Item 1. FINANCIAL STATEMENTS

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Item 1. FINANCIAL STATEMENTS

AMGEN INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In millions, except per-share data)

(Unaudited)

Three months ended March 31,
20262025
Revenues:
Product sales$8,218$7,873
Other revenues400276
Total revenues8,6188,149
Operating expenses:
Cost of sales2,7442,968
Research and development1,7191,486
Selling, general and administrative1,6021,687
Other(113)830
Total operating expenses5,9526,971
Operating income2,6661,178
Other income (expense):
Interest expense, net(657)(723)
Other income, net751,518
Income before income taxes2,0841,973
Provision for income taxes265243
Net income$1,819$1,730
Earnings per share:
Basic$3.37$3.22
Diluted$3.34$3.20
Weighted-average shares used in calculation of earnings per share:
Basic540538
Diluted544541

See accompanying notes.

AMGEN INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In millions)

(Unaudited)

Three months ended March 31,
20262025
Net income$1,819$1,730
Other comprehensive income (loss), net of reclassification adjustments and taxes:
(Losses) gains on foreign currency translation adjustments(5)57
Gains (losses) on cash flow hedges77(223)
Other(4)1
Other comprehensive income (loss), net of reclassification adjustments and taxes68(165)
Comprehensive income$1,887$1,565

See accompanying notes.

AMGEN INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions, except per-share data)

March 31, 2026December 31, 2025
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents$12,038$9,129
Trade receivables, net9,1389,570
Inventories6,1866,225
Other current assets4,1134,133
Total current assets31,47529,057
Property, plant and equipment, net8,2167,913
Intangible assets, net21,37922,276
Goodwill18,67418,680
Other noncurrent assets12,76012,660
Total assets$92,504$90,586
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable$2,935$2,367
Accrued liabilities16,58318,523
Current portion of long-term debt5,4374,599
Total current liabilities24,95525,489
Long-term debt51,88650,005
Long-term deferred tax liabilities1,3441,366
Long-term tax liabilities2,7642,690
Other noncurrent liabilities2,3652,378
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—539.7 shares in 2026 and 538.8 shares in 202534,03034,023
Accumulated deficit(24,650)(25,107)
Accumulated other comprehensive loss(190)(258)
Total stockholders’ equity9,1908,658
Total liabilities and stockholders’ equity$92,504$90,586

See accompanying notes.

AMGEN INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In millions, except per-share data)

(Unaudited)

Three months ended March 31, 2026
Number of shares of common stockCommon stock and additional paid-in capitalAccumulated deficitAccumulated other comprehensive lossTotal
Balance as of December 31, 2025538.8$34,023$(25,107)$(258)$8,658
Net income——1,819—1,819
Other comprehensive income, net of taxes———6868
Dividends declared on common stock ($2.52 per share)——(1,362)—(1,362)
Issuance of common stock in connection with equity award programs0.940——40
Stock-based compensation expense—75——75
Tax impact related to employee stock-based compensation expense—(108)——(108)
Balance as of March 31, 2026539.7$34,030$(24,650)$(190)$9,190
Three months ended March 31, 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——1,730—1,730
Other comprehensive loss, net of taxes———(165)(165)
Dividends declared on common stock ($2.38 per share)——(1,280)—(1,280)
Issuance of common stock in connection with equity award programs0.842——42
Stock-based compensation expense—85——85
Tax impact related to employee stock-based compensation expense—(82)——(82)
Balance as of March 31, 2025537.7$33,578$(27,140)$(231)$6,207

See accompanying notes.

AMGEN INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

(Unaudited)

Three months ended March 31,
20262025
Cash flows from operating activities:
Net income$1,819$1,730
Noncash adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization and other1,1161,387
Impairment of intangible assets—800
Stock-based compensation expense7585
Deferred income taxes(176)(250)
Loss (gain) on equity securities143(1,295)
Other items, net(67)(50)
Changes in operating assets and liabilities, net of acquisitions:
Trade receivables, net413(1,308)
Inventories18288
Other assets8(201)
Accounts payable571497
Accrued income taxes, net71104
Long-term tax liabilities7170
Accrued liabilities(959)(874)
Accrued sales incentives and allowance(839)486
Other liabilities(75)(78)
Net cash provided by operating activities2,1891,391
Cash flows from investing activities:
Purchases of property, plant and equipment(712)(411)
Other(4)(36)
Net cash used in investing activities(716)(447)
Cash flows from financing activities:
Net proceeds from issuance of debt3,964—
Extinguishment of debt(233)(301)
Repayment of debt(833)(2,500)
Dividends paid(1,358)(1,279)
Other(104)(27)
Net cash provided by (used in) financing activities1,436(4,107)
Increase (decrease) in cash and cash equivalents2,909(3,163)
Cash and cash equivalents at beginning of period9,12911,973
Cash and cash equivalents at end of period$12,038$8,810

See accompanying notes.

AMGEN INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2026

(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 months ended March 31, 2026 and 2025, 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, 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 $9.3 billion and $11.1 billion as of March 31, 2026 and December 31, 2025, respectively.

Recently adopted accounting pronouncements

In September 2025, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2025-07, Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606), to improve the evaluation of derivatives by adding a new scope exception and clarify accounting for share-based non-cash consideration received from customers. The standard is effective for public business entities such as Amgen for annual periods beginning after December 15, 2026. Early adoption is permitted, and entities may apply the standard prospectively or following a modified retrospective approach. We early adopted this standard prospectively in the first quarter of 2026. We currently have no contracts or embedded features that are affected by the adoption of this standard, and therefore adoption did not have an impact on our condensed consolidated financial statements.

Recent accounting pronouncements not yet adopted

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 and reported segment net income for the Company’s one reportable segment, as well as a reconciliation of segment net income to the Company’s total consolidated net income for the three months ended March 31, 2026 and 2025 (in millions):

Three months ended March 31,
20262025
Revenues:
Product sales$8,218$7,873
Other revenues400276
Total revenues8,6188,149
Less:
Manufacturing cost of sales(1)(2)2,1802,528
Profit share and royalties in cost of sales(1)564440
Research and development(1)1,7191,486
Sales and marketing(1)1,1341,066
General and administrative(1)468621
Other segment items(3)(87)(562)
Interest income(101)(126)
Interest expense, net657723
Provision for income taxes265243
Segment net income1,8191,730
Reconciliation of profit or loss:
Adjustments and reconciling items——
Consolidated net income$1,819$1,730

(1) During the three months ended March 31, 2026 and 2025, amortization of our finite-lived intangible assets was $896 million and $1.2 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 March 31, 2026 and 2025, we recognized depreciation and right-of-use asset amortization of $220 million and $209 million, respectively.

(2) During the three months ended March 31, 2026 and 2025, manufacturing cost of sales included amortization of step-up to fair value of inventory acquired in business combinations of $247 million and $363 million, respectively.

(3) For the three months ended March 31, 2026, other segment items included in Segment net income primarily consists of: (i) litigation settlements and (ii) fair value adjustments on equity securities (see Note 6, Investments). For the three months ended March 31, 2025, other segment items included in Segment net income primarily consisted of fair value adjustments on equity securities (see Note 6, Investments) and impairment charges on intangible assets (see Note 8, Goodwill and other intangible assets).

3. Revenues

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. Revenues by product and by geographic area, based on customers’ locations, are presented below. A substantial portion of ROW product sales relates to products sold in Europe.

Revenues were as follows (in millions):

Three months ended March 31,
20262025
U.S.ROWTotalU.S.ROWTotal
Repatha$465$411$876$343$313$656
Prolia4612667277203791,099
EVENITY431131562320122442
TEPEZZA4246649036516381
Otezla3527943134394437
BLINCYTO22119441527397370
Nplate283129412201112313
XGEVA228183411360206566
TEZSPIRE(1)343—343285—285
KYPROLIS218112330216108324
ENBREL31463205046510
Aranesp7723431191249340
Vectibix136151287135132267
UPLIZNA2461626282991
IMDELLTRA/IMDYLLTRA1887025879281
KRYSTEXXA255—255236—236
Other products(2)1,1313971,5281,1093661,475
Total product sales(3)$5,773$2,4458,218$5,662$2,2117,873
Other revenues400276
Total revenues$8,618$8,149

(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 months ended March 31, 2026 and 2025.

4. Income taxes

The effective tax rate for the three months ended March 31, 2026 was 12.7% compared with 12.3% for the prior-year period.

The increase in our effective tax rate for the three months ended March 31, 2026, was primarily due to the change in earnings mix, including lower amortization expense from acquisition-related assets, partially offset by the net unrealized losses on equity investments in the current-year period compared to net unrealized gains in the prior-year period (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. Due to the currently enacted scope of the agreement, the Company and its 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 12.6%, as of January 1, 2026.

On July 4, 2025, OB3 was enacted in the United States. OB3 has various provisions, including the permanent extension of certain expiring provisions of the 2017 Tax Act, and modifications to the international tax framework, including the tax rate changes on foreign earnings noted above. The legislation has multiple effective dates, with most provisions effective as of January 1, 2026.

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 in 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. The Notices 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 and paid 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 in 2022, we filed a petition in the U.S. Tax Court to contest a Notice for the years 2013–2015. The Notice 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, and 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 and paid 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 continue to contest the 2010–2012 and 2013–2015 Notices through the judicial process. The two cases were consolidated in the U.S. Tax Court in 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 filed post-trial reply briefs on October 10, 2025. On March 16, 2026, the Court ordered supplemental closing briefs, which are due May 20, 2026. 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. In April 2026, we received a draft notice of proposed adjustment (NOPA) from the IRS for years 2016–2018, which is similar to the proposed adjustments for years 2010–2015 and relates primarily to the allocation of profits between certain of our entities in the United States and the U.S. territory of Puerto Rico. If sustained in full, the adjustments set forth in the draft NOPA could have a material impact on our financial statements. We disagree with the draft NOPA and have informed the IRS audit team that its methodology is inconsistent with

certain positions asserted by the IRS in the Tax Court, which positions were more favorable to Amgen than those previously taken by the exam team. We intend to contest the draft NOPA. We expect that the IRS will begin its audit for years 2019–2022 in the first half of 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 months ended March 31, 2026, the gross amounts of our UTBs increased by $35 million as a result of tax positions taken during the current year. Substantially all of the UTBs as of March 31, 2026, 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 March 31,
20262025
Income (Numerator):
Net income for basic and diluted EPS$1,819$1,730
Shares (Denominator):
Weighted-average shares for basic EPS540538
Effect of dilutive securities43
Weighted-average shares for diluted EPS544541
Basic earnings per share$3.37$3.22
Diluted earnings per share$3.34$3.20

For the three months ended March 31, 2026 and 2025, 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 March 31, 2026Amortized costGross unrealized gainsGross unrealized lossesFair values
U.S. Treasury bills$996$—$—$996
Money market mutual funds10,352——10,352
Other short-term interest-bearing securities131——131
Total interest-bearing securities$11,479$—$—$11,479
Types of securities as of December 31, 2025Amortized costGross unrealized gainsGross unrealized lossesFair values
U.S. Treasury bills$998$—$—$998
Money market mutual funds7,395——7,395
Other short-term interest-bearing securities132——132
Total interest-bearing securities$8,525$—$—$8,525

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

Condensed Consolidated Balance Sheets locationsMarch 31, 2026December 31, 2025
Cash and cash equivalents$11,479$8,525
Total interest-bearing securities$11,479$8,525

Cash and cash equivalents in the above table excludes bank account cash of $559 million and $604 million as of March 31, 2026 and December 31, 2025, respectively.

All interest-bearing securities as of March 31, 2026 and December 31, 2025, mature in one year or less. For the three months ended March 31, 2026 and 2025, interest income on these investments was $101 million and $126 million, respectively.

For the three months ended March 31, 2026 and 2025, realized gains and losses on interest-bearing securities were not material and were recorded in Other 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 March 31, 2026 and December 31, 2025, our ownership interest in BeOne was approximately 17%, and the fair values of our investment were $5.6 billion and $5.8 billion, respectively, which were included in Other noncurrent assets in the Condensed Consolidated Balance Sheets. During the three months ended March 31, 2026 and 2025, we recorded an unrealized loss of $130 million and an unrealized gain of $1.7 billion, respectively, in Other 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 investment in BeOne (discussed above), we held investments in other equity securities with readily determinable fair values (publicly traded securities) of $383 million and $389 million as of March 31, 2026 and December 31, 2025, respectively, which were included in Other noncurrent assets in the Condensed Consolidated Balance Sheets. During the three months ended March 31, 2026, net unrealized losses on these publicly traded securities were not material, compared to net unrealized losses of $363 million in the prior-year period. Additionally, net realized gains and losses on sales of publicly traded securities for the three months ended March 31, 2026 and 2025, were not material.

We held investments of $344 million and $362 million in equity securities without readily determinable fair values as of March 31, 2026 and December 31, 2025, respectively, which were included in Other noncurrent assets in the Condensed Consolidated Balance Sheets. During the three months ended March 31, 2026 and 2025, 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 months ended March 31, 2026 and 2025, were not material.

Equity method investments

Limited partnerships

We held limited partnership investments of $284 million and $253 million as of March 31, 2026 and December 31, 2025, 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 March 31, 2026, we had $144 million of unfunded additional commitments to be made for these investments during the next several years. For the three months ended March 31, 2026 and 2025, net unrealized gains and losses recognized from our limited partnership investments were not material.

7. Inventories

Inventories consisted of the following (in millions):

March 31, 2026December 31, 2025
Raw materials$1,048$915
Work in process3,4263,425
Finished goods1,7121,885
Total inventories$6,186$6,225

8. Goodwill and other intangible assets

Goodwill

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

Balance at December 31, 2025$18,680
Foreign currency translation adjustments(6)
Balance at March 31, 2026$18,674

Other intangible assets

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

March 31, 2026December 31, 2025
Gross carrying amountsAccumulated amortizationOther intangible assets, netGross carrying amountsAccumulated amortizationOther intangible assets, net
Finite-lived intangible assets:
Developed-product-technology rights$47,798$(27,604)$20,194$47,805$(26,754)$21,051
Licensing rights3,903(3,540)3633,917(3,522)395
Research and development technology rights1,416(1,304)1121,425(1,305)120
Marketing-related rights1,202(1,202)—1,203(1,203)—
Total finite-lived intangible assets54,319(33,650)20,66954,350(32,784)21,566
Indefinite-lived intangible assets:
In-process research and development710—710710—710
Total other intangible assets$55,029$(33,650)$21,379$55,060$(32,784)$22,276

Developed-product-technology rights consists of rights related to marketed products acquired in business combinations. 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. R&D technology rights pertains to technologies used in R&D that have alternative future uses. Marketing-related rights primarily consists of rights related to the sale and distribution of marketed products.

The developed-product-technology rights intangible assets related to TAVNEOS have a carrying value of $2.4 billion as of March 31, 2026, with $2.3 billion related to the U.S. market. The product, acquired by the Company in connection with our acquisition of ChemoCentryx in 2022, was approved by the FDA in 2021. On April 27, 2026, the FDA’s Center for Drug Evaluation and Research (CDER) issued a proposal to withdraw approval of TAVNEOS. The proposal follows the FDA’s March 2026 DSC in which it alerted patients and health care professionals about serious liver injury cases, including fatal cases, of DILI associated with TAVNEOS. The proposal alleges that there is new information indicating lack of substantial evidence of effectiveness for the drug and that ChemoCentryx’s application that resulted in FDA approval contained untrue statements of material facts. ChemoCentryx, as the U.S. marketing authorization holder, may request a hearing on this proposal, after which the FDA will determine whether there is a genuine and substantial issue of fact that requires a hearing. If a hearing is not granted, the FDA may enter summary judgment and ultimately withdraw approval. On April 30, 2026, the FDA posted a notice in the Federal Register that proposes to withdraw approval of TAVNEOS and announced an opportunity for ChemoCentryx to request a hearing on this proposal. The Company intends to engage with the FDA, continues to believe that TAVNEOS demonstrates effectiveness and a favorable benefit–risk profile, and intends to follow the appropriate process to support its position. As the FDA’s statement reporting its proposal indicates, TAVNEOS will remain on the market during the pendency of this process. The Company’s evaluation of these developments did not result in significant changes to the estimated future cash flows for TAVNEOS as of March 31, 2026; however, future changes to estimated TAVNEOS cash flows could unfavorably impact the Company’s ability to recover the carrying value of the related intangible assets.

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 a partial impairment of $800 million was recorded in Other operating expenses in the Condensed Consolidated Statements of Income. See Note 11, Fair value measurement.

During the three months ended March 31, 2026 and 2025, we recognized amortization of our finite-lived intangible assets of $896 million and $1.2 billion, respectively. Amortization of intangible assets is primarily included in Cost of sales in the Condensed Consolidated Statements of Income. As of March 31, 2026, the total estimated future amortization of our finite-lived intangible assets for the remaining nine months ending December 31, 2026, and the years ending December 31, 2027, 2028, 2029, 2030 and 2031, was $2.7 billion, $3.6 billion, $2.8 billion, $2.3 billion, $2.2 billion and $2.1 billion, respectively.

9. Financing arrangements

Our borrowings consisted of the following (in millions):

March 31, 2026December 31, 2025
2.00% €750 million notes due 2026 (2.00% 2026 euro Notes)$—$881
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)628640
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)926944
2.45% notes due 2030 (2.45% 2030 Notes)1,2501,250
5.25% notes due 2030 (5.25% 2030 Notes)2,7502,750
4.20% notes due 2031 (4.20% 2031 Notes)1,000—
2.30% notes due 2031 (2.30% 2031 Notes)1,2501,250
2.00% notes due 2032 (2.00% 2032 Notes)987987
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
4.85% notes due 2036 (4.85% 2036 Notes)1,750—
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)1,4781,478
5.75% notes due 2040 (5.75% 2040 Notes)373373
2.80% notes due 2041 (2.80% 2041 Notes)543568
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
5.50% notes due 2046 (5.50% 2046 Notes)500—
4.563% notes due 2048 (4.563% 2048 Notes)1,4151,415
3.375% notes due 2050 (3.375% 2050 Notes)1,2691,462
4.663% notes due 2051 (4.663% 2051 Notes)3,5413,541
3.00% notes due 2052 (3.00% 2052 Notes)598703
4.20% notes due 2052 (4.20% 2052 Notes)882882
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
5.65% notes due 2056 (5.65% 2056 Notes)750—
4.40% notes due 2062 (4.40% 2062 Notes)1,1281,128
March 31, 2026December 31, 2025
5.75% notes due 2063 (5.75% 2063 Notes)2,7502,750
Other notes due 2097100100
Total principal amount of debt58,81056,044
Unamortized bond discounts, premiums and issuance costs, net(1,329)(1,306)
Fair value adjustments(183)(161)
Other2527
Total carrying value of debt57,32354,604
Less current portion(5,437)(4,599)
Total long-term debt$51,886$50,005

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 issuances

During the three months ended March 31, 2026, we issued $4.0 billion of debt consisting of $1.0 billion of the 4.20% 2031 Notes, $1.75 billion of the 4.85% 2036 Notes, $500 million of the 5.50% 2046 Notes and $750 million of the 5.65% 2056 Notes. There were no debt issuances during the three months ended March 31, 2025.

Debt repayments

During the three months ended March 31, 2026, we repaid the €750 million aggregate principal amount of the 2.00% 2026 euro Notes ($833 million upon settlement of the related cross-currency swap), compared to $2.5 billion of debt repayments during the three months ended March 31, 2025.

Debt extinguishment

During the three months ended March 31, 2026, we repurchased an aggregate principal amount of our debt of $324 million, including portions of the 2.80% 2041 Notes, 3.375% 2050 Notes and 3.00% 2052 Notes, for an aggregate cost of $233 million, which resulted in a $90 million gain on extinguishment of debt. During the three months ended March 31, 2025, we repurchased an aggregate principal amount of our debt of $414 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 $301 million, which resulted in a $111 million gain on extinguishment of debt. Gains and losses on extinguishments of debt are recorded in Other 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.

Shelf registration statement and other facilities

In February 2026, we filed a shelf registration statement with the SEC that allows us to issue unspecified amounts of debt securities, common stock, preferred stock, warrants to purchase securities (including debt securities, common stock, preferred stock or depositary shares), rights to purchase common stock or preferred stock, securities purchase contracts, securities purchase units, and depositary shares. Under this shelf registration statement, all of the securities available for issuance may be offered from time to time with terms to be determined at the time of issuance. This shelf registration statement expires in February 2029.

During the three months ended March 31, 2026, we extended the term of our $4.0 billion syndicated, unsecured, revolving credit facility by one year to March 2029. As of March 31, 2026 and December 31, 2025, no amounts were outstanding under this facility.

10. Stockholders’ equity

Stock repurchase program

During the three months ended March 31, 2026 and 2025, we did not repurchase shares under our stock repurchase program. As of March 31, 2026, $6.8 billion of authorization remained available under the stock repurchase program.

Dividends

In March 2026, our Board of Directors declared a quarterly cash dividend of $2.52 per share, which will be paid in June 2026. In December 2025, our Board of Directors declared a quarterly cash dividend of $2.52 per share, which was paid in March 2026.

Accumulated other comprehensive income (loss)

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

Foreign currency translation adjustmentsCash flow hedgesOtherAOCI
Balance as of December 31, 2025$(202)$(90)$34$(258)
Foreign currency translation adjustments(5)——(5)
Unrealized losses—(15)—(15)
Reclassification adjustments into earnings—113—113
Other——(4)(4)
Income taxes—(21)—(21)
Balance as of March 31, 2026$(207)$(13)$30$(190)

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

Three months ended March 31,Condensed Consolidated Statements of Income locations
Components of AOCI20262025
Cash flow hedges:
Foreign currency forward contract (losses) gains$(36)$56Product sales
Cross-currency swap contract (losses) gains(77)83Other income, net
(113)139Income before income taxes
24(30)Provision for income taxes
$(89)$109Net 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 March 31, 2026, using:Total
Assets:
Available-for-sale securities:
U.S. Treasury bills$—$996$—$996
Money market mutual funds10,352——10,352
Other short-term interest-bearing securities—131—131
Equity securities6,008——6,008
Derivatives:
Foreign currency forward contracts—249—249
Total assets$16,360$1,376$—$17,736
Liabilities:
Derivatives:
Foreign currency forward contracts$—$136$—$136
Cross-currency swap contracts—354—354
Interest rate swap contracts—302—302
Contingent consideration obligations——173173
Total liabilities$—$792$173$965
Quoted prices in active markets for identical assets (Level 1)Significant other observable inputs (Level 2)Significant unobservable inputs (Level 3)
Fair value measurement as of December 31, 2025, using:Total
Assets:
Available-for-sale securities:
U.S. Treasury bills$—$998$—$998
Money market mutual funds7,395——7,395
Other short-term interest-bearing securities—132—132
Equity securities6,144——6,144
Derivatives:
Foreign currency forward contracts—196—196
Cross-currency swap contracts—48—48
Total assets$13,539$1,374$—$14,913
Liabilities:
Derivatives:
Foreign currency forward contracts$—$214$—$214
Cross-currency swap contracts—320—320
Interest rate swap contracts—293—293
Contingent consideration obligations——161161
Total liabilities$—$827$161$988

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 investment in BeOne, as of March 31, 2026 and December 31, 2025, 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.

Contingent consideration obligations

As a result of business development activity, we have incurred contingent consideration obligations as discussed below. The contingent consideration obligations are recorded at their fair values by using probability-adjusted discounted cash flows, and we revalue these obligations each reporting period until the 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 through business development activity, and they are reviewed quarterly by management in our R&D and commercial sales organizations. The inputs include, as applicable, estimated probabilities and the timing of achieving specified development, regulatory and commercial milestones as well as estimated annual sales. Significant changes that increase or decrease the probabilities of achieving the related development, regulatory and commercial events or that shorten or lengthen the time required to achieve such events or that increase or decrease estimated annual sales would result in corresponding increases or decreases in the fair values of 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.

As of March 31, 2026 and December 31, 2025, the balances of our contingent consideration obligations were $173 million and $161 million, respectively, and primarily resulted from our acquisition of Teneobio, Inc. in October 2021, which obligates us to make payments to the former shareholders upon achievement of separate development and regulatory milestones

with regard to various R&D programs, and other business development activity in 2025. There were no material changes to our contingent consideration obligations during the three months ended March 31, 2026 and 2025.

Summary of the fair values of other financial instruments

Cash equivalents

The fair values of cash equivalents are approximated at 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 March 31, 2026 and December 31, 2025, the aggregate fair values of our fixed-rate debt were $53.1 billion and $51.0 billion, respectively, and the carrying values of our fixed-rate debt were $55.5 billion and $52.8 billion, respectively. The estimate of the fair value of our term loan is approximated at its carrying value as of March 31, 2026 and December 31, 2025, as this debt instrument bears interest at a floating rate.

During the three months ended March 31, 2026 and 2025, 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 March 31, 2026 and December 31, 2025, we had outstanding foreign currency forward contracts with aggregate notional amounts of $8.0 billion and $7.8 billion, respectively. We have designated these foreign currency forward contracts, which are primarily euro and Japanese yen 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 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, 2026, were as follows (notional amounts in millions):

Foreign currencyU.S. dollars
Hedged notesNotional amountsInterest ratesNotional amountsInterest rates
5.50% 2026 pound sterling Notes£4755.5%$7476.0%
4.00% 2029 pound sterling Notes£7004.0%$1,1114.7%

During the first quarter of 2026, our 2.00% 2026 euro Notes matured and the related cross-currency swaps were settled.

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 three months ended March 31, 2026 and 2025, and amounts expected to be recognized during the next 12 months were 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 March 31,
Derivatives in cash flow hedging relationships20262025
Foreign currency forward contracts$108$(212)
Cross-currency swap contracts(83)66
Forward interest rate contracts(40)—
Total unrealized losses$(15)$(146)

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 both March 31, 2026 and December 31, 2025, we had interest rate swap contracts with an aggregate notional amount of $6.7 billion that hedge certain portions of our long-term debt.

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 locationsMarch 31, 2026December 31, 2025March 31, 2026December 31, 2025
Current portion of long-term debt$1,277$1,273$27$23
Long-term debt$5,088$5,112$(210)$(184)

(1) Current portion of long-term debt includes $43 million and $47 million of carrying value with discontinued hedging relationships as of March 31, 2026 and December 31, 2025, respectively. Long-term debt includes $176 million and $185 million of carrying value with discontinued hedging relationships as of March 31, 2026 and December 31, 2025, respectively.

(2) Current portion of long-term debt includes $43 million and $47 million of hedging adjustments on discontinued hedging relationships as of March 31, 2026 and December 31, 2025, respectively. Long-term debt includes $76 million and $85 million of hedging adjustments on discontinued hedging relationships as of March 31, 2026 and December 31, 2025, 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 March 31, 2026
Product salesOther income, netInterest expense, net
Total amounts recorded in income and (expense) line items presented in the Condensed Consolidated Statements of Income$8,218$75$(657)
The effects of cash flow and fair value hedging:
Losses on cash flow hedging relationships reclassified out of AOCI:
Foreign currency forward contracts$(36)$—$—
Cross-currency swap contracts$—$(77)$—
Gains (losses) on fair value hedging relationships—interest rate swap agreements:
Hedged items(1)$—$—$22
Derivatives designated as hedging instruments$—$—$(8)
Three months ended March 31, 2025
Product salesOther income, netInterest expense, net
Total amounts recorded in income and (expense) line items presented in the Condensed Consolidated Statements of Income$7,873$1,518$(723)
The effects of cash flow and fair value hedging:
Gains on cash flow hedging relationships reclassified out of AOCI:
Foreign currency forward contracts$56$—$—
Cross-currency swap contracts$—$83$—
(Losses) gains on fair value hedging relationships—interest rate swap agreements:
Hedged items(1)$—$—$(96)
Derivatives designated as hedging instruments$—$—$112

(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 March 31, 2026, the amount of net losses on our foreign currency forward and cross-currency swap contracts expected to be reclassified out of AOCI and recognized into earnings during the next 12 months was $114 million.

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 March 31, 2026 and December 31, 2025, the total notional amounts of these foreign currency forward contracts were $584 million and $240 million, 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, 2026 and 2025.

Fair values of derivatives

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

Derivative assetsDerivative liabilities
March 31, 2026Condensed Consolidated Balance Sheets locationsFair valuesCondensed Consolidated Balance Sheets locationsFair values
Derivatives designated as hedging instruments:
Foreign currency forward contractsOther current assets/ Other noncurrent assets$249Accrued liabilities/ Other noncurrent liabilities$135
Cross-currency swap contractsOther current assets/ Other noncurrent assets—Accrued liabilities/ Other noncurrent liabilities354
Interest rate swap contractsOther current assets/ Other noncurrent assets—Accrued liabilities/ Other noncurrent liabilities302
Total derivatives designated as hedging instruments249791
Derivatives not designated as hedging instruments:
Foreign currency forward contractsOther current assets—Accrued liabilities1
Total derivatives not designated as hedging instruments—1
Total derivatives$249$792
Derivative assetsDerivative liabilities
December 31, 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$195Accrued liabilities/ Other noncurrent liabilities$213
Cross-currency swap contractsOther current assets/ Other noncurrent assets48Accrued liabilities/ Other noncurrent liabilities320
Interest rate swap contractsOther current assets/ Other noncurrent assets—Accrued liabilities/ Other noncurrent liabilities293
Total derivatives designated as hedging instruments243826
Derivatives not designated as hedging instruments:
Foreign currency forward contractsOther current assets1Accrued liabilities1
Total derivatives not designated as hedging instruments11
Total derivatives$244$827

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

Our derivative contracts that were in liability positions as of March 31, 2026, 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 primarily included in Net cash provided by operating activities, except for certain circumstances, including the settlement of notional amounts of cross-currency swaps, which are included in Net cash provided by (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, 2025, 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, 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. The outcomes of these proceedings are inherently uncertain and depend on a variety of factors, including the development of the factual record, judicial or administrative rulings, and, in certain cases, the outcome of appellate review. Further, certain of the matters pending against us are at earlier stages of the legal process, which in complex proceedings of the sort we face often extend for several years, and have not progressed sufficiently through discovery and/or the development of important factual information and legal issues to enable us to estimate. Accordingly, except for amounts accrued, in each of the matters described in this filing in which we could incur a liability, our opponents seek an award of a not-

yet-estimable amount of damages or an amount that is 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

In March 2026, Sanofi SA, Regeneron Pharmaceuticals, Inc. (Regeneron) and Amgen entered into a settlement agreement that resolved the following Repatha patent litigations, as detailed below.

Germany

As a result of the settlement between the parties, the following legal actions in Germany have been withdrawn: actions filed by Sanofi-Aventis Deutschland GmbH and Regeneron in the Regional Court of Munich seeking damages arising from the provisional enforcement of an injunction based on Amgen’s European Patent No. 2,215,124 (the EP’124 Patent) against PRALUENT®; the action filed by Sanofi Biotechnology SAS against Amgen GmbH and Amgen (Europe) B.V. in the Regional Court of Dusseldorf alleging that the marketing and sale of Repatha infringes Regeneron’s European Patent No. 2,756,004 (the EP’004 Patent); and Amgen GmbH’s nullity action filed in the German Federal Patent Court seeking invalidation of Regeneron’s EP’004 Patent. These withdrawals bring an end to these actions concerning the EP’124 and EP’004 patents.

Unified Patent Court of the European Union (UPC)

Actions concerning Amgen’s European Patent No. 3,666,797 (the EP’797 Patent)

As a result of the settlement between the parties, Sanofi-Aventis Deutschland GmbH, Sanofi-Aventis Groupe S.A., Sanofi Winthrop Industrie S.A. (collectively, Sanofi-Aventis) withdrew its application for rehearing of the decision of the Court of Appeals of the UPC upholding the validity of the EP’797 Patent, and Amgen withdrew its case in the Munich Local Division of the UPC alleging that PRALUENT infringes Amgen’s EP’797 Patent. These withdrawals bring these actions concerning Amgen’s EP’797 Patent to an end.

Actions concerning Regeneron’s European Patent No. 3,536,712 (the EP’712 Patent)

As a result of the settlement between the parties, Sanofi Biotechnologies SAS (Sanofi Biotechnologies) and Regeneron withdrew their appeal against the decision of the Dusseldorf Local Division of the UPC finding the EP’712 Patent not infringed by Amgen, and Amgen withdrew its counterclaims for revocation of the EP’712 Patent, bringing these actions to an end.

Actions concerning Regeneron’s European Patent No. 4,252,857 (the EP’857 Patent)

As a result of settlement between the parties, Sanofi Biotechnologies and Regeneron withdrew their action in the UPC that alleged Amgen’s Repatha infringes the EP’857 Patent and Amgen withdrew its counterclaims for revocation, bringing an end to these actions.

European Patent Office (EPO)

Proceedings concerning Amgen’s EP’797 Patent

As a result of the settlement between the parties, Sanofi and Regeneron withdrew their oppositions against the EP’797 Patent on March 9, 2026. On March 11, 2026, the Technical Board of Appeal cancelled the oral hearing that was scheduled to begin on April 13, 2026, and officially closed the opposition proceedings on March 12, 2026. Sanofi and Regeneron also withdrew their oppositions against Amgen’s EP’797 Patent, bringing an end to these proceedings.

Proceedings concerning Regeneron’s EP’712 Patent

As a result of the settlement between the parties, Amgen withdrew its opposition against Regeneron’s EP’712 Patent, bringing an end to this proceeding.

Proceedings concerning Regeneron’s EP’857 Patent

As a result of the settlement between the parties, Amgen withdrew its opposition against Regeneron’s EP’857 Patent. Despite the withdrawal of Amgen’s opposition, the EPO notified Regeneron on March 26, 2026 that it intends to proceed without Amgen’s participation.

Japan

As a result of the settlement between the parties, Regeneron withdrew its invalidity trials against Amgen’s patent rights to PCSK9 antibodies in Japan, and Amgen withdrew its damages cases against Sanofi K.K. for infringement of Amgen’s patent rights to PCSK9 antibodies in Japan, bringing an end to these actions.

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

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

The parties entered into a settlement agreement that resolves the patent litigation related to the accused denosumab biosimilar products in the United States. The U.S. District Court for the District of New Jersey (New Jersey District Court) entered a Consent Order and Judgment on March 31, 2026, finding the claims of Amgen’s U.S. patents asserted against the Shanghai Henlius Biotech Inc., Shanghai Henlius Biologics Co., Ltd, Organon LLC and Organon & Co. valid, enforceable and infringed by the accused denosumab biosimilar products in the United States. Upon entry of the Consent Order and Judgment, all remaining claims and counterclaims were dismissed with prejudice.

Amgen Inc. et al. v Alkem Laboratories Ltd., et al.

On February 26, 2026, Amgen responded to Alkem Laboratories Ltd., Ascend Laboratories, LLC, and Enzene Biosciences’ counterclaims.

PAVBLU® (aflibercept-ayyh) Patent Litigation

United States

Regeneron Pharmaceuticals, Inc. v. Amgen Inc. (action filed January 10, 2024) (the 2024 Action)

On March 6, 2026, Regeneron filed a Notice Regarding Case Narrowing in which it identified six patents (including U.S. Patent No. 12,331,099 (the ’099 Patent) asserted in the 2025 Action described below) on which it intends to proceed against Amgen with respect to the 2 mg aflibercept product that is the subject of the multi-district proceeding, and requested dismissal with prejudice of its claims with respect to the fourteen patents asserted against Amgen in Regeneron’s complaint filed on January 10, 2024, as amended (the 2024 Complaint). On April 8, 2026, the U.S. District Court for the Northern District of West Virginia (the West Virginia District Court) granted Regeneron’s request to dismiss. On April 16, 2026, by stipulation of the parties, the West Virginia District Court dismissed without prejudice Amgen’s counterclaims and defenses with respect to the fourteen patents that had been dismissed from the case.

On March 9, 2026, Amgen responded to Regeneron’s 2024 Complaint, denying infringement and asserting counterclaims seeking declaratory judgment that the asserted patents are not infringed, invalid, and/or unenforceable, and counterclaims for Sherman Act (15 U.S.C. § 2) monopolization and attempted monopolization through Walker Process fraud, and unlawful and unfair practices under the California Unfair Competition Law. By its counterclaims, Amgen seeks, among other remedies, damages and an injunction against the conduct of Regeneron. On March 23, 2026, Amgen filed a motion in the West Virginia District Court for a suggestion of remand to the U.S. District Court for the Central District of California of both the 2024 Action and the 2025 Action, which motion Regeneron opposes. On April 20, 2026, Regeneron filed a motion to strike certain of Amgen’s affirmative defenses and to dismiss certain of Amgen’s counterclaims pleaded in response to Regeneron’s 2024 Complaint, including the counterclaims for Sherman Act monopolization and attempted monopolization, and the counterclaim for unlawful and unfair practices under the California Unfair Competition Law.

Regeneron Pharmaceuticals, Inc. v. Amgen Inc. (action filed June 17, 2025) (the 2025 Action)

On April 7, 2026, a hearing was held on Regeneron’s motion to strike certain of Amgen’s affirmative defenses and to dismiss certain of Amgen’s counterclaims to Regeneron’s complaint in this matter, including the counterclaim seeking a declaratory judgment that the ’099 Patent is unenforceable, the counterclaims for Sherman Act monopolization and attempted monopolization, and the counterclaim for unlawful and unfair practices under the California Unfair Competition Law.

Singapore

On February 6, 2026, Regeneron, Bayer Healthcare LLC, Bayer Consumer Care AG, and Bayer (South East Asia) Pte. Ltd. filed a lawsuit against Amgen Singapore Manufacturing Pte. Ltd. (Amgen Singapore, a wholly-owned subsidiary of Amgen) in the High Court of the Republic of Singapore (the Singapore Court), asserting infringement of three Singapore patents based on Amgen’s manufacture of aflibercept in Singapore. By its statement of claim, the claimants seek, among other remedies, an injunction prohibiting the use of the processes claimed in the asserted patents before the expiration of each of the patents found to be infringed. Amgen responded to the statement of claim on March 20, 2026, denying infringement and

asserting a counterclaim seeking revocation of the asserted patents. The claimants responded to Amgen’s counterclaim on April 22, 2026.

KYPROLIS*®* (carfilzomib) Abbreviated New Drug Application (ANDA) Patent Litigation

Onyx Therapeutics, Inc. v. Amneal Pharmaceuticals of New York, LLC and Amneal EU, Limited.

The U.S. District Court for the District of Delaware scheduled a claim construction hearing for September 2, 2026 and scheduled the trial to begin on July 28, 2027.

Onyx Therapeutics, Inc. v. Hetero USA Inc. et al.

On March 24, 2026, Onyx Therapeutics, Inc. (Onyx Therapeutics, a wholly-owned subsidiary of Amgen) filed a lawsuit in the U.S. District Court for the District of Delaware (Delaware District Court) against Hetero USA Inc., Hetero Labs Limited, and Hetero Labs Limited Unit-VI (collectively, Hetero), asserting infringement of U.S. Patent No. 7,737,112 (the ’112 Patent) based on Hetero’s submission of an ANDA seeking FDA approval to market a generic version of KYPROLIS. Onyx Therapeutics seeks an order from the Delaware District Court making any FDA approval of Hetero’s application effective no earlier than the expiration of the ’112 Patent.

TAVNEOS*®* (avacopan) Abbreviated New Drug Application (ANDA) Patent Litigation

ChemoCentryx, Inc. v. Zydus Pharmaceuticals (USA) Inc., Zydus Lifesciences Global FZE, and Zydus Lifesciences Limited

On April 27, 2026, the Zydus defendants responded to the complaint, asserting counterclaims for declaratory judgment of non-infringement and invalidity of U.S. Patent Nos. 11,951,214 and 11,603,356 and raising affirmative defenses.

Antitrust Class Action

CareFirst of Maryland Antitrust Class Action

On March 18, 2026, the U.S. District Court for the Eastern District of Virginia (District Court for the Eastern District of Virginia) granted Amgen’s motion and certified its order on the motion to dismiss for interlocutory review by the U.S. Court of Appeals for the Fourth Circuit (Fourth Circuit Court of Appeals). On March 27, 2026, Amgen filed its petition for permission for interlocutory review with the Fourth Circuit Court of Appeals, which was granted on April 20, 2026.

On April 1, 2026, Amgen filed a motion in the District Court for the Eastern District of Virginia seeking to stay the case while the interlocutory review process remains pending. CareFirst’s opposition to the motion to stay was filed on April 15, 2026, and Amgen’s reply was filed on April 21, 2026.

Sandoz Inc. Antitrust Action

On February 17, 2026, the District Court for the Eastern District of Virginia granted Amgen’s motion to dismiss, dismissing Sandoz Inc.’s (Sandoz) federal antitrust claim with prejudice on the ground that it was a compulsory counterclaim that Sandoz was required to have brought in the prior patent case before the New Jersey District Court, and dismissing Sandoz’s state law claims without prejudice by declining to exercise supplemental jurisdiction over those claims. On March 13, 2026, Sandoz filed a notice of appeal to the Fourth Circuit Court of Appeals.

Other Similar Antitrust Actions

On February 26, 2026, Amgen filed its reply to Centene’s opposition to Amgen’s demurrer. On April 24, 2026, a hearing on Amgen’s demurrers to the Centene, Humana and Molina complaints was held.

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 April 23, 2026, Amgen filed its non-opposition to plaintiff’s motion for class certification.

ChemoCentryx, Inc. Securities Matters

On March 13, 2026, the lead plaintiff filed an unopposed motion for preliminary approval of the settlement between the parties. A hearing on that motion is scheduled for May 21, 2026.

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