:
Basic538537538537
Diluted541541541541

See accompanying notes.

AMGEN INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In millions)

(Unaudited)

Three months ended June 30,Six months ended June 30,
2025202420252024
Net income$1,432$746$3,162$633
Other comprehensive (loss) income, net of reclassification adjustments and taxes:
Gains (losses) on foreign currency translation adjustments86(15)143(39)
(Losses) gains on cash flow hedges(399)51(622)177
Other—(1)1(4)
Other comprehensive (loss) income, net of reclassification adjustments and taxes(313)35(478)134
Comprehensive income$1,119$781$2,684$767

See accompanying notes.

AMGEN INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions, except per-share data)

June 30, 2025December 31, 2024
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents$8,028$11,973
Trade receivables, net8,7016,782
Inventories6,5836,998
Other current assets3,4223,277
Total current assets26,73429,030
Property, plant and equipment, net6,8556,543
Intangible assets, net24,61427,699
Goodwill18,67418,637
Other noncurrent assets11,0209,930
Total assets$87,897$91,839
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable$3,010$1,908
Accrued liabilities15,02217,641
Current portion of long-term debt2,4443,550
Total current liabilities20,47623,099
Long-term debt53,76056,549
Long-term deferred tax liabilities1,3861,616
Long-term tax liabilities2,5112,349
Other noncurrent liabilities2,3362,349
Contingencies and commitments (see Note 13)
Stockholders’ equity:
Common stock and additional paid-in capital; $0.0001 par value; 2,750.0 shares authorized; outstanding—538.3 shares in 2025 and 536.9 shares in 202433,68033,533
Accumulated deficit(25,708)(27,590)
Accumulated other comprehensive loss(544)(66)
Total stockholders’ equity7,4285,877
Total liabilities and stockholders’ equity$87,897$91,839

See accompanying notes.

AMGEN INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In millions, except per-share data)

(Unaudited)

Three months ended June 30, 2025
Number of shares of common stockCommon stock and additional paid-in capitalAccumulated deficitAccumulated other comprehensive lossTotal
Balance as of March 31, 2025537.7$33,578$(27,140)$(231)$6,207
Net income——1,432—1,432
Other comprehensive loss, net of taxes———(313)(313)
Issuance of common stock in connection with equity award programs0.636——36
Stock-based compensation expense—157——157
Tax impact related to employee stock-based compensation expense—(91)——(91)
Balance as of June 30, 2025538.3$33,680$(25,708)$(544)$7,428
Six months ended June 30, 2025
Number of shares of common stockCommon stock and additional paid-in capitalAccumulated deficitAccumulated other comprehensive lossTotal
Balance as of December 31, 2024536.9$33,533$(27,590)$(66)$5,877
Net income——3,162—3,162
Other comprehensive loss, net of taxes———(478)(478)
Dividends declared on common stock ($2.38 per share)——(1,280)—(1,280)
Issuance of common stock in connection with equity award programs1.478——78
Stock-based compensation expense—242——242
Tax impact related to employee stock-based compensation expense—(173)——(173)
Balance as of June 30, 2025538.3$33,680$(25,708)$(544)$7,428

AMGEN INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (continued)

(In millions, except per-share data)

(Unaudited)

Three months ended June 30, 2024
Number of shares of common stockCommon stock and additional paid-in capitalAccumulated deficitAccumulated other comprehensive lossTotal
Balance as of March 31, 2024536.4$33,082$(27,870)$(190)$5,022
Net income——746—746
Other comprehensive income, net of taxes———3535
Issuance of common stock in connection with equity award programs0.865——65
Stock-based compensation expense—157——157
Tax impact related to employee stock-based compensation expense—(100)——(100)
Balance as of June 30, 2024537.2$33,204$(27,124)$(155)$5,925
Six months ended June 30, 2024
Number of shares of common stockCommon stock and additional paid-in capitalAccumulated deficitAccumulated other comprehensive lossTotal
Balance as of December 31, 2023535.4$33,070$(26,549)$(289)$6,232
Net income——633—633
Other comprehensive income, net of taxes———134134
Dividends declared on common stock ($2.25 per share)——(1,208)—(1,208)
Issuance of common stock in connection with equity award programs1.899——99
Stock-based compensation expense—260——260
Tax impact related to employee stock-based compensation expense—(225)——(225)
Balance as of June 30, 2024537.2$33,204$(27,124)$(155)$5,925

See accompanying notes.

AMGEN INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

(Unaudited)

Six months ended June 30,
20252024
Cash flows from operating activities:
Net income$3,162$633
Noncash adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization and other2,7282,799
Impairment of intangible assets80068
Stock-based compensation expense242260
Deferred income taxes(672)(784)
(Gains) losses on equity securities(741)916
Other items, net(73)(174)
Changes in operating assets and liabilities, net of acquisitions:
Trade receivables, net(1,823)310
Inventories5271,528
Other assets(407)(339)
Accounts payable1,086666
Accrued income taxes, net(2,313)(1,311)
Long-term tax liabilities162(637)
Accrued liabilities(50)(361)
Accrued sales incentives and allowance1,113(393)
Other liabilities(70)(33)
Net cash provided by operating activities3,6713,148
Cash flows from investing activities:
Purchases of property, plant and equipment(780)(468)
Other(56)34
Net cash used in investing activities(836)(434)
Cash flows from financing activities:
Extinguishment of debt(602)(410)
Repayment of debt(3,500)(1,400)
Dividends paid(2,559)(2,417)
Other(119)(130)
Net cash used in financing activities(6,780)(4,357)
Decrease in cash and cash equivalents(3,945)(1,643)
Cash and cash equivalents at beginning of period11,97310,944
Cash and cash equivalents at end of period$8,028$9,301

See accompanying notes.

AMGEN INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2025

(Unaudited)

1. Summary of significant accounting policies

Business

Amgen Inc. (including its consolidated 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 our business in one operating segment: human therapeutics. See Note 2, Segment and other information.

Basis of presentation

The interim unaudited financial information for the three and six months ended June 30, 2025 and 2024, has been prepared in accordance with GAAP and includes all adjustments (consisting of only normal, recurring adjustments unless otherwise indicated) that Amgen considers necessary for a fair presentation, in all material respects, 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 the consolidated financial statements and the notes thereto contained in our Annual Report on Form 10-K for the year ended December 31, 2024, and with the condensed consolidated financial statements and the notes thereto contained in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2025.

Principles of consolidation

The condensed consolidated financial statements include the accounts of Amgen and its majority-owned subsidiaries. In determining whether we are the primary beneficiary of a variable interest entity, we consider whether we have both the power to direct activities of the entity that most significantly impact the entity’s economic performance and the obligation to absorb losses of, or the right to receive benefits from, the entity that could potentially be significant to that entity. We do not have any significant interests in any variable interest entities of which we are the primary beneficiary. All material intercompany transactions and balances have been eliminated in consolidation. Certain reclassifications have been made to prior periods in the condensed consolidated financial statements and accompanying notes to conform with the current presentation.

Use of estimates

The preparation of condensed consolidated financial statements in conformity with 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 $10.8 billion and $10.4 billion as of June 30, 2025 and December 31, 2024, respectively.

Recent accounting pronouncements not yet adopted

In December 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, to improve income tax disclosure requirements by requiring more detailed information in several income tax disclosures, such as enhancing disclosure of income taxes paid and requiring disaggregation of the effective income tax rate reconciliation. The standard is effective for public business entities such as Amgen for annual periods beginning after December 15, 2024. Early adoption is permitted, and entities may apply the standard prospectively or retrospectively. We expect the adoption of this new standard to result in incremental disclosures to the notes to our financial statements.

In November 2024, the FASB issued ASU No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, to improve disclosures about a public business entity’s expenses by requiring disaggregated disclosures of certain types of expenses, including purchases of inventory, employee compensation, depreciation, intangible amortization and depletion, as applicable, for each income statement caption that includes those expenses. In addition, the standard will require entities to define and disclose total selling expenses. The standard is effective for public business entities such as Amgen for annual periods beginning after

December 15, 2026, and interim periods beginning after December 15, 2027. Early adoption is permitted, and entities may apply the standard prospectively or retrospectively. We are currently evaluating the impact of adopting this standard on our consolidated financial statements and related disclosures.

2. Segment and other information

We operate our business in one operating segment, which also represents one reportable segment: human therapeutics. Therefore, results of our operations are reported on a consolidated basis for purposes of segment reporting, consistent with internal management reporting.

The human therapeutics segment is engaged in the discovery, development, manufacturing and delivery of innovative medicines to fight some of the world’s toughest diseases. The Company’s Chief Executive Officer has been identified as the chief operating decision maker (CODM). The CODM manages and allocates resources on a consolidated basis. The determination of a single segment is consistent with the financial information regularly reviewed by the CODM for purposes of evaluating performance and allocating resources, which is reviewed on a consolidated basis.

As the Company’s CODM evaluates the financial performance of the Company’s human therapeutics segment on a consolidated basis, the measure of segment performance is net income, as reflected in the Condensed Consolidated Statements of Income. The CODM uses net income to allocate resources on a consolidated basis, which enables the CODM to both assess the overall level of resources available and optimize the distribution of resources across functions, therapeutic areas, regions and R&D programs in line with our long-term corporate-wide strategic goals. In addition, the CODM may also evaluate financial performance based on net income adjusted for certain items that are unusual and non-recurring. As the Company manages its assets on a consolidated basis, the measure of segment assets is total assets, as reflected in the Condensed Consolidated Balance Sheets. See Note 6, Investments, for further information regarding equity method investments, and Net cash used in investing activities in the Condensed Consolidated Statements of Cash Flows for further information regarding capital expenditures.

The following table provides segment revenues, significant segment expenses, other segment items, reported segment net income and a reconciliation of segment net income to the Company’s total consolidated net income for the three and six months ended June 30, 2025 and 2024 (in millions):

Three months ended June 30,Six months ended June 30,
2025202420252024
Revenues:
Product sales$8,771$8,041$16,644$15,159
Other revenues408347684676
Total revenues9,1798,38817,32815,835
Less:
Manufacturing cost of sales(1)(2)2,4842,8255,0125,639
Profit share and royalties in cost of sales(1)527411967797
Research and development(1)1,7441,4473,2302,790
Sales and marketing(1)1,1371,2112,2032,415
General and administrative(1)5545741,1751,178
Other segment items(3)539445(34)965
Equity in loss (income) of equity method investments18(12)29(39)
Interest income(86)(115)(212)(268)
Interest expense, net6948081,4171,632
Provision for income taxes1364837993
Segment net income1,4327463,162633
Reconciliation of profit or loss:
Adjustments and reconciling items————
Consolidated net income$1,432$746$3,162$633

(1) During the three months ended June 30, 2025 and 2024, amortization of our finite-lived intangible assets was $1.1 billion and $1.2 billion, respectively. During the six months ended June 30, 2025 and 2024, amortization of our finite-lived intangible assets was $2.3 billion and $2.4 billion, respectively. Amortization of intangible assets is primarily included in Cost of sales in the Condensed Consolidated Statements of Income. In addition, during the three months ended June 30, 2025 and 2024, we recognized depreciation and right-of-use asset amortization of $220 million and $202 million, respectively. During the six months ended June 30, 2025 and 2024, we recognized depreciation and right-of-use asset amortization of $429 million and $403 million, respectively.

(2) During the three months ended June 30, 2025 and 2024, manufacturing cost of sales included amortization of step-up to fair value of inventory acquired in business combinations of $339 million and $660 million, respectively. During the six months ended June 30, 2025 and 2024, manufacturing cost of sales included amortization of step-up to fair value of inventory acquired in business combinations of $702 million and $1.4 billion, respectively.

(3) Other segment items included in Segment net income primarily consisted of fair value adjustments on equity securities (see Note 6, Investments) and net impairment charges on intangible assets (see Note 8, Goodwill and other intangible assets).

3. Revenues

We operate our business in one operating segment: human therapeutics. Therefore, results of our operations are reported on a consolidated basis for purposes of segment reporting, consistent with internal management reporting. Revenues by product and by geographic area, based on customers’ locations, are presented below. The majority of ROW product sales relates to products sold in Europe.

Revenues were as follows (in millions):

Three months ended June 30,
20252024
U.S.ROWTotalU.S.ROWTotal
Prolia$745$377$1,122$770$395$1,165
Repatha361335696270262532
ENBREL59776049027909
XGEVA347185532399163562
Otezla512106618432112544
EVENITY395123518281110391
TEPEZZA466395054781479
BLINCYTO27011438416599264
KYPROLIS232146378240137377
Aranesp10725235991257348
Nplate228141369214132346
TEZSPIRE(1)342—342234—234
KRYSTEXXA349—349294—294
Vectibix144161305133137270
Other products(2)1,2294611,6909373891,326
Total product sales(3)$6,324$2,4478,771$5,840$2,2018,041
Other revenues408347
Total revenues$9,179$8,388
Six months ended June 30,
20252024
U.S.ROWTotalU.S.ROWTotal
Prolia$1,465$756$2,221$1,427$737$2,164
Repatha7046481,3525435061,049
ENBREL1,101131,1141,463131,476
XGEVA7073911,0987653581,123
Otezla8552001,055725213938
EVENITY715245960517216733
TEPEZZA831558868976903
BLINCYTO543211754318190508
KYPROLIS448254702474279753
Aranesp198501699191506697
Nplate429253682404259663
TEZSPIRE(1)627—627407—407
KRYSTEXXA585—585529—529
Vectibix279293572253264517
Other products(2)2,4998383,3371,9007992,699
Total product sales(3)$11,986$4,65816,644$10,813$4,34615,159
Other revenues684676
Total revenues$17,328$15,835

(1) TEZSPIRE is marketed by our collaborator AstraZeneca outside the United States.

(2) Consists of product sales of our non-principal products.

(3) Hedging gains and losses, which are included in product sales, were not material for the three and six months ended June 30, 2025 and 2024.

4. Income taxes

The effective tax rates for the three and six months ended June 30, 2025 were 8.7% and 10.7%, respectively, compared with 6.0% and 12.8%, respectively, for the corresponding periods in the prior year.

The increase in our effective tax rate for the three months ended June 30, 2025, was primarily due to the change in earnings mix, including lower amortization expense from the fair value step-up of inventory acquired from Horizon, and current year net unfavorable items as compared to the prior period. The decrease in our effective tax rate for the six months ended June 30, 2025, was primarily due to the change in earnings mix, including the Otezla impairment charge recorded in the first quarter of 2025, and current year net favorable items as compared to the prior period, partially offset by the net unrealized gains in the first half of 2025 compared to net unrealized losses in the prior period on equity investments. See Note 6, Investments*.* The effective tax rates differ from the federal statutory rate primarily due to the impact of the jurisdictional mix of income and expenses. Substantially all of the benefit to our effective tax rate from foreign earnings results from locations in which the Company has significant manufacturing operations, including Singapore, Ireland and Puerto Rico, a territory of the United States that is treated as a foreign jurisdiction for U.S. tax purposes. Our operations in Puerto Rico are subject to tax incentive grants through 2050 and the Company’s operations in Singapore are subject to a tax incentive grant through 2036. Effective January 1, 2024, selected individual countries, including the United Kingdom and EU member countries, have enacted the global minimum tax agreement. Additional countries, including Singapore, enacted the minimum tax agreement effective January 1, 2025. Singapore’s enactment of the agreement applies irrespective of the Company’s incentive grant. Our legal entities in such countries, along with their direct and indirect subsidiaries, are now subject to a 15% minimum tax rate on adjusted financial statement income. Our foreign earnings are also subject to U.S. tax at a reduced rate of 10.5%.

On July 4, 2025, the OBBBA was enacted in the United States. The OBBBA has various provisions, including the permanent extension of certain expiring provisions of the 2017 Tax Act, and modifications to the international tax framework. The legislation has multiple effective dates, with certain provisions effective in 2026 and beyond.

One or more of our legal entities file income tax returns in the U.S. federal jurisdiction, various U.S. state jurisdictions and certain foreign jurisdictions. Our income tax returns are routinely examined by tax authorities in those jurisdictions. Significant disputes can arise and have arisen with tax authorities involving issues regarding the timing and amount of deductions, the use of tax credits and allocations of income and expenses among various tax jurisdictions because of differing interpretations of tax laws, regulations and relevant facts. Tax authorities, including the IRS, are becoming more aggressive and are particularly focused on such matters.

In 2017, we received an RAR and a modified RAR from the IRS for the years 2010–2012, proposing significant adjustments that primarily relate to the allocation of profits between certain of our entities in the United States and the U.S. territory of Puerto Rico. We disagreed with the proposed adjustments and calculations and pursued resolution with the IRS appeals office, but were unable to reach a resolution. In July 2021, we filed a petition in the U.S. Tax Court to contest two duplicate Statutory Notices of Deficiency (Notices) for the years 2010–2012 that we received in May and July 2021, which seek to increase our U.S. taxable income for the years 2010–2012 by an amount that would result in additional federal tax of approximately $3.6 billion, plus interest. Any additional tax that could be imposed for the years 2010–2012 would be reduced by up to approximately $900 million of repatriation tax previously accrued on our foreign earnings.

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

We firmly believe that the IRS positions set forth in the 2010–2012 and 2013–2015 Notices are without merit. We are contesting the 2010–2012 and 2013–2015 Notices through the judicial process. The two cases were consolidated in the U.S. Tax Court on December 19, 2022. The trial began on November 4, 2024 and concluded on January 17, 2025. The parties filed opening post-trial briefs on June 13, 2025, and the Court held oral argument on July 16, 2025. The parties are scheduled to file post-trial reply briefs in October 2025. The Company expects a decision from the U.S. Tax Court no earlier than the second half of 2026.

We are currently under examination by the IRS for the years 2016–2018 with respect to issues similar to those for the 2010 through 2015 period. We expect that the IRS will begin its audit of 2019-2022 in 2025 or early 2026, and we believe that

it may seek to continue to audit similar issues related to the allocation of income between the United States and our foreign jurisdictions. In addition, we are under examination by a number of state and foreign tax jurisdictions.

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

During the three and six months ended June 30, 2025, the gross amounts of our UTBs increased by $60 million and $100 million, respectively, as a result of tax positions taken during the current year. Substantially all of the UTBs as of June 30, 2025, if recognized, would impact our effective tax rate.

5. Earnings per share

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

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

Three months ended June 30,Six months ended June 30,
2025202420252024
Income (Numerator):
Net income for basic and diluted EPS$1,432$746$3,162$633
Shares (Denominator):
Weighted-average shares for basic EPS538537538537
Effect of dilutive securities3434
Weighted-average shares for diluted EPS541541541541
Basic earnings per share$2.66$1.39$5.88$1.18
Diluted earnings per share$2.65$1.38$5.84$1.17

For the three and six months ended June 30, 2025 and 2024, the number of antidilutive employee stock-based awards excluded from the computation of diluted EPS was not significant.

6. Investments

Available-for-sale investments

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

Types of securities as of June 30, 2025Amortized costGross unrealized gainsGross unrealized lossesFair values
U.S. Treasury bills$994$—$—$994
Money market mutual funds6,363——6,363
Other short-term interest-bearing securities129——129
Total interest-bearing securities$7,486$—$—$7,486
Types of securities as of December 31, 2024Amortized costGross unrealized gainsGross unrealized lossesFair values
U.S. Treasury bills$997$—$—$997
Money market mutual funds10,354——10,354
Other short-term interest-bearing securities135——135
Total interest-bearing securities$11,486$—$—$11,486

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

Condensed Consolidated Balance Sheets locationsJune 30, 2025December 31, 2024
Cash and cash equivalents$7,486$11,486
Total interest-bearing securities$7,486$11,486

Cash and cash equivalents in the above table excludes bank account cash of $542 million and $487 million as of June 30, 2025 and December 31, 2024, respectively.

All interest-bearing securities as of June 30, 2025 and December 31, 2024, mature in one year or less. For the three months ended June 30, 2025 and 2024, interest income on these investments was $86 million and $115 million, respectively. For the six months ended June 30, 2025 and 2024, interest income on these investments was $212 million and $268 million, respectively.

For the three and six months ended June 30, 2025 and 2024, realized gains and losses on interest-bearing securities were not material and were recorded in Other (expense) income, net, in the Condensed Consolidated Statements of Income. The cost of securities sold is based on the specific-identification method.

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

Equity securities

BeOne Medicines Ltd.

As of June 30, 2025 and December 31, 2024, the fair values of our investment in BeOne were $4.6 billion and $3.5 billion, respectively, which were included in Other noncurrent assets in the Condensed Consolidated Balance Sheets. During the three months ended June 30, 2025 and 2024, we recorded unrealized losses of $570 million and $260 million, respectively. During the six months ended June 30, 2025 and 2024, we recorded an unrealized gain of $1.1 billion and an unrealized loss of $714 million, respectively. These unrealized gains and losses were recognized in Other (expense) income, net, in the Condensed Consolidated Statements of Income.

Subject to certain exceptions or otherwise agreed to by BeOne, while Amgen holds at least 5.0% of BeOne’s outstanding common stock, (A) we may only sell our BeOne equity investment via: (i) a registered public offering, (ii) a sale under Rule

144 of the Securities Act of 1933 (the “Securities Act”) or (iii) a private sale exempt from registration requirements under the Securities Act, and (B) we may not sell more than 5.0% of BeOne’s outstanding common stock in any rolling 12-month period.

Other equity securities

Excluding our equity investments in BeOne (discussed above) and Neumora (discussed below), we held investments in other equity securities with readily determinable fair values (publicly traded securities) of $287 million and $314 million as of June 30, 2025 and December 31, 2024, respectively, which were included in Other noncurrent assets in the Condensed Consolidated Balance Sheets. During the three and six months ended June 30, 2025 and 2024, net unrealized gains and losses on these publicly traded securities were not material. Additionally, net realized gains and losses on sales of publicly traded securities for the three and six months ended June 30, 2025 and 2024, were not material.

We held investments of $323 million and $319 million in equity securities without readily determinable fair values as of June 30, 2025 and December 31, 2024, respectively, which were included in Other noncurrent assets in the Condensed Consolidated Balance Sheets. During the three and six months ended June 30, 2025 and 2024, upward and downward adjustments on these securities were not material. Adjustments were based on observable price transactions. Net realized gains and losses on sales of securities without readily determinable fair values for the three and six months ended June 30, 2025 and 2024, were not material.

Equity method investments

Neumora Therapeutics, Inc.

As of June 30, 2025 and December 31, 2024, our ownership interest in Neumora was approximately 21.9% and the fair values of our investment were $26 million and $375 million, respectively, which were included in Other noncurrent assets in the Condensed Consolidated Balance Sheets. Although our equity investment qualifies us for the equity method of accounting, we have elected the fair value option to account for our investment. Under the fair value option, changes in the fair value of the investment are recognized through earnings in Other (expense) income, net, in the Condensed Consolidated Statements of Income each reporting period. See Note 11, Fair value measurement. We believe the fair value option best reflects the economics of the underlying transaction. During the three months ended June 30, 2025 and 2024, we recognized unrealized losses of $9 million and $138 million, respectively. During the six months ended June 30, 2025 and 2024, we recognized unrealized losses of $349 million and $255 million, respectively.

We are contractually restricted from selling more than 5.0% of Neumora’s outstanding common stock in any rolling 12-month period for as long as we hold at least 10.0% of their outstanding common stock, subject to certain exceptions or otherwise agreed to by Neumora.

Limited partnerships

We held limited partnership investments of $235 million and $262 million as of June 30, 2025 and December 31, 2024, respectively, which were included in Other noncurrent assets in the Condensed Consolidated Balance Sheets. These investments, which are primarily investment funds of early-stage biotechnology companies, are accounted for by using the equity method of accounting and are measured by using our proportionate share of the net asset values of the underlying investments held by the limited partnerships as a practical expedient. These investments are typically redeemable only through distributions upon liquidation of the underlying assets. As of June 30, 2025, we had $146 million of unfunded additional commitments to be made for these investments during the next several years. For the three and six months ended June 30, 2025 and 2024, net unrealized gains and losses recognized from our limited partnership investments were not material.

7. Inventories

Inventories consisted of the following (in millions):

June 30, 2025December 31, 2024
Raw materials$885$818
Work in process3,6584,120
Finished goods2,0402,060
Total inventories$6,583$6,998

8. Goodwill and other intangible assets

Goodwill

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

Balance at December 31, 2024$18,637
Foreign currency translation adjustments37
Balance at June 30, 2025$18,674

Other intangible assets

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

June 30, 2025December 31, 2024
Gross carrying amountsAccumulated amortizationOther intangible assets, netGross carrying amountsAccumulated amortizationOther intangible assets, net
Finite-lived intangible assets:
Developed-product-technology rights$48,201$(24,846)$23,355$48,611$(22,594)$26,017
Licensing rights3,875(3,457)4183,875(3,392)483
Research and development technology rights1,419(1,288)1311,374(1,235)139
Marketing-related rights1,202(1,202)—1,202(1,202)—
Total finite-lived intangible assets54,697(30,793)23,90455,062(28,423)26,639
Indefinite-lived intangible assets:
In-process research and development710—7101,060—1,060
Total other intangible assets$55,407$(30,793)$24,614$56,122$(28,423)$27,699

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

In January 2025, as part of the IRA, the Company’s product Otezla was selected by CMS for Medicare price setting that will be applicable beginning on January 1, 2027. The earlier than anticipated selection resulted in a decrease in the estimated future cash flows for the product in the United States. This selection represented a triggering event that required the Company to evaluate the underlying developed-product-technology rights for impairment. In the first quarter of 2025, the Company utilized a discounted cash flow analysis based on Level 3 inputs, including estimated product sales, operating expenses and a discount rate, that resulted in an intangible asset fair value of $4.0 billion, which was lower than the carrying value of $4.8 billion, and resulted in a partial impairment of both the gross and net carrying amounts of $800 million, which was recognized in Other operating expenses in the Condensed Consolidated Statements of Income. See Note 11, Fair value measurement.

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 second quarter of 2025, the FDA approved UPLIZNA for the Immunoglobulin G4-related disease (IgG4-RD) indication, and commercialization commenced in the United States. As a result, the Company reclassified the related intangible asset with a gross carrying value of $350 million from IPR&D to developed-product-technology rights and began amortizing it on a straight-line basis over its estimated useful life of approximately 11 years from the date placed in service.

During the three months ended June 30, 2025 and 2024, we recognized amortization of our finite-lived intangible assets of $1.1 billion and $1.2 billion, respectively. During the six months ended June 30, 2025 and 2024, we recognized amortization of our finite-lived intangible assets of $2.3 billion and $2.4 billion, respectively. Amortization of intangible assets is primarily included in Cost of sales in the Condensed Consolidated Statements of Income. As of June 30, 2025, the total estimated future

amortization of our finite-lived intangible assets for the remaining six months ending December 31, 2025, and the years ending December 31, 2026, 2027, 2028, 2029 and 2030, was $2.0 billion, $3.7 billion, $3.7 billion, $2.9 billion, $2.3 billion and $2.2 billion, respectively.

9. Financing arrangements

Our borrowings consisted of the following (in millions):

June 30, 2025December 31, 2024
1.90% notes due 2025 (1.90% 2025 Notes)$—$500
5.25% notes due 2025 (5.25% 2025 Notes)—2,000
3.125% notes due 2025 (3.125% 2025 Notes)—1,000
2.00% €750 million notes due 2026 (2.00% 2026 euro Notes)884777
5.507% notes due 2026 (5.507% 2026 Notes)1,5001,500
2.60% notes due 2026 (2.60% 2026 Notes)1,2501,250
Term loan due October 20261,8001,800
5.50% £475 million notes due 2026 (5.50% 2026 pound sterling Notes)652595
2.20% notes due 2027 (2.20% 2027 Notes)1,7241,724
3.20% notes due 2027 (3.20% 2027 Notes)1,0001,000
5.15% notes due 2028 (5.15% 2028 Notes)3,7503,750
1.65% notes due 2028 (1.65% 2028 Notes)1,2341,234
3.00% notes due 2029 (3.00% 2029 Notes)750750
4.05% notes due 2029 (4.05% 2029 Notes)1,2501,250
4.00% £700 million notes due 2029 (4.00% 2029 pound sterling Notes)961876
2.45% notes due 2030 (2.45% 2030 Notes)1,2501,250
5.25% notes due 2030 (5.25% 2030 Notes)2,7502,750
2.30% notes due 2031 (2.30% 2031 Notes)1,2501,250
2.00% notes due 2032 (2.00% 2032 Notes)9871,001
3.35% notes due 2032 (3.35% 2032 Notes)1,0001,000
4.20% notes due 2033 (4.20% 2033 Notes)750750
5.25% notes due 2033 (5.25% 2033 Notes)4,2504,250
6.375% notes due 2037 (6.375% 2037 Notes)478478
6.90% notes due 2038 (6.90% 2038 Notes)254254
6.40% notes due 2039 (6.40% 2039 Notes)333333
3.15% notes due 2040 (3.15% 2040 Notes)1,4781,668
5.75% notes due 2040 (5.75% 2040 Notes)373373
2.80% notes due 2041 (2.80% 2041 Notes)594776
4.95% notes due 2041 (4.95% 2041 Notes)600600
5.15% notes due 2041 (5.15% 2041 Notes)729729
5.65% notes due 2042 (5.65% 2042 Notes)415415
5.60% notes due 2043 (5.60% 2043 Notes)2,7502,750
5.375% notes due 2043 (5.375% 2043 Notes)185185
4.40% notes due 2045 (4.40% 2045 Notes)2,2502,250
4.563% notes due 2048 (4.563% 2048 Notes)1,4151,415
3.375% notes due 2050 (3.375% 2050 Notes)1,5041,764
4.663% notes due 2051 (4.663% 2051 Notes)3,5413,541
3.00% notes due 2052 (3.00% 2052 Notes)754890
4.20% notes due 2052 (4.20% 2052 Notes)882895
4.875% notes due 2053 (4.875% 2053 Notes)1,0001,000
5.65% notes due 2053 (5.65% 2053 Notes)4,2504,250
2.77% notes due 2053 (2.77% 2053 Notes)940940
4.40% notes due 2062 (4.40% 2062 Notes)1,1281,165
June 30, 2025December 31, 2024
5.75% notes due 2063 (5.75% 2063 Notes)2,7502,750
Other notes due 2097100100
Total principal amount of debt57,69561,778
Unamortized bond discounts, premiums and issuance costs, net(1,331)(1,360)
Fair value adjustments(186)(343)
Other2624
Total carrying value of debt56,20460,099
Less current portion(2,444)(3,550)
Total long-term debt$53,760$56,549

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

The Term loan has an interest rate of three-month SOFR plus 1.225%.

Debt repayments

During the three months ended June 30, 2025 and 2024, debt repayments totaled $1.0 billion and $1.4 billion, respectively. During the six months ended June 30, 2025 and 2024, debt repayments totaled $3.5 billion and $1.4 billion, respectively.

Debt extinguishment

During the three months ended June 30, 2025, we repurchased an aggregate principal amount of our debt of $418 million, including portions of the 3.15% 2040 Notes, 2.80% 2041 Notes, 3.375% 2050 Notes, 3.00% 2052 Notes, 4.20% 2052 Notes and 4.40% 2062 Notes, for an aggregate cost of $301 million, which resulted in a $117 million gain on extinguishment of debt. During the three months ended June 30, 2024, we did not have any extinguishments of debt.

During the six months ended June 30, 2025, we repurchased an aggregate principal amount of our debt of $832 million, including portions of the 2.00% 2032 Notes, 3.15% 2040 Notes, 2.80% 2041 Notes, 3.375% 2050 Notes, 3.00% 2052 Notes, 4.20% 2052 Notes and 4.40% 2062 Notes, for an aggregate cost of $602 million, which resulted in a $228 million gain on extinguishment of debt. During the six months ended June 30, 2024, we repurchased an aggregate principal amount of our debt of $544 million, including portions of the 3.15% 2040 Notes, 2.80% 2041 Notes, 3.375% 2050 Notes, 3.00% 2052 Notes, 4.20% 2052 Notes and 4.40% 2062 Notes, for an aggregate cost of $410 million, which resulted in a $133 million gain on extinguishment of debt. Gains on extinguishments of debt are recorded in Other (expense) income, net, in the Condensed Consolidated Statements of Income.

Interest rate swap contracts

See Note 12, Derivative instruments, for a discussion of interest rate swap contracts related to certain of our notes.

10. Stockholders’ equity

Stock repurchase program

During the six months ended June 30, 2025 and 2024, we did not repurchase shares under our stock repurchase program. As of June 30, 2025, $6.8 billion of authorization remained available under the stock repurchase program.

Dividends

In March 2025 and December 2024, our Board of Directors declared quarterly cash dividends of $2.38 per share, which were paid in June 2025 and March 2025, respectively. In August 2025, our Board of Directors declared a quarterly cash dividend of $2.38 per share, which will be paid in September 2025.

Accumulated other comprehensive income (loss)

The components of AOCI were as follows (in millions):

Foreign currency translation adjustmentsCash flow hedgesOtherAOCI
Balance as of March 31, 2025$(317)$64$22$(231)
Foreign currency translation adjustments86——86
Unrealized losses—(323)—(323)
Reclassification adjustments into earnings—(184)—(184)
Other————
Income taxes—108—108
Balance as of June 30, 2025$(231)$(335)$22$(544)
Foreign currency translation adjustmentsCash flow hedgesOtherAOCI
Balance as of December 31, 2024$(374)$287$21$(66)
Foreign currency translation adjustments143——143
Unrealized losses—(469)—(469)
Reclassification adjustments into earnings—(323)—(323)
Other——11
Income taxes—170—170
Balance as of June 30, 2025$(231)$(335)$22$(544)

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

Three months ended June 30,Condensed Consolidated Statements of Income locations
Components of AOCI20252024
Cash flow hedges:
Foreign currency forward contract gains$12$55Product sales
Cross-currency swap contract gains (losses)172(3)Other (expense) income, net
18452Income before income taxes
(40)(11)Provision for income taxes
$144$41Net income
Six months ended June 30,Condensed Consolidated Statements of Income locations
Components of AOCI20252024
Cash flow hedges:
Foreign currency forward contract gains$68$106Product sales
Cross-currency swap contract gains (losses)255(34)Other (expense) income, net
32372Income before income taxes
(70)(15)Provision for income taxes
$253$57Net income

11. Fair value measurement

To estimate the fair values of our financial assets and liabilities, we use valuation approaches within a hierarchy that maximize the use of observable inputs and minimize 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 sources of inputs as follows:

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

The availability of observable inputs can vary among different types of financial assets and liabilities. To the extent that the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. In certain cases, 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 June 30, 2025, using:Total
Assets:
Available-for-sale securities:
U.S. Treasury bills$—$994$—$994
Money market mutual funds6,363——6,363
Other short-term interest-bearing securities—129—129
Equity securities4,898——4,898
Derivatives:
Foreign currency forward contracts—55—55
Cross-currency swap contracts—54—54
Total assets$11,261$1,232$—$12,493
Liabilities:
Derivatives:
Foreign currency forward contracts$—$382$—$382
Cross-currency swap contracts—293—293
Interest rate swap contracts—344—344
Contingent consideration obligations——9090
Total liabilities$—$1,019$90$1,109
Quoted prices in active markets for identical assets (Level 1)Significant other observable inputs (Level 2)Significant unobservable inputs (Level 3)
Fair value measurement as of December 31, 2024, using:Total
Assets:
Available-for-sale securities:
U.S. Treasury bills$—$997$—$997
Money market mutual funds10,354——10,354
Other short-term interest-bearing securities—135—135
Equity securities4,188——4,188
Derivatives:
Foreign currency forward contracts—420—420
Total assets$14,542$1,552$—$16,094
Liabilities:
Derivatives:
Foreign currency forward contracts$—$8$—$8
Cross-currency swap contracts—483—483
Interest rate swap contracts—531—531
Contingent consideration obligations——106106
Total liabilities$—$1,022$106$1,128

Interest-bearing and equity securities

The fair values of our U.S. Treasury bills are determined by utilizing third-party pricing services, which obtain pricing data from active market makers and brokers. The fair values of our money market mutual funds and equity investments in publicly traded securities, including our equity investments in BeOne and Neumora, as of June 30, 2025 and December 31, 2024, are based on quoted market prices in active markets, with no valuation adjustment.

Derivatives

All of our foreign currency forward contracts, cross-currency swap contracts and 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 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, as applicable, include foreign currency exchange rates, SOFR, swap rates, obligor credit default swap rates and cross-currency basis swap spreads. Certain inputs, when applicable, are at commonly quoted intervals. See Note 12, Derivative instruments.

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 estimate the fair values of our fixed-rate debt by using Level 2 inputs. As of June 30, 2025 and December 31, 2024, the aggregate fair values of our fixed-rate debt were $52.1 billion and $54.9 billion, respectively, and the carrying values of our fixed-rate debt were $54.4 billion and $58.3 billion, respectively. The estimates of the fair values of our term loans approximate their carrying values as of June 30, 2025 and December 31, 2024, as these debt instruments bear interest at floating rates.

During the six months ended June 30, 2025 and 2024, there were no transfers of assets or liabilities between fair value measurement levels. Except with respect to the partial impairment of the Otezla intangible asset in the first quarter of 2025 as discussed in Note 8, Goodwill and other intangible assets, there were no material remeasurements of the fair values of assets and liabilities that are not measured at fair value on a recurring basis.

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 have designated certain of our derivatives as cash flow and fair value hedges; we also have derivatives not designated as hedges. We do not use derivatives for speculative trading purposes.

Cash flow hedges

We are exposed to possible changes in the values of certain anticipated foreign currency cash flows resulting from changes in foreign currency exchange rates primarily associated with our euro-denominated international product sales. The foreign currency exchange rate fluctuation exposure associated with cash inflows from our international product sales is partially offset by corresponding cash outflows from our international operating expenses. To further reduce our exposure, we enter into foreign currency forward contracts to hedge a portion of our projected international product sales up to a maximum of three years into the future; and at any given point in time, a higher percentage of nearer-term projected product sales is being hedged than in successive periods.

As of June 30, 2025 and December 31, 2024, we had outstanding foreign currency forward contracts with aggregate notional amounts of $7.4 billion and $7.2 billion, respectively. We have designated these foreign currency forward contracts, which are primarily euro based, as cash flow hedges. Accordingly, we record 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 and pounds sterling 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 terms of the contracts by paying U.S. dollars and receiving euros and pounds sterling. In addition, we will pay U.S. dollars to and receive euros and pounds sterling 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 and pounds sterling 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 recorded in AOCI in the Condensed Consolidated Balance Sheets and reclassified to Other (expense) income, net, in the Condensed Consolidated Statements of Income in the same periods during which the hedged debt affects earnings.

The notional amounts and interest rates of our cross-currency swaps as of June 30, 2025, were as follows (notional amounts in millions):

Foreign currencyU.S. dollars
Hedged notesNotional amountsInterest ratesNotional amountsInterest rates
2.00% 2026 euro Notes€7502.0%$8333.9%
5.50% 2026 pound sterling Notes£4755.5%$7476.0%
4.00% 2029 pound sterling Notes£7004.0%$1,1114.6%

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 terms of the associated debt issuances. Amounts recognized in connection with forward interest rate contracts during the six months ended June 30, 2025 and 2024, and amounts expected to be recognized during the next 12 months are not material.

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

Three months ended June 30,Six months ended June 30,
Derivatives in cash flow hedging relationships2025202420252024
Foreign currency forward contracts$(503)$123$(715)$325
Cross-currency swap contracts180(6)246(30)
Total unrealized (losses) gains$(323)$117$(469)$295

Fair value hedges

To achieve a desired mix of fixed-rate and floating-rate debt, we enter into interest rate swap contracts that qualify for and are designated as fair value hedges. These interest rate swap contracts effectively convert fixed-rate coupons to floating-rate SOFR-based coupons over the terms of the related hedge contracts. As of June 30, 2025 and December 31, 2024, we had interest rate swap contracts with aggregate notional amounts of $5.7 billion and $6.7 billion respectively, that hedge certain portions of our long-term debt issuances. The reduction in aggregate notional amount of these contracts during the six months ended June 30, 2025, was due to the termination of swaps that occurred in connection with the repayment of the 3.125% 2025 Notes (see Note 9, Financing arrangements).

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

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

Carrying amounts of hedged liabilities**(1)**Cumulative amounts of fair value hedging adjustments related to the carrying amounts of the hedged liabilities**(2)**
Condensed Consolidated Balance Sheets locationsJune 30, 2025December 31, 2024June 30, 2025December 31, 2024
Current portion of long-term debt$53$1,045$53$45
Long-term debt$5,304$5,152$(239)$(388)

(1) Current portion of long-term debt includes $53 million and $56 million of carrying value with discontinued hedging relationships as of June 30, 2025 and December 31, 2024, respectively. Long-term debt includes $206 million and $232 million of carrying value with discontinued hedging relationships as of June 30, 2025 and December 31, 2024, respectively.

(2) Current portion of long-term debt includes $53 million and $56 million of hedging adjustments on discontinued hedging relationships as of June 30, 2025 and December 31, 2024, respectively. Long-term debt includes $106 million and $132 million of hedging adjustments on discontinued hedging relationships as of June 30, 2025 and December 31, 2024, respectively.

Impact of hedging transactions

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

Three months ended June 30, 2025Six months ended June 30, 2025
Product salesOther (expense) income, netInterest expense, netProduct salesOther (expense) income, netInterest expense, net
Total amounts recorded in income and (expense) line items presented in the Condensed Consolidated Statements of Income$8,771$(394)$(694)$16,644$1,124$(1,417)
The effects of cash flow and fair value hedging:
Gains on cash flow hedging relationships reclassified out of AOCI:
Foreign currency forward contracts$12$—$—$68$—$—
Cross-currency swap contracts$—$172$—$—$255$—
(Losses) gains on fair value hedging relationships—interest rate swap agreements:
Hedged items(1)$—$—$(61)$—$—$(157)
Derivatives designated as hedging instruments$—$—$75$—$—$187
Three months ended June 30, 2024Six months ended June 30, 2024
Product salesOther (expense) income, netInterest expense, netProduct salesOther (expense) income, netInterest expense, net
Total amounts recorded in income and (expense) line items presented in the Condensed Consolidated Statements of Income$8,041$(307)$(808)$15,159$(542)$(1,632)
The effects of cash flow and fair value hedging:
Gains (losses) on cash flow hedging relationships reclassified out of AOCI:
Foreign currency forward contracts$55$—$—$106$—$—
Cross-currency swap contracts$—$(3)$—$—$(34)$—
(Losses) gains on fair value hedging relationships—interest rate swap agreements:
Hedged items(1)$—$—$(18)$—$—$31
Derivatives designated as hedging instruments$—$—$36$—$—$8

(1) Gains (losses) on hedged items do not exactly offset losses (gains) on the related designated hedging instruments due to amortization of the cumulative amounts of fair value hedging adjustments included in the carrying amount of the hedged debt for discontinued hedging relationships and the recognition of gains on terminated hedges when the corresponding hedged item was paid down in the period.

No portions of our cash flow hedge contracts were excluded from the assessment of hedge effectiveness. As of June 30, 2025, $131 million of net losses on our foreign currency forward and cross-currency swap contracts were expected to be reclassified out of AOCI and recognized into earnings during the next 12 months.

Derivatives not designated as hedges

To reduce our exposure to foreign currency fluctuations in certain assets and liabilities denominated in foreign currencies, we enter into foreign currency forward contracts that are not designated as hedging transactions. Most of these exposures are hedged on a month-to-month basis. As of June 30, 2025 and December 31, 2024, the total notional amounts of these foreign currency forward contracts were $226 million and $148 million, respectively. Gains and losses recognized in earnings for our derivative instruments not designated as hedging instruments were not material for the three and six months ended June 30, 2025 and 2024.

Fair values of derivatives

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

Derivative assetsDerivative liabilities
June 30, 2025Condensed Consolidated Balance Sheets locationsFair valuesCondensed Consolidated Balance Sheets locationsFair values
Derivatives designated as hedging instruments:
Foreign currency forward contractsOther current assets/ Other noncurrent assets$55Accrued liabilities/ Other noncurrent liabilities$382
Cross-currency swap contractsOther current assets/ Other noncurrent assets54Accrued liabilities/ Other noncurrent liabilities293
Interest rate swap contractsOther current assets/ Other noncurrent assets—Accrued liabilities/ Other noncurrent liabilities344
Total derivatives designated as hedging instruments1091,019
Total derivatives$109$1,019
Derivative assetsDerivative liabilities
December 31, 2024Condensed Consolidated Balance Sheets locationsFair valuesCondensed Consolidated Balance Sheets locationsFair values
Derivatives designated as hedging instruments:
Foreign currency forward contractsOther current assets/ Other noncurrent assets$420Accrued liabilities/ Other noncurrent liabilities$8
Cross-currency swap contractsOther current assets/ Other noncurrent assets—Accrued liabilities/ Other noncurrent liabilities483
Interest rate swap contractsOther current assets/ Other noncurrent assets—Accrued liabilities/ Other noncurrent liabilities531
Total derivatives designated as hedging instruments4201,022
Total derivatives$420$1,022

For additional information, see Note 11, Fair value measurement.

Our derivative contracts that were in liability positions as of June 30, 2025, contain certain credit-risk-related contingent provisions that would be triggered if (i) we were to undergo a change in control and (ii) our or the surviving entity’s creditworthiness deteriorates, which is generally defined as having either a credit rating that is below investment grade or a materially weaker creditworthiness after the change in control. If these events were to occur, the counterparties would have the right, but not the obligation, to close the contracts under early-termination provisions. In such circumstances, the counterparties could request immediate settlement of these contracts for amounts that approximate the then current fair values of the contracts. In addition, our derivative contracts are not subject to any type of master netting arrangement, and amounts due either to or from a counterparty under the contracts may be offset against other amounts due either to or from the same counterparty only if an event of default or termination, as defined, were to occur.

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

13. Contingencies and commitments

Contingencies

In the ordinary course of business, we are involved in various legal proceedings, government investigations and other matters that are complex in nature and have outcomes that are difficult to predict. See our Annual Report on Form 10-K for the year ended December 31, 2024, 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 and in Note 20, Contingencies and commitments, to the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2024; and in Note 13, Contingencies and commitments, to the condensed consolidated financial statements in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2025.

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

Our legal proceedings involve various aspects of our business and a variety of claims, some of which present novel factual allegations and/or unique legal theories. In each of the matters described in this filing; in Note 20, Contingencies and commitments, to the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2024; and in Note 13, Contingencies and commitments, to the condensed consolidated financial statements in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2025, in which we could incur a liability, our opponents seek an award of a not-yet-quantified amount of damages or an amount that is not material. In addition, a number of the matters pending against us are at very early stages of the legal process, which in complex proceedings of the sort we face often extend for several years. As a result, none of the matters described in this filing; in Note 20, Contingencies and commitments, to the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2024; and in Note 13, Contingencies and commitments, to the condensed consolidated financial statements in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2025, 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.

Repatha Patent Litigation

Germany

On May 15, 2025, the Regional Court of Munich, which is considering Sanofi-Aventis Deutschland GmbH and Regeneron Pharmaceutical Inc.’s (Regeneron) request for damages arising from Amgen’s provisional enforcement of an injunction against PRALUENT®, canceled the hearing scheduled for May 21, 2025 and indicated it will reschedule the hearing for December 2025.

Unified Patent Court (UPC) of the European Union

In Sanofi Biotechnologies SAS (Sanofi) and Regeneron’s action filed against Amgen before the Dusseldorf Local Division of the UPC, alleging infringement of European Patent No. 3,536,712 (the EP’712 Patent), on May 13, 2025, the Dusseldorf Local Division of the UPC issued a decision that the EP’712 Patent, which Sanofi Biotechnology SAS licensed from Regeneron, is valid but not infringed by Amgen. Amgen filed a Statement of Appeal on July 11, 2025, and Sanofi and Regeneron filed a Statement of Appeal on July 14, 2025.

On June 9, 2025, Sanofi filed a motion seeking to stay its lawsuit against Amgen in the Dusseldorf Local Division of the UPC that alleges Amgen’s Repatha infringes European Patent No. 4,252,857 (the EP’857 Patent). On June 24, 2025, Amgen filed its Statement of Defense and Counterclaims in response to Sanofi’s allegation of infringement of the EP’857 Patent and, on June 30, 2025, opposed Sanofi’s motion to stay the case.

The Court of Appeals of the UPC rescheduled oral argument from May 22, 2025, to August 12, 2025 on Amgen’s appeal seeking to set aside the Central Division of the UPC’s decision to revoke Amgen’s European Patent No. 3,666,797.

European Patent Office

On June 2, 2025, the European Patent Office (EPO) Board of Appeal accelerated Amgen’s appeal from the EPO’s decision that Regeneron’s EP’712 Patent is valid and scheduled oral argument to take place on March 26, 2026.

On June 23, 2025, Amgen filed a Notice of Opposition and Grounds of Opposition before the EPO against Regeneron’s EP’857 Patent. On July 7, 2025, the EPO notified the parties that the Opposition proceedings concerning the EP’857 Patent have been accelerated due to the pending parallel proceedings before the UPC, and Regeneron’s response to Amgen’s Grounds of Opposition must accordingly be filed by October 7, 2025.

Japan

On May 27, 2025, Amgen filed petition for acceptance of an appeal with the Supreme Court of Japan from the Intellectual Property High Court’s dismissal of Amgen’s appeal in Amgen’s lawsuit against Sanofi K.K. seeking monetary compensation for past patent infringement.

Prolia/XGEVA Biologics Price Competition and Innovation Act (BPCIA) Litigation

Amgen Inc. et al. v. Accord et al.

The parties entered into a confidential settlement agreement that resolves the patent litigation related to Accord Biopharma, Inc., Accord Healthcare, Inc. and Intas Pharmaceuticals, Ltd.’s (collectively, Accord) denosumab biosimilar products. Accordingly, the U.S. District Court for the District of New Jersey (New Jersey District Court) entered a Consent Judgment and Injunction on July 16, 2025, that the patents-in-suit are valid, enforceable and infringed and enjoining Accord from making, using, selling or offering for sale or importing its denosumab biosimilar products into the United States until the injunction expires on October 1, 2025. The confidential settlement allows Accord to launch its denosumab biosimilar products in the United States as early as October 1, 2025, subject to regulatory approval.

Amgen Inc. et al. v. Shanghai Henlius Biotech Inc. et al.

On June 25, 2025, Amgen Inc. and Amgen Manufacturing Limited LLC filed a lawsuit in the New Jersey District Court against Shanghai Henlius Biotech Inc., Shanghai Henlius Biologics Co., Ltd, Organon LLC and Organon & Co. (collectively the Shanghai Henlius and Organon Defendants) based on the submission to the FDA of a BLA seeking approval to market and sell a biosimilar version of Amgen’s Prolia and XGEVA products. The complaint asserts infringement of the following patents: U.S. Patent Nos. 7,364,736; 7,888,101; 7,928,205; 8,053,236; 8,217,153; 8,460,896; 8,680,248; 9,228,168; 9,359,435; 10,106,829; 10,227,627; 10,513,723; 10,583,397; 10,655,156; 10,894,972; 11,077,404; 11,098,079; 11,192,919; 11,254,963; 11,319,568; 11,434,514; 11,459,595; 11,492,372; 11,946,085; 11,952,605; and 12,084,686 (collectively, the Asserted Patents against the Shanghai Henlius and Organon Defendants). Amgen seeks a judgment from the New Jersey District Court that the Shanghai Henlius and Organon Defendants have infringed or will infringe one or more claims of each of the Asserted Patents against the Shanghai Henlius and Organon Defendants and based on that judgment, a permanent injunction prohibiting the commercial manufacture, use, offer to sell, or sale within the United States or importation into the United States of the accused proposed denosumab biosimilar by the Shanghai Henlius and Organon Defendants before expiration of each of the patents found to be infringed. Amgen also seeks monetary remedies for any past acts of infringement. On June 25, 2025, this litigation became a member of In Re: Denosumab Patent Litigation multi-district litigation with other cases involving Prolia/XGEVA biosimilars pending in the district. A trial date has not yet been set.

Amgen Inc. et al. v. Hikma Pharmaceuticals USA Inc. et al.

On June 25, 2025, Amgen Inc. and Amgen Manufacturing Limited LLC filed a lawsuit in the New Jersey District Court against Hikma Pharmaceuticals USA Inc., Gedeon Richter Plc., and Gedeon Richter USA, Inc. (collectively the Hikma and Gedeon Richter Defendants) based on the submission to the FDA of a BLA seeking approval to market and sell a biosimilar version of Amgen’s Prolia and XGEVA products. The complaint asserts infringement of the following patents: U.S. Patent Nos. 7,364,736; 7,888,101; 7,928,205; 8,053,236; 8,058,418; 8,460,896; 8,680,248; 9,012,178; 9,228,168; 9,328,134; 9,359,435; 9,371,554; 10,106,829; 10,167,492; 10,227,627; 10,513,723; 10,583,397; 10,822,630; 10,894,972; 11,077,404; 11,098,079; 11,130,980; 11,192,919; 11,254,963; 11,299,760; 11,319,568; 11,434,514; 11,459,595; 11,492,372; 11,946,085; 11,952,605; and 12,084,686 (collectively, the Asserted Patents against the Hikma and Gedeon Richter Defendants). Amgen seeks a judgment from the New Jersey District Court that the Hikma and Gedeon Richter Defendants have infringed or will infringe one or more claims of each of the Asserted Patents against the Hikma and Gedeon Richter Defendants and based on that judgment, a permanent injunction prohibiting the commercial manufacture, use, offer to sell, or sale within the United States or importation into the United States of the accused proposed denosumab biosimilar before expiration of each of the patents found to be infringed. Amgen also seeks monetary remedies for any past acts of infringement. On June 25, 2025, this litigation

became a member of In Re: Denosumab Patent Litigation multi-district litigation with other cases involving Prolia/XGEVA biosimilars pending in the district. A trial date has not yet been set.

Amgen Inc. et al. v. Biocon Biologics, Inc. et al.

On June 30, 2025, Amgen Inc. and Amgen Manufacturing Limited LLC filed a lawsuit in the U.S. District Court for the Eastern District of Massachusetts (Massachusetts District Court) against Biocon Biologics, Inc., Biocon Biologics UK Limited, and Biocon Biologics Limited (collectively Biocon) based on the submission to the FDA of a BLA seeking approval to market and sell a biosimilar version of Amgen’s Prolia and XGEVA products. The complaint asserts infringement of the following patents: U.S. Patent Nos. 7,364,736; 7,888,101; 7,928,205; 8,053,236; 8,058,418; 8,247,210; 8,460,896; 8,680,248; 9,012,178; 9,228,168; 9,328,134; 9,359,435; 10,106,829; 10,167,492; 10,227,627; 10,513,723; 10,583,397; 10,655,156; 10,822,630; 10,894,972; 10,907,186; 11,077,404; 11,098,079; 11,130,980; 11,192,919; 11,254,963; 11,299,760; 11,319,568; 11,434,514; 11,459,595; 11,492,372; 11,946,085; 11,952,605; and 12,084,686 (collectively, the Asserted Patents against Biocon). Amgen seeks a judgment from the Massachusetts District Court that Biocon has infringed or will infringe one or more claims of each of the Asserted Patents against Biocon and based on that judgment, a permanent injunction prohibiting the commercial manufacture, use, offer to sell, or sale within the United States or importation into the United States of Biocon’s proposed denosumab biosimilar before expiration of each of the patents found infringed. Amgen also seeks monetary remedies for any past acts of infringement.

On July 3, 2025, the Judicial Panel on Multidistrict Litigation issued a Conditional Order transferring the case from the Massachusetts District Court to the New Jersey District Court pursuant to 28 U.S.C. § 1407 for coordinated and consolidated pretrial proceedings with the other cases involving Prolia/XGEVA biosimilars pending in the district. On July 17, 2025, this case became a member of In Re: Denosumab Patent Litigation multi-district litigation. A trial date has not yet been set.

PAVBLU*™* (aflibercept-ayyh) Patent Litigation

On June 17, 2025, Regeneron filed a lawsuit in the U.S. District Court for the Central District of California (California Central District Court) against Amgen alleging infringement of U.S. Patent No. 12,331,099 (the ’099 Patent), a formulation patent. By its complaint, Regeneron seeks, among other remedies, damages and an injunction prohibiting the commercial manufacture, use, offer for sale or sale in the United States or import into the United States of PAVBLU before the expiration of the ’099 Patent. On July 17, 2025, the Judicial Panel on Multidistrict Litigation issued a Conditional Order transferring the case from the California Central District Court to the U.S. District Court for the Northern District of West Virginia (West Virginia District Court) pursuant to 28 U.S.C. § 1407 for coordinated and consolidated pretrial proceedings with the other cases involving EYLEA® biosimilars pending in the district, and on July 31, 2025, the case was opened in the West Virginia District Court.

Antitrust Class Action

Regeneron Pharmaceuticals, Inc. Antitrust Action

A jury trial was held in the U.S. District Court for the District of Delaware (Delaware District Court) from May 5, 2025 to May 14, 2025. On May 15, 2025, the jury returned a verdict finding for Regeneron on its federal and state antitrust law and tortious interference claims but finding for Amgen on its below-cost pricing claim under California’s Unfair Practices Act. The jury awarded Regeneron $135.6 million in compensatory damages on its antitrust claims (which are subject to trebling under applicable law), or in the alternative, in compensatory damages plus $271.2 million in punitive damages on its tortious interference claim, with such damages under either alternative claim totaling $406.8 million. As Regeneron must elect between recovery under the antitrust or tortious interference claims, any potential damages award would be limited to one of these claims. Although we cannot predict with certainty the ultimate outcome of this litigation, Amgen believes that the jury’s decision and amounts awarded are inconsistent with the law and evidence at trial.

Both parties have filed post-trial motions. On June 12, 2025, Amgen filed a renewed motion for judgment as a matter of law or, in the alternative, for a new trial. Also on June 12, 2025, Regeneron filed a motion for permanent injunctive relief, a constructive trust, and prejudgment interest. Both motions have since been fully briefed. A hearing on the post-trial motions has been set for August 27, 2025.

In assessing whether we should accrue a liability for this litigation in our condensed consolidated financial statements, we considered various factors, including the legal and factual circumstances of the case, the jury’s award, the court’s post-trial proceedings, applicable law, and the likelihood that the jury’s award will be upheld after post-trial briefing and potentially on appeal. As a result of this review, we have determined, in accordance with applicable accounting standards, that it is not probable that we will incur a loss as a result of this litigation, and we have therefore not recorded a liability for this matter.

The ultimate result of this litigation, however, is uncertain because it is reasonably possible that by settlement or final court judgment that none, some, or all of the jury’s verdict and other relief sought might ultimately be awarded but the size of an award, if any, is not estimable at this time.

Sandoz Inc. Antitrust Action

On June 20, 2025, Amgen filed a motion to dismiss the complaint. Sandoz filed its opposition to the motion to dismiss on July 21, 2025, and Amgen’s reply is due August 21, 2025.

U.S. Tax Litigation and Related Matters

Amgen Inc. & Subsidiaries v. Commissioner of Internal Revenue

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

Securities Class Action Litigation (Roofers Local No. 149 Pension Fund)

On July 10, 2025, the U.S. District Court for the Southern District of New York (Southern District Court of New York) rescheduled the deadline to file summary judgment motions to October 19, 2026.

Shareholder Derivative Actions

On April 9, 2025, the Delaware Court of Chancery consolidated the derivative actions filed by each of David Hamilton, Charles Blackburn and Robert Bryla purportedly on behalf of Amgen against nominal defendant Amgen, Robert Bradway, Peter Griffith and Amgen’s independent Board members.

On April 21, 2025, the Southern District Court of New York consolidated the derivative action filed by DM Cohen, Inc. with the consolidated action that was filed by Leon Martin and Cheri Clearwater purportedly on behalf of Amgen against Amgen, Robert Bradway, Peter Griffith and Amgen’s independent Board members.

On June 9, 2025, the Delaware District Court stayed the shareholder derivative action filed by Carolyn Sieveking and James P. Tierney until a final judgment is entered in the federal securities class action.

ChemoCentryx, Inc. Securities Matters

On May 8, 2025, the lead plaintiff filed a motion for partial summary judgment. On May 29, 2025, defendants, including ChemoCentryx, filed an opposition to the plaintiff’s motion and a motion for summary judgment in whole or in part. A hearing is set for August 7, 2025. The U.S. District Court for the Northern District of California (Northern District Court of California) rescheduled the trial to begin February 23, 2026.

In the case filed by RA Capital Healthcare Fund, LP in the Northern District Court of California, defendants, including ChemoCentryx, moved to dismiss the complaint, and on June 13, 2025, the court issued an order staying the federal case pending resolution of the class action. The court did not reach the merits of defendants’ motion to dismiss.

Previous: Cover and table of contents · Next: Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS