UNITED STATES SECURITIES AND EXCHANGE COMMISSIONWashington,D.C.20549Form 10-QQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF1934For the quarterly period ended June 30,2025ORTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF1934For the transition period from _to_ Commission file number 001-39695VIATRIS INC.(Exact name of registrant as specified in its charter)Delaware83-4364296(State or other jurisdiction of incorporation or organization)(I.R.S.Employer Identification No.)1000 Mylan Boulevard,Canonsburg,Pennsylvania 15317(Address of principal executive offices)(724)514-1800(Registrants telephone number,including area code)Securities registered pursuant to Section 12(b)of the Act:Title of Each Class:Trading Symbol(s)Name of Each Exchange on Which Registered:Common Stock,par value$0.01 per shareVTRSThe NASDAQ Stock MarketIndicate by check mark whether the registrant(1)has filed all reports required to be filed by Section 13 or 15(d)of the Securities Exchange Act of1934 during the preceding 12 months(or for such shorter period that the registrant was required to file such reports),and(2)has been subject to such filingrequirements for the past 90 days.Yes No Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405of Regulation S-T(232.405 of this chapter)during the preceding 12 months(or for such shorter period that the registrant was required to submit suchfiles).Yes No Indicate by check mark whether the registrant is a large accelerated filer,an accelerated filer,a non-accelerated filer,a smaller reporting company,oran emerging growth company.See the definitions of“large accelerated filer,”“accelerated filer,”“smaller reporting company,”and“emerging growthcompany”in Rule 12b-2 of the Exchange Act.Large accelerated filerAccelerated filerNon-accelerated filerSmaller reporting companyEmerging growth companyIf an emerging growth company,indicate by check mark if the registrant has elected not to use the extended transition period for complying with any newor revised financial accounting standards provided pursuant to Section 13(a)of the Exchange Act.Indicate by check mark whether the registrant is a shell company(as defined in Rule 12b-2 of the Exchange Act).Yes No Indicate the number of shares outstanding of each of the issuers classes of common stock,as of the latest practicable date.The number of shares of common stock outstanding,par value$0.01 per share,of the registrant as of August 4,2025 was 1,165,872,127.Table of ContentsVIATRIS INC.AND SUBSIDIARIESINDEX TO FORM 10-QFor the Quarterly Period EndedJune 30,2025 PagePART I FINANCIAL INFORMATIONITEM 1.Condensed Consolidated Financial Statements(unaudited)Condensed Consolidated Statements of Operations Three and Six Months Ended June 30,2025 and 20246Condensed Consolidated Statements of Comprehensive Earnings(Loss)Three and Six Months Ended June 30,2025and 20247Condensed Consolidated Balance Sheets June 30,2025 and December 31,20248Condensed Consolidated Statements of Equity Three and Six Months Ended June 30,2025 and 20249Condensed Consolidated Statements of Cash Flows Six Months Ended June 30,2025 and 202411Notes to Condensed Consolidated Financial Statements12ITEM 2.Managements Discussion and Analysis of Financial Condition and Results of Operations52ITEM 3.Quantitative and Qualitative Disclosures About Market Risk75ITEM 4.Controls and Procedures75PART II OTHER INFORMATIONITEM 1.Legal Proceedings75ITEM 1A.Risk Factors75ITEM 2.Unregistered Sales of Equity Securities and Use of Proceeds76ITEM 5.Other Information76ITEM 6.Exhibits77SIGNATURES782Table of ContentsGlossary of Defined TermsUnless the context requires otherwise,references to“Viatris,”“the Company,”“we,”“us”or“our”in this Form 10-Q(defined below)refer toViatris Inc.and its subsidiaries.We also have used several other terms in this Form 10-Q,most of which are explained or defined below.Some amounts inthis Form 10-Q may not add due to rounding.2003 LTIPMylan N.V.Amended and Restated 2003 Long-Term Incentive Plan2020 Incentive PlanViatris Inc.2020 Stock Incentive Plan2024 Form 10-KViatris annual report on Form 10-K for the fiscal year ended December 31,2024,as amended2024 Revolving FacilityThe$3.5 billion revolving facility dated as of September 27,2024,by and among Viatris,certain lendersand issuing banks from time to time party thereto and Bank of America,N.A.,as administrative agentAdjusted EBITDANon-GAAP financial measure that the Company believes is appropriate to provide information toinvestors-EBITDA(defined below)is further adjusted for share-based compensation expense,litigationsettlements,and other contingencies,net,gain(loss)on divestitures of businesses,impairment of long-lived assets and goodwill,restructuring,acquisition and divestitures-related and other special itemsAdjusted EPSAdjusted net earnings per diluted shareANDAAbbreviated New Drug ApplicationAOCEAccumulated other comprehensive earningsAPIActive pharmaceutical ingredientsARVAntiretroviral medicinesASCAccounting Standards CodificationASUAccounting Standards UpdateBioconBiocon LimitedBiocon BiologicsBiocon Biologics Limited,a majority owned subsidiary of BioconBiocon Biologics TransactionThe transaction between Viatris and Biocon Biologics pursuant to which Viatris contributed itsbiosimilars portfolio,composed of the Biocon collaboration programs,biosimilars to Humira,Enbrel,and Eylea,as well as related assets and liabilities to Biocon BiologicsBusiness Combination AgreementBusiness Combination Agreement,dated as of July 29,2019,as amended from time to time,amongViatris,Mylan,Pfizer and certain of their affiliatesCAMTU.S.corporate alternative minimum taxCCPSCompulsory convertible preferred sharesCodeThe U.S.Internal Revenue Code of 1986,as amendedCODMChief operating decision makerCombinationRefers to Mylan combining with Pfizers Upjohn Business in a Reverse Morris Trust transaction to formViatris on November 16,2020Commercial Paper ProgramThe$1.65 billion unsecured commercial paper program entered into as of November 16,2020 by Viatris,as issuer,Mylan Inc.,Utah Acquisition Sub Inc.and Mylan II B.V.,as guarantors,and certain dealersfrom time to timeDeveloped Markets segmentViatris business segment that includes our operations primarily in the following markets:North Americaand EuropeDistributionPfizers distribution to Pfizer stockholders of all the issued and outstanding shares of Upjohn Inc.EBITDANon-GAAP financial measure that the Company believes is appropriate to provide information toinvestors-U.S.GAAP net earnings(loss)adjusted for income tax provision(benefit),interest expenseand depreciation and amortizationEDPAU.S.District Court for the Eastern District of PennsylvaniaEmerging Markets segmentViatris business segment that includes,but is not limited to,our operations primarily in the followingmarkets:Parts of Asia,the Middle East,South and Central America,Africa,and Eastern EuropeEPSEarnings per shareEUEuropean Union3Table of ContentsExchange ActSecurities Exchange Act of 1934,as amendedFASBFinancial Accounting Standards BoardFDAU.S.Food and Drug AdministrationForm 10-QThis quarterly report on Form 10-Q for the quarterly period ended June 30,2025GA DepotLong-acting glatiramer acetate depot productGlobal Systemically Important BanksFinancial institutions that are considered systemically important by the Financial Stability BoardGreater China segmentViatris business segment that includes our operations primarily in the following markets:mainlandChina,Taiwan and Hong KongIdorsiaIdorsia Pharmaceuticals Ltd.Idorsia TransactionThe transaction between Viatris and Idorsia pursuant to which Viatris acquired the developmentprograms and certain personnel related to selatogrel and cenerimod from Idorsia in exchange for anupfront payment to Idorsia of$350 million,potential development and regulatory milestone payments,certain contingent payments of tiered sales milestones,as well as potential contingent tiered salesroyaltiesIndore ImpactThe estimated negative financial impact on 2025 total revenues and(loss)earnings from operationsversus the comparable 2024 periods as a result of the FDA issued warning letter and import alert relatedto our oral finished dose manufacturing facility in Indore,IndiaIPR&DIn-process research and developmentIRSU.S.Internal Revenue ServiceITInformation technologyJANZ segmentViatris business segment that includes our operations in the following markets:Japan,Australia andNew ZealandMapiMapi Pharma Ltd.Maximum Leverage RatioThe maximum consolidated leverage ratio financial covenant requiring maintenance of a maximum ratioof consolidated total indebtedness as of the end of any quarter to consolidated EBITDA for the trailingfour quarters as defined in the related credit agreements from time to timeMDLMultidistrict litigationMylanMylan N.V.and its subsidiariesMylan Inc.U.S.Dollar NotesThe 4.550%Senior Notes due 2028,5.400%Senior Notes due 2043 and 5.200%Senior Notes due 2048issued by Mylan Inc.,which are fully and unconditionally guaranteed on a senior unsecured basis byMylan II B.V.,Viatris Inc.and Utah Acquisition Sub Inc.NASDAQThe NASDAQ Stock MarketNDANew Drug ApplicationOTCOver-the-counterOTC BusinessViatris OTC business that the Company divested to Cooper Consumer Health SAS in July 2024,including two manufacturing sites located in Merignac,France,and Confienza,Italy,and an R&D site inMonza,Italy.This excludes the Companys rights for Viagra,Dymista(which,in certain limitedmarkets,are sold as OTC products),and select OTC products in certain markets.OTC TransactionOn October 1,2023,Viatris announced it had received an offer for the divestiture of its OTC Business.In January 2024,we exercised our option to accept the offer and entered into a definitive transactionagreement with respect to such OTC Transaction.The OTC Transaction closed in July 2024.Oyster PointOyster Point Pharma,Inc.PfizerPfizer Inc.PSUsPerformance awardsR&DResearch and developmentReceivables FacilityThe accounts receivable facility for up to an aggregate amount of$600 million entered into in May 2025and expiring in April 20284Table of ContentsRegistered Upjohn NotesThe 2.300%Senior Notes due 2027,2.700%Senior Notes due 2030,3.850%Senior Notes due 2040 and4.000%Senior Notes due 2050 originally issued on October 29,2021 registered with the SEC inexchange for the corresponding Unregistered Upjohn U.S.Dollar Notes in a similar aggregate principalamount and with terms substantially identical to the corresponding Unregistered Upjohn U.S.DollarNotes and fully and unconditionally guaranteed by Mylan Inc.,Mylan II B.V.and Utah Acquisition SubInc.Respiratory Delivery PlatformPfizers proprietary dry powder inhaler delivery platformRestricted Stock AwardsThe Companys nonvested restricted stock and restricted stock unit awards,including PSUsRICORacketeer Influenced and Corrupt Organizations ActSARsStock appreciation rightsSDNYU.S.District Court for the Southern District of New YorkSECU.S.Securities and Exchange CommissionSecurities ActSecurities Act of 1933,as amendedSenior U.S.Dollar NotesThe Upjohn U.S.Dollar Notes,the Utah U.S.Dollar Notes and the Mylan Inc.U.S.Dollar Notes,collectivelySeparation and Distribution AgreementSeparation and Distribution Agreement between Viatris and Pfizer,dated as of July 29,2019,asamended from time to timeSG&ASelling,general and administrative expensesstock awardsStock options and SARsTevaTeva Pharmaceutical Industries Ltd.TSATransition services agreements,including related distribution servicesU.K.United KingdomU.S.United StatesU.S.GAAPAccounting principles generally accepted in the U.S.Unregistered Upjohn U.S.Dollar NotesThe 2.300%Senior Notes due 2027,2.700%Senior Notes due 2030,3.850%Senior Notes due 2040 and4.000%Senior Notes due 2050 originally issued on June 22,2020 by Upjohn Inc.(now Viatris Inc.)in aprivate offering exempt from the registration requirements of the Securities Act and fully andunconditionally guaranteed by Mylan Inc.,Mylan II B.V.and Utah Acquisition Sub Inc.UpjohnUpjohn Inc.,a wholly owned subsidiary of Pfizer prior to the Distribution,that combined with Mylanand was renamed Viatris Inc.Upjohn BusinessPfizers off-patent branded and generic established medicines business that,in connection with theCombination,was separated from Pfizer and combined with Mylan to form ViatrisUpjohn Distributor MarketsSelect geographic markets that were part of the Combination that are smaller in nature and in which wehad no established infrastructure prior to or following the Combination and that the Company hasdivested or intends to divestUpjohn U.S.Dollar NotesSenior unsecured notes denominated in U.S.dollars and originally issued by Upjohn Inc.or Viatris Inc.pursuant to an indenture dated June 22,2020 and fully and unconditionally guaranteed by Mylan Inc.,Mylan II B.V.and Utah Acquisition Sub Inc.Utah Acquisition SubUtah Acquisition Sub Inc.,a Delaware corporation and an indirect wholly owned subsidiary of ViatrisUtah U.S.Dollar NotesThe 3.950%Senior Notes due 2026 and 5.250%Senior Notes due 2046 issued by Utah Acquisition SubInc.,which are fully and unconditionally guaranteed on a senior unsecured basis by Mylan Inc.,ViatrisInc.and Mylan II B.V.ViatrisViatris Inc.,formerly known as Upjohn Inc.prior to the completion of the CombinationYEN Term Loan FacilityThe 40 billion term loan agreement dated as of July 1,2021,among Viatris,the guarantors from time totime party thereto,the lenders from time to time party thereto and Mizuho Bank,Ltd.,as administrativeagent5Table of ContentsPART I FINANCIAL INFORMATIONVIATRIS INC.AND SUBSIDIARIESCondensed Consolidated Statements of Operations(Unaudited;in millions,except per share amounts)Three Months EndedSix Months EndedJune 30,June 30,2025202420252024Revenues:Net sales$3,569.0$3,785.9$6,812.2$7,439.4 Other revenues13.1 10.7 24.2 20.6 Total revenues3,582.1 3,796.6 6,836.4 7,460.0 Cost of sales2,249.2 2,351.2 4,342.3 4,510.6 Gross profit1,332.9 1,445.4 2,494.1 2,949.4 Operating expenses:Research and development218.8 204.1 440.8 403.8 Acquired IPR&D(7.8)10.0(1.7)Selling,general and administrative928.7 1,037.0 1,876.8 2,054.5 Impairment of goodwill 321.0 2,936.8 321.0 Litigation settlements and other contingencies,net(47.6)131.0(121.1)207.8 Total operating expenses1,099.9 1,685.3 5,143.3 2,985.4 Earnings(loss)from operations233.0(239.9)(2,649.2)(36.0)Interest expense116.6 145.8 232.1 284.2 Other expense(income),net333.5 6.1 432.8(133.0)Loss before income taxes(217.1)(391.8)(3,314.1)(187.2)Income tax(benefit)provision(212.5)(65.4)(267.5)25.3 Net loss$(4.6)$(326.4)$(3,046.6)$(212.5)Loss per share attributable to Viatris Inc.shareholdersBasic$(0.27)$(2.58)$(0.18)Diluted$(0.27)$(2.58)$(0.18)Weighted average shares outstanding:Basic1,173.0 1,191.1 1,182.7 1,193.1 Diluted1,173.0 1,191.1 1,182.7 1,193.1 See Notes to Condensed Consolidated Financial Statements6Table of ContentsVIATRIS INC.AND SUBSIDIARIESCondensed Consolidated Statements of Comprehensive Earnings(Loss)(Unaudited;in millions)Three Months EndedSix Months EndedJune 30,June 30,2025202420252024Net loss$(4.6)$(326.4)$(3,046.6)$(212.5)Other comprehensive earnings(loss),before tax:Foreign currency translation adjustment507.0(89.7)1,005.8(432.2)Change in unrecognized loss and prior service cost related to defined benefitplans0.5(5.6)0.3(11.8)Net unrecognized(loss)gain on derivatives in cash flow hedging relationships(29.0)8.7(56.5)37.4 Net unrecognized(loss)gain on derivatives in net investment hedgingrelationships(355.2)68.4(528.9)237.5 Net unrealized gain(loss)on available-for-sale fixed income securities0.2 0.8(0.3)Other comprehensive earnings(loss),before tax123.5(18.2)421.5(169.4)Income tax(benefit)provision(83.0)16.0(127.0)58.4 Other comprehensive earnings(loss),net of tax206.5(34.2)548.5(227.8)Comprehensive earnings(loss)$201.9$(360.6)$(2,498.1)$(440.3)See Notes to Condensed Consolidated Financial Statements7Table of ContentsVIATRIS INC.AND SUBSIDIARIESCondensed Consolidated Balance Sheets(Unaudited in millions,except share and per share amounts)June 30,2025December 31,2024ASSETSAssetsCurrent assets:Cash and cash equivalents$566.4$734.8 Accounts receivable,net3,258.1 3,221.3 Inventories4,264.3 3,854.1 Prepaid expenses and other current assets1,685.8 1,710.5 Total current assets9,774.6 9,520.7 Property,plant and equipment,net2,642.6 2,666.1 Intangible assets,net16,323.8 17,070.9 Goodwill6,748.3 9,133.3 Deferred income tax benefit924.3 753.0 Other assets1,997.9 2,356.9 Total assets$38,411.5$41,500.9 LIABILITIES AND EQUITYLiabilitiesCurrent liabilities:Accounts payable$1,782.6$1,853.7 Income taxes payable 192.7 Current portion of long-term debt and other long-term obligations1,680.7 8.3 Other current liabilities3,670.1 3,724.7 Total current liabilities7,133.4 5,779.4 Long-term debt12,791.6 14,038.9 Deferred income tax liability1,080.8 1,107.9 Other long-term obligations1,835.2 1,939.2 Total liabilities22,841.0 22,865.4 EquityViatris Inc.shareholders equityCommon stock:$0.01 par value,3,000,000,000 shares authorized;shares issued:1,245,047,557 and1,234,131,491 as of June 30,2025 and December 31,202412.5 12.3 Additional paid-in capital18,998.2 18,921.6 Retained earnings80.0 3,418.8 Accumulated other comprehensive loss(2,664.4)(3,212.9)16,426.3 19,139.8 Less:Treasury stock at costCommon stock shares:79,334,807 and 40,483,663 as of June 30,2025 and December 31,2024855.8 504.3 Total equity15,570.5 18,635.5 Total liabilities and equity$38,411.5$41,500.9 See Notes to Condensed Consolidated Financial Statements8Table of ContentsVIATRIS INC.AND SUBSIDIARIESCondensed Consolidated Statements of Equity(Unaudited;in millions,except share and per share amounts)AdditionalPaid-InCapitalRetained EarningsAccumulatedOtherComprehensiveLossTotal Equity Common StockTreasury Stock SharesCostSharesCostBalance at March 31,20251,244,908,128$12.4$18,960.8$227.9 59,091,265$(679.8)$(2,870.9)$15,650.4 Net loss (4.6)(4.6)Other comprehensive earnings,net of tax 206.5 206.5 Issuance of restricted stock and stock optionsexercised,net56,905 0.1 0.1 Taxes related to the net share settlement of equityawards (0.4)(0.4)Share-based compensation expense 37.1 37.1 Common stock repurchase 20,243,542(176.0)(176.0)Issuance of common stock82,524 0.7 0.7 Cash dividends declared,$0.12 per common share (143.3)(143.3)Balance at June 30,20251,245,047,557$12.5$18,998.2$80.0 79,334,807$(855.8)$(2,664.4)$15,570.5 AdditionalPaid-InCapitalRetained EarningsAccumulatedOtherComprehensiveLossTotal EquityCommon StockTreasury StockSharesCostSharesCostBalance at December 31,20241,234,131,491$12.3$18,921.6$3,418.8 40,483,663$(504.3)$(3,212.9)$18,635.5 Net loss (3,046.6)(3,046.6)Other comprehensive earnings,net of tax 548.5 548.5 Issuance of restricted stock and stock optionsexercised,net10,771,051 0.2 14.0 14.2 Taxes related to the net share settlement of equityawards (31.0)(31.0)Share-based compensation expense 92.3 92.3 Common stock repurchase 38,851,144(351.5)(351.5)Issuance of common stock145,015 1.3 1.3 Cash dividends declared,$0.24 per common share (292.2)(292.2)Balance at June 30,20251,245,047,557$12.5$18,998.2$80.0 79,334,807$(855.8)$(2,664.4)$15,570.5 See Notes to Condensed Consolidated Financial Statements9Table of ContentsAdditionalPaid-InCapitalRetainedEarningsAccumulatedOtherComprehensiveLossTotalEquity Common StockTreasury Stock SharesCostSharesCostBalance at March 31,20241,230,891,074$12.3$18,839.8$4,607.5 40,483,663$(504.3)$(2,941.0)$20,014.3 Net loss (326.4)(326.4)Other comprehensive loss,net of tax (34.2)(34.2)Issuance of restricted stock and stock optionsexercised,net2,801,327 0.5 0.5 Taxes related to the net share settlement of equityawards (22.4)(22.4)Share-based compensation expense 34.7 34.7 Issuance of common stock60,439 0.7 0.7 Cash dividends declared,$0.12 per common share (147.2)(147.2)Balance at June 30,20241,233,752,840$12.3$18,853.3$4,133.9 40,483,663$(504.3)$(2,975.2)$19,520.0 AdditionalPaid-InCapitalRetainedEarningsAccumulatedOtherComprehensiveLossTotalEquityCommon StockTreasury StockSharesCostSharesCostBalance at December 31,20231,221,994,491$12.2$18,814.7$4,639.7 21,239,521$(251.8)$(2,747.4)$20,467.4 Net loss (212.5)(212.5)Other comprehensive loss,net of tax (227.8)(227.8)Issuance of restricted stock and stock optionsexercised,net11,643,434 0.1 7.1 7.2 Taxes related to the net share settlement of equityawards (51.2)(51.2)Share-based compensation expense 81.4 81.4 Common stock repurchase 19,244,142(252.5)(252.5)Issuance of common stock114,915 1.3 1.3 Cash dividends declared,$0.24 per common share (293.3)(293.3)Balance at June 30,20241,233,752,840$12.3$18,853.3$4,133.9 40,483,663$(504.3)$(2,975.2)$19,520.0 See Notes to Condensed Consolidated Financial Statements10Table of ContentsVIATRIS INC.AND SUBSIDIARIESCondensed Consolidated Statements of Cash Flows(Unaudited;in millions)Six Months EndedJune 30,20252024Cash flows from operating activities:Net loss$(3,046.6)$(212.5)Adjustments to reconcile net loss to net cash provided by operating activities:Depreciation and amortization1,343.0 1,477.3 Share-based compensation expense92.3 81.4 Deferred income tax benefit(91.1)(206.3)Loss on disposal of business80.7 188.4 Acquired IPR&D15.0(12.7)Impairment of goodwill2,936.8 321.0 Other non-cash items726.3(244.9)Litigation settlements and other contingencies,net(97.0)214.0 Changes in operating assets and liabilities:Accounts receivable158.4 32.6 Inventories(232.7)(558.8)Accounts payable(189.7)56.3 Income taxes(366.6)18.7 Other operating assets and liabilities,net(573.6)(160.8)Net cash provided by operating activities755.2 993.7 Cash flows from investing activities:Cash paid for acquisitions,net of cash acquired(350.0)Capital expenditures(95.5)(108.6)Purchase of marketable securities(10.9)(13.3)Proceeds from the sale of marketable securities10.9 13.3 Payments for product rights and other,net(20.0)(11.7)(Purchases)refunds of IPR&D(15.0)12.7 Proceeds from sale of assets and subsidiaries 677.7 Proceeds from the sale of property,plant and equipment12.9 1.4 Net cash(used in)provided by investing activities(117.6)221.5 Cash flows from financing activities:Payments of long-term debt(801.7)Purchase of common stock(350.4)(250.0)Change in short-term borrowings,net1.4 Taxes paid related to net share settlement of equity awards(29.5)(32.1)Contingent consideration payments(13.1)(31.5)Payments of financing fees(1.0)Cash dividends paid(283.1)(288.3)Issuance of common stock1.3 1.3 Other items,net(155.0)128.8 Net cash used in financing activities(829.4)(1,273.5)Effect on cash of changes in exchange rates23.5(16.8)Net decrease in cash,cash equivalents and restricted cash(168.3)(75.1)Cash,cash equivalents and restricted cash beginning of period736.1 993.6 Cash,cash equivalents and restricted cash end of period$567.8$918.5 See Notes to Condensed Consolidated Financial Statements11Table of ContentsVIATRIS INC.AND SUBSIDIARIESNotes to Condensed Consolidated Financial Statements(Unaudited)1.GeneralThe accompanying unaudited condensed consolidated financial statements(“interim financial statements”)of Viatris Inc.and subsidiaries wereprepared in accordance with U.S.GAAP and the rules and regulations of the SEC for reporting on Form 10-Q;therefore,as permitted under these rules,certain footnotes and other financial information included in audited financial statements were condensed or omitted.The interim financial statementscontain all adjustments(consisting of only normal recurring adjustments)necessary to present fairly the interim results of operations,comprehensiveearnings(loss),financial position,equity and cash flows for the periods presented.These interim financial statements should be read in conjunction with the consolidated financial statements and notes thereto in Viatris 2024Form 10-K.The December 31,2024 condensed consolidated balance sheet was derived from audited financial statements.The interim results of operations and comprehensive earnings(loss)for the three and six months ended June 30,2025,and cash flows for the sixmonths ended June 30,2025,are not necessarily indicative of the results to be expected for the full fiscal year or any other future period.Certain reclassifications were made to conform the prior period consolidated financial statements to the current period presentation.Chargesrelated to the impairment of goodwill,which were previously presented in Selling,General and Administrative in the condensed consolidated statements ofoperations,and which were previously presented in Other non-cash items in the condensed consolidated statements of cash flows,are now presented inImpairment of Goodwill in the condensed consolidated statements of operations and the condensed consolidated statements of cash flows.2.Revenue Recognition and Accounts ReceivableThe Company recognizes revenues in accordance with ASC 606,Revenue from Contracts with Customers.Under ASC 606,the Companyrecognizes net revenue for product sales when control of the promised goods or services is transferred to our customers in an amount that reflects theconsideration we expect to be entitled to in exchange for those goods or services.Revenues are recorded net of provisions for variable consideration,including discounts,rebates,governmental rebate programs,price adjustments,returns,chargebacks,promotional programs and other sales allowances.Accruals for these provisions are presented in the condensed consolidated financial statements as reductions in determining net sales and as a contra assetin accounts receivable,net(if settled via credit)and other current liabilities(if paid in cash).Our net sales may be impacted by wholesaler and distributor inventory levels of our products,which can fluctuate throughout the year due to theseasonality of certain products,pricing,the timing of product demand,purchasing decisions and other factors.Such fluctuations may impact thecomparability of our net sales between periods.Consideration received from licenses of intellectual property is recorded as other revenues.Royalty or profit share amounts,which are based onsales of licensed products or technology,are recorded when the customers subsequent sales or usages occur.Such consideration is included in otherrevenues in the condensed consolidated statements of operations.The following table presents the Companys net sales by product category for each of our reportable segments for the three and six months endedJune 30,2025 and 2024,respectively:(In millions)Three Months Ended June 30,2025 Product CategoryDeveloped MarketsGreater ChinaJANZEmerging MarketsTotalBrands$1,121.4$586.5$160.5$416.1$2,284.5 Generics997.9 2.4 145.2 139.0 1,284.5 Total Viatris$2,119.3$588.9$305.7$555.1$3,569.0(a)12Table of ContentsVIATRIS INC.AND SUBSIDIARIESNotes to Condensed Consolidated Financial Statements(Unaudited)-Continued(In millions)Six Months Ended June 30,2025 Product CategoryDeveloped MarketsGreater ChinaJANZEmerging MarketsTotalBrands$2,141.2$1,139.3$302.3$818.6$4,401.4 Generics1,869.8 5.1 279.5 256.4 2,410.8 Total Viatris$4,011.0$1,144.4$581.8$1,075.0$6,812.2(In millions)Three Months Ended June 30,2024Product CategoryDeveloped MarketsGreater ChinaJANZEmerging MarketsTotalBrands$1,233.8$535.7$198.4$395.2$2,363.1 Generics1,085.4 3.3 151.2 182.9 1,422.8 Total Viatris$2,319.2$539.0$349.6$578.1$3,785.9(In millions)Six Months Ended June 30,2024Product CategoryDeveloped MarketsGreater ChinaJANZEmerging MarketsTotalBrands$2,412.6$1,077.5$382.5$799.6$4,672.2 Generics2,072.0 5.4 284.9 404.9 2,767.2 Total Viatris$4,484.6$1,082.9$667.4$1,204.5$7,439.4 _Amounts for the three and six months ended June 30,2025 include the Indore Impact and the impact of foreign currency translations and divestedbusinesses compared to the prior year period.The following table presents net sales on a consolidated basis for select key products for the three and six months ended June 30,2025 and 2024,respectively:Three Months Ended June 30,Six Months Ended June 30,(In millions)2025202420252024Select Key Global ProductsLipitor$387.9$348.4$775.9$737.3 Norvasc 182.7 161.9 355.0 338.2 EpiPen Auto-Injectors136.8 115.5 233.5 195.7 Lyrica 128.1 124.3 240.7 238.5 Viagra 100.3 106.1 198.8 206.8 Creon 91.4 78.2 173.8 153.2 Celebrex 70.0 72.2 133.4 144.4 Effexor 63.1 62.7 122.4 122.1 Zoloft 61.1 58.9 121.3 116.9 Xalabrands40.7 45.6 77.8 88.1 Select Key Segment ProductsYupelri$66.6$54.5$124.9$109.7 Dymista 48.4 55.0 91.2 103.2 Amitiza 41.6 36.9 74.9 69.9 Xanax 33.9 35.4 66.2 69.9 _The Company does not disclose net sales for any products considered competitively sensitive.Products disclosed may change in future periods,including as a result of seasonality,competition or new product launches.Amounts for the three and six months ended June 30,2025 include the impact of foreign currency translations compared to the prior year period.(a)(a)(a)(b)(c)13Table of ContentsVIATRIS INC.AND SUBSIDIARIESNotes to Condensed Consolidated Financial Statements(Unaudited)-ContinuedRefer to intellectual property matters included in Note 17 Litigation for additional information regarding Yupelri and Amitiza.Variable Consideration and Accounts ReceivableThe following table presents a reconciliation of gross sales to net sales by each significant category of variable consideration during the three andsix months ended June 30,2025 and 2024,respectively:Three Months EndedSix Months EndedJune 30,June 30,(In millions)2025 20242025 2024Gross sales$5,974.8$6,383.9$11,545.0$12,558.5 Gross to net adjustments:Chargebacks(1,260.6)(1,282.6)(2,418.6)(2,526.8)Rebates,promotional programs and other sales allowances(918.4)(1,040.5)(1,889.0)(2,088.8)Returns(47.8)(70.1)(102.1)(130.4)Governmental rebate programs(179.0)(204.8)(323.1)(373.1)Total gross to net adjustments$(2,405.8)$(2,598.0)$(4,732.8)$(5,119.1)Net sales$3,569.0$3,785.9$6,812.2$7,439.4 _Amounts for the three and six months ended June 30,2025 include the Indore Impact and the impact of foreign currency translations and divestedbusinesses compared to the prior year period.No significant revisions were made to the methodology used in determining these provisions or the nature of the provisions during the three andsix months ended June 30,2025.Such allowances were comprised of the following at June 30,2025 and December 31,2024,respectively:(In millions)June 30,2025December 31,2024Accounts receivable,net$1,417.8$1,547.0 Other current liabilities1,046.3 989.4 Total$2,464.1$2,536.4 Accounts receivable,net was comprised of the following at June 30,2025 and December 31,2024,respectively:(In millions)June 30,2025December 31,2024Trade receivables,net$2,794.2$2,675.3 Other receivables463.9 546.0 Accounts receivable,net$3,258.1$3,221.3 Accounts Receivable Factoring ArrangementsWe have entered into accounts receivable factoring agreements with financial institutions to sell certain of our non-U.S.accounts receivable.These transactions are accounted for as sales and result in a reduction in accounts receivable because the agreements transfer effective control over and riskrelated to the receivables to the buyers.Our factoring agreements do not allow for recourse in the event of uncollectibility,and we do not retain any interestin the underlying accounts receivable once sold.We derecognized$123.0 million and$68.5 million of accounts receivable as of June 30,2025 andDecember 31,2024,respectively,under these factoring arrangements.Additionally,we have a similar arrangement for certain European countries.As ofJune 30,2025 and December 31,2024,we assigned and derecognized approximately$15.4 million and$29.9 million,respectively,of Trade Receivables,Net,which were included in Other Receivables.(d)(a)(a)(a)14Table of ContentsVIATRIS INC.AND SUBSIDIARIESNotes to Condensed Consolidated Financial Statements(Unaudited)-Continued3.Recent Accounting PronouncementsAccounting Standards and Disclosure Rules Issued Not Yet AdoptedIn March 2024,the SEC adopted final rules under SEC Release No.34-99678 and No.33-11275,“The Enhancement and Standardization ofClimate-Related Disclosures for Investors”(the“Final Rules”),which would require registrants to provide certain climate-related information in theirregistration statements and annual reports.The Final Rules would require,among other things,disclosure in the notes to the audited financial statements ofthe effects of severe weather events and other natural conditions,subject to certain thresholds,as well as amounts related to carbon offsets and renewableenergy credits or certificates in certain circumstances.The Final Rules would also require disclosure outside of the financial statements of material scope 1and scope 2 greenhouse gas emissions,among other climate-related disclosures.In April 2024,the SEC stayed the effectiveness of the Final Rules pendingcompletion of litigation in the U.S.Court of Appeals for the Eighth Circuit.Prior to the effectiveness of the Final Rules being stayed,the disclosurerequirements of the Final Rules were scheduled to begin phasing in for the Company for fiscal year 2025.On March 27,2025,the SEC voted to end itsdefense of the Final Rules and withdrew its defense of the Final Rules in the pending litigation.The Company continues to monitor the status of the FinalRules.There were no other significant changes in new accounting standards from those disclosed in Viatris 2024 Form 10-K.Refer to Viatris 2024Form 10-K for additional information.4.Acquisitions and Other TransactionsAcquisition of Idorsia ProductsOn March 15,2024,the Company acquired exclusive global development and commercialization rights to two Phase 3 assets from Idorsia,as wellas the potential to add additional innovative assets in the future.Under the terms of the original agreements,the development programs and certainpersonnel for selatogrel and cenerimod were transferred to Viatris from Idorsia in exchange for an upfront payment to Idorsia of$350 million,potentialcontingent milestone payments(including$300 million payable upon the achievement of certain development and regulatory milestones,and$2.1 billionpayable upon the achievement of certain tiered sales milestones),as well as potential contingent tiered sales royalties.Viatris and Idorsia are bothcontractually obligated to contribute to the development costs for both programs.Viatris has worldwide commercialization rights for both selatogrel andcenerimod(which excluded,for cenerimod only,Japan,South Korea and certain countries in the Asia-Pacific region).A joint development committee wasformed to oversee the development of the ongoing Phase 3 programs through regulatory approval.The agreements also provided Viatris a right of firstrefusal and a right of first negotiation for certain other assets in Idorsias pipeline.The transaction expanded our portfolio of innovative assets by addingtwo Phase 3 assets and combines our financial strength and worldwide operational infrastructure with Idorsias proven,highly-productive drugdevelopment team and innovation engine.In accordance with U.S.GAAP,the transaction has been accounted for as a business combination under the acquisition method of accounting.Under the acquisition method of accounting,the assets acquired and liabilities assumed in the transaction were recorded at their respective estimated fairvalues at the acquisition date.During the six months ended June 30,2025 and 2024,the Company incurred acquisition-related costs of approximately$7.1 million and$3.9 million,respectively,which were recorded primarily in SG&A in the condensed consolidated statements of operations.The U.S.GAAP purchase price allocated to the transaction was$695 million,which consisted of$350 million of cash consideration paid andestimated contingent consideration at the date of acquisition valued at approximately$345 million.The fair value of the contingent consideration wasvalued using a Monte Carlo simulation model using Level 3 inputs.The fair value is sensitive to changes in the forecasts of operating metrics,probabilityof success,and discount rates.Refer to Note 11,Financial Instruments and Risk Management for additional information.The allocation of the purchaseprice to the assets acquired and liabilities assumed is shown below.There were no measurement period adjustments.15Table of ContentsVIATRIS INC.AND SUBSIDIARIESNotes to Condensed Consolidated Financial Statements(Unaudited)-Continued(In millions)Current assets$2.1 IPR&D675.0 Goodwill19.5 Total assets acquired$696.6 Current liabilities1.6 Net assets acquired$695.0 The amount allocated to IPR&D represents an estimate of the fair value of purchased in-process technology for research projects that,as of theclosing date of the acquisition,had not reached technological feasibility and had no alternative future use.The fair value of IPR&D of$675 million wasbased on the excess earnings method,which utilizes forecasts of expected cash inflows(including estimates for ongoing costs)and other contributorycharges.A discount rate of 20%was utilized to discount net cash inflows to present values.IPR&D is accounted for as an indefinite-lived intangible assetand will be subject to impairment testing until completion or abandonment of the projects.Upon successful completion and launch of each product,theCompany will make a determination of the estimated useful life of the individual asset.Viatris and Idorsia are both contractually obligated to contribute tothe development costs for both programs,which are expected to be incurred through 2026.There are risks and uncertainties associated with the timely andsuccessful completion of the projects included in IPR&D,including but not limited to the high cost and uncertainty of conducting clinical trials(particularly with respect to new and/or complex or innovative drugs),obtaining approval by relevant regulatory bodies and our partners financialcondition,and no assurances can be given that the underlying assumptions used to estimate the fair value of IPR&D will not change or the timelycompletion of each project to commercial success will occur.The goodwill of$19.5 million arising from the acquisition consisted largely of the value of the employee workforce and the expected value ofproducts,including additional indications,to be developed in the future.All of the goodwill was assigned to the Developed Markets segment.None of thegoodwill recognized in this transaction is expected to be deductible for income tax purposes.The acquisition did not have a material impact on theCompanys results of operations since the acquisition date or on a pro forma basis during the three and six months ended June 30,2024.On February 25,2025,in order to preserve the ongoing continuity of the development programs for selatogrel and cenerimod considering certaincapital structuring steps announced by Idorsia to secure its ongoing operations,Viatris and Idorsia entered into a letter agreement to amend certain terms ofthe original agreements described above.Under the terms of the letter agreement,Viatris received additional territory rights in Japan,South Korea andcertain other countries in the Asia-Pacific region for cenerimod,a$250 million reduction in contingent milestone payments,including$200 million ofdevelopment milestones,and additional personnel to expedite transitioning the development programs to Viatris in exchange for Viatris assuming$100 million of Idorsias obligation to contribute to development costs.In addition,the joint development committee has been replaced with a transitioncommittee to oversee the transition of both development programs to Viatris.Refer to Note 11 Financial Instruments and Risk Management for additionalinformation on the fair value adjustment to the Idorsia Transaction contingent consideration liability recorded during the six months ended June 30,2025 asa result of the February 25,2025 letter agreement.5.DivestituresBy the end of 2024,the Company had substantially completed the previously announced divestitures of its OTC Business,its womens healthcarebusiness primarily related to oral and injectable contraceptives,its API business in India,its rights to two womens healthcare products in certain countries,and commercialization rights in the majority of the Upjohn Distributor Markets.During the three and six months ended June 30,2025,the Company recorded additional pre-tax charges of approximately$43.8 million and$80.7 million,respectively,related to the divestitures.The additional charges were recorded as a component of Other Expense(Income),Net in thecondensed consolidated statements of operations,and were primarily due to an increase in estimated transaction related costs,including the assumption ofadditional contractual obligations,as well as the impact of working capital and other transaction-related adjustments.16Table of ContentsVIATRIS INC.AND SUBSIDIARIESNotes to Condensed Consolidated Financial Statements(Unaudited)-ContinuedIn conjunction with these transactions,Viatris and the respective buyers entered into various agreements to provide a framework for ourrelationship with the respective buyers after the closing of the divestitures,including transition services agreements,manufacturing and supply agreements,and distribution agreements,some of which include various on-going financial obligations.During the three months ended June 30,2025 and 2024,theCompany recognized TSA income related to all divestitures of approximately$12.4 million and$6.0 million,respectively.During the six months endedJune 30,2025 and 2024,the Company recognized TSA income related to all divestitures of approximately$29.8 million and$19.5 million,respectively.TSA income is recorded as a component of Other Expense(Income),Net.6.Share-Based Incentive PlanPrior to the Distribution,Viatris adopted and Pfizer,in the capacity as Viatris sole stockholder at such time,approved the 2020 Incentive Plan(theViatris Inc.2020 Stock Incentive Plan)which became effective as of the Distribution.In connection with the Combination,as of November 16,2020,theCompany assumed the 2003 LTIP(Mylan N.V.Amended and Restated 2003 Long-Term Incentive Plan),which had previously been approved by Mylanshareholders.The 2020 Incentive Plan includes 72,500,000 shares of Viatris common stock authorized for grant pursuant to the 2020 Incentive Plan,which may include dividend payments payable in common stock on unvested shares granted under awards.No shares remain available for issuance underthe 2003 LTIP,however,certain awards remain outstanding under the plan.The Board approved an amendment to the 2020 Incentive Plan,which was approved by Viatris shareholders on December 6,2024,to increase themaximum aggregate number of shares of Viatris common stock available for issuance under the 2020 Incentive Plan by 49,000,000.Under the 2020 Incentive Plan,shares are reserved for issuance to key employees,consultants,independent contractors and non-employeedirectors of the Company through a variety of incentive awards,including:stock options,SARs,restricted stock and units,PSUs,other stock-based awardsand short-term cash awards.Stock option awards are granted with an exercise price equal to the fair market value of the shares underlying the stock optionsat the date of the grant,generally become exercisable over periods ranging from three to four years,and generally expire in ten years.The following table summarizes stock awards(stock options and SARs)activity:Number of SharesUnder Stock AwardsWeighted AverageExercise Price perShareOutstanding at December 31,20243,350,786$35.94 Exercised(12,291)6.51 Forfeited(515,096)37.04 Outstanding at June 30,20252,823,399$35.86 Vested and expected to vest at June 30,20252,821,503$35.88 Exercisable at June 30,20252,810,777$35.98 As of June 30,2025,stock awards outstanding,stock awards vested and expected to vest,and stock awards exercisable each had averageremaining contractual terms of 2.6 years.Also,at June 30,2025,stock awards outstanding,stock awards vested and expected to vest,and stock awardsexercisable each had aggregate intrinsic values of$0.1 million.17Table of ContentsVIATRIS INC.AND SUBSIDIARIESNotes to Condensed Consolidated Financial Statements(Unaudited)-ContinuedA rollforward of the changes in the Companys nonvested Restricted Stock Awards(restricted stock and restricted stock unit awards,includingPSUs)from December 31,2024 to June 30,2025 is presented below:Number of RestrictedStock AwardsWeighted AverageGrant-DateFair Value Per ShareNonvested at December 31,202429,083,934$11.49 Granted19,015,678 9.57 Released(12,653,426)10.91 Forfeited(1,621,873)11.44 Nonvested at June 30,202533,824,313$10.63 As of June 30,2025,the Company had$236.2 million of total unrecognized compensation expense,net of estimated forfeitures,related to all of itsstock-based awards,which we expect to recognize over the remaining weighted average vesting period of 1.7 years.The total intrinsic value of RestrictedStock Awards released and stock options exercised during the six months ended June 30,2025 and 2024 was$118.8 million and$137.9 million,respectively.7.Pensions and Other Postretirement BenefitsDefined Benefit PlansThe Company sponsors various defined benefit pension plans in several countries.Benefits provided generally depend on length of service,paygrade and remuneration levels.Employees in the U.S.,Puerto Rico and certain international locations are also provided retirement benefits through definedcontribution plans.The Company also sponsors other postretirement benefit plans including plans that provide for postretirement supplemental medical coverage.Benefits from these plans are provided to employees and their spouses and dependents who meet various minimum age and service requirements.Inaddition,the Company sponsors other plans that provide for life insurance benefits and postretirement medical coverage for certain officers andmanagement employees.Net Periodic Benefit CostComponents of net periodic benefit cost for the three and six months ended June 30,2025 and 2024 were as follows:Pension and Other Postretirement BenefitsThree Months EndedSix Months EndedJune 30,June 30,(In millions)2025202420252024Service cost$7.4$7.8$14.9$15.7 Interest cost16.3 16.7 32.5 33.3 Expected return on plan assets(16.8)(16.9)(33.6)(33.8)Amortization of prior service costs 0.6 1.1 Recognized net actuarial gains(2.9)(4.2)(5.8)(8.5)Net periodic benefit cost$4.0$4.0$8.0$7.8 The Company is making the minimum mandatory contributions to its defined benefit pension plans in the U.S.and Puerto Rico for the 2025 planyear.The Company expects to make total benefit payments of approximately$112.2 million from pension and other postretirement benefit plans in 2025.The Company anticipates making contributions to pension and other postretirement benefit plans of approximately$68.8 million in 2025.18Table of ContentsVIATRIS INC.AND SUBSIDIARIESNotes to Condensed Consolidated Financial Statements(Unaudited)-Continued8.Balance Sheet ComponentsSelected balance sheet components consist of the following:Cash and restricted cash(In millions)June 30,2025December 31,2024June 30,2024Cash and cash equivalents$566.4$734.8$917.2 Restricted cash,included in prepaid expenses and other current assets1.4 1.3 1.3 Cash,cash equivalents and restricted cash$567.8$736.1$918.5 Inventories(In millions)June 30,2025December 31,2024Raw materials$1,547.4$1,345.9 Work in process531.7 527.3 Finished goods2,185.2 1,980.9 Inventories$4,264.3$3,854.1 Prepaid expenses and other current assets(In millions)June 30,2025December 31,2024Prepaid expenses$179.9$140.9 Available-for-sale fixed income securities39.7 38.0 Fair value of financial instruments142.4 261.6 Equity securities60.1 55.5 Deferred charge for taxes on intercompany profit665.1 526.6 Income tax receivable339.2 300.7 Other current assets259.4 387.2 Prepaid expenses and other current assets$1,685.8$1,710.5 Prepaid expenses consist primarily of prepaid rent,insurance and other individually insignificant items.Property,plant and equipment,net(In millions)June 30,2025December 31,2024Machinery and equipment$3,040.1$2,894.7 Buildings and improvements1,519.9 1,464.3 Construction in progress390.2 397.1 Land and improvements117.0 113.2 Gross property,plant and equipment5,067.2 4,869.3 Accumulated depreciation2,424.6 2,203.2 Property,plant and equipment,net$2,642.6$2,666.1 19Table of ContentsVIATRIS INC.AND SUBSIDIARIESNotes to Condensed Consolidated Financial Statements(Unaudited)-ContinuedOther assets(In millions)June 30,2025December 31,2024CCPS in Biocon Biologics950.0 1,349.8 Operating lease right-of-use assets276.3 253.1 Other long-term assets771.6 754.0 Other assets$1,997.9$2,356.9 Accounts payable(In millions)June 30,2025December 31,2024Trade accounts payable$1,320.0$1,355.3 Other payables462.6 498.4 Accounts payable$1,782.6$1,853.7 Other current liabilities(In millions)June 30,2025December 31,2024Accrued sales allowances$1,046.3$989.4 Payroll and employee benefit liabilities567.8 729.3 Legal and professional accruals,including litigation accruals540.8 472.8 Contingent consideration37.1 59.5 Accrued restructuring44.7 63.4 Accrued interest46.0 49.9 Fair value of financial instruments377.0 125.8 Operating lease liability111.6 87.1 Other898.8 1,147.5 Other current liabilities$3,670.1$3,724.7 Other long-term obligations(In millions)June 30,2025December 31,2024Employee benefit liabilities$487.8$467.9 Contingent consideration330.1 496.6 Tax related items,including contingencies320.6 341.9 Operating lease liability182.0 179.3 Accrued restructuring129.7 128.5 Other385.0 325.0 Other long-term obligations$1,835.2$1,939.2 9.Loss per ShareBasic loss per share is computed by dividing net loss attributable to holders of Viatris Imon stock by the weighted average number ofshares outstanding during the period.Diluted loss per share is computed by dividing net loss attributable to holders of Viatris Imon stock by theweighted average number of shares outstanding during the period increased by the number of additional shares that would have been outstanding related topotentially dilutive securities or instruments,if the impact is dilutive.20Table of ContentsVIATRIS INC.AND SUBSIDIARIESNotes to Condensed Consolidated Financial Statements(Unaudited)-ContinuedBasic and diluted loss per share attributable to Viatris Inc.are calculated as follows:Three Months EndedSix Months EndedJune 30,June 30,(In millions,except per share amounts)2025202420252024Basic loss attributable to Viatris Imon shareholders(numerator):Net loss attributable to Viatris Imon shareholders$(4.6)$(326.4)$(3,046.6)$(212.5)Shares(denominator):Weighted average shares outstanding1,173.0 1,191.1 1,182.7 1,193.1 Basic loss per share attributable to Viatris Inc.shareholders$(0.27)$(2.58)$(0.18)Diluted loss attributable to Viatris Imon shareholders(numerator):Net loss attributable to Viatris Imon shareholders$(4.6)$(326.4)$(3,046.6)$(212.5)Shares(denominator):Weighted average shares outstanding1,173.0 1,191.1 1,182.7 1,193.1 Share-based awards Total dilutive shares outstanding1,173.0 1,191.1 1,182.7 1,193.1 Diluted loss per share attributable to Viatris Inc.shareholders$(0.27)$(2.58)$(0.18)Additional stock awards and Restricted Stock Awards were outstanding during the three and six months ended June 30,2025 and 2024,but werenot included in the computation of diluted loss per share for each respective period because the effect would be anti-dilutive.Excluded shares also includecertain PSUs whose performance conditions had not been fully met.Such excluded shares and anti-dilutive awards represented 27.6 million shares and27.4 million shares for the three and six months ended June 30,2025,respectively,and 23.2 million shares and 22.7 million shares for the three and sixmonths ended June 30,2024,respectively.The Company paid a quarterly dividend of$0.12 per share on the Companys issued and outstanding common stock on March 18,2025 and June16,2025.On August 4,2025,the Companys Board of Directors declared a quarterly cash dividend of$0.12 per share on the Companys issued andoutstanding common stock,which will be payable on September 15,2025 to shareholders of record as of the close of business on August 22,2025.Thedeclaration and payment of future dividends to holders of the Companys common stock will be at the discretion of the Board of Directors,and will dependupon factors,including but not limited to,the Companys financial condition,earnings,capital requirements of its businesses,legal requirements,regulatory constraints,industry practice,and other factors that the Board of Directors deems relevant.On February 28,2022,the Company announced that its Board of Directors had authorized a share repurchase program for the repurchase of up to$1.0 billion of the Companys shares of common stock.The Company subsequently announced that on February 26,2024,its Board of Directorsauthorized a$1.0 billion increase to the Companys previously announced$1.0 billion share repurchase program.As a result,the Companys sharerepurchase program now authorizes the repurchase of up to$2.0 billion of the Companys shares of common stock.Such repurchases may be made fromtime-to-time at the Companys discretion and effected by any means,including but not limited to,open market repurchases,pursuant to plans in accordancewith Rules 10b5-1 or 10b-18 under the Exchange Act,privately negotiated transactions(including accelerated stock repurchase programs)or anycombination of such methods as the Company deems appropriate.The program does not have an expiration date.During the three months ended June 30,2025,the Company repurchased approximately 20.2 million shares of common stock at a cost of approximately$175.0 million.During the six monthsended June 30,2025 and 2024,the Company repurchased approximately 38.9 million shares of common stock at a cost of approximately$350.4 million,and approximately 19.2 million shares of common stock at a cost of approximately$250 million,respectively,under the program.As of June 30,2025,theCompany had repurchased a total of approximately 79.3 million shares of common stock at a cost of approximately$850.4 million under the program.Theshare repurchase program does not obligate the Company to acquire any particular amount of common stock.21Table of ContentsVIATRIS INC.AND SUBSIDIARIESNotes to Condensed Consolidated Financial Statements(Unaudited)-Continued10.Goodwill and Intangible AssetsGoodwillThe changes in the carrying amount of goodwill for the six months ended June 30,2025 are as follows:(In millions)DevelopedMarkets Greater ChinaJANZ Emerging MarketsTotalBalance at December 31,2024:6,752.9 921.5 295.1 1,163.8 9,133.3 Impairment(2,261.0)(300.8)(375.0)(2,936.8)Foreign currency translation527.3 6.3 5.7 12.5 551.8 Balance at June 30,2025:$5,019.2$927.8$801.3$6,748.3 _Balances as of June 30,2025 and December 31,2024 include an accumulated impairment loss of$3.19 billion and$929.0 million,respectively.Balances as of June 30,2025 and December 31,2024 include an accumulated impairment loss of$651.8 million and$351.0 million,respectively.Balances as of June 30,2025 and December 31,2024 include an accumulated impairment loss of$499.0 million and$124.0 million,respectively.The Company reviews goodwill for impairment annually on April 1st or more frequently if events or changes in circumstances indicate that thecarrying value of goodwill may not be recoverable.During the first quarter of 2025,the Company experienced a sharp and sustained decline in its shareprice and significantly increased uncertainty and volatility in the geopolitical and economic environments in which the Company operates.As a result ofthese factors,the Company determined that a triggering event had occurred for each of its reporting units and performed an interim goodwill impairmenttest as of March 31,2025.The Company also performed the annual goodwill impairment test as of April 1,2025.There were no significant changes from the interimgoodwill test performed at March 31,2025 and the results were consistent with the interim goodwill impairment test.Also,no triggering events have beenidentified since the April 1,2025 impairment test date.The Company performed both its interim and annual goodwill impairment tests on a quantitative basis for its five reporting units,North America,Europe,Emerging Markets,JANZ,and Greater China.In estimating each reporting units fair value,the Company performed an extensive valuationanalysis,utilizing a discounted cash flow approach.The determination of the fair value of the reporting units requires the Company to make significantestimates and assumptions that affect the reporting units expected future cash flows.These estimates and assumptions,utilizing Level 3 inputs,primarilyinclude,but are not limited to,the discount rate,terminal growth rates,operating income before depreciation and amortization,capital expendituresforecasts and control premiums.For the March 31,2025 interim goodwill impairment test,when compared to the prior year annual goodwill impairment test completed on April 1,2024,the significantly increased uncertainty and volatility in the geopolitical and economic environments in which the Company operates increased theCompanys business risks,including,but not limited to,the potential for continued or additional drug pricing reduction pressures,general uncertaintyrelated to timing of responses and approvals from the FDA resulting from evolving regulatory priorities and associated changes to the operations of theagency,and the potential for adverse impacts from future tariffs and trade restrictions.The negative impact of any or all of these factors could be material.The significant increase in business risks and uncertainty led to an increase in discount rate assumptions impacting all reporting units as compared to theApril 1,2024 annual goodwill impairment test.As of March 31,2025(prior to the impairment charges noted below),the allocation of the Companys total goodwill was as follows:NorthAmerica$3.09 billion,Europe$3.92 billion,Emerging Markets$1.17 billion,JANZ$0.30 billion and Greater China$0.92 billion.(1)(2)(3)(1)(2)(3)22Table of ContentsVIATRIS INC.AND SUBSIDIARIESNotes to Condensed Consolidated Financial Statements(Unaudited)-ContinuedIn conjunction with its March 31,2025 interim goodwill impairment test,the Company recorded the following impairment charges in the firstquarter of 2025:(In millions)North AmericaEuropeJANZEmerging MarketsTotalImpairment charge$707.0$1,554.0$300.8$375.0$2,936.8 For the North America reporting unit at March 31,2025 and April 1,2025,the Company forecasted cash flows for the next 10 years.During theforecast period,the revenue compound annual growth rate was approximately 3.1%.A terminal year value was calculated with a negative 3.0%revenuegrowth rate applied.The discount rate utilized was 12.5%and the estimated tax rate was 24.8%.For the Europe reporting unit at March 31,2025 and April 1,2025,the Company forecasted cash flows for the next 10 years.During the forecastperiod,the revenue compound annual growth rate was approximately 3.3%.A terminal year value was calculated with a 2.0%revenue growth rate applied.The discount rate utilized was 12.0%and the estimated tax rate was 15.8%.For the Emerging Markets reporting unit at March 31,2025 and April 1,2025,the Company forecasted cash flows for the next 10 years.Duringthe forecast period,the revenue compound annual growth rate was approximately 3.5%.A terminal year value was calculated with a 2.0%revenue growthrate applied.The discount rate utilized was 14.5%and the estimated tax rate was 16.7%.For the JANZ reporting unit at March 31,2025 and April 1,2025,the Company forecasted cash flows for the next 10 years.During the forecastperiod,the revenue compound annual growth rate was approximately negative 0.9%.A terminal year value was calculated with a 1.0%revenue growth rateapplied.The discount rate utilized was 8.5%and the estimated tax rate was 30.2%.After the goodwill impairment charge recorded during the first quarterof 2025,there is no remaining goodwill allocated to the JANZ reporting unit.Following the goodwill impairment charges recorded in these reporting units,since the carrying value of the reporting units is equal to theirestimated fair value as of March 31,2025 and April 1,2025,if market conditions or the projected results were to negatively change,it may be necessary torecord further impairment charges to one or more of these reporting units in future periods.Any such future charges could be material.For the Greater China reporting unit,the estimated fair value exceeded its carrying value by approximately$322.0 million or 5.8%for both theMarch 31,2025 and April 1,2025 goodwill impairment tests.As it relates to the discounted cash flow approach for the Greater China reporting unit atMarch 31,2025 and April 1,2025,the Company forecasted cash flows for the next 10 years.During the forecast period,the revenue compound annualgrowth rate was approximately 1.6%.A terminal year value was calculated with a negative 1.5%revenue growth rate applied.The discount rate utilizedwas 15.0%and the estimated tax rate was 24.7%.If all other assumptions are held constant,a reduction in the terminal value growth rate by 3.5%or anincrease in discount rate by 1.0%would result in an impairment charge for the Greater China reporting unit.In conjunction with its April 1,2024 annual goodwill impairment test,the Company recorded a goodwill impairment charge of$321.0 millionduring the second quarter of 2024 related to its JANZ reporting unit.The impairment charge was primarily the result of a 1.0%increase in the discount rateand a 0.5%reduction in the terminal growth rate assumption for the reporting unit.Due to the inherent uncertainty involved in making these estimates,actual results could differ from those estimates.In addition,changes inunderlying assumptions,especially as they relate to the key assumptions detailed,could have a significant impact on the fair value of the reporting units.23Table of ContentsVIATRIS INC.AND SUBSIDIARIESNotes to Condensed Consolidated Financial Statements(Unaudited)-ContinuedIntangible Assets,NetIntangible assets consist of the following components at June 30,2025 and December 31,2024:(In millions)Weighted AverageLife(Years)Original CostAccumulatedAmortizationNet Book ValueJune 30,2025Product rights,licenses and other 13$34,906.3$19,384.4$15,521.9 In-process research and development801.9 801.9$35,708.2$19,384.4$16,323.8 December 31,2024Product rights,licenses and other 13$33,348.5$17,091.8$16,256.7 In-process research and development814.2 814.2$34,162.7$17,091.8$17,070.9 _Represents amortizable intangible assets.Other intangible assets consist principally of customer lists and contractual rights.On July 18,2025,the Company announced that a randomized,double-masked,vehicle-controlled,Phase 3 study to evaluate the efficacy andsafety of pimecrolimus 0.3%(MR-139)ophthalmic ointment in subjects with blepharitis did not meet its primary endpoint of complete resolution of debrisafter six weeks of twice daily dosing.The Company is evaluating the appropriate next steps for the Phase 3 program,which may include revising theplanned additional Phase 3 study.The Company has an IPR&D asset of approximately$74 million related to this program.Amortization expense,intangible asset disposal&impairment charges and IPR&D intangible asset impairment charges(which are included as acomponent of amortization expense)are classified primarily within Cost of Sales in the condensed consolidated statements of operations and were asfollows for the three and six months ended June 30,2025 and 2024:Three Months EndedSix Months EndedJune 30,June 30,(In millions)2025202420252024Intangible asset amortization expense$583.3$597.2$1,154.5$1,198.2 IPR&D intangible asset impairment charges2.2 102.0 2.2 102.0 Total intangible asset amortization expense(including disposal&impairmentcharges)$585.5$699.2$1,156.7$1,300.2 Intangible asset amortization expense over the remainder of 2025 and for the years ending December 31,2026 through 2029 is estimated to be asfollows:(In millions)2025$1,189 20262,324 20272,103 20281,840 20291,235(1)(1)(1)24Table of ContentsVIATRIS INC.AND SUBSIDIARIESNotes to Condensed Consolidated Financial Statements(Unaudited)-Continued11.Financial Instruments and Risk ManagementThe Company is exposed to certain financial risks relating to its ongoing business operations.The primary financial risks that are managed byusing derivative instruments are foreign currency risk and interest rate risk.Foreign Currency Risk ManagementIn order to manage certain foreign currency risks,the Company enters into foreign exchange forward contracts to mitigate risk associated withchanges in spot exchange rates of mainly non-functional currency denominated assets or liabilities.The foreign exchange forward contracts are measured atfair value and reported as current assets or current liabilities in the condensed consolidated balance sheets.Any gains or losses on the foreign exchangeforward contracts are recognized in earnings in the period incurred in the condensed consolidated statements of operations.The Company has also entered into forward contracts to hedge forecasted foreign currency denominated sales from certain internationalsubsidiaries and a portion of forecasted intercompany inventory sales denominated in Euro,Japanese Yen,and Chinese Renminbi for up to eighteenmonths.These contracts are designated as cash flow hedges to manage foreign currency transaction risk and are measured at fair value and reported ascurrent assets or current liabilities in the condensed consolidated balance sheets.Any changes in the fair value of designated cash flow hedges are deferredin AOCE and are reclassified into earnings when the hedged item impacts earnings.Net Investment HedgesThe Company may hedge the foreign currency risk associated with certain net investment positions in foreign subsidiaries by either borrowingdirectly in foreign currencies and designating all or a portion of the foreign currency debt as a hedge of the applicable net investment position or enteringinto foreign currency swaps that are designated as hedges of net investments.The Company has designated certain Euro and Yen borrowings as a hedge of its investment in certain Euro-functional and Yen-functionalcurrency subsidiaries in order to manage foreign currency translation risk.Borrowings designated as net investment hedges are marked-to-market using thecurrent spot exchange rate as of the end of the period,with gains and losses included in the foreign currency translation component of AOCE until the saleor substantial liquidation of the underlying net investments.In addition,the Company manages the related foreign exchange risk of the Euro and Yenborrowings not designated as net investment hedges through certain Euro and Yen denominated financial assets and forward currency swaps.The following table summarizes the principal amounts of the Companys outstanding Euro and Yen borrowings and the notional amounts of theEuro and Yen borrowings designated as net investment hedges:Notional Amount Designated as a NetInvestment Hedge(In millions)Principal AmountJune 30,2025December 31,20241.362%Euro Senior Notes due 2027850.0 850.0 850.0 3.125%Euro Senior Notes due 2028750.0 750.0 750.0 1.908%Euro Senior Notes due 20321,250.0 1,250.0 1,250.0 Euro Total2,850.0 2,850.0 2,850.0 YenYEN Term Loan40,000.0 40,000.0 40,000.0 Yen Total40,000.0 40,000.0 40,000.0 _At June 30,2025,the principal amount of the Companys outstanding Yen borrowings and the notional amount of the Yen borrowings designatedas net investment hedges was$277.7 million.25Table of ContentsVIATRIS INC.AND SUBSIDIARIESNotes to Condensed Consolidated Financial Statements(Unaudited)-ContinuedDuring the third quarter of 2023,the Company executed fixed-rate cross-currency interest rate swaps with notional amounts totaling Japanese Yen14.6 billion with settlement dates through 2026.During the second quarter of 2024,the Company executed fixed-rate cross-currency interest rate swapswith notional amounts totaling 500 million with settlement dates through 2026.The transactions hedge a portion of the Companys net investment incertain Yen-and Euro-functional currency subsidiaries.All changes in the fair value of these derivative instruments,which are designated as net investmenthedges,are marked-to-market using the current spot exchange rate as of the end of the period.The portion of these changes related to the excludedcomponent will be amortized in interest expense over the life of the derivative while the remainder will be recorded in AOCE until the sale or substantialliquidation of the underlying net investments.The semiannual net interest payment received related to the fixed-rate component of the cross-currencyinterest rate swaps will be reflected in operating cash flows.Subsequent to June 30,2025,the Company terminated its Yen fixed-rate cross-currencyinterest rate swaps in exchange for$3.4 million in cash proceeds,net of fees.During the fourth quarter of 2023,the Company executed foreign currency forward contracts with notional amounts totaling 500 million.Duringthe second quarter of 2024,the Company executed additional foreign currency forward contracts with notional amounts totaling 600 million.Thetransactions hedged a portion of the Companys net investment in certain Euro functional currency subsidiaries.The contracts were designated as a netinvestment hedge and matured in July 2024.In April 2025,the Company executed foreign currency forward contracts with notional amounts totaling Chinese Renminbi 1.42 billion(approximately$200 million)maturing in December 2026 and Chinese Renminbi 695 million(approximately$100 million)maturing in December 2027.The transactions hedge a portion of the Companys net investment in certain Chinese Renminbi functional currency subsidiaries.The contracts weredesignated as net investment hedges.Interest Rate Risk ManagementThe Company enters into interest rate swaps from time to time in order to manage interest rate risk associated with the Companys fixed-rate andfloating-rate debt.Interest rate swaps that meet specific accounting criteria are accounted for as fair value or cash flow hedges.All derivative instrumentsused to manage interest rate risk are measured at fair value and reported as current assets or current liabilities in the condensed consolidated balance sheets.For fair value hedges,the changes in the fair value of both the hedging instrument and the underlying debt obligations are included in interest expense.Forcash flow hedges,the change in fair value of the hedging instrument is deferred through AOCE and is reclassified into earnings when the hedged itemimpacts earnings.Cash Flow Hedging RelationshipsThe Companys interest rate swaps designated as cash flow hedges fix the interest rate on a portion of the Companys variable-rate debt or hedgepart of the Companys interest rate exposure associated with the variability in the future cash flows attributable to changes in interest rates.Any changes infair value are included in earnings or deferred through AOCE,depending on the nature and effectiveness of the offset.Any ineffectiveness in a cash flowhedging relationship is recognized immediately in earnings in the condensed consolidated statements of operations.Credit Risk ManagementThe Company regularly reviews the creditworthiness of its financial counterparties and does not expect to incur a significant loss from the failureof any counterparties to perform under any agreements.The Company is not subject to any obligations to post collateral under derivative instrumentcontracts.Certain derivative instrument contracts entered into by the Company are governed by master agreements,which contain credit-risk-relatedcontingent features that would allow the counterparties to terminate the contracts early and request immediate payment should the Company trigger anevent of default on other specified borrowings.The Company records all derivative instruments on a gross basis in the condensed consolidated balancesheets.Accordingly,there are no offsetting amounts that net assets against liabilities.26Table of ContentsVIATRIS INC.AND SUBSIDIARIESNotes to Condensed Consolidated Financial Statements(Unaudited)-ContinuedThe following table summarizes the classification and fair values of derivative instruments in our condensed consolidated balance sheets:Asset DerivativesLiability Derivatives(In millions)Balance Sheet LocationJune 30,2025Fair ValueDecember 31,2024 Fair ValueBalance Sheet LocationJune 30,2025Fair ValueDecember 31,2024 Fair ValueDerivatives designated as hedges:Cross-currency interest rate swapsPrepaid expenses&other current assets$0.1$24.1 Other currentliabilities$52.7$Foreign currency forward contractsPrepaid expenses&other current assets3.9 39.2 Other currentliabilities23.3 Foreign currency forward contracts Other long-termobligations5.9 Total derivatives designated as hedges4.0 63.3 81.9 Derivatives not designated as hedges:Foreign currency forward contractsPrepaid expenses&other current assets138.4 198.3 Other currentliabilities301.0 125.8 Total derivatives not designated as hedges138.4 198.3 301.0 125.8 Total derivatives$142.4$261.6$382.9$125.8 27Table of ContentsVIATRIS INC.AND SUBSIDIARIESNotes to Condensed Consolidated Financial Statements(Unaudited)-ContinuedThe following table summarizes information about the gains/(losses)incurred to hedge or offset operational foreign exchange or interest rate risk:Amount of Gains/(Losses)Recognized in EarningsAmount of Gains/(Losses)Recognized in AOCE(Netof Tax)on DerivativesAmount of Gains/(Losses)Reclassified from AOCEinto EarningsThree months ended June 30,(In millions)Location of Gain/(Loss)202520242025202420252024Derivative Financial Instruments in Cash FlowHedging Relationships:Foreign currency forward contractsNet sales$(21.6)$12.9$0.7$10.0 Interest rate swapsInterest expense (1.0)(1.3)(1.2)(1.6)Derivative Financial Instruments in Net InvestmentHedging Relationships:Cross-currency interest rate swapsInterest expense3.4 2.6(40.3)5.1 Foreign currency forward contractsOther expense(income),net (4.6)3.3 1.1 Non-derivative Financial Instruments in NetInvestment Hedging Relationships:Foreign currency borrowings (233.0)45.1 Derivative Financial Instruments Not Designated asHedging Instruments:Foreign currency option and forward contractsOther income,net(125.3)68.9 Total$(121.9)$71.5$(300.5)$65.1$0.6$8.4 Amount of Gains/(Losses)Recognized in EarningsAmount of Gains/(Losses)Recognized in AOCE(Netof Tax)on DerivativesAmount of Gains/(Losses)Reclassified from AOCEinto EarningsSix months ended June 30,(In millions)Location of Gain/(Loss)202520242025202420252024Derivative Financial Instruments in Cash FlowHedging Relationships:Foreign currency forward contractsNet sales$(34.8)$37.7$10.6$16.6 Interest rate swapsInterest expense (1.9)(2.5)(2.4)(3.2)Derivative Financial Instruments in Net InvestmentHedging Relationships:Cross-currency interest rate swapsInterest expense6.8 3.8(60.1)10.0 Foreign currency forward contractsOther expense(income),net (4.6)14.0 1.1 Non-derivative Financial Instruments in NetInvestment Hedging Relationships:Foreign currency borrowings (349.4)162.1 Derivative Financial Instruments Not Designated asHedging Instruments:Foreign currency option and forward contractsOther expense(income),net(235.2)46.1 Total$(228.4)$49.9$(450.8)$221.3$9.3$13.4 _At June 30,2025,the Company expects that approximately$32.0 million of pre-tax net losses on cash flow hedges will be reclassified fromAOCE into earnings during the next twelve months.Represents the location of the gain/(loss)recognized in earnings on derivatives.Represents the location of the gain/(loss)reclassified from AOCE into earnings.(1)(3)(3)(2)(3)(2)(1)(3)(3)(2)(3)(2)(1)(2)(3)28Table of ContentsVIATRIS INC.AND SUBSIDIARIESNotes to Condensed Consolidated Financial Statements(Unaudited)-ContinuedFair Value MeasurementFair value is based on the price that would be received from the sale of an identical asset or paid to transfer an identical liability in an orderlytransaction between market participants at the measurement date.In order to increase consistency and comparability in fair value measurements,a fairvalue hierarchy has been established that prioritizes observable and unobservable inputs used to measure fair value into three broad levels,which aredescribed below:Level 1:Quoted prices(unadjusted)in active markets that are accessible at the measurement date for identical assets or liabilities.The fairvalue hierarchy gives the highest priority to Level 1 inputs.Level 2:Observable market-based inputs other than quoted prices in active markets for identical assets or liabilities.Level 3:Unobservable inputs are used when little or no market data is available.The fair value hierarchy gives the lowest priority to Level 3inputs.In determining fair value,the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use ofunobservable inputs to the extent possible,as well as considers counterparty credit risk in its assessment of fair value.Financial assets and liabilities carried at fair value are classified in the tables below in one of the three categories described above:June 30,2025December 31,2024(In millions)Level 1Level 2Level 3Level 1Level 2Level 3Recurring fair value measurementsFinancial AssetsCash equivalents:Money market funds$223.1$387.7$Total cash equivalents223.1 387.7 Equity securities:Exchange traded funds58.3 54.8 Marketable securities1.8 0.7 Total equity securities60.1 55.5 CCPS in Biocon Biologics 950.0 1,349.8 Available-for-sale fixed income investments:Corporate bonds 13.7 12.9 U.S.Treasuries 19.3 17.2 Agency mortgage-backed securities 2.2 3.2 Asset backed securities 4.2 4.4 Other 0.3 0.3 Total available-for-sale fixed income investments 39.7 38.0 Foreign exchange derivative assets 142.3 237.5 Interest rate swap derivative assets 0.1 24.1 Total assets at recurring fair value measurement$283.2$182.1$950.0$443.2$299.6$1,349.8 Financial LiabilitiesForeign exchange derivative liabilities$330.2$125.8$Interest rate swap derivative liabilities 52.7 Contingent consideration 367.2 556.1 Total liabilities at recurring fair value measurement$382.9$367.2$125.8$556.1 29Table of ContentsVIATRIS INC.AND SUBSIDIARIESNotes to Condensed Consolidated Financial Statements(Unaudited)-ContinuedFor financial assets and liabilities that utilize Level 2 inputs,the Company utilizes both direct and indirect observable price quotes,includinginterest rate yield curves,foreign exchange forward prices and bank price quotes.Below is a summary of valuation techniques for the Companys financialassets and liabilities:Cash equivalents valued at observable net asset value prices.Equity securities,exchange traded funds valued at the active quoted market prices from broker or dealer quotations or transparent pricingsources at the reporting date.Unrealized gains and losses attributable to changes in fair value are included in Other Expense(Income),Net inthe condensed consolidated statements of operations.Equity securities,marketable securities valued using quoted stock prices from public exchanges at the reporting date.Unrealized gains andlosses attributable to changes in fair value are included in Other Expense(Income),Net in the condensed consolidated statements ofoperations.CCPS in Biocon Biologics The Company elected the fair value option for the CCPS under ASC 825.Through March 31,2025,the CCPSwere valued using a Monte Carlo simulation model using Level 3 inputs.The fair value of the CCPS is sensitive to changes in the forecasts ofoperating metrics,changes in volatility and discount rates,and share dilution.During the second quarter of 2025,there was an observablethird-party transaction that indicated the fair value of the CCPS was lower than the amount calculated utilizing the Monte Carlo simulationmodel.Accordingly,the Company recognized a reduction in the fair value of$284.0 million during the second quarter of 2025 based uponthis third-party transaction.The fair value is reassessed quarterly and any change in the fair value estimate is recorded in Other Expense(Income),Net in the condensed consolidated statements of operations for that period.During the three months ended June 30,2025 and 2024,the Company recorded a loss(gain)of$284.0 million and$(282.4)million,respectively,and during the six months ended June 30,2025 and2024,the Company recorded a loss(gain)of$399.8 million and$(329.3)million,respectively,as a result of remeasuring the CCPS in BioconBiologics to fair value.The Companys CCPS in Biocon Biologics are classified as equity securities and are included in Other Assets in thecondensed consolidated balance sheets.Available-for-sale fixed income investments valued at the quoted market prices from broker or dealer quotations or transparent pricingsources at the reporting date.Unrealized gains and losses attributable to changes in fair value,net of income taxes,are included inaccumulated other comprehensive loss as a component of shareholders equity.Foreign exchange derivative assets and liabilities valued using quoted forward foreign exchange prices and spot rates at the reporting date.Counterparties to these contracts are highly rated financial institutions.Contingent ConsiderationAs of June 30,2025 and December 31,2024,the Company had a contingent consideration liability of$288.0 million and$378.0 million,respectively,related to the Idorsia Transaction.During the six months ended June 30,2025,the Company recorded a fair value adjustment gain related tothe Idorsia Transaction contingent consideration liability,primarily as a result of the February 25,2025 letter agreement entered into that amended certainterms of the original development agreement for selatogrel and cenerimod.Refer to Note 4 Acquisitions and Other Transactions for additional information.As of June 30,2025 and December 31,2024,the Company had a contingent consideration liability of$77.5 million and$176.3 million,respectively,related to the Respiratory Delivery Platform.The measurement of these contingent consideration liabilities is calculated using unobservableLevel 3 inputs based on the Companys own assumptions primarily related to the probability and timing of future events,including the timing of additionalpotential competition,and payments which are discounted using a market rate of return.At June 30,2025,discount rates ranging from 8.5%to 18.0%,andat December 31,2024,discount rates ranging from 9.0%and 19.0%were utilized in the valuations.Significant changes in unobservable inputs could resultin material changes to the contingent consideration liabilities.30Table of ContentsVIATRIS INC.AND SUBSIDIARIESNotes to Condensed Consolidated Financial Statements(Unaudited)-ContinuedA rollforward of the activity in the Companys fair value of contingent consideration from December 31,2024 to June 30,2025 is as follows:(In millions)Current PortionLong-TermPortion Total ContingentConsiderationBalance at December 31,2024$59.5$496.6$556.1 Payments(19.9)(19.9)Reclassifications(2.5)2.5 Accretion 2.4 2.4 Fair value gain (171.4)(171.4)Balance at June 30,2025$37.1$330.1$367.2 _Included in other current liabilities in the condensed consolidated balance sheets.Included in other long-term obligations in the condensed consolidated balance sheets.Included in litigation settlements and other contingencies,net in the condensed consolidated statements of operations.Although the Company has not elected the fair value option for financial assets and liabilities other than the CCPS,any future transacted financialasset or liability will be evaluated for the fair value election.12.DebtFor additional information,see Note 10 Debt in Viatris 2024 Form 10-K.Receivables FacilityThe Company has a Receivables Facility for up to an aggregate amount of$600 million which expires in April 2028.Under the terms of theReceivables Facility,certain of our accounts receivable secure the amounts borrowed and cannot be used to pay our other debts or liabilities.The amountthat we may borrow at a given point in time is determined based on the amount of qualifying accounts receivable that are present at such point in time.Amounts outstanding under the Receivables Facility are included as a component of short-term borrowings,while the accounts receivable securing theseobligations remain as a component of accounts receivable,net,in our condensed consolidated balance sheets.(1)(2)(3)(1)(2)(3)31Table of ContentsVIATRIS INC.AND SUBSIDIARIESNotes to Condensed Consolidated Financial Statements(Unaudited)-ContinuedLong-Term DebtA summary of long-term debt is as follows:($in millions)Interest Rate asof June 30,2025June 30,2025December 31,2024Current portion of long-term debt:2026 Senior Notes 3.950%$1,673.5$Other0.8 0.6 Deferred financing fees(1.2)Current portion of long-term debt$1,673.1$0.6 Non-current portion of long-term debt:2026 Senior Notes 3.950%$1,672.8 2027 Euro Senior Notes 1.362%1,019.5 899.4 2027 Senior Notes 2.300v1.4 764.2 2028 Euro Senior Notes 3.1251.1 773.7 2028 Senior Notes 4.550t9.4 749.3 2030 Senior Notes 2.700%1,492.9 1,497.0 2032 Euro Senior Notes 1.908%1,560.7 1,376.2 2040 Senior Notes 3.850%1,633.6 1,637.1 2043 Senior Notes 5.400I7.6 497.5 2046 Senior Notes5.2509.9 999.9 2048 Senior Notes5.200t7.9 747.9 2050 Senior Notes 4.000%2,189.2 2,191.6 YEN Term Loan FacilityVariable277.7 254.4 Other2.2 2.2 Deferred financing fees(21.5)(24.3)Long-term debt$12,791.6$14,038.9 _Instrument was issued by Mylan Inc.Instrument was originally issued by Mylan N.V.;now held by Utah Acquisition Sub Inc.Instrument was issued by Viatris Inc.Instrument was issued by Upjohn Finance B.V.Fair ValueAt June 30,2025 and December 31,2024,the aggregate fair value of the Companys outstanding notes was approximately$11.81 billion and$11.53 billion,respectively.The fair values of the outstanding notes were valued at quoted market prices from broker or dealer quotations and wereclassified as Level 2 in the fair value hierarchy.*32Table of ContentsVIATRIS INC.AND SUBSIDIARIESNotes to Condensed Consolidated Financial Statements(Unaudited)-ContinuedMandatory minimum repayments remaining on the notional amount of outstanding long-term debt at June 30,2025 were as follows for each of theperiods ending December 31:(In millions)Total2025$20261,953 20271,752 20281,634 2029 Thereafter8,673 Total$14,012 13.Comprehensive LossAccumulated other comprehensive loss,as reflected in the condensed consolidated balance sheets,is comprised of the following:(In millions)June 30,2025December 31,2024Accumulated other comprehensive loss:Net unrealized loss on available-for-sale fixed income securities,net of tax$(0.6)$(1.2)Net unrecognized gain and prior service cost related to defined benefit plans,net of tax253.8 254.2 Net unrecognized loss on derivatives in cash flow hedging relationships,net of tax(12.8)32.3 Net unrecognized gain on derivatives in net investment hedging relationships,net of tax80.2 492.6 Foreign currency translation adjustment(2,985.0)(3,990.8)$(2,664.4)$(3,212.9)Components of accumulated other comprehensive loss,before tax,consist of the following,for the three and six months ended June 30,2025 and2024:33Table of ContentsVIATRIS INC.AND SUBSIDIARIESNotes to Condensed Consolidated Financial Statements(Unaudited)-ContinuedThree Months Ended June 30,2025Gains and Losses on Derivatives in CashFlow Hedging RelationshipsGains andLosses on NetInvestmentHedgesGains andLosses onAvailable-for-Sale FixedIncomeSecuritiesDefinedPensionPlan ItemsForeignCurrencyTranslationAdjustmentTotals(In millions)ForeignCurrencyForwardContractsInterestRateSwapsTotalBalance at March 31,2025,net of tax$9.0$359.1$(0.8)$253.8$(3,492.0)$(2,870.9)Other comprehensive(loss)earningsbefore reclassifications,before tax(29.5)(355.2)0.2 3.4 507.0 125.9 Amounts reclassified from accumulatedother comprehensive(loss)earnings,before tax:Gain on foreign exchange forwardcontracts classified as cash flowhedges,included in net sales(0.7)(0.7)(0.7)Loss on interest rate swaps classified ascash flow hedges,included in interestexpense1.2 1.2 1.2 Amortization of actuarial gain includedin SG&A(2.9)(2.9)Net other comprehensive(loss)earnings,before tax(29.0)(355.2)0.2 0.5 507.0 123.5 Income tax(benefit)provision(7.2)(76.3)0.5 (83.0)Balance at June 30,2025,net of tax$(12.8)$80.2$(0.6)$253.8$(2,985.0)$(2,664.4)34Table of ContentsVIATRIS INC.AND SUBSIDIARIESNotes to Condensed Consolidated Financial Statements(Unaudited)-ContinuedSix Months Ended June 30,2025Gains and Losses on Derivatives in CashFlow Hedging RelationshipsGains andLosses on NetInvestmentHedgesGains andLosses onAvailable-for-Sale FixedIncomeSecuritiesDefinedPensionPlan ItemsForeignCurrencyTranslationAdjustmentTotals(In millions)ForeignCurrencyForwardContractsInterestRateSwapsTotalBalance at December 31,2024,net of tax$32.3$492.6$(1.2)$254.2$(3,990.8)$(3,212.9)Other comprehensive(loss)earningsbefore reclassifications,before tax(48.3)(528.9)0.8 6.1 1,005.8 435.5 Amounts reclassified from accumulatedother comprehensive(loss)earnings,before tax:Gain on foreign exchange forwardcontracts classified as cash flowhedges,included in net sales(10.6)(10.6)(10.6)Loss on interest rate swaps classified ascash flow hedges,included in interestexpense2.4 2.4 2.4 Amortization of actuarial gain includedin SG&A(5.8)(5.8)Net other comprehensive(loss)earnings,before tax(56.5)(528.9)0.8 0.3 1,005.8 421.5 Income tax(benefit)provision(11.4)(116.5)0.2 0.7 (127.0)Balance at June 30,2025,net of tax$(12.8)$80.2$(0.6)$253.8$(2,985.0)$(2,664.4)35Table of ContentsVIATRIS INC.AND SUBSIDIARIESNotes to Condensed Consolidated Financial Statements(Unaudited)-ContinuedThree Months Ended June 30,2024Gains and Losses on Derivatives in CashFlow Hedging RelationshipsGains andLosses on NetInvestmentHedgesGains andLosses onAvailable-for-Sale FixedIncomeSecuritiesDefinedPensionPlan ItemsForeignCurrencyTranslationAdjustmentTotals(In millions)ForeignCurrencyForwardContractsInterestRateSwapsTotalBalance at March 31,2024,net of tax$13.6$369.6$(1.4)$266.4$(3,589.2)$(2,941.0)Other comprehensive earnings(loss)before reclassifications,before tax17.1 68.4 (2.0)(89.7)(6.2)Amounts reclassified from accumulatedother comprehensive earnings(loss),before tax:Gain on foreign exchange forwardcontracts classified as cash flowhedges,included in net sales(10.0)(10.0)(10.0)Loss on interest rate swaps classifiedas cash flow hedges,included ininterest expense1.6 1.6 1.6 Amortization of prior service costsincluded in SG&A0.6 0.6 Amortization of actuarial gainincluded in SG&A(4.2)(4.2)Net other comprehensive earnings(loss),before tax8.7 68.4 (5.6)(89.7)(18.2)Income tax provision(benefit)2.1 14.8 (0.9)16.0 Balance at June 30,2024,net of tax$20.2$423.2$(1.4)$261.7$(3,678.9)$(2,975.2)36Table of ContentsVIATRIS INC.AND SUBSIDIARIESNotes to Condensed Consolidated Financial Statements(Unaudited)-ContinuedSix Months Ended June 30,2024Gains and Losses on Derivatives in CashFlow Hedging RelationshipsGains andLosses on NetInvestmentHedgesGains andLosses onAvailable-for-Sale FixedIncomeSecuritiesDefinedPensionPlan ItemsForeignCurrencyTranslationAdjustmentTotals(In millions)ForeignCurrencyForwardContractsInterestRateSwapsTotalBalance at December 31,2023,net of tax$(8.0)$237.1$(1.2)$271.4$(3,246.7)$(2,747.4)Other comprehensive earnings(loss)before reclassifications,before tax50.8 237.5(0.3)(4.4)(432.2)(148.6)Amounts reclassified from accumulatedother comprehensive(loss)earnings,before tax:Gain on foreign exchange forwardcontracts classified as cash flowhedges,included in net sales(16.6)(16.6)(16.6)Loss on interest rate swaps classified ascash flow hedges,included in interestexpense3.2 3.2 3.2 Amortization of prior service costsincluded in SG&A1.1 1.1 Amortization of actuarial gain includedin SG&A(8.5)(8.5)Net other comprehensive earnings(loss),before tax37.4 237.5(0.3)(11.8)(432.2)(169.4)Income tax provision(benefit)9.2 51.4(0.1)(2.1)58.4 Balance at June 30,2024,net of tax$20.2$423.2$(1.4)$261.7$(3,678.9)$(2,975.2)14.Segment InformationViatris has four reportable segments:Developed Markets,Greater China,JANZ,and Emerging Markets.The Company reports segmentinformation on the basis of markets and geography,which reflects its focus on bringing its large and diversified portfolio of branded and generic products,including complex products,to people in markets everywhere.Our Developed Markets segment comprises our operations primarily in North America andEurope.Our Greater China segment includes our operations in mainland China,Taiwan and Hong Kong.Our JANZ segment consists of our operations inJapan,Australia and New Zealand.Our Emerging Markets segment encompasses our presence in more than 125 countries with developing markets andemerging economies including in Asia,Africa,Eastern Europe,Latin America and the Middle East as well as the Companys ARV franchise.The Companys chief operating decision maker(“CODM”)is the Chief Executive Officer,who evaluates the performance of its segments andallocates resources based on total revenues and our measure of segment profit or loss,segment profitability.These financial metrics are used to reviewoperating trends,perform comparisons between periods,and monitor budget and forecast-to-actual variances on a regular basis.Net sales of our businesssegments exclude intersegment sales as these activities are not regularly reviewed by the CODM and are eliminated in consolidation.Certain costs and gains are not included in the measurement of segment profitability,or in segment cost of sales,and segment SG&A,asmanagement excludes these costs in assessing segment financial performance.Such costs and gains include:Intangible asset amortization expense;Asset impairments(including of goodwill,intangible assets(including IPR&D),and long-lived assets);37Table of ContentsVIATRIS INC.AND SUBSIDIARIESNotes to Condensed Consolidated Financial Statements(Unaudited)-ContinuedR&D and Acquired IPR&D expense;Net charges or net gains for litigation settlements and other contingencies;Certain costs related to transactions and events such as:(i)purchase accounting adjustments,where we incur expenses associated with theamortization of fair value adjustments to inventory and property,plant and equipment;(ii)share-based compensation expense;(iii)acquisition-related costs,where we incur costs for executing the transaction,integrating the acquired operations and restructuring the combined company;and(iv)other significant items,which are substantive and/or unusual,and in some cases recurring,items(such as restructuring,including costsassociated with facilities to be closed or divested,employee separation costs,impairment charges,accelerated depreciation,incrementalmanufacturing variances,equipment relocation costs,decommissioning and other restructuring related costs,and certain remediation costs)thatare evaluated on an individual basis by management and that either as a result of their nature or size,would not be expected to occur as part of ournormal business on a regular basis.Such special items can include,but are not limited to,non-acquisition-related restructuring costs,as well ascosts incurred for asset impairments and costs,as well as gains and losses,related to disposals of assets or businesses,including those related todivestitures,and,as applicable,any associated transition activities;Corporate and other unallocated costs associated with global functions(such as IT,facilities,legal,finance,human resources,insurance,public affairs,compliance,and procurement),patient advocacy activities and certain compensation and other corporate costs(such as certainexpenses associated with our manufacturing,including manufacturing variances associated with production)and operations that are not directlyassessed to an operating segment as business unit(segment)management does not manage these costs;Other Expense(Income),Net(including interest and dividend income,gains and losses from investments,business divestitures,andforeign exchange);andInterest expense.The Company does not report depreciation expense,total assets and capital expenditures by segment,as such information is not used by theCODM.The accounting policies of the segments are the same as those described in Note 2 Summary of Significant Accounting Policies included in the2024 Form 10-K.38Table of ContentsVIATRIS INC.AND SUBSIDIARIESNotes to Condensed Consolidated Financial Statements(Unaudited)-ContinuedPresented in the table below is segment information for the periods identified and a reconciliation of segment information to total consolidatedinformation.Three Months Ended June 30,2025(In millions)DevelopedMarketsGreater ChinaJANZEmergingMarketsTotal ReportableSegmentsNet Sales$2,119.3$588.9$305.7$555.1$3,569.0 Other revenue10.3 1.0 1.8 13.1 Total revenue$2,129.6$588.9$306.7$556.9$3,582.1 Less:Cost of sales1,004.6 62.5 181.7 240.4 1,489.2 Selling,general and administration249.5 124.6 41.3 78.4 493.8 Segment profitability$875.5$401.8$83.7$238.1$1,599.1 Reconciliation of segment profit:Intangible asset amortization expense(583.3)Intangible asset(including IPR&D)disposal&impairment charges(2.2)Research and development(218.8)Acquired IPR&D Litigation settlements&other contingencies,net47.6 Transaction related and other special items(212.8)Corporate and other unallocated(396.6)Earnings from operations$233.0 Six Months Ended June 30,2025(In millions)DevelopedMarketsGreater ChinaJANZEmergingMarketsTotal ReportableSegmentsNet sales$4,011.0$1,144.4$581.8$1,075.0$6,812.2 Other revenues17.2 2.0 5.0 24.2 Total revenues$4,028.2$1,144.4$583.8$1,080.0$6,836.4 Less:Cost of sales1,930.8 123.3 358.2 453.2 2,865.5 Selling,general and administration483.8 234.6 79.7 152.7 950.8 Segment profit$1,613.6$786.5$145.9$474.1$3,020.1 Reconciliation of segment profit:Intangible asset amortization expense(1,154.5)Intangible asset(including IPR&D)disposal&impairment charges(2.2)Impairment of goodwill(2,936.8)Research and development(440.8)Acquired IPR&D(10.0)Litigation settlements and other contingencies,net121.1 Transaction related and other special items(469.3)Corporate and other unallocated(776.8)Loss from operations$(2,649.2)39Table of ContentsVIATRIS INC.AND SUBSIDIARIESNotes to Condensed Consolidated Financial Statements(Unaudited)-ContinuedThree Months Ended June 30,2024(In millions)DevelopedMarketsGreater ChinaJANZEmergingMarketsTotal ReportableSegmentsNet Sales$2,319.2$539.0$349.6$578.1$3,785.9 Other revenue5.9 0.4 0.2 4.2 10.7 Total revenue$2,325.1$539.4$349.8$582.3$3,796.6 Less:Cost of sales1,025.1 59.2 207.3 271.6 1,563.2 Selling,general and administration292.3 130.8 41.2 78.0 542.3 Segment profitability$1,007.7$349.4$101.3$232.7$1,691.1 Reconciliation of segment profit:Intangible asset amortization expense(597.2)Intangible asset(including IPR&D)disposal&impairment charges(102.0)Impairment of goodwill(321.0)Research and development(204.1)Acquired IPR&D7.8 Litigation settlements&other contingencies,net(131.0)Transaction related and other special items(196.4)Corporate and other unallocated(387.1)Loss from operations$(239.9)Six Months Ended June 30,2024(In millions)DevelopedMarketsGreater ChinaJANZEmergingMarketsTotal ReportableSegmentsNet sales$4,484.6$1,082.9$667.4$1,204.5$7,439.4 Other revenues13.1 0.4 0.5 6.6 20.6 Total revenues$4,497.7$1,083.3$667.9$1,211.1$7,460.0 Less:Cost of sales2,001.5 120.4 396.7 536.9 3,055.5 Selling,general and administration575.2 247.2 82.6 162.0 1,067.0 Segment profit$1,921.0$715.7$188.6$512.2$3,337.5 Reconciliation of segment profit:Intangible asset amortization expense(1,198.2)Intangible asset(including IPR&D)disposal&impai
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1 0 D ec em b er 2 0 2 4Q225Financial ResultsA ug us t 7,2 0 2 5Forward-Looking StatementsStatements included in this press release that are not historical in nature are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.Gilead cautions readers that forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially.These risks and uncertainties include those relating to:Gileads ability to achieve its full year 2025 financial guidance,including as a result of the uncertainty of the amount and timing of Veklury revenues,the impact of the Inflation Reduction Act,changes in U.S.regulatory or legislative policies,and changes in U.S.trade policies,including tariffs;Gileads ability to make progress on any of its long-term ambitions or priorities laid out in its corporate strategy;Gileads ability to accelerate or sustain revenues for its virology,oncology and other programs;Gileads ability to realize the potential benefits of acquisitions,collaborations or licensing arrangements,including the acquisitions of MYR,and the arrangements with Arcellx,Kymera and the Global Fund;patent protection and estimated loss of exclusivity for our products and product candidates;Gileads ability to initiate,progress or complete clinical trials within currently anticipated timeframes or at all,the possibility of unfavorable results from ongoing and additional clinical trials,including those involving Livdelzi,Trodelvy,Yescarta,Yeztugo(lenacapavir),anito-cel,bulevirtide,GS-1720,and GS-4182(such as the ASCENT-03,ASCENT-04,ASSURE,iMMagine-1,MYR301,PURPOSE 1,PURPOSE 2,WONDERS-1,and WONDERS-2 studies),and the risk that safety and efficacy data from clinical trials may not warrant further development of Gileads product candidates or the product candidates of Gileads strategic partners;Gileads ability to resolve the issues cited by the FDA in the clinical hold on the GS-1720 and GS-4182 trials to the satisfaction of the FDA and the risk that FDA may not remove the clinical hold,in whole or in part,in a timely manner or at all;Gileads ability to submit new drug applications for new product candidates or expanded indications in the currently anticipated timelines;Gileads ability to receive or maintain regulatory approvals in a timely manner or at all,including for additional approvals for lenacapavir for HIV PrEP,and the risk that any such approvals,if granted,may be subject to significant limitations on use and may be subject to withdrawal or other adverse actions by the applicable regulatory authority;Gileads ability to successfully commercialize its products;the risk of potential disruptions to the manufacturing and supply chain of Gileads products;pricing and reimbursement pressures from government agencies and other third parties,including required rebates and other discounts;a larger than anticipated shift in payer mix to more highly discounted payer segments;market share and price erosion caused by the introduction of generic versions of Gilead products;the risk that physicians and patients may not see advantages of Gileads products over other therapies and may therefore be reluctant to prescribe the products,including Yeztugo;Gileads ability to effectively manage the access strategy relating to lenacapavir for HIV PrEP,subject to necessary regulatory approvals;and other risks identified from time to time in Gileads reports filed with the SEC,including annual reports on Form 10-K,quarterly reports on Form 10-Q and current reports on Form 8-K.In addition,Gilead makes estimates and judgments that affect the reported amounts of assets,liabilities,revenues and expenses and related disclosures.Gilead bases its estimates on historical experience and on various other market specific and other relevant assumptions that it believes to be reasonable under the circumstances,the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.There may be other factors of which Gilead is not currently aware that may affect matters discussed in the forward-looking statements and may also cause actual results to differ significantly from these estimates.Further,results for the quarter ended June30,2025 are not necessarily indicative of operating results for any future periods.Gilead directs readers to its press releases,annual reports on Form 10-K,quarterly reports on Form 10-Q and other subsequent disclosure documents filed with the SEC.Gilead claims the protection of the Safe Harbor contained in the Private Securities Litigation Reform Act of 1995 for forward-looking statements.The reader is cautioned that forward-looking statements are not guarantees of future performance and is cautioned not to place undue reliance on these forward-looking statements.All forward-looking statements are based on information currently available to Gilead and Gilead assumes no obligation to update or supplement any such forward-looking statements other than as required by law.Any forward-looking statements speak only as of the date hereof or as of the dates indicated in the statements.Gilead owns or has rights to various trademarks,copyrights and trade names used in its business,including the following:GILEAD,GILEAD SCIENCES,KITETM,AMBISOME,ATRIPLA,BIKTARVY,CAYSTON,COMPLERA,DESCOVY,DESCOVY FOR PREP,EMTRIVA,EPCLUSA,EVIPLERA,GENVOYA,HARVONI,HEPCLUDEX,HEPSERA,JYSELECA,LETAIRIS,LIVDELZI/LYVDELZI,ODEFSEY,SOVALDI,STRIBILD,SUNLENCA,TECARTUS,TRODELVY,TRUVADA,TRUVADA FOR PREP,TYBOST,VEKLURY,VEMLIDY,VIREAD,VOSEVI,YESCARTA,YEZTUGO and ZYDELIG.This report may also refer to trademarks,service marks and trade names of other companies.2Contents34-5Key TakeawaysCommercial ResultsPipeline UpdatesFinancial ResultsAppendix6-1415-2021-2628-35Q225Key TakeawaysDa n ie l O Da yC ha i r m a n&C hi ef E x ec ut i ve Offi c erGilead Q225-Key Takeaways1Business Performance32Total Product Sales excluding Veklury up 4%YoY to$6.9B,driven by HIV,Livdelzi,and TrodelvyTotal HIV up 7%YoY;Biktarvy up 9%YoY and Descovy up 35%YoYTotal Oncology up 1%YoY;Trodelvy up 14%YoY;Cell Therapy down 7%YoY Strong top and bottom line results reflected in increased 2025 revenue and EPS guidance5FDA approval of Yeztugo(lenacapavir),a twice-yearly injection for HIV preventionInitiated Phase 3 PURPOSE-365 study for evaluating once-yearly lenacapavir for PrEPClinically meaningful Phase 3 ASCENT-03&-04 data for Trodelvy1 in 1L mTNBC;FDA filings in 2H 2025Updated next-generation CAR T data at EHA 2025;advancing KITE-363 developmentLooking AheadOngoing Yeztugo launch amid growing PrEP marketPositive CHMP opinion for twice-yearly lenacapavir for PrEP;EC decision expected 2H 2025Phase 3 updates for ARTISTRY-1&ARTISTRY-2 for once-daily BIC/LEN expected in 2H 2025Phase 2 iMMagine-1 update for anito-cel in MM expected in 2H 2025;target launch in 2026Clinical Updates1.Trodelvy Pembrolizumab for ASCENT-04 in PD-L1 (CPS10)1L mTNBC.Note:YoY reflects Q225 vs Q224.BIC/LEN bictegravir lenacapavir,CHMP Committee for Medicinal Products for Human Use,EC European Commission,EHA European Hematology Association;MM multiple myeloma,PrEP pre-exposure prophylaxis.J o ha n n a Me rc ie rC hi ef C om m er c i a l Offi c erCommercial Results&Market DynamicsSolid Base Business Performance in Q225HIV Product Sales 7%YoY, 11%QoQ 7%YoY$5.1BHIV-44%YoY$121MVeklury-28%YoY$202MOther 14%YoY$364MTrodelvy-7%YoY$485MCell Therapy-4%YoY$795MLiver Disease$5.1BNote:YoY reflects Q225 vs Q224 and QoQ reflects Q225 vs Q125.Oncology Product Sales 1%YoY, 12%QoQ$849MTotal Product Sales excluding Veklury 4%YoY, 10%QoQ$6.9BTotal Product Sales 2%YoY, 7%QoQ$7.1B7$3,821$4,161$4,532$3,664$4,096$571$570$603$553$624$353$342$317$370$368$4,745$5,073$5,452$4,587$5,088 Q224Q324Q424Q125Q225U.S.EuropeRest of WorldHIV:Strong Demand-Driven YoY Growth 8 YoY reflects increased demand and higher average realized price QoQ reflects seasonal inventory dynamics,higher average realized price and higher demandSales QoQ 11%Sales YoY 7%Product Sales($M)Note:YoY reflects Q225 vs Q224 and QoQ reflects Q225 vs Q125.Q225 sales:$3.5B, 9%YoY, 12%QoQU.S.Market Share51%U.S.Treatment Market Growth YoY2-3%Q225 sales:$653M; 35%YoY, 11%QoQ U.S.Market Share40%U.S.PrEP Market Growth YoY15%Remains#1 prescribed regimen for new starts and treatment switches across most major marketsYoY driven by higher demand QoQ reflects seasonal inventory dynamics and higher average realized price,as well as higher demandDescovy for PrEP maintaining share despite availability of other regimens,including genericsYoY driven by higher average realized price and demandQoQ primarily driven by seasonal inventory dynamics and higher demandShare Growth for HIV Treatment&PrEPBiktarvy received FDA approval to expand its label to include the treatment of people with HIV(PWH)with an antiretroviral treatment(ART)history who are not virologically suppressed,with no known or suspected resistance to the integrase strand inhibitor(INSTI)class,emtricitabine or tenofovir.Note:YoY reflects Q225 vs Q224 and QoQ reflects Q225 vs Q125.Biktarvy(bictegravir 50 mg,emtricitabine 200 mg,tenofovir alafenamide 25 mg)tablets.Descovy(emtricitabine 200 mg,tenofovir alafenamide 25 mg)tablets.PrEP pre-exposure prophylaxis.9Yeztugo:Now Approved in U.S.for HIV PrEPNote:In the U.S.,Yeztugo is approved for use as pre-exposure prophylaxis(PrEP)to reduce the risk of sexually acquired HIV-1 in adults and adolescents(35 kg)who are at risk for HIV-1 acquisition.10First prescription writtenhours24 hoursFirst dose administereddaysUpon Approval:First product shippedFDAApproval18 June 2025U.S.LaunchJune 2025WHO RecommendationJuly 2025EU CHMPOpinionJuly 2025European Commission DecisionExpected 2H25FY25 HIV Guidance Updated to Reflect YTD Strength11HIV Revenue Illustrative Guidance 7%YoY Strong performance of Biktarvy and Descovy driving increased sales guidance for FY25HIV sales now expected to grow3%YoYNo changes to:Medicare Part D assumptionsYeztugo assumptions,given launch recencyPolicy environment assumptions$17.2B$18.2B$19.6BFY22FY23FY24FY25 AugustGuidanceTotal HIV SalesImpact of IRA Part D ReformProduct Sales($B)7%(Illustrative vs FY24) 3%(vs FY24)$431$393$391$335$413$142$132$134$168$170$259$207$194$256$211$832$733$719$758$795 Q224Q324Q424Q125Q225U.S.EuropeRest of WorldLiver Disease:Growing Livdelzi ContributionsLivdelzi(seladelpar)capsules.HCV includes Epclusa,the authorized generic version of Epclusa,Harvoni,the authorized generic version of Harvoni,Sovaldi and Vosevi.HBV includes Hepsera(adefovir dipivoxil),Vemlidy(tenofovir alafenamide),and Viread(tenofovir disoproxil fumarate).HDV includes Hepcludex(bulevirtide).Note:Received full marketing authorization from EC for Hepcludex(bulevirtide)for the treatment of adults with chronic HDV and compensated liver disease.Bulevirtide remains the only approved treatment for chronic hepatitis delta virus(“HDV”)in the EU and is not approved in the U.S.Note:YoY reflects Q225 vs Q224 and QoQ reflects Q225 vs Q125.12-4%YoY reflects lower HCV sales,partially offset by higher demand across Livdelzi,HDV and HBV 5%QoQ reflects higher demand for Livdelzi and higher average realized price for HCV,partially offset by lower HCV volume Ongoing launch activities for Livdelzi in the U.S.and EuropeU.S.HCV market Share60%Q225 Livdelzi sales$78MProduct Sales($M)Trodelvy:Continued Strength in mBC1.U.S.and EU.Trodelvy(sacituzumab govitecan-hziy)for injection.Note:YoY reflects Q225 vs Q224 and QoQ reflects Q225 vs Q125.mBC metastatic breast cancer.mTNBC metastatic triple-negative breast cancer.mUC metastatic urothelial cancer.13$224$226$247$181$224$69$80$77$75$96$26$26$31$37$44$320$332$355$293$364 Q224Q324Q424Q125Q225U.S.EuropeRest of WorldProduct Sales($M) 14%YoY and 24%QoQ reflecting continued strength in mBC more than offsetting lower YoY mUC sales Strong demand outside of U.S.both YoY and QoQCountries Approved592L mTNBC1 share#1Cell Therapy:Evolving Competitive Landscape$414$387$390$386$393$107$98$98$78$92$521$485$488$464$485 Q224Q324Q424Q125Q225YescartaTecartusYescarta(axicabtagene ciloleucel)suspension for IV infusion.Tecartus(brexucabtagene autoleucel)suspension for IV infusion.Note:YoY reflects Q225 vs Q224 and QoQ reflects Q225 vs Q125.ATC authorized treatment center.14Product Sales($M)-7%YoY,reflecting lower demand,partially offset by higher average realized price 5%QoQ,driven by favorable FX impact as well as increased demand for Yescarta in the U.S.and Tecartus globallyPatients treated to date31KATCs Globally570Die t ma r Be rg e r,MD,PhDC hi ef M ed i c a l Offi c erPipeline UpdatesStrong Execution Driving Clinical MomentumCHMP Committee for Medicinal Products for Human Use,EC European Commission,EHA European Hematology Association16Positive Regulatory Updates in Virology&Clinical Data Readouts Across Oncology 2H 2025 UpdatesPositive CHMP OpinionJuly 2025FDA ApprovalJune 2025ASCENT-04 ASCO UpdateJune 2025ASCENT-04&-03 ToplineApril/May 2025iMMagine-1 EHA UpdateJune 2025Next Gen CAR TASCO UpdateJune 2025Q2 2025 UpdateEC Regulatory DecisionASCENT-03&ASCENT-04 FilingiMMagine-1Pivotal DataPrEPTreatment DailyWeeklyMonthlyQuarterlyTwice-Yearly Once-YearlyHIV:Advancing Leading Clinical PipelineNote:These proposed launch dates are for investigational products that are subject to regulatory review and approval.Timing of estimated product launches are subject to change.Potential future programs are indicated in dashed boxes.bNAb broadly neutralizing antibody,IM intramuscular,INSTI integrase inhibitor,and SC subcutaneous17Phase 1Phase 2Phase 3WONDERS-1GS-4182/GS-1720 Complex RegimensFDA APPROVEDPURPOSE-1&PURPOSE-2SC lenacapavir20302027ISLEND-1&ISLEND-2lenacapavir/islatravirARTISTRY-1&ARTISTRY-2bictegravir/lenacapavirlenacapavir bNAbs20272029-20302031-20332031-2033WONDERS-1&WONDERS-2Program on Clinical Holdteropavimab zinlirvimab(bNAbs)lenacapavir GS-1614GS-1614(islatravir pro-drug)GS-3107/INSTIGS-3107(lenacapavir pro-drug)2031-2033lenacapavir INSTI(GS-1219 or GS-3242)PURPOSE-365IM lenacapavir2028GS-1219 or GS-32421XXXXNote:The use of Trodelvy with or without pembrolizumab in 1L mTNBC is investigational and has not been approved anywhere globally.1.Trodelvy is approved in 2L mTNBC and pre-treated HR /HER2-mBC.2.Trodelvys use in non-small cell lung cancer,small cell lung cancer,and endometrial cancer is investigational and has not been approved anywhere globally.ADC antibody-drug conjugate,mPFS median progression-free survival,mTNBC metastatic triple negative breast cancer,SoC standard of careTrodelvy:Potential to Change Practice in 1L mTNBC18Only ADC to demonstrate statistically significant and clinically meaningful PFS benefit in 1L mTNBCASCENT-03Trodelvy1L mTNBC not candidatefor PD-(L)1 inhibitorsASCENT-04Trodelvy Pembrolizumab1L mTNBC PD-L1 (CPS10)Clinical Programs Across Multiple Tumor Types:Breast Cancer1Non-Small Cell Lung Cancer2Small Cell Lung Cancer2 Endometrial Cancer2Advancing Next Wave of CAR T TreatmentsNote:anito-cel(in partnership with Arcellx),KITE-363,KITE-197,KITE-753 are investigational cell therapies and are not approved for any indication.FIT fast-in-time 19Next Generation CAR TAnito-celiMMagine-14L R/R MMTopline readout ASH 2024Data update EHA 2025Data update Expected 2H25Target launch 2026EHA Oral Presentation(May cutoff)Consistent and compelling clinical profile across efficacy and safety No delayed neurotoxicityLymphomasSelection of go-forward CAR T in 2H25Kite-363(CD19/CD20)Bicistronic-CARKite-197(CD19)FIT-CARKite-753(CD19/CD20)Bicistronic&FIT-CARAutoimmuneSelected for go-forward for clinical trialsKite-363(CD19/CD20)Bicistronic-CARProgramTrialIndicationUpdateStatusLenacapavirPURPOSE 1&2Q6M LAI HIV PrEPEC DecisionPURPOSE 365Q12M LAI HIV PrEPPhase 3 FPIBIC/LENARTISTRY-1QD Oral HIV TxPhase 3 updateARTISTRY-2QD Oral HIV TxPhase 3 updateAnito-celiMMagine-14L R/R MMPhase 2 update1H252H25ProgramTrialIndicationUpdateStatusYeztugo(Lenacapavir)PURPOSE 1&2Q6M LAI HIV PrEPFDA DecisionGS-1720/GS-4182WONDERS-11QW LAO HIV TxPhase 2 updateLivdelziRESPONSEPrimary Biliary CholangitisEC DecisionTrodelvyASCENT-031L mTNBC(PD-L1-)Phase 3 updateASCENT-041L mTNBC(PD-L1 )Phase 3 updateEVOKE-SCLCES-SCLCPhase 3 FPI20Key 2025 MilestonesLivdelzi(seladelpar).Trodelvy(sacituzumab govitecan-hziy).1.Program timelines pending resolution of GS-1720 and GS-4182 clinical holds.BIC bictegravir,ES-SCLC extensive-stage small cell lung cancer,FPI first patient in,LAI long-acting injectable,LAO long-acting oral,LEN lenacapavir,mTNBC-metastatic triple-negative breast cancer,PD-L1-programmed death-ligand 1,PrEP-pre-exposure prophylaxis,Q6M twice yearly,Q12M annual,QD daily,QW weekly,R/R MM relapsed or refractory multiple myeloma,Tx treatment.On TrackCompletedNew Since Last UpdateClinical Hold An d re w Dic kin s o nC hi ef F i na nc i a l Offi c erFinancial Results$214$121$6,698$6,934$6,912Q224Q225Continued Strength Across the Base BusinessHIV 7%YoY,inc.Biktarvy 9%and Descovy 35%Trodelvy 14%YoYLivdelzi sales almost doubled QoQ to$78MProduct Sales,excluding Veklury 4%YoY 10%QoQTotal Product Sales 2%YoY 7%QoQReflecting 44%lower Veklury sales due to fewer COVID-19 related hospitalizationsNote:YoY reflects Q225 vs Q224 and QoQ reflects Q225 vs Q125.Product Sales($M)22Veklury-44seBusiness 4%$7,054Q225 Non-GAAP DataIn millions,except percentages and per share amountsQ224Q225YoY Change COGS$965$922-4%Product Gross Margin 86bps R&D$1,335$1,4509quired IPR&D$38$61NM SG&A$1,351$1,358FlatNon-GAAP Operating Expenses$2,724$2,8695%Non-GAAP Operating Income$3,265$3,2901%Operating Margin47F%-49bpsEffective Tax Rate18bpsNon-GAAP Net Income attributable to Gilead$2,519$2,521Flat Non-GAAP Diluted EPS attributable to Gilead$2.01$2.01FlatShares used in per share calculation-diluted1,2511,255R&D increase driven by investment in clinical manufacturing and studies;no change to expectation for flat R&D in FY25 vs FY24Acquired IPR&D primarily reflects Kymera collaborationSG&A primarily reflects higher HIV promotional expenses offset by lower corporate expensesDisciplined Expense ManagementPlease refer to accompanying press release for disclosures about our use of non-GAAP financial measures and GAAP to non-GAAP reconciliations.Note:YoY reflects Q225 vs Q224.NM not meaningful,23FY25 Guidance:Increased Base Business Expectations24Product Sales Excluding Veklury($B mid-point)FY25 April GuidanceAugust Guidance RaiseFY25 August IllustrativeGuidance 4% 7%(vs FY24)FY25 August GuidanceMedicare Part D Redesign$27B $0.5B$27.5B$1.1B 3%(vs FY24)Increase of$500M reflecting strong YTD results and higher FY25 base business expectations,including:Stronger HIV growth of 3%YoY,driven by Biktarvy and Descovy YTD performanceFX tailwindsCell therapy now expected to decline modestlyThere is no change to assumptions for:$1.1B impact from Medicare Part D Redesign;Yeztugo,given recency of launchTariffs and broader policy environmentProduct Sales Excluding Veklury11 Feb 202524 April 20257 August 2025Total Product Sales$28.2B-$28.6BNo change$28.3B-$28.7B Product Sales ex-Veklury$26.8B-$27.2BNo change$27.3B-$27.7B Veklury Sales$1.4BNo change$1.0BNon-GAAPProduct Gross Margin85-86%No change86%R&D ExpenseFlatNo changeNo change Acquired IPR&D$0.4BNo changeNo change SG&A ExpenseHigh-single digitclineNo changeMid to high-single digitcline Operating Income$12.7B-$13.2BNo change$13.0B-$13.4B Effective Tax Rate19%No changeNo change Diluted EPS$7.70-$8.10No change$7.95-$8.25GAAP Diluted EPS$5.95-$6.35$5.65-$6.05$5.85-$6.15This financial guidance excludes the impact of any expenses related to potential acquisitions or business development transactions that have not been executed,future fair value adjustments of equity securities and discrete tax charges or benefits associated with changes in tax related laws and guidelines as Gilead is unable to project such amounts.This guidance is subject to a number of risks and uncertainties.See Forward-Looking Statements on page 2.Please refer to the accompanying press release for GAAP to non-GAAP reconciliations.2025 Guidance P&L25SG&A updated to reflect higher HIV sales and marketing expenses and other corporate expenses associated with higher FY25 base business expectationsNo change to R&D expectationsNon-GAAP Operating ExpensesEPS Guidance increased by$0.20 at midpointNon-GAAP EPSFY25 expectations reduced to$1B,reflecting current path of pandemic and lower hospitalization rates in 1H25Veklury$1BDividends Paid in Q225$527MShares Repurchased in Q22515M shares at average$105.88Continue to invest in our business and R&D pipeline while managing expensesContinue ordinary course partnerships and business development transactionsGrow our dividendRepurchase shares to offset dilution and opportunistically reduce share countCapital Priorities Unchanged:Returned$1.5B in Q2251.Repurchases of common stock under repurchase program.26$6BNew Share Repurchase ProgramApproved July 2025Q&AJohanna MercierChief Commercial OfficerAndrew DickinsonChief Financial OfficerDietmar Berger,MD,PhDChief Medical OfficerDaniel ODayChairman&Chief Executive OfficerCindy PerettieEVP&Head of KiteClinical stage programs152Potential clinical stage opt-in assets8Kite ProgramOptionable Partner Program28Pipeline shown above as of end of Q225.FDA approved medicines shown:Livdelzi for primary biliary cholangitis(accelerated approval).1.Program count does not include potential partner opt-in programs or programs that have received both FDA and EC approval.Anito-cel-anitocabtagene autoleucel,Axi-cel-axicabtagene ciloleucel,BIC-bictegravir,DOM domvanalimab,FL-follicular lymphoma,GI gastrointestinal,HDV hepatitis delta virus,HIV-human immunodeficiency virus,HER /HER2-mBC-hormone receptor positive,human epidermal growth factor receptor 2 negative metastatic breast cancer,HR high risk,ISL-islatravir,LAI long acting injectable,LAO long acting oral,LBCL-large B-cell lymphoma,LEN-lenacapavir,mEC metastatic endometrial cancer,MM multiple myeloma,mNSCLC metastatic non-small cell lung cancer,mTNBC metastatic triple-negative breast cancer,PBC-primary biliary cholangitis,pembro pembrolizumab,PrEP-pre-exposure prophylaxis,R/R relapsed/refractory,SG-sacituzumab govitecan-hziy,TNBC triple-negative breast cancer,ZIM zimberelimab.PHASE 2PHASE 3,FILED,or APPROVEDPHASE 1OncologyInflammatory DiseaseViral DiseaseYeztugoHIV PrEP LAIHepcludex HDVSG 1L mTNBC(PD-L1-)DOM ZIM chemo 1L mNSCLCAnito-cel2-4L R/R MMSG pembro 1L mTNBC(PD-L1 )SG2L mECSG pembro adjuvant TNBCDOM ZIM chemo1L Upper GISG HR /HER2-chemo-nave mBCAxi-cel 2L HR FLBIC/LEN comboHIV OralLEN/ISL comboHIV LAOSG pembro 1L mNSCLC(PD-L1 TPS50%)Axi-cel 1L HR LBCLRobust Pipeline with Upcoming Catalysts SGSCLCClinical ProgramIndicationPhase 1Phase 2 Phase 3FiledUpdates since Q125HIV PreventionLenacapavir(PURPOSE 1&2)HIV PrEP LAIFDA approval grantedHIV TreatmentBictegravir/lenacapavir oral combination(ARTISTRY-1&-2)HIV OralIslatravir/lenacapavir oral combination(ISLEND-1&-2)1HIV LAOHIV INSTI/capsid inhibitor(GS-4182/GS-1720)(WONDERS-1&-2)2HIV LAOClinical HoldHIV capsid inhibitor(GS-3107)HIV LAOLenacapavir teropavimab zinlirvimab3HIV LAIHIV INSTI(GS-1219)HIV LAIHIV INSTI(GS-3242)HIV LAIHIV NRTTI(GS-1614)1 HIV LAIHIV CureTeropavimab zinlirvimab3,4HIV CureVesatolimod(FRESH)HIV CureHIV bispecific T-cell engager(GS-8588)HIV Cure29NDA approved and MAA filed Breakthrough Therapy DesignationPRIME DesignationPNew listing since Q125Change since Q125Pipeline shown above as of end of Q225.1.Subject to Gilead and Merck co-development and co-commercialization agreement.2.Program timelines pending resolution of GS-1720 and GS-4182 clinical holds.3.Teropavimab and zinlirvimab are broadly neutralizing antibody(bNAbs).4.Non-Gilead sponsored trial(s)ongoing.HIV-human immunodeficiency virus,INSTI-integrase strand transfer inhibitor,LAI long-acting injectable,LAO long-acting oral,MAA-marketing authorization application,NDA new drug application,NRTTI-nucleoside reverse transcriptase translocation inhibitor,PrEP-pre-exposure prophylaxis.Viral Diseases Pipeline 1/2Clinical ProgramIndicationPhase 1Phase 2 Phase 3FiledUpdates since Q125HDV Hepcludex(MYR301)HDVHBV CureSelgantolimodHBV CureHBV therapeutic vaccine(GS-2829 GS-6779)HBV CureEmerging VirusesObeldesivirRSVRemoved from pipelineObeldesivirPediatric RSVRemoved from pipelineOpt-insAssembly BiosciencesHBV,HDV,HSV4 clinical stage programs30BLA pending;MAA approvedPPipeline shown above as of end of Q225.BLA biologics license application,HBV hepatitis B virus,HDV hepatitis delta virus,HIV-human immunodeficiency virus,HSV herpes simplex virus,MAA-marketing authorization application,RSV respiratory syncytial virus.Viral Diseases Pipeline 2/2Breakthrough Therapy DesignationPRIME DesignationPNew listing since Q125Change since Q125Clinical ProgramIndicationPhase 1Phase 2 Phase 3FiledUpdates since Q125LymphomaAxicabtagene ciloleucel(ZUMA-22)2L HR FLAxicabtagene ciloleucel(ZUMA-23)1L HR LBCLBrexucabtagene autoleucel(ZUMA-4)Pediatric ALL/NHLCD19/CD20 bicistronic(KITE-363)R/R DLBCLCD19/CD20 bicistronic(KITE-753)1R/R DLBCLCD19 CAR(KITE-197)1R/R DLBCLMultiple MyelomaAnitocabtagene autoleucel(iMMagine-3)22-4L R/R MMAnitocabtagene autoleucel(iMMagine-1)24L R/R MM31Pipeline shown above as of end of Q225.1.Manufacturing innovation.2.Global strategic collaboration to co-develop and co-commercialize with Arcellx.ALL-acute lymphocytic leukemia,DLBCL diffuse large B-cell lymphoma,FL-follicular lymphoma,HR high risk,LBCL-large B cell lymphoma,MM multiple myeloma,NHL non-Hodgkins lymphoma,R/R relapsed/refractory.Cell Therapy PipelineBreakthrough Therapy DesignationPRIME DesignationPNew listing since Q125Change since Q125Clinical ProgramIndicationPhase 1Phase 2 Phase 3FiledUpdates since Q125BreastSacituzumab govitecan-hziy(ASCENT-03)1L mTNBC(PD-L1-)Sacituzumab govitecan-hziy pembrolizumab(ASCENT-04)11L mTNBC(PD-L1 )Sacituzumab govitecan-hziy pembrolizumab(ASCENT-05)High risk adjuvant TNBCSacituzumab govitecan-hziy(ASCENT-07)HR /HER2-chemo-nave mBCLung&ThoracicSacituzumab govitecan-hziy pembrolizumab(EVOKE-03)11L mNSCLC(PD-L1 ,TPS50%)Domvanalimab zimberelimab chemo(STAR-121)21L mNSCLCSacituzumab govitecan-hziy pembrolizumab(EVOKE-02)11L mNSCLCSacituzumab govitecan-hziy(EVOKE-SCLC-04)ES-SCLCNewLung cancer platform(VELOCITY-Lung3,EDGE-Lung2,4)NSCLCDomvanalimab zimberelimab chemo(VELOCITY-HNSCC)21L HNSCCGenitourinarySacituzumab govitecan-hziy combinations(TROPHY U-01)1L mUCGynecologySacituzumab govitecan-hziy(ASCENT-GYN-01)52L mEC32Pipeline shown above as of end of Q225.1.In collaboration with Merck.2.In collaboration with Arcus Biosciences.3.VELOCITY-Lung includes combinations of domvanalimab,etrumadenant,zimberelimab,and sacituzumab govitecan-hziy.4.EDGE-Lung includes immunotherapy-based combinations of quemliclustat,domvanalimab,and zimberelimab.5.In collaboration with the GOG Foundation(GOG)and European Network of Gynecological Oncological Trial Groups(ENGOT).ES-SCLC extensive stage-small cell lung cancer,HNSCC-head and neck squamous cell carcinoma,HR /HER2-mBC-hormone receptor positive,human epidermal growth factor receptor 2 negative metastatic breast cancer,mEC metastatic endometrial cancer,mNSCLC metastatic non-small cell lung cancer,mTNBC metastatic triple-negative breast cancer,mUC-metastatic urothelial carcinoma,NSCLC non-small cell lung cancer,TNBC triple-negative breast cancer.Oncology Pipeline 1/2Breakthrough Therapy DesignationPRIME DesignationPNew listing since Q125Change since Q125Clinical ProgramIndicationPhase 1Phase 2 Phase 3FiledUpdates since Q125Other Solid TumorSacituzumab govitecan-hziy(TROPiCS-03)Basket(Solid Tumors)GastrointestinalDomvanalimab zimberelimab chemotherapy(STAR-221)11L Upper GIEtrumadenant zimberelimab combinations(ARC-9)1mCRCRemoved from pipelineQuemliclustat /-zimberelimab(ARC-8)1mPDACRemoved from pipelineAdvanced CancersDenikitug(GS-1811)Advanced CancersDGK inhibitor(GS-9911)Advanced CancersRemoved from pipelineGS-2121Advanced CancersIL-2 variant(GS-4528)Advanced CancersIL-18BP(GS-0321)2Advanced CancersMasked IL-12(XTX301)3Advanced CancersMCL1 inhibitor(GS-9716)Advanced CancersRemoved from pipelinePARP1 inhibitor(GS-0201)Advanced CancersOpt-insArcusAdvanced Cancers3 clinical stage programsIncludes opt-in opportunity for QuemliMacroGenicsAdvanced Cancers1 clinical stage program33Pipeline shown above as of end of Q225.1.In collaboration with Arcus Biosciences.2.Operationalized by Compugen.3.Operationalized by Xilio.CCR8 chemokine receptor 8,DGK-diacylglycerol kinase alpha,GI gastrointestinal,MCL1 myeloid cell leukemia-1,mCRC metastatic colorectal cancer,mPDAC-metastatic pancreatic ductal adenocarcinoma,PARP1 poly(ADP-ribose)polymerase 1.Oncology Pipeline 2/2Breakthrough Therapy DesignationPRIME DesignationPNew listing since Q125Change since Q125Clinical ProgramIndicationPhase 1Phase 2 Phase 3FiledUpdates since Q125Inflammatory DiseaseEdecesertib(COSMIC)LupusTilpisertib fosmecarbil(PALEKONA)IBD47 inhibitor(SWIFT)IBDFXR agonist(GS-8670)IBDBTLA agonist(GS-0272)Inflammatory DiseasesCD200R agonist(GS-5305)Inflammatory DiseasesPD1 agonist(GS-0151)Inflammatory DiseasesIRAK4 Degrader(GS-6791)Inflammatory DiseasesNewMetabolic DiseaseGLP-1R agonist(GS-4571)Metabolic DiseaseFibrotic DiseaseCilofexor/firsocostat/semaglutide combination(WAYFIND)1NASHRemoved from pipeline34Pipeline shown above as of end of Q225.1.Clinical collaboration with Novo Nordisk.BTLA-B-and T-lymphocyte attenuator,GLP-1 glucagon-like peptide-1,IBD inflammatory bowel disease,MAA marketing authorization application,NASH nonalcoholic steatohepatitis,NDA new drug application,PBC primary biliary cholangitis,PD1-program cell death protein 1.Inflammatory Diseases PipelineBreakthrough Therapy DesignationPRIME DesignationPNew listing since Q125Change since Q125As ofin billions where applicableJun 30,2024Sep 30,2024Dec 31,2024Mar 31,2025June 30,2025Total Debt,net$23.35$23.25$26.71$24.95$24.95Debt Discounts,Premiums and Issuance Costs0.160.160.190.180.18Liability related to sale of future royalties1(1.26)(1.15)(1.15)(1.14)(1.13)Total Adjusted Debt1$22.25$22.25$25.75$24.00$24.00Twelve Months EndedJun 30,2024Sep 30,2024Dec 31,2024Mar 31,2025June 30,2025Net Income attributable to Gilead$1.05$0.13$0.48$5.96$6.31Add:Interest Expense2&Other(Income)expense,net1.020.650.971.400.85Add:Tax0.500.060.210.860.89Add:Depreciation0.370.380.380.380.38Add:Amortization2.392.382.392.392.39Add:Initial costs of externally developed IPR&D projects34.394.364.070.310.32Add:Impairments3.054.804.181.751.94Adjusted EBITDA4$12.77$12.75$12.68$13.05$13.08Adjusted Debt to Adjusted EBITDA ratio41.74x1.75x2.03x1.84x1.83x1.Adjusted Debt excludes funding agreements with:(1)RPI Finance Trust that was assumed as part of our acquisition of Immunomedics under which Immunomedics received cash in exchange for perpetual,tiered royalty payments on worldwide sales of Trodelvy,and(2)Abingworth LLP that was assumed as part of our acquisition of CymaBay under which CymaBay received funding in exchange for future regulatory and sales-based milestone payments upon regulatory approval of Seladelpar.2.Total interest expense and amortization from all issued debt is expected to be in the range of$1.0B-$1.1B for the full year 2025.We retain the flexibility to refinance or to repay maturing debt.3.Represents the initial costs of externally developed IPR&D projects with no alternative future use,acquired directly in a transaction other than a business combination,including upfront payments related to various collaborations and the initial costs of rights to IPR&D projects.4.Adjusted EBITDA and Adjusted Debt to Adjusted EBITDA ratio are non-GAAP performance measures used by our investors and analysts to assess the overall operating performance in the context of financial leverage.GAAP to Non-GAAP Reconciliation of Outstanding Adjusted Debt and Adjusted EBITDA35
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Summary Revenue Drivers R&D Progress Sustainability Financial Performance Financial Statements Gloss.
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H1 and Q2 2025 ResultsConference call and webcast for investors and analysts 29 July 20252Forward-lo.
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1This document contains proprietary information of Viatris Inc.Unauthorized use,duplication,dissemin.
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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON,D.C.20549FORM 10-Q(Mark One)QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934For the quarterly period ended June 30,2025OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from to Commission File Number:001-35565AbbVie Inc.(Exact name of registrant as specified in its charter)Delaware32-0375147(State or other jurisdiction of incorporation or organization)(I.R.S.employer identification number)1 North Waukegan RoadNorth Chicago,Illinois 60064-6400Telephone:(847)932-7900Indicate by check mark whether the registrant(1)has filed all reports required to be filed by Section 13 or 15(d)of the Securities Exchange Act of 1934 during thepreceding 12 months(or for such shorter period that the registrant was required to file such reports),and(2)has been subject to such filing requirements for thepast 90 days.Yes No Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of RegulationS-T(232.405 of this chapter)during the preceding 12 months(or for such shorter period that the registrant was required to submit such files).Yes No Indicate by check mark whether the registrant is a large accelerated filer,an accelerated filer,a non-accelerated filer,a smaller reporting company,or an emerginggrowth company.See the definitions of“large accelerated filer,”“accelerated filer,”“smaller reporting company,”and emerging growth company in Rule 12b-2 ofthe Exchange Act.Large Accelerated FilerAccelerated FilerNon-Accelerated FilerSmaller reporting companyEmerging growth companyIf an emerging growth company,indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revisedfinancial accounting standards provided pursuant to Section 13(a)of the Exchange Act.Indicate by check mark whether the registrant is a shell company(as defined in Rule 12b-2 of the Exchange Act).Yes No Securities registered pursuant to Section 12(b)of the Act:Title of each classTrading Symbol(s)Name of each exchange on which registeredCommon Stock,par value$0.01 per shareABBVNew York Stock ExchangeNYSE Texas0.750%Senior Notes due 2027ABBV27New York Stock Exchange2.125%Senior Notes due 2028ABBV28New York Stock Exchange2.625%Senior Notes due 2028ABBV28BNew York Stock Exchange2.125%Senior Notes due 2029ABBV29New York Stock Exchange1.250%Senior Notes due 2031ABBV31New York Stock ExchangeAs of July 29,2025,AbbVie Inc.had 1,766,558,253 shares of common stock at$0.01 par value outstanding.AbbVie Inc.and SubsidiariesTable of ContentsPART I.FINANCIAL INFORMATIONPageItem 1.FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA1Item 2.MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS27Item 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK37Item 4.CONTROLS AND PROCEDURES37PART II.OTHER INFORMATIONItem 1.LEGAL PROCEEDINGS38Item 2.UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS38Item 5.OTHER ITEMS38Item 6.EXHIBITS39PART I.FINANCIAL INFORMATIONITEM 1.FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA AbbVie Inc.and SubsidiariesCondensed Consolidated Statements of Earnings(unaudited)Three months ended June 30,Six months ended June 30,(in millions,except per share data)2025202420252024Net revenues$15,423$14,462$28,766$26,772 Cost of products sold4,346 4,202 8,348 8,296 Selling,general and administrative3,253 3,377 6,546 6,692 Research and development2,131 1,948 4,198 3,887 Acquired IPR&D and milestones823 937 1,071 1,101 Other operating income(24)(24)Total operating costs and expenses10,529 10,464 20,139 19,976 Operating earnings4,894 3,998 8,627 6,796 Interest expense,net678 506 1,305 959 Net foreign exchange loss23 1 27 5 Other expense,net2,639 1,345 4,080 1,931 Earnings before income tax expense1,554 2,146 3,215 3,901 Income tax expense613 773 985 1,156 Net earnings941 1,373 2,230 2,745 Net earnings attributable to noncontrolling interest3 3 6 6 Net earnings attributable to AbbVie Inc.$938$1,370$2,224$2,739 Per share dataBasic earnings per share attributable to AbbVie Inc.$0.52$0.77$1.25$1.54 Diluted earnings per share attributable to AbbVie Inc.$0.52$0.77$1.24$1.53 Weighted-average basic shares outstanding1,768 1,768 1,768 1,769 Weighted-average diluted shares outstanding1,771 1,771 1,772 1,772 The accompanying notes are an integral part of these condensed consolidated financial statements.2025 Form 10-Q|1AbbVie Inc.and Subsidiaries Condensed Consolidated Statements of Comprehensive Income(unaudited)Three months ended June 30,Six months ended June 30,(in millions)2025202420252024Net earnings$941$1,373$2,230$2,745 Foreign currency translation adjustments,net of tax expense(benefit)of$33 for the threemonths and$50 for the six months ended June 30,2025 and$(4)for the three months and$(24)for the six months ended June 30,20241,051(157)1,538(553)Net investment hedging activities,net of tax expense(benefit)of$(192)for the threemonths and$(269)for the six months ended June 30,2025 and$23 for the three monthsand$80 for the six months ended June 30,2024(698)84(981)291 Pension and post-employment benefits,net of tax expense(benefit)of$for the threemonths and$for the six months ended June 30,2025 and$3 for the three months and$4 for the six months ended June 30,20244 8 2 18 Cash flow hedging activities,net of tax expense(benefit)of$(16)for the three months and$(20)for the six months ended June 30,2025 and$(2)for the three months and$5 for thesix months ended June 30,2024(153)6(172)36 Other comprehensive income(loss)204(59)387(208)Comprehensive income1,145 1,314 2,617 2,537 Comprehensive income attributable to noncontrolling interest3 3 6 6 Comprehensive income attributable to AbbVie Inc.$1,142$1,311$2,611$2,531 The accompanying notes are an integral part of these condensed consolidated financial statements.2025 Form 10-Q|2AbbVie Inc.and Subsidiaries Condensed Consolidated Balance Sheets(in millions,except share data)June 30,2025December 31,2024(unaudited)AssetsCurrent assetsCash and equivalents$6,467$5,524 Short-term investments 31 Accounts receivable,net12,637 10,919 Inventories4,960 4,181 Prepaid expenses and other5,197 4,927 Total current assets29,261 25,582 Investments310 279 Property and equipment,net5,283 5,134 Intangible assets,net57,031 60,068 Goodwill35,638 34,956 Other assets9,659 9,142 Total assets$137,182$135,161 Liabilities and EquityCurrent liabilitiesShort-term borrowings$5,556$Current portion of long-term debt and finance lease obligations1,966 6,804 Accounts payable and accrued liabilities32,245 31,945 Total current liabilities39,767 38,749 Long-term debt and finance lease obligations62,959 60,340 Deferred income taxes2,554 2,579 Other long-term liabilities32,040 30,129 Commitments and contingenciesStockholders equity(deficit)Common stock,$0.01 par value,4,000,000,000 shares authorized,1,837,290,114 shares issued as of June30,2025 and 1,831,594,494 as of December 31,202418 18 Common stock held in treasury,at cost,70,829,000 shares as of June 30,2025 and 66,337,508 as ofDecember 31,2024(9,147)(8,201)Additional paid-in capital21,987 21,333 Accumulated deficit(11,503)(7,900)Accumulated other comprehensive loss(1,538)(1,925)Total stockholders equity(deficit)(183)3,325 Noncontrolling interest45 39 Total equity(deficit)(138)3,364 Total liabilities and equity$137,182$135,161 The accompanying notes are an integral part of these condensed consolidated financial statements.2025 Form 10-Q|3AbbVie Inc.and Subsidiaries Condensed Consolidated Statements of Equity(Deficit)(unaudited)(in millions)CommonsharesoutstandingCommonstockTreasurystockAdditionalpaid-incapitalAccumulateddeficitAccumulatedothercomprehensivelossNoncontrollinginterestTotalBalance at March 31,20241,766$18$(7,829)$20,656$(2,384)$(2,454)$40$8,047 Net earnings attributable to AbbVie Inc.1,370 1,370 Other comprehensive loss,net of tax (59)(59)Dividends declared (2,754)(2,754)Purchases of treasury stock (9)(9)Stock-based compensation plans and other 223 223 Change in noncontrolling interest 3 3 Balance at June 30,20241,766$18$(7,838)$20,879$(3,768)$(2,513)$43$6,821 Balance at March 31,20251,766$18$(9,137)$21,808$(9,527)$(1,742)$42$1,462 Net earnings attributable to AbbVie Inc.938 938 Other comprehensive income,net of tax 204 204 Dividends declared (2,914)(2,914)Purchases of treasury stock (10)(10)Stock-based compensation plans and other 179 179 Change in noncontrolling interest 3 3 Balance at June 30,20251,766$18$(9,147)$21,987$(11,503)$(1,538)$45$(138)Balance at December 31,20231,766$18$(6,533)$20,180$(1,000)$(2,305)$37$10,397 Net earnings attributable to AbbVie Inc.2,739 2,739 Other comprehensive loss,net of tax (208)(208)Dividends declared (5,507)(5,507)Purchases of treasury stock(7)(1,333)(1,333)Stock-based compensation plans and other7 28 699 727 Change in noncontrolling interest 6 6 Balance at June 30,20241,766$18$(7,838)$20,879$(3,768)$(2,513)$43$6,821 Balance at December 31,20241,765$18$(8,201)$21,333$(7,900)$(1,925)$39$3,364 Net earnings attributable to AbbVie Inc.2,224 2,224 Other comprehensive income,net of tax 387 387 Dividends declared (5,827)(5,827)Purchases of treasury stock(5)(973)(973)Stock-based compensation plans and other6 27 654 681 Change in noncontrolling interest 6 6 Balance at June 30,20251,766$18$(9,147)$21,987$(11,503)$(1,538)$45$(138)The accompanying notes are an integral part of these condensed consolidated financial statements.2025 Form 10-Q|4AbbVie Inc.and SubsidiariesCondensed Consolidated Statements of Cash Flows(unaudited)Six months ended June 30,(in millions)(brackets denote cash outflows)20252024Cash flows from operating activitiesNet earnings$2,230$2,745 Adjustments to reconcile net earnings to net cash from operating activities:Depreciation367 367 Amortization of intangible assets3,722 3,838 Deferred income taxes(300)(405)Change in fair value of contingent consideration liabilities4,313 2,136 Payments of contingent consideration liabilities(1,408)(876)Stock-based compensation589 566 Acquired IPR&D and milestones1,071 1,101 Non-cash litigation reserve adjustments,net of cash payments(750)27 Other,net96(53)Changes in operating assets and liabilities,net of acquisitions:Accounts receivable(1,496)(524)Inventories(211)(127)Prepaid expenses and other assets(257)309 Accounts payable and other liabilities(181)(1,337)Income tax assets and liabilities,net(997)(1,456)Cash flows from operating activities6,788 6,311 Cash flows from investing activitiesAcquisitions of businesses,net of cash acquired(204)(9,199)Other acquisitions and investments(1,274)(1,033)Acquisitions of property and equipment(504)(434)Purchases of investment securities(22)(22)Sales and maturities of investment securities39 9 Other,net49(11)Cash flows from investing activities(1,916)(10,690)Cash flows from financing activitiesNet change in commercial paper borrowings with original maturities of three months or less1,549 Proceeds from issuance of other short-term borrowings4,007 5,008 Repayments of other short-term borrowings(5,008)Proceeds from issuance of long-term debt3,994 14,963 Repayments of long-term debt and finance lease obligations(6,780)(3,448)Debt issuance costs(23)(99)Dividends paid(5,835)(5,522)Purchases of treasury stock(973)(1,333)Proceeds from the exercise of stock options61 137 Other,net32 24 Cash flows from financing activities(3,968)4,722 Effect of exchange rate changes on cash and equivalents39(27)Net change in cash and equivalents943 316 Cash and equivalents,beginning of period5,524 12,814 Cash and equivalents,end of period$6,467$13,130 The accompanying notes are an integral part of these condensed consolidated financial statements.2025 Form 10-Q|5AbbVie Inc.and SubsidiariesNotes to Condensed Consolidated Financial Statements(unaudited)Note 1 Basis of Presentation Basis of Historical PresentationThe unaudited interim condensed consolidated financial statements of AbbVie Inc.(AbbVie or the company)have been prepared pursuant to therules and regulations of the United States Securities and Exchange Commission.Accordingly,certain information and footnote disclosures normallyincluded in annual financial statements prepared in accordance with generally accepted accounting principles in the United States(U.S.GAAP)have been omitted.These unaudited interim condensed consolidated financial statements should be read in conjunction with the companys auditedconsolidated financial statements and notes included in the companys Annual Report on Form 10-K for the year ended December 31,2024.It is managements opinion that these financial statements include all normal and recurring adjustments necessary for a fair presentation of thecompanys financial position and operating results.Net revenues and net earnings for any interim period are not necessarily indicative of future orannual results.Certain other reclassifications were made to conform the prior period interim condensed consolidated financial statements to thecurrent period presentation.Recent Accounting PronouncementsRecent Accounting Pronouncements Not Yet AdoptedASU No.2024-03In November 2024,the Financial Accounting Standards Board(FASB)issued Accounting Standards Update(ASU)No.2024-03,IncomeStatement-Reporting Comprehensive Income-Expense Disaggregation Disclosures(Subtopic 220-40).The standard requires further disaggregationof relevant expense captions in a separate note to the financial statements.The standard is effective for AbbVie starting in annual periods in 2027and interim periods beginning in 2028,with early adoption permitted.AbbVie is currently assessing the impact of adopting this guidance on itsconsolidated financial statements.ASU No.2023-09In December 2023,the FASB issued ASU No.2023-09,Income Taxes(Topic 740).The standard requires disaggregation of the effective ratereconciliation into standard categories,enhances disclosure of income taxes paid,and modifies other income tax-related disclosures.The standardis effective for AbbVie starting in annual periods in 2025.AbbVie is currently assessing the impact of adopting this guidance on its consolidatedfinancial statements.Note 2 Supplemental Financial InformationInterest Expense,NetThree months ended June 30,Six months ended June 30,(in millions)2025202420252024Interest expense$740$726$1,440$1,386 Interest income(62)(220)(135)(427)Interest expense,net$678$506$1,305$959 Inventories(in millions)June 30,2025December 31,2024Finished goods$1,681$1,173 Work-in-process2,113 1,951 Raw materials1,166 1,057 Inventories$4,960$4,181 2025 Form 10-Q|6Property and Equipment,Net(in millions)June 30,2025December 31,2024Property and equipment,gross$12,934$12,267 Accumulated depreciation(7,651)(7,133)Property and equipment,net$5,283$5,134 Depreciation expense was$186 million for the three months and$367 million for the six months ended June 30,2025 and$184 million for the threemonths and$367 million for the six months ended June 30,2024.Note 3 Earnings Per ShareAbbVie grants certain restricted stock units(RSUs)that are considered to be participating securities.Due to the presence of participating securities,AbbVie calculates earnings per share(EPS)using the more dilutive of the treasury stock or the two-class method.For all periods presented,thetwo-class method was more dilutive.The following table summarizes the impact of the two-class method:Three months ended June 30,Six months ended June 30,(in millions,except per share data)2025202420252024Basic EPSNet earnings attributable to AbbVie Inc.$938$1,370$2,224$2,739 Earnings allocated to participating securities10 10 20 20 Earnings available to common shareholders$928$1,360$2,204$2,719 Weighted-average basic shares outstanding1,768 1,768 1,768 1,769 Basic earnings per share attributable to AbbVie Inc.$0.52$0.77$1.25$1.54 Diluted EPSNet earnings attributable to AbbVie Inc.$938$1,370$2,224$2,739 Earnings allocated to participating securities10 10 20 20 Earnings available to common shareholders$928$1,360$2,204$2,719 Weighted-average shares of common stock outstanding1,768 1,768 1,768 1,769 Effect of dilutive securities3 3 4 3 Weighted-average diluted shares outstanding1,771 1,771 1,772 1,772 Diluted earnings per share attributable to AbbVie Inc.$0.52$0.77$1.24$1.53 Certain shares issuable under stock-based compensation plans were excluded from the computation of EPS because the effect would have beenantidilutive.The number of common shares excluded was insignificant for all periods presented.Note 4 Licensing,Acquisitions and Other Arrangements Proposed Acquisition of Capstan Therapeutics,Inc.In June 2025,AbbVie entered into a definitive agreement to acquire Capstan Therapeutics,Inc.(Capstan),including its lead program CPTX2309,apotential first-in-class in vivo targeted lipid nanoparticle(tLNP)anti-CD19 CAR-T therapy candidate,currently in Phase 1,for the treatment of B cell-mediated autoimmune diseases.Under the terms of the agreement,AbbVie will make an upfront cash payment of approximately$2.1 billion toacquire Capstan.The transaction is expected to close in 2025,subject to regulatory approvals and other customary closing conditions.2025 Form 10-Q|7Acquisition of Nimble Therapeutics,Inc.On January 23,2025,AbbVie completed its acquisition of Nimble Therapeutics,Inc.(Nimble).Nimble is a biotechnology company dedicated todelivering on the promise of oral peptide therapeutics and its lead asset,an investigational oral peptide IL23R inhibitor,is in preclinical developmentfor the treatment of psoriasis.The aggregate purchase price of$288 million was comprised of a$210 million upfront cash payment and$78 millionfor the acquisition date fair value of contingent consideration liabilities,for which AbbVie may owe up to$130 million in future payments uponachievement of certain development milestones.The transaction was accounted for as a business combination using the acquisition method ofaccounting.As of the acquisition date,AbbVie acquired$118 million of intangible assets and resulted in the recognition of$170 million of goodwill.Goodwill was calculated as the excess of the consideration transferred over the fair value of net assets recognized and represents the futureeconomic benefits arising from other assets acquired that could not be individually identified and separately recognized,including expectedsynergies related to enhancement of AbbVies existing immunology discovery capabilities and development efforts.The goodwill is not deductiblefor tax purposes.Other assets acquired and liabilities assumed were insignificant.Acquisition of Cerevel Therapeutics Holdings,Inc.On August 1,2024,AbbVie completed its acquisition of Cerevel Therapeutics Holdings,Inc.(Cerevel Therapeutics).Cerevel Therapeutics is aclinical-stage biotechnology company focused on the discovery and development of differentiated therapies for neuroscience diseases.CerevelTherapeutics neuroscience pipeline included multiple clinical-stage and preclinical candidates with the potential to treat several diseases includingschizophrenia,Parkinsons disease and mood disorders.The total fair value of the consideration transferred to owners of Cerevel Therapeuticscommon stock was$8.7 billion($8.3 billion,net of cash acquired).The acquisition of Cerevel Therapeutics was accounted for as a businesscombination using the acquisition method of accounting and the valuation of assets acquired and liabilities assumed was finalized during the threemonths ended March 31,2025.Acquisition of ImmunoGen,Inc.On February 12,2024,AbbVie completed its acquisition of ImmunoGen,Inc.(ImmunoGen).ImmunoGen is a commercial-stage biotechnologycompany focused on the discovery,development and commercialization of antibody-drug conjugates(ADC)for cancer patients.ImmunoGensoncology portfolio included its flagship cancer therapy Elahere,a first-in-class ADC approved for platinum-resistant ovarian cancer,and a pipeline ofpromising next-generation ADCs targeting hematologic malignancies and solid tumors.The total fair value of the consideration transferred toowners of ImmunoGen common stock was$9.8 billion($9.2 billion,net of cash acquired).The acquisition of ImmunoGen was accounted for as abusiness combination using the acquisition method of accounting and the valuation of assets acquired and liabilities assumed was finalized duringthe three months ended December 31,2024.Other Licensing&Acquisitions ActivityCash outflows related to other acquisitions and investments totaled$1.3 billion for the six months ended June 30,2025 and$1.0 billion for the sixmonths ended June 30,2024.The following table summarizes acquired IPR&D and milestones expense:Three months ended June 30,Six months ended June 30,(in millions)2025202420252024Upfront charges$705$927$951$1,006 Development milestones118 10 120 95 Acquired IPR&D and milestones$823$937$1,071$1,101 2025 Form 10-Q|8Ichnos Glenmark Innovation,Inc.Subsequent to June 30,2025,AbbVie announced that it entered into a licensing agreement with Ichnos Glenmark Innovation,Inc.(IGI).Under theterms of the agreement,AbbVie will make an upfront payment of$700 million and receive an exclusive license to develop,manufacture andcommercialize ISB-2001,a tri-specific T-cell engager for the treatment of multiple myeloma across North America,Europe,Japan,and GreaterChina.AbbVie could make additional payments of up to$1.2 billion upon achievement of certain development,regulatory and commercialmilestones and pay tiered royalties.The transaction is expected to close in 2025,subject to regulatory approvals and other customary closingconditions.ADARx Pharmaceuticals,Inc.In May 2025,AbbVie entered into a license option agreement with ADARx Pharmaceuticals,Inc.(ADARx).Under the terms of the agreement,AbbVie received exclusive options to global license rights to develop and commercialize ADARxs small interfering RNA(siRNA)therapeuticsacross multiple disease areas,including neuroscience,immunology and oncology.Under the terms of the agreement,AbbVie made an upfrontpayment of$335 million which was recognized in acquired IPR&D and milestones expense in the condensed consolidated statement of earnings inthe second quarter of 2025.AbbVie could make additional payments of up to$385 million for option fees and option exercise payments,up to$7.5 billion upon achievement of certain development,regulatory and commercial milestones and pay tiered royalties.Gubra A/SIn April 2025,AbbVie completed its licensing agreement with Gubra A/S.Under the terms of the agreement,AbbVie received an exclusive globallicense to develop and commercialize GUB014295(ABBV-295),a long-acting amylin analog for the treatment of obesity.Under the terms of theagreement,AbbVie made an upfront payment of$350 million which was recognized in acquired IPR&D and milestones expense in the condensedconsolidated statement of earnings in the second quarter of 2025.AbbVie could make additional payments of up to$1.9 billion upon achievement ofcertain development,regulatory and commercial milestones and pay tiered royalties.Celsius Therapeutics,Inc.In June 2024,AbbVie acquired Celsius Therapeutics,Inc.(Celsius Therapeutics)including its lead pipeline asset CEL383.Celsius Therapeutics is aclinical-stage biotechnology company focused on the discovery and development of precision medicine in inflammatory bowel disease.Thetransaction was accounted as an asset acquisition as CEL383 represented substantially all of the fair value of the gross assets acquired.Theupfront payment of$250 million was recorded in acquired IPR&D and milestones expense in the condensed consolidated statement of earnings inthe second quarter of 2024.AbbVie entered into several other individually insignificant collaborations,licensing agreements or other asset acquisitions in which the relatedupfront payments were recorded in acquired IPR&D and milestones expense.Note 5 CollaborationsThe company has ongoing transactions with other entities through collaboration agreements.The following represent the significant collaborationagreements impacting the periods ended June 30,2025 and 2024.Collaboration with Janssen Biotech,Inc.In December 2011,Pharmacyclics,a wholly-owned subsidiary of AbbVie,entered into a worldwide collaboration and license agreement withJanssen Biotech,Inc.and its affiliates(Janssen),one of the Janssen Pharmaceutical companies of Johnson&Johnson,for the joint developmentand commercialization of Imbruvica,a novel,orally active,selective covalent inhibitor of Brutons tyrosine kinase and certain compounds structurallyrelated to Imbruvica,for oncology and other indications,excluding all immune and inflammatory mediated diseases or conditions and all psychiatricor psychological diseases or conditions,in the United States and outside the United States.The collaboration provides Janssen with an exclusive license to commercialize Imbruvica outside of the United States and co-exclusively withAbbVie in the United States.Both parties are responsible for the development,manufacturing and marketing of any products generated as a resultof the collaboration.The collaboration has no set duration or specific expiration date and provides for potential future development,regulatory andapproval milestone payments of up to$200 million to AbbVie.The collaboration also includes a cost sharing arrangement for associatedcollaboration activities.Except in certain cases,Janssen is responsible for approximately 60%of collaboration development costs and AbbVie isresponsible for the remaining 40%of collaboration development costs.2025 Form 10-Q|9In the United States,both parties have co-exclusive rights to commercialize the products;however,AbbVie is the principal in the end-customerproduct sales.AbbVie and Janssen share pre-tax profits and losses equally from the commercialization of products.Sales of Imbruvica are includedin AbbVies net revenues.Janssens share of profits is included in AbbVies cost of products sold.Other costs incurred under the collaboration arereported in their respective expense line items,net of Janssens share.Outside the United States,Janssen is responsible for and has exclusive rights to commercialize Imbruvica.AbbVie and Janssen share pre-taxprofits and losses equally from the commercialization of products.AbbVies share of profits is included in AbbVies net revenues.Other costsincurred under the collaboration are reported in their respective expense line items,net of Janssens share.The following table shows the profit and cost sharing relationship between Janssen and AbbVie:Three months ended June 30,Six months ended June 30,(in millions)2025202420252024United States-Janssens share of profits(included in cost of products sold)$253$284$500$567 International-AbbVies share of profits(included in net revenues)211 238 420 466 Global-AbbVies share of other costs(included in respective line items)25 40 50 82 AbbVies receivable from Janssen,included in accounts receivable,net,was$227 million at June 30,2025 and$237 million at December 31,2024.AbbVies payable to Janssen,included in accounts payable and accrued liabilities,was$247 million at June 30,2025 and$282 million at December31,2024.Collaboration with Genentech,Inc.AbbVie and Genentech,Inc.(Genentech),a member of the Roche Group,are parties to a collaboration and license agreement executed in 2007 tojointly research,develop and commercialize human therapeutic products containing BCL-2 inhibitors and certain other compound inhibitors whichincludes Venclexta,a BCL-2 inhibitor used to treat certain hematological malignancies.AbbVie shares equally with Genentech all pre-tax profits andlosses from the development and commercialization of Venclexta in the United States.AbbVie pays royalties on Venclexta net revenues outside theUnited States.AbbVie manufactures and distributes Venclexta globally and is the principal in the end-customer product sales.Sales of Venclexta are included inAbbVies net revenues.Genentechs share of United States profits is included in AbbVies cost of products sold.AbbVie records sales andmarketing costs associated with the United States collaboration as part of selling,general and administrative(SG&A)expenses and globaldevelopment costs as part of research and development(R&D)expenses,net of Genentechs share.Royalties paid for Venclexta revenues outsidethe United States are also included in AbbVies cost of products sold.The following table shows the profit and cost sharing relationship between Genentech and AbbVie:Three months ended June 30,Six months ended June 30,(in millions)2025202420252024Genentechs share of profits,including royalties(included in cost of products sold)$262$243$504$470 AbbVies share of sales and marketing costs from U.S.collaboration(included inSG&A)3 6 13 15 AbbVies share of development costs(included in R&D)15 23 32 42 2025 Form 10-Q|10Note 6 Goodwill and Intangible AssetsGoodwillThe following table summarizes the changes in the carrying amount of goodwill:(in millions)Balance as of December 31,2024$34,956 Additions170 Foreign currency translation adjustments512 Balance as of June 30,2025$35,638(a)Goodwill additions related to the acquisition of Nimble(see Note 4).The company performs its annual goodwill impairment assessment in the third quarter,or earlier if impairment indicators exist.As of June 30,2025,there were no accumulated goodwill impairment losses.Intangible Assets,NetThe following table summarizes intangible assets:June 30,2025December 31,2024(in millions)Gross carrying amountAccumulated amortizationNet carrying amountGross carrying amountAccumulated amortizationNet carrying amountDefinite-lived intangible assetsDeveloped product rights$82,150$(31,754)$50,396$81,428$(28,253)$53,175 License agreements8,352(7,003)1,349 8,315(6,624)1,691 Total definite-lived intangible assets90,502(38,757)51,745 89,743(34,877)54,866 Indefinite-lived intangible assets5,286 5,286 5,202 5,202 Total intangible assets,net$95,788$(38,757)$57,031$94,945$(34,877)$60,068 Definite-Lived Intangible AssetsAmortization expense was$1.9 billion for the three months and$3.7 billion for the six months ended June 30,2025 and$1.9 billion for the threemonths and$3.8 billion for the six months ended June 30,2024.Amortization expense was included in cost of products sold in the condensedconsolidated statements of earnings.Indefinite-Lived Intangible AssetsIndefinite-lived intangible assets represent acquired IPR&D associated with products that have not yet received regulatory approval.The companyperforms its annual impairment assessment of indefinite-lived intangible assets in the third quarter,or earlier if impairment indicators exist.(a)2025 Form 10-Q|11Note 7 Restructuring PlansAbbVie continuously evaluates its operations to identify opportunities to optimize its manufacturing and R&D operations,commercial infrastructureand administrative costs and to respond to changes in its business environment.As a result,AbbVie management periodically approves individualrestructuring plans to achieve these objectives.As of June 30,2025 and 2024,no such plans were individually significant.Restructuring chargeswere$136 million for the three months and$153 million for the six months ended June 30,2025 and$49 million for the three months and$64million for the six months ended June 30,2024.These charges are recognized in cost of products sold,R&D expense and SG&A expense in thecondensed consolidated statements of earnings based on the classification of the affected employees or the related operations.The following table summarizes the cash activity in the restructuring reserve for the six months ended June 30,2025:(in millions)Accrued balance as of December 31,2024$236 Restructuring charges46 Payments and other adjustments(41)Accrued balance as of June 30,2025$241 Note 8 Financial Instruments and Fair Value MeasuresRisk Management PolicySee Note 11 to the companys Annual Report on Form 10-K for the year ended December 31,2024 for a summary of AbbVies risk managementpolicy and use of derivative instruments.Financial InstrumentsVarious AbbVie foreign subsidiaries enter into foreign currency forward exchange contracts to manage exposures to changes in foreign exchangerates for anticipated intercompany transactions denominated in a currency other than the functional currency of the local entity.These contracts,with notional amounts totaling$3.8 billion at June 30,2025 and$1.9 billion at December 31,2024,are designated as cash flow hedges and arerecorded at fair value.The durations of these forward exchange contracts were generally less than 18 months.Accumulated gains and losses as ofJune 30,2025 are reclassified from accumulated other comprehensive income(loss)(AOCI)and included in cost of products sold at the time theproducts are sold,generally not exceeding six months from the date of settlement.The company also enters into foreign currency forward exchange contracts to manage its exposure to foreign currency denominated trade payablesand receivables and intercompany loans.These contracts are not designated as hedges and are recorded at fair value.Resulting gains or lossesare reflected in net foreign exchange loss in the condensed consolidated statements of earnings and are generally offset by losses or gains on theforeign currency exposure being managed.These contracts had notional amounts totaling$6.3 billion at June 30,2025 and$5.9 billion atDecember 31,2024.The company also uses foreign currency forward exchange contracts or foreign currency denominated debt to hedge its net investments in certainforeign subsidiaries and affiliates.The company had an aggregate principal amount of senior Euro notes designated as net investment hedges of3.1 billion at June 30,2025 and December 31,2024.In addition,the company had foreign currency forward exchange contracts designated as netinvestment hedges with notional amounts totaling 6.5 billion,SEK1.9 billion,CAD500 million and CHF80 million at June 30,2025 and 6.2 billion,SEK1.4 billion,CAD500 million and CHF50 million at December 31,2024.The company uses the spot method of assessing hedge effectiveness forderivative instruments designated as net investment hedges.Realized and unrealized gains and losses from these hedges are included in AOCIand the initial fair value of hedge components excluded from the assessment of effectiveness is recognized in interest expense,net over the life ofthe hedging instrument.The company is a party to interest rate swap contracts designated as fair value hedges with notional amounts totaling$3.5 billion at June 30,2025and December 31,2024.The effect of the hedge contracts is to change a fixed-rate interest obligation to a floating rate for that portion of the debt.AbbVie records the contracts at fair value and adjusts the carrying amount of the fixed-rate debt by an offsetting amount.No amounts are excluded from the assessment of effectiveness for cash flow hedges or fair value hedges.2025 Form 10-Q|12The following table summarizes the amounts and location of AbbVies derivative instruments on the condensed consolidated balance sheets:Fair value Derivatives in asset positionFair value Derivatives in liability position(in millions)Balance sheet captionJune 30,2025December 31,2024Balance sheet captionJune 30,2025December 31,2024Foreign currency forward exchange contractsDesignated as cash flow hedgesPrepaid expenses andother$11$119 Accounts payable andaccrued liabilities$99$5 Designated as cash flow hedgesOther assets Other long-term liabilities11 Designated as net investment hedgesPrepaid expenses andother 4 Accounts payable andaccrued liabilities274 Designated as net investment hedgesOther assets 148 Other long-term liabilities352 Not designated as hedgesPrepaid expenses andother30 42 Accounts payable andaccrued liabilities40 30 Interest rate swap contractsDesignated as fair value hedgesOther assets60 Other long-term liabilities104 231 Total derivatives$101$313$880$266 While certain derivatives are subject to netting arrangements with the companys counterparties,the company does not offset derivative assets andliabilities within the condensed consolidated balance sheets.The following table presents the pre-tax amounts of gains(losses)from derivative instruments recognized in other comprehensive income(loss):Three months ended June 30,Six months ended June 30,(in millions)2025202420252024Foreign currency forward exchange contractsDesignated as cash flow hedges$(135)$20$(154)$75 Designated as net investment hedges(570)88(763)222 Assuming market rates remain constant through contract maturities,the company expects to reclassify pre-tax losses of$8 million into cost ofproducts sold for foreign currency cash flow hedges and pre-tax gains of$21 million into interest expense,net for other cash flow hedges during thenext 12 months.Related to AbbVies non-derivative,foreign currency denominated debt designated as net investment hedges,the company recognized in othercomprehensive income(loss)pre-tax losses of$283 million for the three months and$416 million for the six months ended June 30,2025 and pre-tax gains of$50 million for the three months and$207 million for the six months ended June 30,2024.The following table summarizes the pre-tax amounts and location of derivative instrument net gains(losses)recognized in the condensedconsolidated statements of earnings,including the net gains(losses)reclassified out of AOCI into net earnings.See Note 10 for the amount of netgains(losses)reclassified out of AOCI.Three months ended June 30,Six months ended June 30,(in millions)Statement of earnings caption2025202420252024Foreign currency forward exchange contractsDesignated as cash flow hedgesCost of products sold$29$10$28$22 Designated as net investment hedgesInterest expense,net37 31 71 58 Not designated as hedgesNet foreign exchange loss(17)34(46)16 Interest rate swap contractsDesignated as fair value hedgesInterest expense,net47 54 102(11)Debt designated as hedged item in fair value hedgesInterest expense,net(47)(54)(102)11 OtherInterest expense,net5 6 10 12 2025 Form 10-Q|13Fair Value MeasuresThe fair value hierarchy consists of the following three levels:Level 1 Valuations based on unadjusted quoted prices in active markets for identical assets that the company has the ability to access;Level 2 Valuations based on quoted prices for similar instruments in active markets,quoted prices for identical or similar instruments inmarkets that are not active and model-based valuations in which all significant inputs are observable in the market;and Level 3 Valuations using significant inputs that are unobservable in the market and include the use of judgment by the companysmanagement about the assumptions market participants would use in pricing the asset or liability.The following table summarizes the bases used to measure certain assets and liabilities carried at fair value on a recurring basis on the condensedconsolidated balance sheet as of June 30,2025:Basis of fair value measurement(in millions)TotalQuoted prices inactive markets foridentical assets (Level 1)Significant otherobservable inputs (Level 2)Significantunobservable inputs(Level 3)AssetsCash and equivalents$6,467$6,163$304$Money market funds and time deposits10 10 Debt securities33 33 Equity securities101 64 37 Interest rate swap contracts60 60 Foreign currency contracts41 41 Total assets$6,712$6,227$485$LiabilitiesInterest rate swap contracts$104$104$Foreign currency contracts776 776 Financing liability358 358 Contingent consideration24,649 24,649 Total liabilities$25,887$880$25,007 2025 Form 10-Q|14The following table summarizes the bases used to measure certain assets and liabilities carried at fair value on a recurring basis on the condensedconsolidated balance sheet as of December 31,2024:Basis of fair value measurement(in millions)TotalQuoted prices inactive markets foridentical assets (Level 1)Significant otherobservable inputs (Level 2)Significantunobservable inputs(Level 3)AssetsCash and equivalents$5,524$5,179$345$Money market funds and time deposits10 10 Debt securities33 33 Equity securities98 70 28 Foreign currency contracts313 313 Total assets$5,978$5,249$729$LiabilitiesInterest rate swap contracts$231$231$Foreign currency contracts35 35 Financing liability328 328 Contingent consideration21,666 21,666 Total liabilities$22,260$266$21,994 Money market funds and time deposits are valued using relevant observable market inputs including quoted prices for similar assets and interestrate curves.Equity securities primarily consist of investments for which the fair values were determined by using the published market prices perunit multiplied by the number of units held,without consideration of transaction costs.The derivatives entered into by the company were valuedusing observable market inputs including published interest rate curves and both forward and spot prices for foreign currencies.The financing liability is related to financing arrangements which the company elected to account for in accordance with the fair value option,aspermitted under ASC 825 Financial Instruments.The fair value measurement of the financing liability was determined based on significantunobservable inputs.Potential payments are estimated by applying a probability-weighted expected payment model,which are then discounted topresent value.Changes to the fair value of the financing liability can result from changes to one or a number of inputs,including discount rates,estimated probabilities and timing of achieving milestones and estimated amounts of future sales.The change in fair value recognized in netearnings is recorded in other expense,net in the condensed consolidated statements of earnings and the change in fair value attributable toinstrument-specific credit risk is recognized in other comprehensive income(loss).Changes in fair value recognized in other expense,net and inother comprehensive income(loss)for the three and six months ended June 30,2025 were insignificant.The fair value measurements of the contingent consideration liabilities were determined based on significant unobservable inputs,including thediscount rate,estimated probabilities and timing of achieving specified development,regulatory and commercial milestones and the estimatedamount of future sales of the acquired products.The potential contingent consideration payments are estimated by applying a probability-weightedexpected payment model for contingent milestone payments and a Monte Carlo simulation model for contingent royalty payments,which are thendiscounted to present value.Changes to the fair value of the contingent consideration liabilities can result from changes to one or a number ofinputs,including discount rates,the probabilities of achieving the milestones,the time required to achieve the milestones and estimated futuresales.Significant judgment is employed in determining the appropriateness of certain of these inputs.Changes to the inputs described above couldhave a material impact on the companys financial position and results of operations in any given period.2025 Form 10-Q|15The fair value of the companys contingent consideration liabilities was calculated using the following significant unobservable inputs:June 30,2025December 31,2024RangeWeightedaverageRangeWeightedaverageDiscount rate4.0%-4.8%4.3%4.6%-5.2%4.8%Probability of payment for royalties by indication100000%Projected year of payments2025-203420292025-20342029(a)Unobservable inputs were weighted by the relative fair value of the contingent consideration liabilities.There have been no transfers of assets or liabilities into or out of Level 3 of the fair value hierarchy.The following table presents the changes in fairvalue of total contingent consideration liabilities which are measured using Level 3 inputs:Six months ended June 30,(in millions)20252024Beginning balance$21,666$19,890 Additions78 Change in fair value recognized in net earnings4,313 2,136 Payments(1,408)(876)Ending balance$24,649$21,150(a)Additions during the six months ended June 30,2025,represent contingent consideration liabilities related to the Nimble acquisition.The change in fair value recognized in net earnings is recorded in other expense,net in the condensed consolidated statements of earnings.Certain financial instruments are carried at historical cost or some basis other than fair value.The book values,approximate fair values and basesused to measure the approximate fair values of certain financial instruments as of June 30,2025 are shown in the table below:Basis of fair value measurement(in millions)Book valueApproximate fairvalueQuoted pricesin active marketsfor identicalassets (Level 1)Significant other observable inputs (Level 2)Significantunobservableinputs (Level 3)LiabilitiesShort-term borrowings$5,556$5,579$5,579$Current portion of long-term debt and finance leaseobligations,excluding fair value hedges2,015 1,999 1,982 17 Long-term debt and finance lease obligations,excluding fairvalue hedges and financing liability62,645 59,315 56,884 2,431 Total liabilities$70,216$66,893$58,866$8,027$(a)(a)(a)2025 Form 10-Q|16The book values,approximate fair values and bases used to measure the approximate fair values of certain financial instruments as of December31,2024 are shown in the table below:Basis of fair value measurement(in millions)Book valueApproximate fairvalueQuoted pricesin active marketsfor identicalassets (Level 1)Significant other observable inputs (Level 2)Significantunobservableinputs (Level 3)LiabilitiesCurrent portion of long-term debt and finance leaseobligations,excluding fair value hedges$6,797$6,767$6,620$147$Long-term debt and finance lease obligations,excluding fairvalue hedges and financing liability60,243 55,836 53,441 2,395 Total liabilities$67,040$62,603$60,061$2,542$AbbVie also holds investments in equity securities that do not have readily determinable fair values.The company records these investments atcost and remeasures them to fair value based on certain observable price changes or impairment events as they occur.The carrying amount ofthese investments was$166 million as of June 30,2025 and$169 million as of December 31,2024.No significant cumulative upward or downwardadjustments have been recorded for these investments as of June 30,2025.Concentrations of RiskOf total net accounts receivable,three U.S.wholesalers accounted for 80%as of June 30,2025 and 81%as of December 31,2024,andsubstantially all of AbbVies pharmaceutical product net revenues in the United States were to these three wholesalers.Debt and Credit FacilitiesIssuance and Repayment of Long-Term DebtIn February 2025,the company issued$4.0 billion aggregate principal amount of unsecured senior notes.The following table summarizes theissued debt:(in millions)Senior Notes4.65%Senior Notes due 2028$1,250 4.875%Senior Notes due 20301,000 5.20%Senior Notes due 20351,000 5.60%Senior Notes due 2055750 Total debt issued$4,000 The notes are unsecured,unsubordinated obligations of AbbVie and will rank equally in right of payment with all of AbbVies existing and futureunsecured,unsubordinated indebtedness,liabilities and other obligations.AbbVie may redeem the fixed-rate senior notes prior to maturity at aredemption price equal to the greater of the principal amount or the sum of present values of the remaining scheduled payments of principal andinterest plus a make-whole premium.AbbVie may also redeem the fixed-rate senior notes at par between one and six months prior to maturity.In March 2025,the company repaid$3.0 billion aggregate principal amount of 3.80%senior notes at maturity.In May 2025,the company repaid$3.8 billion aggregate principal amount of 3.60%senior notes at maturity.In May 2024,the company repaid a 1.5 billion aggregate principal amount of 1.38%senior euro notes at maturity.In June 2024,the company repaid a 700 million aggregate principal amount of 1.25%senior euro notes and$1.0 billion aggregate principalamount of 3.85%senior notes at maturity.2025 Form 10-Q|17Short-Term BorrowingsShort-term borrowings included commercial paper borrowings of$3.6 billion as of June 30,2025,of which$2.0 billion had original maturities greaterthan three months.There were no commercial paper amounts outstanding as of December 31,2024.The weighted-average interest rate oncommercial paper borrowings was 4.64%for the six months ended June 30,2025 and 5.54%for the six months ended June 30,2024.In April 2025,AbbVie entered into a$4.0 billion 364-day term loan credit agreement.In May 2025,AbbVie borrowed$2.0 billion under this term loancredit agreement which was outstanding and included in short-term borrowings on the condensed consolidated balance sheet as of June 30,2025.Borrowings under the term loan bear interest at adjusted Secured Overnight Financing Rate Reference Rate(SOFR) 0.7%.The term loan may beprepaid without penalty upon prior notice and contains covenants,all of which the company was in compliance with as of June 30,2025.In January 2025,AbbVie entered into a new$3.0 billion five-year revolving credit facility that matures in January 2030 which is in addition to theexisting$5.0 billion five-year revolving credit facility that matures in March 2028.The revolving credit facilities are available to support AbbViescommercial paper program and enable the company to borrow funds to meet liquidity requirements on an unsecured basis at variable interest ratesand contain various covenants.At June 30,2025,the company was in compliance with all covenants,and commitment fees under the credit facilitywere insignificant.No amounts were outstanding under the companys credit facilities as of June 30,2025 and December 31,2024.Financing Related to ImmunoGen and Cerevel Therapeutics AcquisitionsIn connection with the acquisitions of ImmunoGen and Cerevel Therapeutics,in February 2024,the company issued$15.0 billion aggregateprincipal amount of unsecured senior notes.The notes are unsecured,unsubordinated obligations of AbbVie and will rank equally in right ofpayment with all of AbbVies existing and future unsecured,unsubordinated indebtedness,liabilities and other obligations.AbbVie may redeem thefixed-rate senior notes prior to maturity at a redemption price equal to the greater of the principal amount or the sum of present values of theremaining scheduled payments of principal and interest on the fixed-rate senior notes to be redeemed plus a make-whole premium.AbbVie mayalso redeem the fixed-rate senior notes at par between one and six months prior to maturity.In connection with the offering,debt issuance costsincurred totaled$99 million and debt discounts totaled$37 million,which are being amortized over the respective terms of the notes to interestexpense,net in the condensed consolidated statements of earnings.AbbVie used the net proceeds received from the issuance of the notes to finance the acquisition of ImmunoGen,repay its term loan,repaycommercial paper borrowings,pay fees and expenses in respect of the foregoing,finance general corporate purposes and,together with cash onhand,fund AbbVies acquisition of Cerevel Therapeutics.In December 2023,AbbVie entered into a$9.0 billion 364-day bridge credit agreement and$5.0 billion 364-day term loan credit agreement.InFebruary 2024,AbbVie borrowed and repaid$5.0 billion under the term loan credit agreement.Interest charged on this borrowing was based onSOFR 0.975%with an effective interest rate of 6.29%.Subsequent to the$15.0 billion issuance of senior notes,AbbVie terminated both the bridgeand term loan credit agreements in the first quarter of 2024.In February 2024,concurrent with the ImmunoGen acquisition,the company assumedand repaid an ImmunoGen senior secured term loan at a fair value of$99 million.2025 Form 10-Q|18Note 9 Post-Employment BenefitsThe following table summarizes net periodic benefit cost relating to the companys defined benefit and other post-employment plans:Defined benefit plansOther post-employment plansThree months ended June 30,Six months ended June 30,Three months ended June 30,Six months ended June 30,(in millions)20252024202520242025202420252024Service cost$68$71$131$143$10$10$20$21 Interest cost124 113 241 226 11 11 22 21 Expected return on plan assets(208)(196)(414)(393)Amortization of prior service credit (9)(9)(18)(18)Amortization of actuarial loss10 13 16 26 2 5 4 9 Net periodic benefit cost(credit)$(6)$1$(26)$2$14$17$28$33 The components of net periodic benefit cost other than service cost are included in other expense,net in the condensed consolidated statements ofearnings.Note 10 EquityStock-Based CompensationStock-based compensation expense is principally related to awards issued pursuant to the AbbVie 2013 Incentive Stock Program and the AbbVieAmended and Restated 2013 Incentive Stock Program and is summarized as follows:Three months ended June 30,Six months ended June 30,(in millions)2025202420252024Cost of products sold$11$10$33$32 Research and development79 74 239 207 Selling,general and administrative89 134 317 327 Pre-tax compensation expense179 218 589 566 Tax benefit(34)(34)(104)(94)After-tax compensation expense$145$184$485$472 In addition to stock-based compensation expense included in the table above and in connection with the acquisition of ImmunoGen,AbbVieincurred cash-settled,post-closing expense for ImmunoGen employee incentive awards,which is summarized in the table below:(in millions)Six months ended June 30,2024Cost of products sold$31 Research and development126Selling,general and administrative192Total post-closing cash settled expense$349 Stock OptionsDuring the six months ended June 30,2025,primarily in connection with the companys annual grant,AbbVie granted 0.6 million stock options witha weighted-average grant-date fair value of$38.39.As of June 30,2025,$10 million of unrecognized compensation cost related to stock options isexpected to be recognized as expense over approximately the next two years.2025 Form 10-Q|19RSUs and Performance SharesDuring the six months ended June 30,2025,primarily in connection with the companys annual grant,AbbVie granted 4.8 million RSUs andperformance shares with a weighted-average grant-date fair value of$193.81.As of June 30,2025,$905 million of unrecognized compensationcost related to RSUs and performance shares is expected to be recognized as expense over approximately the next two years.Cash DividendsThe following table summarizes quarterly cash dividends declared during 2025 and 2024:20252024Date DeclaredPayment DateDividend Per ShareDate DeclaredPayment DateDividend Per Share06/20/2508/15/25$1.64 10/30/2402/14/25$1.64 02/13/2505/15/25$1.64 09/06/2411/15/24$1.55 06/21/2408/15/24$1.55 02/15/2405/15/24$1.55 Stock Repurchase ProgramThe companys stock repurchase authorization permits purchases of AbbVie shares from time to time in open-market or private transactions atmanagements discretion.The program has no time limit and can be discontinued at any time.Shares repurchased under this program are recordedat acquisition cost,including related expenses,and are available for general corporate purposes.On February 16,2023,AbbVies board of directors authorized a$5.0 billion increase to the existing stock repurchase authorization.AbbVierepurchased 3 million shares for$606 million during the six months ended June 30,2025 and 5 million shares for$959 million during the six monthsended June 30,2024.AbbVies remaining stock repurchase authorization was approximately$2.9 billion as of June 30,2025.Accumulated Other Comprehensive LossThe following table summarizes the changes in each component of accumulated other comprehensive loss,net of tax,for the six months endedJune 30,2025:(in millions)Foreigncurrency translationadjustmentsNet investmenthedgingactivitiesPension and post-employment benefitsCash flowhedging activitiesTotalBalance as of December 31,2024$(2,114)$549$(664)$304$(1,925)Other comprehensive income(loss)before reclassifications1,538(925)1(142)472 Net losses(gains)reclassified from accumulated other comprehensiveloss(56)1(30)(85)Net current-period other comprehensive income(loss)1,538(981)2(172)387 Balance as of June 30,2025$(576)$(432)$(662)$132$(1,538)Other comprehensive income for the six months ended June 30,2025 included foreign currency translation adjustments totaling a gain of$1.5billion principally due to the impact of the strengthening of the Euro on the translation of the companys Euro-denominated assets and the offsettingimpact of net investment hedging activities totaling a loss of$981 million.2025 Form 10-Q|20The following table summarizes the changes in each component of accumulated other comprehensive loss,net of tax,for the six months endedJune 30,2024:(in millions)Foreigncurrency translationadjustmentsNet investmenthedgingactivitiesPension and post-employment benefitsCash flowhedging activitiesTotalBalance as of December 31,2023$(1,106)$65$(1,488)$224$(2,305)Other comprehensive income(loss)before reclassifications(553)336 5 62(150)Net losses(gains)reclassified from accumulated other comprehensiveloss(45)13(26)(58)Net current-period other comprehensive income(loss)(553)291 18 36(208)Balance as of June 30,2024$(1,659)$356$(1,470)$260$(2,513)Other comprehensive loss for the six months ended June 30,2024 included foreign currency translation adjustments totaling a loss of$553 millionprincipally due to the impact of the weakening of the Euro on the translation of the companys Euro-denominated assets and the offsetting impact ofnet investment hedging activities totaling a gain of$291 million.The following table presents the impact on AbbVies condensed consolidated statements of earnings for significant amounts reclassified out of eachcomponent of accumulated other comprehensive loss:Three months ended June 30,Six months ended June 30,(in millions)(brackets denote gains)2025202420252024Net investment hedging activitiesGains on derivative amount excluded from effectiveness testing$(37)$(31)$(71)$(58)Tax expense8 7 15 13 Total reclassifications,net of tax$(29)$(24)$(56)$(45)Pension and post-employment benefitsAmortization of actuarial losses and other$3$9$2$17 Tax benefit(1)(3)(1)(4)Total reclassifications,net of tax$2$6$1$13 Cash flow hedging activitiesGains on foreign currency forward exchange contracts$(29)$(10)$(28)$(22)Other(5)(6)(10)(12)Tax expense6 4 8 8 Total reclassifications,net of tax$(28)$(12)$(30)$(26)(a)Amounts are included in interest expense,net(see Note 8).(b)Amounts are included in the computation of net periodic benefit cost(see Note 9).(c)Amounts are included in cost of products sold(see Note 8).(a)(b)(c)(a)2025 Form 10-Q|21Note 11 Income Taxes The effective tax rate was 39%for the three months and 31%for the six months ended June 30,2025 compared to 36%for the three months and30%for the six months ended June 30,2024.The effective tax rate in each period differed from the U.S.statutory tax rate of 21%principally due tothe impact of foreign operations which reflects the impact of lower income tax rates in locations outside the United States,changes in fair value ofcontingent consideration and business development activities.The increase in the effective tax rate for the three months and six months endedJune 30,2025 over the prior year was primarily due to changes in fair value of contingent consideration offset by changes in jurisdictional mix ofearnings and business development activities.Subsequent to June 30,2025,on July 4,2025,the United States government signed into law the One Big Beautiful Bill Act of 2025(2025 Act).Included within the 2025 Act are certain new tax provisions,limitations and modifications to existing tax provisions that were previously enactedunder the Tax Cuts and Jobs Act of 2017,including rules related to the taxation of income earned outside of the United States and the tax treatmentof domestic performed research and development costs.In addition,the legislation contains various effective dates and transition elections.AbbVieis currently evaluating the impact of the 2025 Act on its consolidated financial statements.Note 12 Legal Proceedings and Contingencies AbbVie is subject to contingencies,such as various claims,legal proceedings and investigations regarding product liability,intellectual property,commercial,securities and other matters that arise in the normal course of business.Loss contingency provisions are recorded for probable lossesat managements best estimate of a loss,or when a best estimate cannot be made,a minimum loss contingency amount within a probable range isrecorded.The recorded accrual balance for litigation was approximately$1.8 billion as of June 30,2025 and$2.5 billion as of December 31,2024.For litigation matters discussed below for which a loss is probable or reasonably possible,the company is unable to estimate the possible loss orrange of loss,if any,beyond the amounts accrued.Initiation of new legal proceedings or a change in the status of existing proceedings may result ina change in the estimated loss accrued by AbbVie.While it is not feasible to predict the outcome of all proceedings and exposures with certainty,management believes that their ultimate disposition should not have a material adverse effect on AbbVies consolidated financial position,results ofoperations or cash flows.Subject to certain exceptions specified in the separation agreement by and between Abbott Laboratories(Abbott)and AbbVie,AbbVie assumed theliability for,and control of,all pending and threatened legal matters related to its business,including liabilities for any claims or legal proceedingsrelated to products that had been part of its business,but were discontinued prior to the distribution,as well as assumed or retained liabilities,andwill indemnify Abbott for any liability arising out of or resulting from such assumed legal matters.Antitrust LitigationLawsuits are pending against AbbVie and others generally alleging that the 2005 patent litigation settlement involving Niaspan entered into betweenKos Pharmaceuticals,Inc.(a company acquired by Abbott in 2006 and presently a subsidiary of AbbVie)and a generic company violated federaland state antitrust laws and state unfair and deceptive trade practices and unjust enrichment laws.Plaintiffs generally seek monetary damagesand/or injunctive relief and attorneys fees.The lawsuits pending in federal court consist of six individual plaintiff lawsuits and a certified class actionby Niaspan direct purchasers.The cases are pending in the United States District Court for the Eastern District of Pennsylvania for coordinated orconsolidated pre-trial proceedings under the federal multi-district litigation(MDL)Rules as In re:Niaspan Antitrust Litigation,MDL No.2460.InOctober 2016,the Orange County,California District Attorneys Office filed a lawsuit on behalf of the State of California regarding the Niaspanpatent litigation settlement in Orange County Superior Court,asserting a claim under the unfair competition provision of the California Business andProfessions Code seeking injunctive relief,restitution,civil penalties and attorneys fees.Government ProceedingsLawsuits are pending against Allergan and several other manufacturers generally alleging that they improperly promoted and sold prescriptionopioid products.Approximately 380 lawsuits are pending against Allergan in federal and state courts.Most of the federal court lawsuits areconsolidated for pre-trial purposes in the United States District Court for the Northern District of Ohio under the MDL rules as In re:NationalPrescription Opiate Litigation,MDL No.2804.Approximately 25 of the lawsuits are pending in various state courts.The plaintiffs in these lawsuits,which include states,counties,cities,other municipal entities,Native American tribes,union trust funds and other third-party payors,privatehospitals and personal injury claimants,generally seek compensatory and punitive damages.Of these approximately 380 lawsuits,approximately20 of them are brought by states,counties,cities,and other municipal entities,approximately 5 of which are in the process of being dismissedpursuant to the previously announced settlement.2025 Form 10-Q|22In March 2023,AbbVie Inc.filed a petition in the United States Tax Court,AbbVie Inc.and Subsidiaries v.Commissioner of Internal Revenue.Thepetition disputed the Internal Revenue Service determination concerning a$572 million income tax benefit recorded in 2014 related to a paymentmade to a third party for the termination of a proposed business combination.In June 2025,the United States Tax Court granted AbbVies motionfor summary judgment and denied the Commissioner of Internal Revenues cross-motion for summary judgment.The United States Tax Courtordered and decided that there is no deficiency in income tax due from AbbVie for the tax year 2014.Shareholder and Securities LitigationIn May 2024,a putative class action lawsuit,Reese v.AbbVie Inc.,was filed in Delaware Chancery Court challenging the lawfulness of Section2.13(D)(iv)in the Second Amended and Restated By-laws of AbbVie Inc.As noted in its Form 8-K filed on September 6,2024,AbbVie believed thisprovision was lawful but no longer had any practical value.Accordingly,AbbVie did not believe defending this provision was the best use ofCompany resources.AbbVie therefore amended its by-laws to,among other things,delete section 2.13(D)(iv).As a result of this amendment,plaintiff agreed that his claims were moot.In September 2024,the court granted an Order Voluntarily Dismissing the Action as Moot and RetainingJurisdiction to Determine Plaintiffs Counsels Application for an Award of Attorneys Fees and Reimbursement of Expenses.To avoid the time andexpense of continued litigation and without any admissions,the parties agreed to resolve plaintiffs counsel fee application with a payment of$175 thousand to plaintiffs counsel.In July 2025,the court entered a stipulation and order providing that the case will be closed.In entering thatorder,the court was not asked to review,and did not pass judgment on,the payment of the attorneys fees and expenses or their reasonableness.In October 2018,a federal securities lawsuit,Holwill v.AbbVie Inc.,et al.,was filed in the United States District Court for the Northern District ofIllinois against AbbVie,its former chief executive officer and former chief financial officer,alleging that reasons stated for Humira sales growth infinancial filings between 2013 and 2018 were misleading because they omitted alleged misconduct in connection with Humira patient andreimbursement support services and other services and items of value that allegedly induced Humira prescriptions.In September 2021,the courtgranted plaintiffs motion to certify a class.In July 2025,the court granted AbbVie and the individual defendants motion for summary judgement.Product Liability and General LitigationIn April 2023,a putative class action lawsuit,Camargo v.AbbVie Inc.,was filed in the United States District Court for the Northern District of Illinoison behalf of Humira patients who paid for Humira based on its list price or who,after losing insurance coverage,discontinued Humira because theycould not pay based on its list price,alleging that Humiras list price is excessive in violation of multiple states unfair and deceptive trade practicesstatutes.The plaintiff generally seeks monetary damages,injunctive relief,and attorneys fees.Lawsuits are pending against various Allergan entities in the United States and other countries including Australia,Brazil,Canada,South Korea,and the Netherlands,in which plaintiffs generally allege that they developed,or may develop,breast implant-associated anaplastic large celllymphoma(ALCL)or other injuries from Allergans Biocell textured breast implants,which were voluntarily withdrawn from worldwide markets in2019.Approximately 145 ALCL lawsuits and 1,290 other lawsuits are coordinated for pre-trial purposes in the United States District Court for theDistrict of New Jersey under the MDL rules as In re:Allergan Biocell Textured Breast Implant Product Liability Litigation,MDL No.2921.Approximately 75 ALCL lawsuits and 475 other lawsuits are pending in various state courts.Approximately 60 ALCL and 1,005 other lawsuits arepending in other countries.Plaintiffs generally seek monetary damages,medical monitoring,and attorneys fees.In January 2025,a putative class action lawsuit,Sheet Metal Workers Health Plan of Southern California,Arizona,and Nevada v.AbbVie Inc.,wasfiled in the United States District Court for the Northern District of Illinois on behalf of third-party payors of Humira,alleging that AbbVies rebatingpractices are impairing biosimilar competition with Humira in violation of federal and state antitrust laws.The plaintiff generally seeks monetarydamages,injunctive relief and attorneys fees.Intellectual Property LitigationAbbVie Inc.is seeking to enforce patent rights relating to upadacitinib(a drug sold under the trademark Rinvoq).Litigation was filed in the UnitedStates District Court for the District of Delaware in November 2023 against Hetero USA,Inc.,Hetero Labs Limited,Hetero Labs Limited Unit-V,Aurobindo Pharma USA,Inc.and Aurobindo Pharma Ltd.AbbVie alleges defendants proposed generic upadacitinib products infringe certainpatents and seeks declaratory and injunctive relief.AbbVie Inc.is seeking to enforce patent rights related to ubrogepant(a drug sold under the trademark Ubrelvy).Litigation was filed in the UnitedStates District Court for the District of New Jersey in March 2024 against Aurobindo Pharma U.S.A.,Inc.,Aurobindo Pharma Limited,and ApitoriaPharma Private Limited;Zydus Pharmaceuticals(USA)Inc.and Zydus Lifesciences Limited;MSN Pharmaceuticals Inc.,MSN Laboratories PrivateLimited,and MSN Life Sciences Private Limited;and Hetero USA Inc.,Hetero Labs2025 Form 10-Q|23Limited Unit-III,and Hetero Labs Limited.AbbVie alleges defendants proposed generic ubrogepant products infringe certain patents and seeksdeclaratory and injunctive relief.Merck Sharp&Dohme LLC,which exclusively licenses certain patents to AbbVie,is a co-plaintiff in the litigation.2025 Form 10-Q|24Note 13 Segment InformationAbbVie operates as a single global business segment dedicated to the research and development,manufacturing,commercialization and sale ofinnovative medicines and therapies.This operating structure enables the Chief Executive Officer,as chief operating decision maker(CODM),toallocate resources and assess business performance on a global basis in order to achieve established long-term strategic goals.Consistent withthis structure,a global research and development and supply chain organization is responsible for the discovery,manufacturing and supply ofproducts.Commercial efforts that coordinate the marketing,sales and distribution of these products are organized by geographic region ortherapeutic area.All of these activities are supported by a global corporate administrative staff.The determination of a single business segment isconsistent with the consolidated financial information regularly reviewed by the CODM for purposes of assessing performance,allocating resourcesand planning and forecasting future periods.The CODM regularly reviews net revenues,net earnings and significant segment expenses and uses net earnings as its principal measure ofsegment profit or loss.Net earnings and significant segment expenses reviewed by CODM are reported on the condensed consolidated statementsof earnings for the periods ended June 30,2025 and 2024.The CODM uses net earnings as its principal measure of segment profit or loss tocompare past financial performance with current performance and analyze underlying business performance and trends.The CODM does not usesegment assets to make decisions regarding resources;therefore,the total asset disclosure has not been included.The following table details AbbVies worldwide net revenues:Three months ended June 30,Six months ended June 30,(in millions)2025202420252024ImmunologySkyriziUnited States$3,843$2,340$6,762$3,996 International580 387 1,086 739 Total$4,423$2,727$7,848$4,735 RinvoqUnited States$1,452$1,017$2,672$1,742 International576 413 1,074 781 Total$2,028$1,430$3,746$2,523 HumiraUnited States$802$2,360$1,546$4,131 International378 454 755 953 Total$1,180$2,814$2,301$5,084 NeuroscienceVraylarUnited States$898$773$1,661$1,465 International2 1 4 3 Total$900$774$1,665$1,468 Botox TherapeuticUnited States$775$669$1,498$1,280 International153 145 296 282 Total$928$814$1,794$1,562 UbrelvyUnited States$330$227$563$424 International8 4 15 10 Total$338$231$578$434 QuliptaUnited States$237$146$409$274 International30 4 51 7 Total$267$150$460$281 VyalevUnited States$22$28$International76 18 133 27 Total$98$18$161$27 DuodopaUnited States$20$23$40$48 International77 90 153 180 Total$97$113$193$228 Other NeuroscienceUnited States$51$57$106$118 International4 5 8 9 Total$55$62$114$127 2025 Form 10-Q|25Three months ended June 30,Six months ended June 30,(in millions)2025202420252024OncologyImbruvicaUnited States$543$595$1,072$1,205 Collaboration revenues211 238 420 466 Total$754$833$1,492$1,671 VenclextaUnited States$321$300$633$581 International370 337 723 670 Total$691$637$1,356$1,251 ElahereUnited States$138$128$303$192 International21 35 Total$159$128$338$192 EpkinlyCollaboration revenues$49$29$85$51 International21 7 36 12 Total$70$36$121$63 Other OncologyUnited States$2$2$AestheticsBotox CosmeticUnited States$410$450$705$839 International282 279 543 523 Total$692$729$1,248$1,362 Juvederm CollectionUnited States$105$138$180$244 International155 205 311 396 Total$260$343$491$640 Other AestheticsUnited States$282$275$552$556 International45 43 90 81 Total$327$318$642$637 Eye CareOzurdexUnited States$30$35$60$69 International95 89 188 186 Total$125$124$248$255 Lumigan/GanfortUnited States$52$42$100$71 International51 61 109 123 Total$103$103$209$194 Alphagan/CombiganUnited States$13$26$28 International36 36 70 80 Total$36$49$96$108 Other Eye CareUnited States$144$149$261$298 International106 108 206 216 Total$250$257$467$514 Other Key ProductsMavyretUnited States$184$167$326$311 International191 202 355 407 Total$375$369$681$718 CreonUnited States$404$372$759$657 Linzess/ConstellaUnited States$247$211$386$468 International11 10 20 19 Total$258$221$406$487 All other$603$810$1,350$1,554 Total net revenues$15,423$14,462$28,766$26,772 See the following for additional information about certain income and expenses included in net earnings:intangible assets amortization expense(Note 6),change in fair value of contingent consideration(Note 8),interest income and expense(Note 2),depreciation expense(Note 2),litigationmatters(Note 12),income tax expense(Note 11)and restructuring expense(Note 7).2025 Form 10-Q|26ITEM 2.MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OFOPERATIONSThe following is a discussion and analysis of the financial condition of AbbVie Inc.(AbbVie or the company)as of June 30,2025 and December 31,2024 and the results of operations for the three and six months ended June 30,2025 and 2024.This commentary should be read in conjunctionwith the Condensed Consolidated Financial Statements and accompanying notes appearing in Item 1,“Financial Statements and SupplementaryData.”EXECUTIVE OVERVIEWCompany OverviewAbbVie is a global,diversified research-based biopharmaceutical company positioned for success with a comprehensive product portfolio that hasleadership positions across immunology,neuroscience,oncology,aesthetics and eye care.AbbVie uses its expertise,dedicated people and uniqueapproach to innovation to develop and market advanced therapies that address some of the worlds most complex and serious diseases.On February 13,2025,the board of directors of AbbVie unanimously elected Chief Executive Officer(CEO)Robert A.Michael to succeed RichardA.Gonzalez as Chairman of the board of directors,effective July 1,2025,at which time Mr.Gonzalez retired from the board.AbbVies products are generally sold worldwide directly to wholesalers,distributors,government agencies,health care facilities,specialtypharmacies and independent retailers from AbbVie-owned distribution centers and public warehouses.Certain products(including aestheticproducts and devices)are also sold directly to physicians and other licensed healthcare providers.In the United States,AbbVie distributespharmaceutical products principally through independent wholesale distributors,with some sales directly to retailers,pharmacies,patients or othercustomers.Outside the United States,AbbVie sells products primarily to wholesalers or through distributors,and depending on the market worksthrough largely centralized national payers system to agree on reimbursement terms.Certain products are co-marketed or co-promoted with othercompanies.AbbVie operates as a single global business segment and has approximately 55,000 employees.2025 Strategic ObjectivesAbbVies mission is to discover and develop innovative medicines and products that solve serious health issues today and address the medicalchallenges of tomorrow while achieving top-tier financial performance through outstanding execution.AbbVie intends to execute its strategy andadvance its mission in a number of ways,including:(i)maximizing the benefits of a diversified revenue base with multiple long-term growth drivers;(ii)leveraging AbbVies commercial strength and international infrastructure across therapeutic areas and ensuring strong commercial execution ofnew product launches;(iii)continuing to invest in and expand its pipeline in support of opportunities in immunology,neuroscience,oncology,aesthetics and eye care as well as continued investment in key on-market products;(iv)generating substantial operating cash flows to supportinvestment in innovative research and development,and return cash to shareholders via a strong and growing dividend while also continuing torepay debt.In addition,AbbVie anticipates several regulatory submissions and data readouts from key clinical trials in the next 12 months.Financial ResultsThe companys financial performance for the six months ended June 30,2025 included delivering worldwide net revenues of$28.8 billion,operatingearnings of$8.6 billion,diluted earnings per share of$1.24 and cash flows from operations of$6.8 billion.Worldwide net revenues increased 7%ona reported basis and 8%on a constant currency basis.Financial results for the six months ended June 30,2025 also included the following costs:(i)$3.7 billion related to the amortization of intangibleassets;and(ii)$4.3 billion for the change in fair value of contingent consideration liabilities.Additionally,financial results reflected continued fundingto support all stages of AbbVies pipeline assets and continued investment in AbbVies on-market brands.2025 Form 10-Q|27Recent EventsAbbVies business may be impacted by risks associated with global macroeconomic conditions,including international trade disruptions anddisputes as well as trade protection measures.For example,the United States government has recently imposed broad-based tariffs targetingspecified countries.While the impact of these tariffs on AbbVies business and results of operations to date has not been material,the United Statesgovernment may in the future pause,reimpose or increase tariffs and foreign governments have and,in the future,may impose retaliatory tradeprotection measures.Any new or additional tariffs,particularly those targeting the pharmaceuticals industry,may increase uncertainties andassociated risks and could adversely impact AbbVies business and results of operations.AbbVie is also subject to public and legislative pressure with respect to pharmaceutical pricing.In the United States,Executive Order 14297,issuedon May 12,2025,directs the Secretary of Health and Human Services(HHS)to pursue most-favored-nation(MFN)pricing,defined as the lowestprice in any Organization for Economic Co-operation and Development country with a gross domestic product per capita of at least 60%of that ofthe United States.The order directs HHS to implement policies mandating MFN pricing along with other regulatory actions if substantial progresstoward voluntary compliance is not achieved.AbbVie continues to evaluate the potential impact of this executive order,and any new or additionallegislation,regulations or executive orders related to pharmaceutical pricing may increase uncertainties and associated risks and could adverselyimpact AbbVies business and results of operations.On July 4,2025,the United States government signed into law the One Big Beautiful Bill Act of 2025(2025 Act).Included within the 2025 Act arecertain new tax provisions,limitations and modifications to existing tax provisions that were previously enacted under the Tax Cuts and Jobs Act of2017,including rules related to the taxation of income earned outside of the United States and the tax treatment of domestic performed researchand development costs.In addition,the legislation contains various effective dates and transition elections.The 2025 Act also includes certain newhealth care provisions related to the orphan drug exclusion of the Inflation Reduction Act of 2022,and Medicaid,which have various effective dates.AbbVie is currently evaluating the impact of the 2025 Act on its consolidated financial statements.Research and DevelopmentResearch and innovation are the cornerstones of AbbVies business as a global biopharmaceutical company.AbbVies long-term success dependsto a great extent on its ability to continue to discover and develop innovative products and acquire or collaborate on compounds currently indevelopment by other biotechnology or pharmaceutical companies.AbbVies pipeline currently includes approximately 90 compounds,devices or indications in development individually or under collaboration orlicense agreements.Of these programs,approximately 50 are in mid-and late-stage development.The companys pipeline is focused on suchimportant specialties as immunology,neuroscience,oncology,aesthetics and eye care.AbbVies recently announced partnership with Gubra marksthe companys entrance into the obesity field,a therapeutic area with significant unmet need.The following sections summarize transitions of significant programs from mid-stage development to late-stage development as well asdevelopments in significant late-stage and registration programs.AbbVie expects multiple mid-stage programs to transition into late-stage programsin the next 12 months.Significant Programs and DevelopmentsImmunologyRinvoqIn April 2025,AbbVie announced that the European Commission(EC)granted marketing authorization to Rinvoq for the treatment ofgiant cell arteritis(GCA)in adult patients.In April 2025,AbbVie announced that the U.S.Food and Drug Administration(FDA)approved Rinvoq for the treatment of GCA in adultpatients.In July 2025,AbbVie announced positive topline results from Study 2 of its Phase 3 UP-AA trial for Rinvoq as a monotherapy in adultsand adolescents with severe alopecia areata.2025 Form 10-Q|28NeuroscienceQuliptaIn February 2025,AbbVie initiated a Phase 3 clinical trial to evaluate Qulipta for the preventive treatment of menstrual migraine.In June 2025,AbbVie announced positive topline results from its Phase 3 TEMPLE head-to-head study evaluating the tolerability,safetyand efficacy of Qulipta compared to the highest tolerated dose of topiramate in adult patients with a history of four or more migraine daysper month.OncologyEmrelisIn May 2025,AbbVie announced that the U.S.FDA granted accelerated approval for Emrelis(telisotuzumab vedotin-tllv)for thetreatment of adult patients with locally advanced or metastatic,non-squamous non-small cell lung cancer with high c-Met proteinoverexpression who have received a prior systemic therapy.VenclextaIn June 2025,AbbVie announced that the global Phase 3 VERONA trial evaluating Venclexta in combination with azacitidine in thetreatment of newly diagnosed higher-risk myelodysplastic syndrome did not meet the primary endpoint of overall survival.No new safetysignals were observed.In July 2025,AbbVie announced the submission of a supplemental New Drug Application(sNDA)to the U.S.FDA for the fixed-duration,all oral combination regimen of Venclexta and acalabrutinib in previously untreated patients with chronic lymphocytic leukemia(CLL).The submission is supported by positive results from the Phase 3 AMPLIFY trial which demonstrated that the combination regimenimproved progression-free survival compared to standard chemoimmunotherapy in previously untreated patients with CLL.EpkinlyIn May 2025,Genmab A/S(Genmab)announced positive topline results from the Phase 3 trial evaluating Epkinly plus rituximab andlenalidomide versus rituximab and lenalidomide alone in adult patients with relapsed or refractory follicular lymphoma.AestheticsTrenibotEIn April 2025,AbbVie announced that it submitted a Biologics License Application(BLA)to the U.S.FDA for approval oftrenibotulinumtoxinE(TrenibotE)for the treatment of moderate to severe glabellar lines.TrenibotE is a first-in-class botulinum neurotoxinserotype E characterized by a rapid onset of action as early as 8 hours after administration and short duration of effect of 2-3 weeks.Ifapproved,TrenibotE will be the first neurotoxin of its kind available to patients.Juvederm CollectionIn June 2025,AbbVie announced that the U.S.FDA accepted for review the supplemental premarket approval application for Skinvive byJuvederm to reduce neck lines for the improvement of neck appearance.OtherEmblaveoIn February 2025,AbbVie announced that the U.S.FDA approved Emblaveo(aztreonam and avibactam),as the first fixed-dose,intravenous,monobactam/-lactamase inhibitor combination antibiotic to treat complicated intra-abdominal infections,including thosecaused by Gram-negative bacteria.MavyretIn June 2025,AbbVie announced that the U.S FDA approved a label expansion for Mavyret,an oral pangenotypic direct acting antiviraltherapy.It is now approved for the treatment of adults and pediatric patients three years and older with acute or chronic hepatitis C virusinfection immediately at the time of diagnosis.For a more comprehensive discussion of AbbVies products and pipeline,see the companys Annual Report on Form 10-K for the year endedDecember 31,2024.2025 Form 10-Q|29RESULTS OF OPERATIONSNet RevenuesThe comparisons presented at constant currency rates reflect comparative local currency net revenues at the prior years foreign exchange rates.This measure provides information on the change in net revenues assuming that foreign currency exchange rates had not changed between theprior and current periods.AbbVie believes that the non-GAAP measure of change in net revenues at constant currency rates,when used inconjunction with the GAAP measure of change in net revenues at actual currency rates,may provide a more complete understanding of thecompanys operations and can facilitate analysis of the companys results of operations,particularly in evaluating performance from one period toanother.Three months ended June 30,Percent changeSix months ended June 30,Percent changeAt actual currency ratesAt constant currency ratesAt actual currency ratesAt constant currency rates(dollars in millions)2025202420252024United States$11,762$11,106 5.9%5.9%$21,741$20,147 7.9%7.9%International3,661 3,356 9.1%8.4%7,025 6,625 6.0%8.3%Net revenues$15,423$14,462 6.6%6.5%$28,766$26,772 7.4%8.0 25 Form 10-Q|30The following table details AbbVies worldwide net revenues:Three months ended June 30,Percent changeSix months ended June 30,Percent changeAt actual currencyratesAt constant currency ratesAt actual currencyratesAt constant currency rates(dollars in millions)2025202420252024ImmunologySkyriziUnited States$3,843$2,340 64.3d.3%$6,762$3,996 69.2i.2%International580 387 49.7G.2%1,086 739 46.9I.6%Total$4,423$2,727 62.2a.8%$7,848$4,735 65.8f.2%RinvoqUnited States$1,452$1,017 42.7B.7%$2,672$1,742 53.3S.3%International576 413 39.67.5%1,074 781 37.6.1%Total$2,028$1,430 41.8A.2%$3,746$2,523 48.5I.3%HumiraUnited States$802$2,360(66.0)%(66.0)%$1,546$4,131(62.6)%(62.6)%International378 454(16.8)%(17.2)u5 953(20.8)%(18.4)%Total$1,180$2,814(58.1)%(58.2)%$2,301$5,084(54.7)%(54.3)%NeuroscienceVraylarUnited States$898$773 16.2.2%$1,661$1,465 13.4.4%International2 1 72.8v.8%4 3 41.8G.4%Total$900$774 16.3.3%$1,665$1,468 13.5.5%Botox TherapeuticUnited States$775$669 15.9.9%$1,498$1,280 17.0.0%International153 145 5.7%6.0)6 282 5.2%8.6%Total$928$814 14.1.2%$1,794$1,562 14.9.5%UbrelvyUnited States$330$227 46.5F.5%$563$424 33.03.0%International8 4 73.9v.7 10 46.7Q.2%Total$338$231 47.1G.2%$578$434 33.33.4%QuliptaUnited States$237$146 62.8b.8%$409$274 49.5I.5%International30 4 100.00.0Q 7 100.00.0%Total$267$150 77.5v.9%$460$281 63.6c.6%VyalevUnited States$22$n/mn/m$28$n/mn/mInternational76 18 100.00.03 27 100.00.0%Total$98$18 100.00.0%$161$27 100.00.0%DuodopaUnited States$20$23(13.6)%(13.6)%$40$48(16.6)%(16.6)%International77 90(13.7)%(16.3)3 180(14.9)%(14.0)%Total$97$113(13.7)%(15.7)%$193$228(15.2)%(14.5)%Other NeuroscienceUnited States$51$57(11.4)%(11.4)%$106$118(10.4)%(10.4)%International4 5(23.3)%(21.3)%8 9(12.7)%(8.1)%Total$55$62(12.3)%(12.2)%$114$127(10.5)%(10.2)%OncologyImbruvicaUnited States$543$595(8.9)%(8.9)%$1,072$1,205(11.1)%(11.1)%Collaboration revenues211 238(11.2)%(11.2)B0 466(9.7)%(9.7)%Total$754$833(9.5)%(9.5)%$1,492$1,671(10.7)%(10.7)%VenclextaUnited States$321$300 7.4%7.4%$633$581 9.1%9.1%International370 337 9.5%9.1r3 670 7.8.3%Total$691$637 8.5%8.3%$1,356$1,251 8.4.3%ElahereUnited States$138$128 8.0%8.0%$303$192 57.5W.5%International21 n/mn/m35 n/mn/mTotal$159$128 24.2#.7%$338$192 75.5u.5%EpkinlyCollaboration revenues$49$29 70.5p.5%$85$51 66.8f.8%International21 7 100.00.06 12 100.00.0%Total$70$36 93.9.3%$121$63 92.1.3%Other OncologyUnited States$2$n/mn/m$2$n/mn/mAestheticsBotox CosmeticUnited States$410$450(8.7)%(8.7)%$705$839(15.9)%(15.9)%International282 279 0.9%1.2T3 523 3.7%5.8%Total$692$729(5.0)%(4.9)%$1,248$1,362(8.4)%(7.6) 25 Form 10-Q|31Three months ended June 30,Percent changeSix months ended June 30,Percent changeAt actual currencyratesAt constant currency ratesAt actual currencyratesAt constant currency rates(dollars in millions)2025202420252024Juvederm CollectionUnited States$105$138(23.6)%(23.6)%$180$244(25.9)%(25.9)%International155 205(24.4)%(24.4)11 396(21.5)%(19.8)%Total$260$343(24.0)%(24.0)%$491$640(23.2)%(22.2)%Other AestheticsUnited States$282$275 1.6%1.6%$552$556(1.0)%(1.0)%International45 43 5.8%6.4 81 11.7.5%Total$327$318 2.2%2.3%$642$637 0.6%0.9%Eye CareOzurdexUnited States$30$35(12.6)%(12.6)%$60$69(12.4)%(12.4)%International95 89 5.8%4.48 186 0.8%2.7%Total$125$124 0.6%(0.4)%$248$255(2.8)%(1.4)%Lumigan/GanfortUnited States$52$42 19.9.9%$100$71 39.49.4%International51 61(15.4)%(15.2)9 123(11.0)%(7.7)%Total$103$103(0.8)%(0.7)%$209$194 7.5%9.6%Alphagan/CombiganUnited States$13(91.6)%(91.6)%$26$28(3.6)%(3.6)%International36 36(3.1)%(0.2)p 80(13.1)%(8.5)%Total$36$49(25.6)%(23.5)%$96$108(10.6)%(7.2)%Other Eye CareUnited States$144$149(4.3)%(4.3)%$261$298(12.8)%(12.8)%International106 108(1.7)%0.9 6 216(4.4)%0.3%Total$250$257(3.2)%(2.1)%$467$514(9.3)%(7.3)%Other Key ProductsMavyretUnited States$184$167 9.7%9.7%$326$311 4.9%4.9%International191 202(5.1)%(6.5)55 407(12.8)%(11.2)%Total$375$369 1.6%0.8%$681$718(5.1)%(4.2)%CreonUnited States$404$372 8.4%8.4%$759$657 15.4.4%Linzess/ConstellaUnited States$247$211 17.4.4%$386$468(17.4)%(17.4)%International11 10 10.8.3 19 7.0%9.7%Total$258$221 17.1.1%$406$487(16.5)%(16.4)%All other$603$810(25.4)%(24.8)%$1,350$1,554(13.1)%(12.5)%Total net revenues$15,423$14,462 6.6%6.5%$28,766$26,772 7.4%8.0%n/m Not meaningfulThe following discussion and analysis of AbbVies net revenues by product is presented on a constant currency basis.Net revenues for Skyrizi increased 62%for the three months and 66%for the six months ended June 30,2025 primarily driven by continued strongmarket share uptake as well as market growth across all indications.Net revenues for Rinvoq increased 41%for the three months and 49%for the six months ended June 30,2025 primarily driven by continued strongmarket share uptake as well as market growth across all indications.Net revenues for Humira decreased 58%for the three months and 54%for the six months ended June 30,2025 primarily driven by continuedimpact of direct biosimilar competition following the loss of exclusivity.Net revenues for Vraylar increased 16%for the three months and 14%for the six months ended June 30,2025 primarily driven by continued marketshare uptake as well as market growth.Net revenues for Botox Therapeutic increased 14%for the three months and 16%for the six months ended June 30,2025 primarily driven bycontinued market share uptake as well as market growth.Net revenues for Ubrelvy increased 47%for the three months and 33%for the six months ended June 30,2025 primarily driven by continuedmarket share uptake as well as favorable pricing.Net revenues for Qulipta increased 77%for the three months and 64%for the six months ended June 30,2025 primarily driven by continued strongmarket share uptake.Net revenues for Imbruvica represent product revenues in the United States and collaboration revenues outside of the United States related toAbbVies 50%share of Imbruvica profit.AbbVies global Imbruvica revenues decreased 10%for the three months and 11 25 Form 10-Q|32for the six months ended June 30,2025 primarily driven by decreased demand and unfavorable pricing in the United States as well as decreasedcollaboration revenues.Net revenues for Venclexta increased 8%for the three months and 10%for the six months ended June 30,2025 primarily driven by continuedmarket share uptake as well as market growth partially offset by unfavorable pricing.Net revenues for Elahere increased 24%for the three months and 76%for the six months ended June 30,2025 primarily driven by increaseddemand.Net revenues for the six months ended June 30,2025 were also favorably impacted by a full period of Elahere results in 2025 compared tothe prior year.Net revenues for Botox Cosmetic decreased 5%for the three months and 8%for the six months ended June 30,2025.In the United States,BotoxCosmetic net revenues decreased 9%for the three months and 16%for the six months ended June 30,2025 primarily driven by lower market shareand decreased consumer demand.Net revenues for the six months ended June 30,2025 were also impacted by unfavorable pricing due toconsumer loyalty program changes in the United States.Internationally,Botox Cosmetic net revenues increased 1%for the three months and 6%for the six months ended June 30,2025 primarily driven by increased consumer demand across certain international markets.Net revenues for Juvederm Collection decreased 24%for the three months and 22%for the six months ended June 30,2025 primarily driven bydecreased global consumer demand.Gross Margin Three months ended June 30,Six months ended June 30,(dollars in millions)20252024%change20252024%changeGross margin$11,077$10,2608%$20,418$18,47611%as a%of net revenues72qqi%Gross margin as a percentage of net revenues increased for the three and six months ended June 30,2025 compared to the prior year primarilydue to increased leverage from net revenues growth,lower amortization of intangibles and the favorable impact of acquisition and integration costsincurred during the six months ended June 30,2024 in connection with the ImmunoGen acquisition partially offset by unfavorable changes inproduct mix.Selling,General and AdministrativeThree months ended June 30,Six months ended June 30,(dollars in millions)20252024%change20252024%changeSelling,general and administrative$3,253$3,377(4)%$6,546$6,692(2)%as a%of net revenues21#%Selling,general and administrative(SG&A)expenses as a percentage of net revenues decreased for the three and six months ended June 30,2025 compared to the prior year.SG&A expense as a percentage of net revenues for the three and six months ended June 30,2025 was favorablyimpacted by leverage from revenue growth partially offset by increased restructuring charges.SG&A expense for the six months ended June 30,2025 was also favorably impacted by acquisition and integration costs incurred during the six months ended June 30,2024 in connection with theImmunoGen acquisition.Research and DevelopmentThree months ended June 30,Six months ended June 30,(dollars in millions)20252024%change20252024%changeResearch and development$2,131$1,948 9%$4,198$3,8878%as a%of net revenues14%Research and development(R&D)expenses as a percentage of net revenues increased for the three months and were flat for the six monthsended June 30,2025 compared to the prior year.R&D expense percentage for the three and six months ended June 30,2025 was unfavorablyimpacted by increased funding to support all stages of the companys pipeline assets.R&D expense percentage for the six months ended June 30,2025 was also favorably impacted by acquisition and integration costs incurred during the six months ended June 30,2024 in connection with theImmunoGen acquisition.2025 Form 10-Q|33Acquired IPR&D and MilestonesThree months ended June 30,Six months ended June 30,(dollars in millions)2025202420252024Upfront charges$705$927$951$1,006 Development milestones118 10 120 95 Acquired IPR&D and milestones$823$937$1,071$1,101 Acquired IPR&D and milestones expense for the three and six months ended June 30,2025 included charges related to the upfront payments of$350 million to Gubra A/S for an exclusive global license to develop and commercialize GUB014295(ABBV-295)and$335 million to ADARxPharmaceuticals,Inc.for exclusive options to global license rights to develop and commercialize ADARxs small interfering RNA(siRNA)therapeutics.Acquired IPR&D and milestones expense for the three and six months ended June 30,2024 included a charge related to the upfrontpayment of$250 million to acquire Celsius Therapeutics.See Note 4 to the condensed consolidated financial statements for additional information.Other Non-Operating Expenses(Income)Three months ended June 30,Six months ended June 30,(in millions)2025202420252024Interest expense$740$726$1,440$1,386 Interest income(62)(220)(135)(427)Interest expense,net$678$506$1,305$959 Net foreign exchange loss$23$1$27$5 Other expense,net2,639 1,345 4,080 1,931 Interest expense increased for the three and six months ended June 30,2025 compared to the prior year primarily due to a higher average debtbalance.Interest income decreased for the three and six months ended June 30,2025 compared to the prior year primarily due to a lower average cash andequivalents balance.Other expense,net included charges related to changes in fair value of contingent consideration liabilities of$2.8 billion for the three months and$4.3 billion for the six months ended June 30,2025 and$1.5 billion for the three months and$2.1 billion for the six months ended June 30,2024.The fair value of contingent consideration liabilities is impacted by the passage of time and multiple other inputs,including the probability of successof achieving regulatory milestones,discount rates,the estimated amount of future sales of the acquired products and other market-based factors.For the three and six months ended June 30,2025,the change in fair value reflected higher estimated Skyrizi sales,the passage of time and lowerdiscount rates.For the three and six months ended June 30,2024,the change in fair value reflected higher estimated Skyrizi sales and the passageof time,partially offset by higher discount rates.Income Tax ExpenseThe effective tax rate was 39%for the three mo
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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington,D.C.20549FORM 10-Q(Mark One)QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACTOF 1934For the quarterly period ended June 30,2025orTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACTOF 1934Commission File Number:001-37702Amgen Inc.(Exact name of registrant as specified in its charter)Delaware 95-3540776(State or other jurisdiction of incorporation or organization)(I.R.S.Employer Identification No.)One Amgen Center Drive 91320-1799Thousand OaksCalifornia(Address of principal executive offices)(Zip Code)(805)447-1000(Registrants telephone number,including area code)Securities registered pursuant to Section 12(b)of the Act:Title of each classTrading Symbol(s)Name of each exchange on which registeredCommon stock,$0.0001 par valueAMGNThe Nasdaq Global Select Market2.00%Senior Notes due 2026AMGN26The Nasdaq Global Select MarketIndicate by check mark whether the registrant(1)has filed all reports required to be filed by Section 13 or 15(d)of the Securities Exchange Act of 1934during the preceding 12 months(or for such shorter period that the registrant was required to file such reports)and(2)has been subject to such filingrequirements for the past 90 days.Yes No Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 ofRegulation S-T(232.405 of this chapter)during the preceding 12 months(or for such shorter period that the registrant was required to submit suchfiles).Yes No Indicate by check mark whether the registrant is a large accelerated filer,an accelerated filer,a non-accelerated filer,a smaller reporting company,or anemerging growth company.See the definitions of“large accelerated filer,”“accelerated filer,”“smaller reporting company,”and“emerging growth company”in Rule 12b-2 of the Exchange Act.Large accelerated filerAccelerated filerNon-accelerated filerSmaller reporting companyEmerging growth companyIf an emerging growth company,indicate by check mark if the registrant has elected not to use the extended transition period for complying with any newor revised financial accounting standards provided pursuant to Section 13(a)of the Exchange Act.Indicate by check mark whether the registrant is a shell company(as defined in Rule 12b-2 of the Exchange Act).Yes No As of July 31,2025,the registrant had 538,361,851 shares of common stock,$0.0001 par value,outstanding.AMGEN INC.INDEX Page No.DEFINED TERMS AND PRODUCTSiiPART IFINANCIAL INFORMATION1Item 1.FINANCIAL STATEMENTS1CONDENSED CONSOLIDATED STATEMENTS OF INCOME1CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME2CONDENSED CONSOLIDATED BALANCE SHEETS3CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY4CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS6NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS7Item 2.MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OFOPERATIONS31Item 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK45Item 4.CONTROLS AND PROCEDURES46PART IIOTHER INFORMATION47Item 1.LEGAL PROCEEDINGS47Item 1A.RISK FACTORS47Item 2.UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS58Item 5.OTHER INFORMATION58Item 6.EXHIBITS58INDEX TO EXHIBITS59SIGNATURES65iDefined Terms and ProductsDefined termsWe use several terms in this Form 10-Q,including but not limited to those that are finance,regulation and disease-state related,as well as names of othercompanies,which are provided below.TermDescription2017 Tax ActTax Cuts and Jobs Act of 2017340B ProgramFederal 340B Drug Pricing ProgramAOCIaccumulated other comprehensive income(loss)AstraZenecaAstraZeneca plcBeOneBeOne Medicines Ltd.(formerly BeiGene,Ltd.)BLABiologics License ApplicationCMSCenters for Medicare&Medicaid ServicesEMAEuropean Medicines AgencyEPSearnings per shareEUEuropean UnionFDAU.S.Food and Drug AdministrationFitchFitch Ratings,Inc.G7Group of Seven(Canada,France,Germany,Italy,Japan,the United Kingdom and the United States)GAAPU.S.generally accepted accounting principlesHHSU.S.Department of Health and Human ServicesHorizonHorizon Therapeutics plcIPR&Din-process research and developmentIRAInflation Reduction Act of 2022IRSInternal Revenue ServiceLater-Stage Clinical ProgramsR&D expenses incurred in or related to phase 2 and phase 3 clinical programs intended to result in registrationof a new product or a new indication for an existing product primarily in the United States or the EUMarketed Product SupportR&D expenses incurred in support of the Companys marketed products that are authorized to be sold primarilyin the United States or the EU.Includes clinical trials designed to gather information on product safety(certainof which may be required by regulatory authorities)and their product characteristics after regulatory approvalhas been obtained,as well as the costs of obtaining regulatory approval of a product in a new market afterapproval in either the United States or the EU has been obtainedMD&Amanagements discussion and analysisMFNMost-Favored-NationsMFN EOMost-Favored-Nations Prescription Drug Pricing Executive OrderMoodysMoodys Investors Service,Inc.NeumoraNeumora Therapeutics,Inc.OBBBAThe One Big Beautiful Bill ActOECDOrganisation for Economic Co-operation and DevelopmentPBMpharmacy benefit managerPDABPrescription Drug Affordability BoardR&Dresearch and developmentRANKLreceptor activator of nuclear factor kappa-B ligandRARRevenue Agent ReportResearch and Early PipelineR&D expenses incurred in activities substantially in support of early research through the completion of phase 1clinical trials,including drug discovery,toxicology,pharmacokinetics and drug metabolism and processdevelopmentiiTermDescriptionROWrest of worldS&PStandard&Poors Financial Services LLCSECU.S.Securities and Exchange CommissionSG&Aselling,general and administrativeSOFRSecured Overnight Financing RateU.S.TreasuryU.S.Department of the TreasuryUTBunrecognized tax benefitiiiProductsThe brand names of our products,our delivery devices and certain of our product candidates and their associated generic names are provided below.TermDescriptionACTIMMUNEACTIMMUNE (interferon gamma-1b)AimovigAimovig (erenumab-aooe)AMJEVITA/AMGEVITAAMJEVITA(adalimumab-atto)/AMGEVITA (adalimumab)AranespAranesp (darbepoetin alfa)AVSOLAAVSOLA (infliximab-axxq)BKEMV/BEKEMVBKEMV (eculizumab-aeeb)/BEKEMV (eculizumab)BLINCYTOBLINCYTO (blinatumomab)BUPHENYLBUPHENYL (sodium phenylbutyrate)CorlanorCorlanor (ivabradine)ENBRELEnbrel (etanercept)EPOGENEPOGEN (epoetin alfa)EVENITYEVENITY (romosozumab-aqqg)IMDELLTRA/IMDYLLTRAIMDELLTRA (tarlatamab-dlle)/IMDYLLTRA (tarlatamab)IMLYGICIMLYGIC (talimogene laherparepvec)KANJINTIKANJINTI (trastuzumab-anns)KRYSTEXXAKRYSTEXXA (pegloticase)KYPROLISKYPROLIS (carfilzomib)LUMAKRAS/LUMYKRASLUMAKRAS/LUMYKRAS (sotorasib)MariTideMaridebart cafraglutide(MariTide)MVASIMVASI (bevacizumab-awwb)NeulastaNeulasta (pegfilgrastim)NEUPOGENNEUPOGEN (filgrastim)NplateNplate (romiplostim)OtezlaOtezla (apremilast)ParsabivParsabiv (etelcalcetide)PAVBLUPAVBLU (aflibercept-ayyh)PENNSAIDPENNSAID (diclofenac sodium topical solution)2%PROCYSBIPROCYSBI (cysteamine bitartrate)ProliaProlia (denosumab)QUINSAIRQUINSAIR (levofloxacin)RAVICTIRAVICTI (glycerol phenylbutyrate)RAYOSRAYOS (prednisone)RepathaRepatha (evolocumab)RIABNIRIABNI (rituximab-arrx)Sensipar/MimparaSensipar/Mimpara (cinacalcet)TAVNEOSTAVNEOS (avacopan)TEPEZZATEPEZZA (teprotumumab-trbw)TEZSPIRETEZSPIRE (tezepelumab-ekko)UPLIZNAUPLIZNA (inebilizumab-cdon)VectibixVectibix (panitumumab)WEZLANA/WEZENLAWEZLANA(ustekinumab-auub)/WEZENLA (ustekinumab)XGEVAXGEVA (denosumab)ivPART IFINANCIAL INFORMATION Item 1.FINANCIAL STATEMENTSAMGEN INC.CONDENSED CONSOLIDATED STATEMENTS OF INCOME(In millions,except per-share data)(Unaudited)Three months ended June 30,Six months ended June 30,2025202420252024Revenues:Product sales$8,771$8,041$16,644$15,159 Other revenues408 347 684 676 Total revenues9,179 8,388 17,328 15,835 Operating expenses:Cost of sales3,011 3,236 5,979 6,436 Research and development1,744 1,447 3,230 2,790 Selling,general and administrative1,691 1,785 3,378 3,593 Other77 11 907 116 Total operating expenses6,523 6,479 13,494 12,935 Operating income2,656 1,909 3,834 2,900 Other income(expense):Interest expense,net(694)(808)(1,417)(1,632)Other(expense)income,net(394)(307)1,124(542)Income before income taxes1,568 794 3,541 726 Provision for income taxes136 48 379 93 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:Basic538 537 538 537 Diluted541 541 541 541 See accompanying notes.1AMGEN INC.CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME(In millions)(Unaudited)Three months ended June 30,Six months ended June 30,2025202420252024Net income$1,432$746$3,162$633 Other comprehensive(loss)income,net of reclassification adjustmentsand 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 reclassificationadjustments and taxes(313)35(478)134 Comprehensive income$1,119$781$2,684$767 See accompanying notes.2AMGEN INC.CONDENSED CONSOLIDATED BALANCE SHEETS(In millions,except per-share data)June 30,2025December 31,2024(Unaudited)ASSETSCurrent assets:Cash and cash equivalents$8,028$11,973 Trade receivables,net8,701 6,782 Inventories6,583 6,998 Other current assets3,422 3,277 Total current assets26,734 29,030 Property,plant and equipment,net6,855 6,543 Intangible assets,net24,614 27,699 Goodwill18,674 18,637 Other noncurrent assets11,020 9,930 Total assets$87,897$91,839 LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable$3,010$1,908 Accrued liabilities15,022 17,641 Current portion of long-term debt2,444 3,550 Total current liabilities20,476 23,099 Long-term debt53,760 56,549 Long-term deferred tax liabilities1,386 1,616 Long-term tax liabilities2,511 2,349 Other noncurrent liabilities2,336 2,349 Contingencies and commitments(see Note 13)Stockholders equity:Common stock and additional paid-in capital;$0.0001 par value;2,750.0 shares authorized;outstanding538.3 shares in 2025 and 536.9 shares in 202433,680 33,533 Accumulated deficit(25,708)(27,590)Accumulated other comprehensive loss(544)(66)Total stockholders equity7,428 5,877 Total liabilities and stockholders equity$87,897$91,839 See accompanying notes.3AMGEN INC.CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY(In millions,except per-share data)(Unaudited)Three months ended June 30,2025Number of shares of common stockCommon stock and additional paid-in capitalAccumulated deficitAccumulated other comprehensive lossTotalBalance 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 awardprograms0.6 36 36 Stock-based compensation expense 157 157 Tax impact related to employee stock-based compensationexpense(91)(91)Balance as of June 30,2025538.3$33,680$(25,708)$(544)$7,428 Six months ended June 30,2025Number of shares of common stockCommon stock and additional paid-in capitalAccumulated deficitAccumulated other comprehensive lossTotalBalance 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 awardprograms1.4 78 78 Stock-based compensation expense 242 242 Tax impact related to employee stock-based compensationexpense(173)(173)Balance as of June 30,2025538.3$33,680$(25,708)$(544)$7,428 4AMGEN INC.CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY(continued)(In millions,except per-share data)(Unaudited)Three months ended June 30,2024Number of shares of common stockCommon stock and additional paid-in capitalAccumulated deficitAccumulated other comprehensive lossTotalBalance as of March 31,2024536.4$33,082$(27,870)$(190)$5,022 Net income 746 746 Other comprehensive income,net of taxes 35 35 Issuance of common stock in connection with equity awardprograms0.8 65 65 Stock-based compensation expense 157 157 Tax impact related to employee stock-based compensationexpense(100)(100)Balance as of June 30,2024537.2$33,204$(27,124)$(155)$5,925 Six months ended June 30,2024Number of shares of common stockCommon stock and additional paid-in capitalAccumulated deficitAccumulated other comprehensive lossTotalBalance as of December 31,2023535.4$33,070$(26,549)$(289)$6,232 Net income 633 633 Other comprehensive income,net of taxes 134 134 Dividends declared on common stock($2.25 per share)(1,208)(1,208)Issuance of common stock in connection with equity awardprograms1.8 99 99 Stock-based compensation expense 260 260 Tax impact related to employee stock-based compensationexpense(225)(225)Balance as of June 30,2024537.2$33,204$(27,124)$(155)$5,925 See accompanying notes.5AMGEN INC.CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(In millions)(Unaudited)Six months ended June 30,20252024Cash 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 other2,728 2,799 Impairment of intangible assets800 68 Stock-based compensation expense242 260 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 Inventories527 1,528 Other assets(407)(339)Accounts payable1,086 666 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 activities3,671 3,148 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 period11,973 10,944 Cash and cash equivalents at end of period$8,028$9,301 See accompanying notes.6AMGEN INC.NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTSJune 30,2025(Unaudited)1.Summary of significant accounting policiesBusinessAmgen Inc.(including its consolidated subsidiaries,referred to as“Amgen,”“the Company,”“we,”“our”or“us”)is a global biotechnology pioneer thatdiscovers,develops,manufactures and delivers innovative human therapeutics.We operate our business in one operating segment:human therapeutics.SeeNote 2,Segment and other information.Basis of presentationThe interim unaudited financial information for the three and six months ended June 30,2025 and 2024,has been prepared in accordance with GAAP andincludes 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 fullfiscal year.The condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto containedin our Annual Report on Form 10-K for the year ended December 31,2024,and with the condensed consolidated financial statements and the notes theretocontained in our Quarterly Report on Form 10-Q for the quarter ended March 31,2025.Principles of consolidationThe condensed consolidated financial statements include the accounts of Amgen and its majority-owned subsidiaries.In determining whether we are theprimary beneficiary of a variable interest entity,we consider whether we have both the power to direct activities of the entity that most significantly impact theentitys economic performance and the obligation to absorb losses of,or the right to receive benefits from,the entity that could potentially be significant to thatentity.We do not have any significant interests in any variable interest entities of which we are the primary beneficiary.All material intercompany transactionsand balances have been eliminated in consolidation.Certain reclassifications have been made to prior periods in the condensed consolidated financialstatements and accompanying notes to conform with the current presentation.Use of estimatesThe preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions thataffect the amounts reported in the condensed consolidated financial statements and accompanying notes.Actual results may differ from those estimates.Property,plant and equipment,netProperty,plant and equipment is recorded at historical cost,net of accumulated depreciation and amortization of$10.8 billion and$10.4 billion as of June30,2025 and December 31,2024,respectively.Recent accounting pronouncements not yet adoptedIn December 2023,the Financial Accounting Standards Board(FASB)issued Accounting Standards Update(ASU)No.2023-09,Income Taxes(Topic740):Improvements to Income Tax Disclosures,to improve income tax disclosure requirements by requiring more detailed information in several income taxdisclosures,such as enhancing disclosure of income taxes paid and requiring disaggregation of the effective income tax rate reconciliation.The standard iseffective for public business entities such as Amgen for annual periods beginning after December 15,2024.Early adoption is permitted,and entities may applythe standard prospectively or retrospectively.We expect the adoption of this new standard to result in incremental disclosures to the notes to our financialstatements.In November 2024,the FASB issued ASU No.2024-03,Income StatementReporting Comprehensive IncomeExpense Disaggregation Disclosures(Subtopic 220-40):Disaggregation of Income Statement Expenses,to improve disclosures about a public business entitys expenses by requiring disaggregateddisclosures of certain types of expenses,including purchases of inventory,employee compensation,depreciation,intangible amortization and depletion,asapplicable,for each income statement caption that includes those expenses.In addition,the standard will require entities to define and disclose total sellingexpenses.The standard is effective for public business entities such as Amgen for annual periods beginning after7December 15,2026,and interim periods beginning after December 15,2027.Early adoption is permitted,and entities may apply the standard prospectively orretrospectively.We are currently evaluating the impact of adopting this standard on our consolidated financial statements and related disclosures.2.Segment and other informationWe operate our business in one operating segment,which also represents one reportable segment:human therapeutics.Therefore,results of ouroperations 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 theworlds toughest diseases.The Companys Chief Executive Officer has been identified as the chief operating decision maker(CODM).The CODM managesand allocates resources on a consolidated basis.The determination of a single segment is consistent with the financial information regularly reviewed by theCODM for purposes of evaluating performance and allocating resources,which is reviewed on a consolidated basis.As the Companys CODM evaluates the financial performance of the Companys human therapeutics segment on a consolidated basis,the measure ofsegment performance is net income,as reflected in the Condensed Consolidated Statements of Income.The CODM uses net income to allocate resources on aconsolidated 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 financialperformance based on net income adjusted for certain items that are unusual and non-recurring.As the Company manages its assets on a consolidated basis,themeasure of segment assets is total assets,as reflected in the Condensed Consolidated Balance Sheets.See Note 6,Investments,for further informationregarding equity method investments,and Net cash used in investing activities in the Condensed Consolidated Statements of Cash Flows for furtherinformation regarding capital expenditures.8The following table provides segment revenues,significant segment expenses,other segment items,reported segment net income and a reconciliation ofsegment net income to the Companys 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 30,2025202420252024Revenues:Product sales$8,771$8,041$16,644$15,159 Other revenues408 347 684 676 Total revenues9,179 8,388 17,328 15,835 Less:Manufacturing cost of sales2,484 2,825 5,012 5,639 Profit share and royalties in cost of sales527 411 967 797 Research and development1,744 1,447 3,230 2,790 Sales and marketing1,137 1,211 2,203 2,415 General and administrative554 574 1,175 1,178 Other segment items539 445(34)965 Equity in loss(income)of equity method investments18(12)29(39)Interest income(86)(115)(212)(268)Interest expense,net694 808 1,417 1,632 Provision for income taxes136 48 379 93 Segment net income1,432 746 3,162 633 Reconciliation of profit or loss:Adjustments and reconciling items Consolidated net income$1,432$746$3,162$633 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 30,2025and 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 CondensedConsolidated 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$202million,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.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 millionand$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 businesscombinations of$702 million and$1.4 billion,respectively.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).(1)(2)(1)(1)(1)(1)(3)_(1)(2)(3)93.RevenuesWe operate our business in one operating segment:human therapeutics.Therefore,results of our operations are reported on a consolidated basis forpurposes 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 30,20252024U.S.ROWTotalU.S.ROWTotalProlia$745$377$1,122$770$395$1,165 Repatha361 335 696 270 262 532 ENBREL597 7 604 902 7 909 XGEVA347 185 532 399 163 562 Otezla512 106 618 432 112 544 EVENITY395 123 518 281 110 391 TEPEZZA466 39 505 478 1 479 BLINCYTO270 114 384 165 99 264 KYPROLIS232 146 378 240 137 377 Aranesp107 252 359 91 257 348 Nplate228 141 369 214 132 346 TEZSPIRE342 342 234 234 KRYSTEXXA349 349 294 294 Vectibix144 161 305 133 137 270 Other products1,229 461 1,690 937 389 1,326 Total product sales$6,324$2,447 8,771$5,840$2,201 8,041 Other revenues408 347 Total revenues$9,179$8,388(1)(2)(3)10Six months ended June 30,20252024U.S.ROWTotalU.S.ROWTotalProlia$1,465$756$2,221$1,427$737$2,164 Repatha7046481,352 5435061,049 ENBREL1,101131,114 1,463131,476 XGEVA7073911,098 7653581,123 Otezla8552001,055 725213938 EVENITY715245960 517216733 TEPEZZA83155886 897 6 903 BLINCYTO543211754 318190508 KYPROLIS448254702 474279753 Aranesp198501699 191506697 Nplate429253682 404259663 TEZSPIRE627 627 407 407 KRYSTEXXA585 585 529 529 Vectibix279293572 253264517 Other products2,499 8383,337 1,900 7992,699 Total product sales$11,986$4,658 16,644$10,813$4,346 15,159 Other revenues684 676 Total revenues$17,328$15,835 TEZSPIRE is marketed by our collaborator AstraZeneca outside the United States.Consists of product sales of our non-principal products.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.(1)(2)(3)_(1)(2)(3)114.Income taxesThe 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 loweramortization 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 Otezlaimpairment charge recorded in the first quarter of 2025,and current year net favorable items as compared to the prior period,partially offset by the netunrealized 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 taxrates 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 oureffective tax rate from foreign earnings results from locations in which the Company has significant manufacturing operations,including Singapore,Irelandand 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 taxincentive grants through 2050 and the Companys operations in Singapore are subject to a tax incentive grant through 2036.Effective January 1,2024,selectedindividual 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.Singapores enactment of the agreement applies irrespective of theCompanys incentive grant.Our legal entities in such countries,along with their direct and indirect subsidiaries,are now subject to a 15%minimum tax rate onadjusted 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 certainexpiring provisions of the 2017 Tax Act,and modifications to the international tax framework.The legislation has multiple effective dates,with certainprovisions 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 authoritiesinvolving issues regarding the timing and amount of deductions,the use of tax credits and allocations of income and expenses among various tax jurisdictionsbecause of differing interpretations of tax laws,regulations and relevant facts.Tax authorities,including the IRS,are becoming more aggressive and areparticularly focused on such matters.In 2017,we received an RAR and a modified RAR from the IRS for the years 20102012,proposing significant adjustments that primarily relate to theallocation 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 andcalculations 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 tocontest two duplicate Statutory Notices of Deficiency(Notices)for the years 20102012 that we received in May and July 2021,which seek to increase ourU.S.taxable income for the years 20102012 by an amount that would result in additional federal tax of approximately$3.6 billion,plus interest.Anyadditional tax that could be imposed for the years 20102012 would be reduced by up to approximately$900 million of repatriation tax previously accrued onour foreign earnings.In 2020,we received an RAR and a modified RAR from the IRS for the years 20132015,also proposing significant adjustments that primarily relate tothe 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 20102012.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 20132015 that we previously reported receiving in April 2022 thatseeks to increase our U.S.taxable income for the years 20132015 by an amount that would result in additional federal tax of approximately$5.1 billion,plusinterest.In addition,the Notice asserts penalties of approximately$2.0 billion.Any additional tax that could be imposed for the years 20132015 would bereduced 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 20102012 and 20132015 Notices are without merit.We are contesting the 20102012 and20132015 Notices through the judicial process.The two cases were consolidated in the U.S.Tax Court on December 19,2022.The trial began on November4,2024 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 secondhalf of 2026.We are currently under examination by the IRS for the years 20162018 with respect to issues similar to those for the 2010 through 2015 period.Weexpect that the IRS will begin its audit of 2019-2022 in 2025 or early 2026,and we believe that12it 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 areunder 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 isappropriate 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 resultin 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 resultof 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 shareThe computation of basic EPS is based on the weighted-average number of our common shares outstanding.The computation of diluted EPS is based onthe weighted-average number of our common shares outstanding and dilutive potential common shares,which primarily include shares that may be issuedunder our stock option,restricted stock and performance unit award programs(collectively,dilutive securities),as determined by using the treasury stockmethod.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 30,2025202420252024Income(Numerator):Net income for basic and diluted EPS$1,432$746$3,162$633 Shares(Denominator):Weighted-average shares for basic EPS538 537 538 537 Effect of dilutive securities3 4 3 4 Weighted-average shares for diluted EPS541 541 541 541 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 ofdiluted EPS was not significant.136.InvestmentsAvailable-for-sale investmentsThe 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 valuesU.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 valuesU.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 31,2024Cash 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 and2024,interest income on these investments was$86 million and$115 million,respectively.For the six months ended June 30,2025 and 2024,interest incomeon 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 recordedin Other(expense)income,net,in the Condensed Consolidated Statements of Income.The cost of securities sold is based on the specific-identificationmethod.The primary objective of our investment portfolio is to maintain safety of principal,prudent levels of liquidity and acceptable levels of risk.Ourinvestment 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 securitiesBeOne 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 wereincluded in Other noncurrent assets in the Condensed Consolidated Balance Sheets.During the three months ended June 30,2025 and 2024,we recordedunrealized 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 theCondensed Consolidated Statements of Income.Subject to certain exceptions or otherwise agreed to by BeOne,while Amgen holds at least 5.0%of BeOnes outstanding common stock,(A)we mayonly sell our BeOne equity investment via:(i)a registered public offering,(ii)a sale under Rule14144 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 maynot sell more than 5.0%of BeOnes outstanding common stock in any rolling 12-month period.Other equity securitiesExcluding our equity investments in BeOne(discussed above)and Neumora(discussed below),we held investments in other equity securities withreadily determinable fair values(publicly traded securities)of$287 million and$314 million as of June 30,2025 and December 31,2024,respectively,whichwere included in Other noncurrent assets in the Condensed Consolidated Balance Sheets.During the three and six months ended June 30,2025 and 2024,netunrealized gains and losses on these publicly traded securities were not material.Additionally,net realized gains and losses on sales of publicly tradedsecurities 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 endedJune 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,werenot material.Equity method investmentsNeumora 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 ourequity investment qualifies us for the equity method of accounting,we have elected the fair value option to account for our investment.Under the fair valueoption,changes in the fair value of the investment are recognized through earnings in Other(expense)income,net,in the Condensed Consolidated Statementsof Income each reporting period.See Note 11,Fair value measurement.We believe the fair value option best reflects the economics of the underlyingtransaction.During the three months ended June 30,2025 and 2024,we recognized unrealized losses of$9 million and$138 million,respectively.During thesix 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 Neumoras outstanding common stock in any rolling 12-month period for as long as wehold at least 10.0%of their outstanding common stock,subject to certain exceptions or otherwise agreed to by Neumora.Limited partnershipsWe held limited partnership investments of$235 million and$262 million as of June 30,2025 and December 31,2024,respectively,which were includedin Other noncurrent assets in the Condensed Consolidated Balance Sheets.These investments,which are primarily investment funds of early-stagebiotechnology companies,are accounted for by using the equity method of accounting and are measured by using our proportionate share of the net assetvalues of the underlying investments held by the limited partnerships as a practical expedient.These investments are typically redeemable only throughdistributions upon liquidation of the underlying assets.As of June 30,2025,we had$146 million of unfunded additional commitments to be made for theseinvestments during the next several years.For the three and six months ended June 30,2025 and 2024,net unrealized gains and losses recognized from ourlimited partnership investments were not material.7.InventoriesInventories consisted of the following(in millions):June 30,2025December 31,2024Raw materials$885$818 Work in process3,658 4,120 Finished goods2,040 2,060 Total inventories$6,583$6,998 158.Goodwill and other intangible assetsGoodwillThe 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 assetsOther 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,netFinite-lived intangible assets:Developed-product-technology rights$48,201$(24,846)$23,355$48,611$(22,594)$26,017 Licensing rights3,875(3,457)418 3,875(3,392)483 Research and development technology rights1,419(1,288)131 1,374(1,235)139 Marketing-related rights1,202(1,202)1,202(1,202)Total finite-lived intangible assets54,697(30,793)23,904 55,062(28,423)26,639 Indefinite-lived intangible assets:In-process research and development710 710 1,060 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 consistsof contractual rights to receive future milestone,royalty and profit-sharing payments;capitalized payments to third parties for milestones related to regulatoryapprovals to commercialize products;and upfront payments associated with royalty obligations for marketed products.Marketing-related rights primarilyconsists of rights related to the sale and distribution of marketed products.R&D technology rights pertains to technologies used in R&D that have alternativefuture uses.In January 2025,as part of the IRA,the Companys product Otezla was selected by CMS for Medicare price setting that will be applicable beginning onJanuary 1,2027.The earlier than anticipated selection resulted in a decrease in the estimated future cash flows for the product in the United States.Thisselection represented a triggering event that required the Company to evaluate the underlying developed-product-technology rights for impairment.In the firstquarter of 2025,the Company utilized a discounted cash flow analysis based on Level 3 inputs,including estimated product sales,operating expenses and adiscount 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 partialimpairment of both the gross and net carrying amounts of$800 million,which was recognized in Other operating expenses in the Condensed ConsolidatedStatements 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 risksand/or lack of receipt of required regulatory approvals.We review IPR&D projects for impairment annually,whenever events or changes in circumstancesindicate that the carrying amounts may not be recoverable and upon the establishment of technological feasibility or regulatory approval.During the secondquarter of 2025,the FDA approved UPLIZNA for the Immunoglobulin G4-related disease(IgG4-RD)indication,and commercialization commenced in theUnited 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 ofJune 30,2025,the total estimated future16amortization 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.179.Financing arrangementsOur borrowings consisted of the following(in millions):June 30,2025December 31,20241.90%notes due 2025(1.90 25 Notes)$500 5.25%notes due 2025(5.25 25 Notes)2,000 3.125%notes due 2025(3.125 25 Notes)1,000 2.00u0 million notes due 2026(2.00 26 euro Notes)884 777 5.507%notes due 2026(5.507 26 Notes)1,500 1,500 2.60%notes due 2026(2.60 26 Notes)1,250 1,250 Term loan due October 20261,800 1,800 5.50G5 million notes due 2026(5.50 26 pound sterling Notes)652 595 2.20%notes due 2027(2.20 27 Notes)1,724 1,724 3.20%notes due 2027(3.20 27 Notes)1,000 1,000 5.15%notes due 2028(5.15 28 Notes)3,750 3,750 1.65%notes due 2028(1.65 28 Notes)1,234 1,234 3.00%notes due 2029(3.00 29 Notes)750 750 4.05%notes due 2029(4.05 29 Notes)1,250 1,250 4.00p0 million notes due 2029(4.00 29 pound sterling Notes)961 876 2.45%notes due 2030(2.45 30 Notes)1,250 1,250 5.25%notes due 2030(5.25 30 Notes)2,750 2,750 2.30%notes due 2031(2.30 31 Notes)1,250 1,250 2.00%notes due 2032(2.00 32 Notes)987 1,001 3.35%notes due 2032(3.35 32 Notes)1,000 1,000 4.20%notes due 2033(4.20 33 Notes)750 750 5.25%notes due 2033(5.25 33 Notes)4,250 4,250 6.375%notes due 2037(6.375 37 Notes)478 478 6.90%notes due 2038(6.90 38 Notes)254 254 6.40%notes due 2039(6.40 39 Notes)333 333 3.15%notes due 2040(3.15 40 Notes)1,478 1,668 5.75%notes due 2040(5.75 40 Notes)373 373 2.80%notes due 2041(2.80 41 Notes)594 776 4.95%notes due 2041(4.95 41 Notes)600 600 5.15%notes due 2041(5.15 41 Notes)729 729 5.65%notes due 2042(5.65 42 Notes)415 415 5.60%notes due 2043(5.60 43 Notes)2,750 2,750 5.375%notes due 2043(5.375 43 Notes)185 185 4.40%notes due 2045(4.40 45 Notes)2,250 2,250 4.563%notes due 2048(4.563 48 Notes)1,415 1,415 3.375%notes due 2050(3.375 50 Notes)1,504 1,764 4.663%notes due 2051(4.663 51 Notes)3,541 3,541 3.00%notes due 2052(3.00 52 Notes)754 890 4.20%notes due 2052(4.20 52 Notes)882 895 4.875%notes due 2053(4.875 53 Notes)1,000 1,000 5.65%notes due 2053(5.65 53 Notes)4,250 4,250 2.77%notes due 2053(2.77 53 Notes)940 940 4.40%notes due 2062(4.40 62 Notes)1,128 1,165 18 June 30,2025December 31,20245.75%notes due 2063(5.75 63 Notes)2,750 2,750 Other notes due 2097100 100 Total principal amount of debt57,695 61,778 Unamortized bond discounts,premiums and issuance costs,net(1,331)(1,360)Fair value adjustments(186)(343)Other26 24 Total carrying value of debt56,204 60,099 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 48 Notes,the 4.663 51Notes and the 2.77 53 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 repaymentsDuring the three months ended June 30,2025 and 2024,debt repayments totaled$1.0 billion and$1.4 billion,respectively.During the six months endedJune 30,2025 and 2024,debt repayments totaled$3.5 billion and$1.4 billion,respectively.Debt extinguishmentDuring 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 40 Notes,2.80 41 Notes,3.375 50 Notes,3.00 52 Notes,4.20 52 Notes and 4.40 62 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 32 Notes,3.15 40 Notes,2.80 41 Notes,3.375 50 Notes,3.00 52 Notes,4.20 52 Notes and 4.40 62 Notes,for an aggregate costof$602 million,which resulted in a$228 million gain on extinguishment of debt.During the six months ended June 30,2024,we repurchased an aggregateprincipal amount of our debt of$544 million,including portions of the 3.15 40 Notes,2.80 41 Notes,3.375 50 Notes,3.00 52 Notes,4.20 52 Notes and 4.40 62 Notes,for an aggregate cost of$410 million,which resulted in a$133 million gain on extinguishment of debt.Gains onextinguishments of debt are recorded in Other(expense)income,net,in the Condensed Consolidated Statements of Income.Interest rate swap contractsSee Note 12,Derivative instruments,for a discussion of interest rate swap contracts related to certain of our notes.10.Stockholders equityStock repurchase programDuring the six months ended June 30,2025 and 2024,we did not repurchase shares under our stock repurchase program.As of June 30,2025,$6.8billion of authorization remained available under the stock repurchase program.DividendsIn March 2025 and December 2024,our Board of Directors declared quarterly cash dividends of$2.38 per share,which were paid in June 2025 andMarch 2025,respectively.In August 2025,our Board of Directors declared a quarterly cash dividend of$2.38 per share,which will be paid in September 2025.19Accumulated other comprehensive income(loss)The components of AOCI were as follows(in millions):ForeigncurrencytranslationadjustmentsCash flow hedgesOtherAOCIBalance as of March 31,2025$(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)ForeigncurrencytranslationadjustmentsCash flow hedgesOtherAOCIBalance 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 1 1 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 locationsComponents of AOCI20252024Cash flow hedges:Foreign currency forward contract gains$12$55 Product salesCross-currency swap contract gains(losses)172(3)Other(expense)income,net184 52 Income before income taxes(40)(11)Provision for income taxes$144$41 Net incomeSix months ended June 30,Condensed Consolidated Statements of Income locationsComponents of AOCI20252024Cash flow hedges:Foreign currency forward contract gains$68$106 Product salesCross-currency swap contract gains(losses)255(34)Other(expense)income,net323 72 Income before income taxes(70)(15)Provision for income taxes$253$57 Net income2011.Fair value measurementTo estimate the fair values of our financial assets and liabilities,we use valuation approaches within a hierarchy that maximize the use of observableinputs and minimize the use of unobservable inputs by requiring that observable inputs be used when available.Observable inputs are inputs that marketparticipants would use in pricing an asset or liability based on market data obtained from sources independent of the Company.Unobservable inputs are inputsthat reflect the Companys assumptions about the inputs that market participants would use in pricing an asset or liability and are developed based on the bestinformation 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 accessLevel 2 Valuations for which all significant inputs are observable either directly or indirectlyother than Level 1 inputsLevel 3 Valuations based on inputs that are unobservable and significant to the overall fair value measurementThe availability of observable inputs can vary among different types of financial assets and liabilities.To the extent that the valuation is based on modelsor inputs that are less observable or unobservable in the market,the determination of fair value requires more judgment.In certain cases,inputs used formeasuring fair value may fall into different levels of the fair value hierarchy.In such cases,for financial statement disclosure purposes,the level in the fairvalue 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 valuemeasurement.The fair values of each major class of the Companys financial assets and liabilities measured at fair value on a recurring basis were as follows(inmillions):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:TotalAssets: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 90 90 Total liabilities$1,019$90$1,109 21Quoted 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:TotalAssets: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 106 106 Total liabilities$1,022$106$1,128 Interest-bearing and equity securitiesThe fair values of our U.S.Treasury bills are determined by utilizing third-party pricing services,which obtain pricing data from active market makersand brokers.The fair values of our money market mutual funds and equity investments in publicly traded securities,including our equity investments in BeOneand Neumora,as of June 30,2025 and December 31,2024,are based on quoted market prices in active markets,with no valuation adjustment.DerivativesAll of our foreign currency forward contracts,cross-currency swap contracts and interest rate swap contracts are with counterparties that have minimumcredit ratings of A or equivalent by S&P,Moodys or Fitch.We estimate the fair values of these contracts by taking into consideration valuations obtainedfrom a third-party valuation service that uses an income-based industry-standard valuation model for which all significant inputs are observable either directlyor indirectly.These inputs,as applicable,include foreign currency exchange rates,SOFR,swap rates,obligor credit default swap rates and cross-currency basisswap spreads.Certain inputs,when applicable,are at commonly quoted intervals.See Note 12,Derivative instruments.Summary of the fair values of other financial instrumentsCash equivalentsThe fair values of cash equivalents approximate their carrying values due to the short-term nature of such financial instruments.BorrowingsWe 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 ourfixed-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 debtinstruments 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 withrespect 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,therewere no material remeasurements of the fair values of assets and liabilities that are not measured at fair value on a recurring basis.2212.Derivative instrumentsThe Company is exposed to foreign currency exchange rate and interest rate risks related to its business operations.To reduce our risks related to suchexposures,we use or have used certain derivative instruments,including foreign currency forward,foreign currency option,cross-currency swap,forwardinterest rate and interest rate swap contracts.We have designated certain of our derivatives as cash flow and fair value hedges;we also have derivatives notdesignated as hedges.We do not use derivatives for speculative trading purposes.Cash flow hedgesWe are exposed to possible changes in the values of certain anticipated foreign currency cash flows resulting from changes in foreign currency exchangerates primarily associated with our euro-denominated international product sales.The foreign currency exchange rate fluctuation exposure associated with cashinflows from our international product sales is partially offset by corresponding cash outflows from our international operating expenses.To further reduce ourexposure,we enter into foreign currency forward contracts to hedge a portion of our projected international product sales up to a maximum of three years intothe 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,werecord the unrealized gains and losses on these contracts in AOCI in the Condensed Consolidated Balance Sheets,and we reclassify them to Product sales inthe 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 enterinto 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 atthe 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 thematurities of the contracts for these same notional amounts.The terms of these contracts correspond to the related hedged debt,thereby effectively convertingthe interest payments and principal repayment on the debt from euros and pounds sterling to U.S.dollars.We have designated these cross-currency swapcontracts as cash flow hedges.Accordingly,the unrealized gains and losses on these contracts are recorded in AOCI in the Condensed Consolidated BalanceSheets and reclassified to Other(expense)income,net,in the Condensed Consolidated Statements of Income in the same periods during which the hedged debtaffects 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.dollarsHedged notesNotional amountsInterest ratesNotional amountsInterest rates2.00 26 euro Notes750 2.0%$833 3.9%5.50 26 pound sterling Notes475 5.5%$747 6.0%4.00 29 pound sterling Notes700 4.0%$1,111 4.6%In connection with the anticipated issuance of long-term fixed-rate debt,we occasionally enter into forward interest rate contracts in order to hedge thevariability in cash flows due to changes in the applicable U.S.Treasury rate between the time we enter into these contracts and the time the related debt isissued.Gains and losses on forward interest rate contracts,which are designated as cash flow hedges,are recognized in AOCI in the Condensed ConsolidatedBalance Sheets and are amortized into Interest expense,net,in the Condensed Consolidated Statements of Income over the terms of the associated debtissuances.Amounts recognized in connection with forward interest rate contracts during the six months ended June 30,2025 and 2024,and amounts expectedto be recognized during the next 12 months are not material.23Unrealized gains and losses recognized in AOCI for our derivative instruments designated as cash flow hedges were as follows(in millions):Three months ended June 30,Six months ended June 30,Derivatives in cash flow hedging relationships2025202420252024Foreign currency forward contracts$(503)$123$(715)$325 Cross-currency swap contracts180(6)246(30)Total unrealized(losses)gains$(323)$117$(469)$295 Fair value hedgesTo 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 valuehedges.These interest rate swap contracts effectively convert fixed-rate coupons to floating-rate SOFR-based coupons over the terms of the related hedgecontracts.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 billionrespectively,that hedge certain portions of our long-term debt issuances.The reduction in aggregate notional amount of these contracts during the six monthsended June 30,2025,was due to the termination of swaps that occurred in connection with the repayment of the 3.125 25 Notes(see Note 9,Financingarrangements).For interest rate swap contracts that qualify for and are designated as fair value hedges,we recognize in Interest expense,net,in the CondensedConsolidated Statements of Income the unrealized gain or loss on the derivative resulting from the change in fair value during the period,as well as theoffsetting 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 hedgingrelationship involving an interest rate swap contract is terminated,the gain or loss realized on contract termination is recorded as an adjustment to the carryingvalue 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 ConsolidatedBalance Sheets as follows(in millions):Carrying amounts of hedged liabilitiesCumulative amounts of fair value hedging adjustmentsrelated to the carrying amounts of the hedgedliabilitiesCondensed Consolidated Balance Sheets locationsJune 30,2025December 31,2024June 30,2025December 31,2024Current portion of long-term debt$53$1,045$53$45 Long-term debt$5,304$5,152$(239)$(388)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.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.(1)(2)_(1)(2)24Impact of hedging transactionsThe 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 30,2025Product salesOther(expense)income,netInterestexpense,netProduct salesOther(expense)income,netInterest expense,netTotal amounts recorded in income and(expense)line itemspresented 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 ofAOCI:Foreign currency forward contracts$12$68$Cross-currency swap contracts$172$255$(Losses)gains on fair value hedging relationshipsinterestrate swap agreements:Hedged items$(61)$(157)Derivatives designated as hedging instruments$75$187 Three months ended June 30,2024Six months ended June 30,2024Product salesOther(expense)income,netInterestexpense,netProduct salesOther(expense)income,netInterest expense,netTotal amounts recorded in income and(expense)line itemspresented 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 reclassifiedout of AOCI:Foreign currency forward contracts$55$106$Cross-currency swap contracts$(3)$(34)$(Losses)gains on fair value hedging relationshipsinterestrate swap agreements:Hedged items$(18)$31 Derivatives designated as hedging instruments$36$8 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 adjustmentsincluded 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 downin 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 losseson our foreign currency forward and cross-currency swap contracts were expected to be reclassified out of AOCI and recognized into earnings during the next12 months.Derivatives not designated as hedgesTo reduce our exposure to foreign currency fluctuations in certain assets and liabilities denominated in foreign currencies,we enter into foreign currencyforward 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 andDecember 31,2024,the total notional amounts of these foreign currency forward contracts were$226 million and$148 million,respectively.Gains and lossesrecognized in earnings for our derivative instruments not designated as hedging instruments were not material for the three and six months ended June 30,2025and 2024.(1)(1)_(1)25Fair values of derivativesThe fair values of derivatives included in the Condensed Consolidated Balance Sheets were as follows(in millions):Derivative assetsDerivative liabilitiesJune 30,2025Condensed Consolidated Balance Sheets locationsFair valuesCondensed Consolidated Balance Sheets locationsFair valuesDerivatives designated as hedging instruments:Foreign currency forward contractsOther current assets/Othernoncurrent assets$55 Accrued liabilities/Other noncurrent liabilities$382 Cross-currency swap contractsOther current assets/Othernoncurrent assets54 Accrued liabilities/Other noncurrent liabilities293 Interest rate swap contractsOther current assets/Othernoncurrent assets Accrued liabilities/Other noncurrent liabilities344 Total derivatives designated as hedging instruments109 1,019 Total derivatives$109$1,019 Derivative assetsDerivative liabilitiesDecember 31,2024Condensed Consolidated Balance Sheets locationsFair valuesCondensed Consolidated Balance Sheets locationsFair valuesDerivatives designated as hedging instruments:Foreign currency forward contractsOther current assets/Othernoncurrent assets$420 Accrued liabilities/Othernoncurrent liabilities$8 Cross-currency swap contractsOther current assets/Othernoncurrent assets Accrued liabilities/Othernoncurrent liabilities483 Interest rate swap contractsOther current assets/Othernoncurrent assets Accrued liabilities/Othernoncurrent liabilities531 Total derivatives designated as hedging instruments420 1,022 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 betriggered if(i)we were to undergo a change in control and(ii)our or the surviving entitys creditworthiness deteriorates,which is generally defined as havingeither a credit rating that is below investment grade or a materially weaker creditworthiness after the change in control.If these events were to occur,thecounterparties would have the right,but not the obligation,to close the contracts under early-termination provisions.In such circumstances,the counterpartiescould request immediate settlement of these contracts for amounts that approximate the then current fair values of the contracts.In addition,our derivativecontracts 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 againstother 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 byoperating activities,except for the settlement of notional amounts of cross-currency swaps,which are included in Net cash used in financing activities.2613.Contingencies and commitmentsContingenciesIn the ordinary course of business,we are involved in various legal proceedings,government investigations and other matters that are complex in natureand 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 FactorsOur business may be affected by litigation and government investigations.We describe our legal proceedings and other matters that are significant or that webelieve could become significant in this footnote and in Note 20,Contingencies and commitments,to the consolidated financial statements in our AnnualReport on Form 10-K for the year ended December 31,2024;and in Note 13,Contingencies and commitments,to the condensed consolidated financialstatements 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 losscan be reasonably estimated.We evaluate,on a quarterly basis,developments in legal proceedings and other matters that could cause an increase or decrease inthe 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 legaltheories.In each of the matters described in this filing;in Note 20,Contingencies and commitments,to the consolidated financial statements in our AnnualReport on Form 10-K for the year ended December 31,2024;and in Note 13,Contingencies and commitments,to the condensed consolidated financialstatements 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 anot-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 thelegal 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 Note20,Contingencies and commitments,to the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31,2024;andin Note 13,Contingencies and commitments,to the condensed consolidated financial statements in our Quarterly Report on Form 10-Q for the quarter endedMarch 31,2025,in which we could incur a liability,have progressed sufficiently through discovery and/or the development of important factual informationand 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 ordetermine the eventual outcomes of these matters,an adverse determination in one or more of these matters currently pending could have a material adverseeffect 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 LitigationGermanyOn 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 Amgens provisional enforcement of an injunction against PRALUENT,canceled the hearing scheduled forMay 21,2025 and indicated it will reschedule the hearing for December 2025.Unified Patent Court(UPC)of the European UnionIn Sanofi Biotechnologies SAS(Sanofi)and Regenerons action filed against Amgen before the Dusseldorf Local Division of the UPC,alleginginfringement of European Patent No.3,536,712(the EP712 Patent),on May 13,2025,the Dusseldorf Local Division of the UPC issued a decision that theEP712 Patent,which Sanofi Biotechnology SAS licensed from Regeneron,is valid but not infringed by Amgen.Amgen filed a Statement of Appeal on July11,2025,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 AmgensRepatha infringes European Patent No.4,252,857(the EP857 Patent).On June 24,2025,Amgen filed its Statement of Defense and Counterclaims in responseto Sanofis allegation of infringement of the EP857 Patent and,on June 30,2025,opposed Sanofis motion to stay the case.The Court of Appeals of the UPC rescheduled oral argument from May 22,2025,to August 12,2025 on Amgens appeal seeking to set aside the CentralDivision of the UPCs decision to revoke Amgens European Patent No.3,666,797.27European Patent OfficeOn June 2,2025,the European Patent Office(EPO)Board of Appeal accelerated Amgens appeal from the EPOs decision that Regenerons EP712 Patent isvalid 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 Regenerons EP857 Patent.On July 7,2025,the EPO notified the parties that the Opposition proceedings concerning the EP857 Patent have been accelerated due to the pending parallel proceedingsbefore the UPC,and Regenerons response to Amgens Grounds of Opposition must accordingly be filed by October 7,2025.JapanOn May 27,2025,Amgen filed petition for acceptance of an appeal with the Supreme Court of Japan from the Intellectual Property High Courtsdismissal of Amgens appeal in Amgens lawsuit against Sanofi K.K.seeking monetary compensation for past patent infringement.Prolia/XGEVA Biologics Price Competition and Innovation Act(BPCIA)LitigationAmgen 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 andenjoining Accord from making,using,selling or offering for sale or importing its denosumab biosimilar products into the United States until the injunctionexpires 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 HenliusBiotech Inc.,Shanghai Henlius Biologics Co.,Ltd,Organon LLC and Organon&Co.(collectively the Shanghai Henlius and Organon Defendants)based onthe submission to the FDA of a BLA seeking approval to market and sell a biosimilar version of Amgens Prolia and XGEVA products.The complaint assertsinfringement 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 moreclaims of each of the Asserted Patents against the Shanghai Henlius and Organon Defendants and based on that judgment,a permanent injunction prohibitingthe commercial manufacture,use,offer to sell,or sale within the United States or importation into the United States of the accused proposed denosumabbiosimilar by the Shanghai Henlius and Organon Defendants before expiration of each of the patents found to be infringed.Amgen also seeks monetaryremedies for any past acts of infringement.On June 25,2025,this litigation became a member of In Re:Denosumab Patent Litigation multi-district litigationwith 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 PharmaceuticalsUSA Inc.,Gedeon Richter Plc.,and Gedeon Richter USA,Inc.(collectively the Hikma and Gedeon Richter Defendants)based on the submission to the FDAof a BLA seeking approval to market and sell a biosimilar version of Amgens Prolia and XGEVA products.The complaint asserts infringement of thefollowing 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 AssertedPatents against the Hikma and Gedeon Richter Defendants).Amgen seeks a judgment from the New Jersey District Court that the Hikma and Gedeon RichterDefendants have infringed or will infringe one or more claims of each of the Asserted Patents against the Hikma and Gedeon Richter Defendants and based onthat judgment,a permanent injunction prohibiting the commercial manufacture,use,offer to sell,or sale within the United States or importation into the UnitedStates of the accused proposed denosumab biosimilar before expiration of each of the patents found to be infringed.Amgen also seeks monetary remedies forany past acts of infringement.On June 25,2025,this litigation28became 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 thesubmission to the FDA of a BLA seeking approval to market and sell a biosimilar version of Amgens Prolia and XGEVA products.The complaint assertsinfringement 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 infringeone or more claims of each of the Asserted Patents against Biocon and based on that judgment,a permanent injunction prohibiting the commercialmanufacture,use,offer to sell,or sale within the United States or importation into the United States of Biocons proposed denosumab biosimilar beforeexpiration 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 tothe New Jersey District Court pursuant to 28 U.S.C.1407 for coordinated and consolidated pretrial proceedings with the other cases involvingProlia/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 LitigationOn June 17,2025,Regeneron filed a lawsuit in the U.S.District Court for the Central District of California(California Central District Court)againstAmgen 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 PAVBLUbefore the expiration of the 099 Patent.On July 17,2025,the Judicial Panel on Multidistrict Litigation issued a Conditional Order transferring the case fromthe 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 ActionRegeneron Pharmaceuticals,Inc.Antitrust ActionA 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 itsbelow-cost pricing claim under Californias 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 tortiousinterference claim,with such damages under either alternative claim totaling$406.8 million.As Regeneron must elect between recovery under the antitrust ortortious interference claims,any potential damages award would be limited to one of these claims.Although we cannot predict with certainty the ultimateoutcome of this litigation,Amgen believes that the jurys 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 anew trial.Also on June 12,2025,Regeneron filed a motion for permanent injunctive relief,a constructive trust,and prejudgment interest.Both motions havesince 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 jurys award,the courts post-trial proceedings,applicable law,and the likelihood that the jurysaward will be upheld after post-trial briefing and potentially on appeal.As a result of this review,we have determined,in accordance with applicableaccounting 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.29The ultimate result of this litigation,however,is uncertain because it is reasonably possible that by settlement or final court judgment that none,some,orall of the jurys 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 ActionOn 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 Amgensreply is due August 21,2025.U.S.Tax Litigation and Related MattersAmgen Inc.&Subsidiaries v.Commissioner of Internal RevenueSee Note 4,Income taxes,for discussion of the IRS tax dispute and the Companys 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 filesummary judgment motions to October 19,2026.Shareholder Derivative ActionsOn April 9,2025,the Delaware Court of Chancery consolidated the derivative actions filed by each of David Hamilton,Charles Blackburn and RobertBryla purportedly on behalf of Amgen against nominal defendant Amgen,Robert Bradway,Peter Griffith and Amgens 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 thatwas filed by Leon Martin and Cheri Clearwater purportedly on behalf of Amgen against Amgen,Robert Bradway,Peter Griffith and Amgens independentBoard members.On June 9,2025,the Delaware District Court stayed the shareholder derivative action filed by Carolyn Sieveking and James P.Tierney until a finaljudgment is entered in the federal securities class action.ChemoCentryx,Inc.Securities MattersOn May 8,2025,the lead plaintiff filed a motion for partial summary judgment.On May 29,2025,defendants,including ChemoCentryx,filed anopposition to the plaintiffs 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 theNorthern 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 dismissthe 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 meritsof defendants motion to dismiss.30Item 2.MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe following MD&A is intended to assist the reader in understanding Amgens business.MD&A is provided as a supplement to,and should be read inconjunction with our Annual Report on Form 10-K for the year ended December 31,2024,and our Quarterly Report on Form 10-Q for the quarter endedMarch 31,2025.Our results of operations discussed in MD&A are presented in conformity with GAAP.Amgen operates in one operating segment:humantherapeutics.Therefore,our results of operations are discussed on a consolidated basis.Forward-looking statementsThis report and other documents we file with the SEC contain forward-looking statements that are based on current expectations,estimates,forecasts andprojections about us,our future performance,our business,our beliefs and our managements assumptions.In addition,we,or others on our behalf,may makeforward-looking statements in press releases,written statements or our communications and discussions with investors and analysts in the normal course ofbusiness through meetings,webcasts,phone calls and conference calls.Such words as“expect,”“anticipate,”“outlook,”“could,”“target,”“project,”“intend,”“plan,”“believe,”“seek,”“estimate,”“should,”“may,”“assume”and“continue”as well as variations of such words and similar expressions are intended toidentify such forward-looking statements.These statements are not guarantees of future performance,and they involve certain risks,uncertainties andassumptions that are difficult to predict.We describe our respective risks,uncertainties and assumptions that could affect the outcome or results of operationsin Item 1A.Risk Factors in Part II herein and in Part I,Item 1A.Risk Factors of our Annual Report on Form 10-K for the year ended December 31,2024,andin Part II,Item 1A.Risk Factors of our Quarterly Report on Form 10-Q for the quarter ended March 31,2025.We have based our forward-looking statementson our managements beliefs and assumptions based on information available to our management at the time the statements are made.We caution you thatactual outcomes and results may differ materially from what is expressed,implied or forecasted by our forward-looking statements.Reference is made inparticular to forward-looking statements regarding product sales,regulatory activities,clinical trial results,reimbursement,expenses,EPS,liquidity and capitalresources,trends,planned dividends,stock repurchases,and collaborations.Except as required under the federal securities laws and the rules and regulations ofthe SEC,we do not have any intention or obligation to update publicly any forward-looking statements after the distribution of this report,whether as a resultof new information,future events,changes in assumptions or otherwise.OverviewAmgen Inc.(including its subsidiaries,referred to as“Amgen,”“the Company,”“we,”“our”or“us”)discovers,develops,manufactures and deliversinnovative medicines to fight some of the worlds toughest diseases.We focus on areas of high unmet medical need and leverage our expertise to strive forsolutions that dramatically improve peoples lives,while also reducing the social and economic burden of disease.We helped launch the biotechnologyindustry more than 40 years ago and have grown to be one of the worlds leading independent biotechnology companies.Our robust pipeline includes potentialfirst-in-class medicines at all stages of development.Our principal products are Prolia,Repatha,ENBREL,XGEVA,Otezla,EVENITY,TEPEZZA,BLINCYTO,KYPROLIS,Aranesp,Nplate,TEZSPIRE,KRYSTEXXA and Vectibix.We also market a number of other products,including but not limited to MVASI,AMJEVITA/AMGEVITA,UPLIZNA,PAVBLU,IMDELLTRA/IMDYLLTRA,Neulasta,TAVNEOS,RAVICTI,WEZLANA/WEZENLA,Parsabiv,LUMAKRAS/LUMYKRAS,Aimovig andPROCYSBI.Tariffs and trade protection measuresThe imposition of tariffs and trade protection measures by the United States and other countries,including the universal 10%tariff on goods importedinto the United States,the currently-suspended country-specific tariffs,the recently announced preliminary tariff agreements,the China retaliatory tariffs onU.S.goods,the imposition of new and/or other retaliatory tariffs,and potential sector-specific tariffs on our industry,including the Section 232 pharmaceuticaltariff,and others,may adversely affect our business and operations.While existing tariffs have not had a material adverse effect on our results of operations forthe first half of 2025,we are currently evaluating the potential impact of such tariffs on our business in future periods and our ability to mitigate such impacts.For example,certain tariffs that are currently in effect,or anticipated to take effect in the future,have increased,and are expected to further increase,ourmanufacturing and operating expenses in future quarters,including the cost to deliver products to markets,cost of sourcing materials for the manufacturing ofour products and cost of materials used in our R&D activities.Such tariffs have had a limited impact in the first half of 2025,but may increasingly affect thecost to expand our manufacturing capacity in the United States,including increased construction costs and/or delays in construction for our Ohio and NorthCarolina facilities.Furthermore,retaliatory tariffs imposed by other countries may adversely affect our business,operations and delivery and launches ofproducts in such markets,including the performance of our collaborations in such markets.However,the degree of adverse effects from any tariffs on ourbusiness and operations in31future periods will depend on various factors,including the rates of such tariffs,the expansion of such tariffs to include certain goods(such as pharmaceuticalproducts),the magnitude of response by other countries to U.S.tariffs and the length of time such tariffs are in effect.For additional discussion of these andother risks,see Part II,Item 1A.Risk Factors,of this Quarterly Report on Form 10-Q.Macroeconomic and other challengesUncertain macroeconomic conditions,including the risk of inflation,fluctuating interest rates and instability in the financial system,as well as risinghealthcare costs,continue to pose challenges to our business.Uncertainty around tariffs and trade protection measures in the United States and other countries,including the imposition of new or retaliatory tariffs,along with ongoing geopolitical conflicts and rising geopolitical tensions,continue to create additionaluncertainty in global macroeconomic conditions.Additionally,with public and private healthcare-provider focus,the industry continues to be subject to costcontainment measures and significant pricing pressures,resulting in net price declines.Moreover,provisions of the IRA,as well as the 340B Program,have negatively affected,and are likely to continue to negatively affect,our business.Forexample,ENBREL and Otezla have been selected by CMS for Medicare price setting beginning in 2026 and 2027,respectively.In addition to the IRA,otherrecent and proposed U.S.policy actions,including the Most-Favored-Nations Prescription Drug Pricing Executive Order(MFN EO),may negatively impactour product sales depending on their scope and implementation.Finally,wholesale and end-user buying patterns can affect our product sales.These buying patterns can cause fluctuations in quarterly product sales,buthave generally not been significant to date when comparing full-year product performance to the prior year.For additional discussion of these and other risks,see Part II,Item 1A.Risk Factors,of this Quarterly Report on Form 10-Q.Significant developmentsThe following is a summary of select significant developments affecting our business that occurred since the filing of our Quarterly Report on Form 10-Qfor the quarter ended March 31,2025.For additional developments,see our Annual Report on Form 10-K for the year ended December 31,2024 and ourQuarterly Report on Form 10-Q for the quarter ended March 31,2025.Products/pipelineMaridebart cafraglutide(MariTide)In June 2025,the underlying details from Part 1 of the Phase 2 study of MariTide and complete results from the primary analysis of the Phase 1pharmacokinetics low dose initiation(PK-LDI)study evaluating lower starting doses of MariTide were presented at the American Diabetes Association 85Scientific Sessions and simultaneously published in The New England Journal of Medicine.These data are consistent with the topline results from Part 1 of thePhase 2 study as previously announced and presented by the Company in November 2024.See Part I,Item 1.BusinessSignificant Developments,of ourAnnual Report on Form 10-K for the year ended December 31,2024.In Part 1 of the Phase 2 study,among participants living with obesity without type 2 diabetes,MariTide demonstrated average weight loss up toapproximately 20%compared to 2.6%in the placebo arm.In participants living with obesity and type 2 diabetes,MariTide demonstrated average weight lossup to approximately 17%compared to 1.4%in the placebo arm,per the efficacy estimand.Weight loss had not plateaued by 52 weeks,indicating the potentialfor further weight reduction.Additionally,weight loss with MariTide was associated with improvements in cardiometabolic parameters,including reductions inhemoglobin A1c(up to 2.2 percentage points),waist circumference,blood pressure,high-sensitivity C-reactive protein and select lipid levels.No new safety signals were identified in Part 1 of the Phase 2 study,and tolerability was consistent with the GLP-1 class.The most frequently reportedadverse events(AEs)were gastrointestinal(GI)related,and most were mild to moderate.GI events were predominantly limited to initial dosing and lessfrequent when dose escalation was used without compromising efficacy.Discontinuation rates of MariTide due to GI AEs in the dose escalation arms(up to7.8%)were lower than non-dose escalation arms.IMDELLTRA/IMDYLLTRAIn June 2025,Amgen announced interim results from the global Phase 3 DeLLphi-304 trial evaluating IMDELLTRA/IMDYLLTRA in patients withsmall cell lung cancer(SCLC)who had progressed on or after one line of platinum-based chemotherapy.The study demonstrated thatIMDELLTRA/IMDYLLTRA significantly reduced the risk of death by 40%compared to standard-of-care chemotherapy,with a median overall survival of13.6 months compared to 8.3 months.th32Additionally,IMDELLTRA/IMDYLLTRA showed a statistically significant improvement in median progression-free survival of 4.2 months compared to 3.7months and enhanced patient-reported outcomes related to cancer-associated symptoms,including dyspnea and cough.The safety profile ofIMDELLTRA/IMDYLLTRA was consistent with prior studies.BemarituzumabIn June 2025,Amgen announced interim results from the Phase 3 FORTITUDE-101 clinical trial evaluating first-line bemarituzumab plus chemotherapy(mFOLFOX6).The study met its primary endpoint of overall survival(OS)at a pre-specified interim analysis,demonstrating a statistically significant andclinically meaningful improvement in OS as compared to placebo plus chemotherapy in people living with unresectable locally advanced or metastatic gastricor gastroesophageal junction(G/GEJ)cancer with FGFR2b overexpression and who are non-HER2 positive.The most common treatment-emergent adverseevents(25%)in patients treated with bemarituzumab plus chemotherapy were reduced visual acuity,punctate keratitis,anaemia,neutropenia,nausea,cornealepithelium defect and dry eye.TEPEZZAIn June 2025,the European Commission granted marketing authorization approval of TEPEZZ
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON,D.C.20549 FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30,2025 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number 001-16174 TEVA PHARMACEUTICAL INDUSTRIES LIMITED(Exact name of registrant as specified in its charter)Israel(State or other jurisdiction of incorporation or organization)124 Dvora HaNevia St.,Tel Aviv,ISRAEL(Address of principal executive offices)Not Applicable(IRS Employer Identification Number)6944020(Zip code) 972(3)914-8213(Registrants telephone number,including area code)Securities registered pursuant to Section 12(b)of the Act:Title of each class American Depositary Shares,each representing one Ordinary Share Trading Symbol(s)TEVA Name of each exchange on which registered New York Stock Exchange Indicate by check mark whether the registrant(1)has filed all reports required to be filed by Section 13 or 15(d)of the Securities Exchange Act of 1934 during the preceding 12 months(or for such shorter period that the registrant was required to file such reports),and(2)has been subject to such filing requirements for the past 90 days.Yes No Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T(232.405 of this chapter)during the preceding 12 months(or for such shorter period that the registrant was required to submit such files).Yes No Indicate by check mark whether the registrant is a large accelerated filer,an accelerated filer,a non-accelerated filer,smaller reporting company,or an emerging growth company.See the definitions of“large accelerated filer,”“accelerated filer,”“smaller reporting company,”and“emerging growth company”in Rule 12b-2 of the Exchange Act.Large accelerated filer Non-accelerated filer Emerging growth company Accelerated filer Smaller reporting company If an emerging growth company,indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a)of the Exchange Act.Indicate by check mark whether the registrant is a shell company(as defined in Rule 12b-2 of the Act).Yes No As of June 30,2025,the registrant had 1,147,150,917 ordinary shares outstanding.TEVA PHARMACEUTICAL INDUSTRIES LIMITED For an accessible version of this Quarterly Report on Form 10-Q,please visit INDEX PART I.Financial Statements(unaudited)Item 1.Financial Statements(unaudited)Consolidated Balance Sheets 3 Consolidated Statements of Income(loss)4 Consolidated Statements of Comprehensive Income(loss)5 Consolidated statements of changes in equity Consolidated Statements of Cash Flows 8 Notes to Consolidated Financial Statements 9 Item 2.Managements Discussion and Analysis of Financial Condition and Results of Operations 52 Item 3.Quantitative and Qualitative Disclosures about Market Risk 79 Item 4.Controls and Procedures 79 PART II.OTHER INFORMATION Item 1.Legal Proceedings 80 Item 1A.Risk Factors 80 Item 2.Unregistered Sales of Equity Securities and Use of Proceeds 80 Item 3.Defaults Upon Senior Securities 80 Item 4.Mine Safety Disclosures 80 Item 5.Other Information 80 Item 6.Exhibits 81 Signatures 82 TEVA PHARMACEUTICAL INDUSTRIES LIMITED INTRODUCTION AND USE OF CERTAIN TERMS Unless otherwise indicated,all references to the“Company,”“we,”“our”and“Teva”refer to Teva Pharmaceutical Industries Limited and its subsidiaries,and references to“revenues”refer to net revenues.References to“U.S.dollars,”“dollars,”“U.S.$”and“$”are to the lawful currency of the United States of America,and references to“NIS”are to new Israeli shekels.References to“ADS(s)”are to Tevas American Depositary Share(s).References to“MS”are to multiple sclerosis.Market data,including both sales and share data,is based on information provided by IQVIA,a provider of market research to the pharmaceutical industry(“IQVIA”),unless otherwise stated.References to“R&D”are to Research and Development,references to“IPR&D”are to in-process R&D,references to“S&M”are to Selling and Marketing and references to“G&A”are to General and Administrative.Some amounts in this report may not add up due to rounding.All percentages have been calculated using unrounded amounts.This report on Form 10-Q contains many of the trademarks and trade names used by Teva in the United States and internationally to distinguish its products and services.Any third-party trademarks mentioned in this report are the property of their respective owners.CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS In addition to historical information,this Quarterly Report on Form 10-Q,and the reports and documents incorporated by reference in this Quarterly Report on Form 10-Q,may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995,which are based on managements current beliefs and expectations and are subject to substantial risks and uncertainties,both known and unknown,that could cause our future results,performance or achievements to differ significantly from that expressed or implied by such forward-looking statements.These forward-looking statements include statements concerning our plans,strategies,objectives,future performance and financial and operating targets,and any other information that is not historical information.You can identify these forward-looking statements by the use of words such as“should,”“expect,”“anticipate,”“estimate,”“target,”“may,”“project,”“guidance,”“intend,”“plan,”“believe”and other words and terms of similar meaning and expression in connection with any discussion of future operating or financial performance.Important factors that could cause or contribute to such differences include risks relating to:our ability to successfully compete in the marketplace,including:that we are substantially dependent on our generic products;concentration of our customer base and commercial alliances among our customers;competition faced by our generic medicines from other pharmaceutical companies and changes in regulatory policy that may result in additional costs and delays;delays in launches of new generic products;our ability to develop and commercialize additional pharmaceutical products;competition for our innovative medicines;our ability to achieve expected results from investments in our product pipeline;our ability to successfully execute our Pivot to Growth strategy,including to expand our innovative and biosimilar medicines pipeline and profitably commercialize the innovative medicines and biosimilar portfolio,whether organically or through business development,to sustain and focus our portfolio of generic medicines,and to execute on our organizational transformation and to achieve expected cost savings;and the effectiveness of our patents and other measures to protect our intellectual property rights,including any potential challenges to our Orange Book patent listings in the U.S.;our significant indebtedness,which may limit our ability to incur additional indebtedness,engage in additional transactions or make new investments;and our potential need to raise additional funds in the future,which may not be available on acceptable terms or at all;our business and operations in general,including:the impact of global economic conditions and other macroeconomic developments and the governmental and societal responses thereto;the widespread outbreak of an illness or any other communicable disease,or any other public health crisis;effectiveness of our optimization efforts;significant disruptions of information technology systems,including cybersecurity attacks and breaches of our data security;interruptions in our supply chain or problems with internal or third party manufacturing;challenges associated with conducting business globally,including political or economic instability,major hostilities or terrorism,such as the ongoing conflict between Russia and Ukraine and the state of war declared in Israel;our ability to attract,hire,integrate and retain highly skilled personnel;our ability to successfully bid for suitable acquisition targets or licensing opportunities,or to consummate and integrate acquisitions;and our prospects and opportunities for growth if we sell assets or business units and close or divest plants and facilities,as well as our ability to successfully and cost-effectively consummate such sales and divestitures,including our planned divestiture of our API business;compliance,regulatory and litigation matters,including:failure to comply with complex legal and regulatory environments;the effects of governmental and civil proceedings and litigation which we are,or in the future become,party to;the effects of reforms in healthcare regulation and reductions in pharmaceutical pricing,reimbursement and coverage,including as a result of the One Big Beautiful Bill signed into law in the U.S.in July 2025(“OBBBA”),which is expected to result in stricter Medicaid eligibility requirements and work requirements,which may result in reduced Medicaid enrollment and a resulting decline in coverage for purchases of our medicines,and U.S.Executive Orders issued in April and May 2025 intended to reduce the prices paid by Americans for prescription medicines,including most-favored-nation pricing;increased legal and regulatory action in connection with public concern over the abuse of opioid medications;our ability to timely make payments required under our nationwide opioids settlement agreement and provide our generic version of Narcan(naloxone hydrochloride nasal spray)in the amounts and at the times required under the terms of such agreement;scrutiny from competition and pricing authorities around the world,including our ability to comply with and operate under our deferred prosecution agreement(“DPA”)with the U.S.Department of Justice(“DOJ”);potential liability for intellectual property right infringement;product liability claims;failure to comply with complex Medicare,Medicaid and other governmental programs reporting and payment obligations;compliance with sanctions and trade control laws;environmental risks;and the impact of Environmental,Social and Governance(“ESG”)issues;1 TEVA PHARMACEUTICAL INDUSTRIES LIMITED the impact of the state of war declared in Israel and the military activity in the Middle East,including the risk of disruptions to our operations and facilities,such as our manufacturing and R&D facilities,located in Israel,the impact of our employees who are military reservists being called to active military duty,and the impact of the war on the economic,social and political stability of Israel;other financial and economic risks,including:our exposure to currency fluctuations and restrictions as well as credit risks;potential impairments of our long-lived assets;the impact of geopolitical conflicts including the state of war declared in Israel and the conflict between Russia and Ukraine;potential significant increases in tax liabilities;the effect on our overall effective tax rate of the termination or expiration of governmental programs or tax benefits,or of a change in our business;our exposure to changes in international trade policies,including the imposition of tariffs in the jurisdictions in which we operate,and the effects of such developments on sales of our products and the pricing and availability of our raw materials;and the impact of any future failure to establish and maintain effective internal control over our financial reporting;and other factors discussed in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K for the year ended December 31,2024,including in the sections captioned“Risk Factors”and“Forward-looking Statements.”Forward-looking statements speak only as of the date on which they are made,and we assume no obligation to update or revise any forward-looking statements or other information contained herein,whether as a result of new information,future events or otherwise.You are cautioned not to put undue reliance on these forward-looking statements.2 PART I FINANCIAL INFORMATION ITEM1.FINANCIAL STATEMENTS TEVA PHARMACEUTICAL INDUSTRIES LIMITED CONSOLIDATED BALANCE SHEETS(U.S.dollars in millions,except for share data)(Unaudited)June 30,2025 December 31,2024 ASSETS Current assets:Cash and cash equivalents$2,161$3,300 Accounts receivables,net of allowance for credit losses of$84 million and$78 million as of June 30,2025 and December 31,2024,respectively.3,564 3,059 Inventories 3,497 3,007 Prepaid expenses 1,084 1,006 Other current assets 472 409 Assets held for sale 1,842 1,771 Total current assets 12,620 12,552 Deferred income taxes 1,781 1,799 Other non-current assets 470 462 Property,plant and equipment,net 4,810 4,581 Operating lease right-of-use assets,net 358 367 Identifiable intangible assets,net 4,142 4,418 Goodwill 15,949 15,147 Total assets$40,131$39,326 LIABILITIES AND EQUITY Current liabilities:Short-term debt$464$1,781 Sales reserves and allowances 4,050 3,678 Accounts payables 2,498 2,203 Employee-related obligations 481 624 Accrued expenses 3,095 2,792 Other current liabilities 940 1,020 Liabilities held for sale 334 698 Total current liabilities 11,861 12,796 Long-term liabilities:Deferred income taxes 440 483 Other taxes and long-term liabilities 3,938 4,028 Senior notes and loans 16,763 16,002 Operating lease liabilities 296 296 Total long-term liabilities 21,436 20,809 Commitments and contingencies,see note 10 Total liabilities 33,297 33,606 Redeemable non-controlling interests 340 Equity:Teva shareholders equity:Ordinary shares of NIS 0.10 par value per share;June 30,2025 and December 31,2024:authorized 2,495 million shares;issued 1,253 million shares and 1,240 million shares,respectively.58 58 Additional paid-in capital 28,003 27,764 Accumulated deficit(14,676)(15,173)Accumulated other comprehensive loss(2,431)(3,148)Treasury shares as of June 30,2025 and December 31,2024:106 million and 107 million ordinary shares,respectively.(4,128)(4,128)6,827 5,373 Non-controlling interests 7 7 Total equity 6,834 5,380 Total liabilities,redeemable non-controlling interests and equity$40,131$39,326 Amounts may not add up due to rounding.The accompanying notes are an integral part of the financial statements.3 TEVA PHARMACEUTICAL INDUSTRIES LIMITED CONSOLIDATED STATEMENTS OF INCOME(LOSS)(U.S.dollars in millions,except share and per share data)(Unaudited)Three months ended June 30,Six months ended June 30,2025 2024 2025 2024 Net revenues$4,176$4,164$8,067$7,983 Cost of sales 2,074 2,140 4,088 4,188 Gross profit 2,102 2,024 3,979 3,795 Research and development expenses 244 269 490 511 Selling and marketing expenses 654 656 1,276 1,265 General and administrative expenses 305 283 603 561 Intangible assets impairments 42 61 163 141 Goodwill impairment 400 400 Other assets impairments,restructuring and other items 232 280 210 954 Legal settlements and loss contingencies 166 83 252 188 Other loss(income)4 (2)9 (1)Operating income(loss)455 (5)975 (223)Financial expenses,net 252 241 477 491 Income(loss)before income taxes 203 (246)497 (713)Income taxes(benefit)(78)630 (4)578 Share in(profits)losses of associated companies,net(1)(2)(1)2 Net income(loss)283 (874)503 (1,294)Net income(loss)attributable to redeemable and non-redeemable non-controlling interests*(29)6 (309)Net income(loss)attributable to Teva 282 (846)497 (985)Earnings(loss)per share attributable to ordinary shareholders:Basic$0.25$(0.75)$0.43$(0.87)Diluted$0.24$(0.75)$0.43$(0.87)Weighted average number of shares(in millions):Basic 1,147 1,133 1,142 1,128 Diluted 1,161 1,133 1,159 1,128 *Represents an amount less than$0.5 million.Amounts may not add up due to rounding.The accompanying notes are an integral part of the financial statements.4 TEVA PHARMACEUTICAL INDUSTRIES LIMITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME(LOSS)(U.S.dollars in millions)(Unaudited)Three months ended June 30,Six months ended June 30,2025 2024 2025 2024 Net income(loss)$283$(874)$503$(1,294)Other comprehensive income(loss),net of tax:Currency translation adjustment 227(145)721 (268)Unrealized gain(loss)from derivative financial instruments,net 17 7 24 14 Unrealized loss on defined benefit plans (1)(1)Total other comprehensive income(loss)244(138)744 (255)Total comprehensive income(loss)527(1,012)1,247 (1,549)Comprehensive income(loss)attributable to redeemable and non-redeemable non-controlling interests*(61)33 (383)Comprehensive income(loss)attributable to Teva$527$(951)$1,214$(1,166)*Represents an amount less than$0.5 million.Amounts may not add up due to rounding.The accompanying notes are an integral part of the financial statements.5 TEVA PHARMACEUTICAL INDUSTRIES LIMITED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY Teva shareholders equity Ordinary shares Number of shares(in millions)Stated value Additional paid-in capital Retained earnings(accumulated deficit)Accumulated other comprehensive(loss)Treasury shares Total Teva shareholders equity Non-controlling interests Total equity(U.S.dollars in millions)Balance at March 31,2025 1,253 58 27,965 (14,958)(2,675)(4,128)6,262 7 6,269 Net Income(loss)282 282 *283 Other comprehensive income(loss)244 244 244 Stock-based compensation expense 38 38 38 Balance at June 30,2025 1,253$58$28,003$(14,676)$(2,431)$(4,128)$6,827$7$6,834 *Represents an amount less than$0.5 million.Teva shareholders equity Ordinary shares Number of shares(in millions)Stated value Additional paid-in capital Retained earnings(accumulated deficit)Accumulated other comprehensive(loss)Treasury shares Total Teva shareholders equity Non-controlling interests Total equity(U.S.dollars in millions)Balance at December 31,2024 1,240 58 27,764 (15,173)(3,148)(4,128)5,373 7 5,380 Net Income(loss)497 497 *497 Other comprehensive income(loss)717 717 717 Issuance of Shares 13 *Proceeds from exercise of options 3 3 3 Stock-based compensation expense 72 72 72 Purchase of shares from redeemable non-controlling interests*165 165 165 Balance at June 30,2025 1,253$58$28,003$(14,676)$(2,431)$(4,128)$6,827$7$6,834 *Represents an amount less than$0.5 million.*In connection with the sale of Tevas business venture in Japan.See note 17.Teva shareholders equity Ordinary shares Number of shares(in millions)Stated value Additional paid-in capital Retained earnings(accumulated deficit)Accumulated other comprehensive(loss)Treasury shares Total Teva shareholders equity Non-controlling interests Total equity(U.S.dollars in millions)Balance at March 31,2024 1,238 58 27,796 (13,673)(2,775)(4,128)7,278 265 7,543 Net Income(loss)(846)(846)(29)(874)Other comprehensive income(loss)(106)(106)(32)(138)Issuance of shares*Stock-based compensation expense 32 32 32 Balance at June 30,2024 1,239$58$27,829$(14,519)$(2,881)$(4,128)$6,359$204$6,563 *Represents an amount less than 0.5 million.6 Teva shareholders equity Ordinary shares Number of shares(in millions)Stated value Additional paid-in capital Retained earnings(accumulated deficit)Accumulated other comprehensive(loss)Treasury shares Total Teva shareholders equity Non-controlling interests Total equity(U.S.dollars in millions)Balance at December 31,2023 1,227 57 27,807 (13,534)(2,697)(4,128)7,506 620 8,126 Net Income(loss)(985)(985)(309)(1,294)Other comprehensive income(loss)(181)(181)(74)(255)Issuance of Shares 12 1 *1 1 Stock-based compensation expense 60 60 60 Proceeds from exercise of options 6 6 6 Dividend to non-controlling interest*(18)(18)Purchase of shares from non-controlling interests*(45)(3)(48)(16)(64)Balance at June 30,2024 1,239$58$27,829$(14,519)$(2,881)$(4,128)$6,359$204$6,563 *Represents an amount less than$0.5 million.*In connection with dividends to non-controlling interests in Tevas business venture in Japan.*Purchase of shares from non-controlling interests in a Tevas subsidiary in Switzerland.Amounts may not add up due to rounding.The accompanying notes are an integral part of the financial statements.7 TEVA PHARMACEUTICAL INDUSTRIES LIMITED CONSOLIDATED STATEMENTS OF CASH FLOWS(U.S.dollars in millions)(Unaudited)Three months ended June 30,Six months ended June 30,2025 2024 2025 2024 Operating activities:Net income(loss)$283 (874)$503 (1,294)Adjustments to reconcile net income(loss)to net cash provided by operations:Depreciation and amortization 251 259 494 531 Impairment of goodwill 400 400 Impairment of long-lived assets and assets held for sale 99 130 177 809 Net change in operating assets and liabilities(336)(10)(1,035)(507)Deferred income taxes net and uncertain tax positions(211)(424)(183)(613)Stock-based compensation 38 32 72 60 Other items*105 592 94 594 Net loss(gain)from sale of business and long-lived assets(2)(1)(1)Net cash provided by(used in)operating activities 227 103 122 (21)Investing activities:Beneficial interest collected in exchange for securitized trade receivables 336 317 658 612 Purchases of property,plant and equipment and intangible assets(96)(97)(223)(221)Proceeds from sale of business and long-lived assets,net 9 1 26 1 Acquisition of businesses,net of cash acquired (15)Purchases of investments and other assets(16)(43)(27)(55)Other investing activities 3 3 Net cash provided by(used in)investing activities 236 178 437 322 Financing activities:Repayment of senior notes and loans and other long-term liabilities(2,300)(956)(3,668)(956)Proceeds from senior notes,net of issuance costs 2,305 2,305 Purchase of shares from redeemable and non-redeemable non-controlling interests (38)(64)Dividends paid to redeemable and non-redeemable non-controlling interests (340)(78)Other financing activities 1 (10)3 (19)Net cash provided by(used in)financing activities 6 (966)(1,738)(1,117)Translation adjustment on cash and cash equivalents(5)(49)40 (153)Net change in cash and cash equivalents 464 (733)(1,139)(969)Balance of cash,cash equivalents at beginning of period 1,697 2,991 3,300 3,227 Balance of cash,cash equivalents at end of period$2,161 2,258$2,161 2,258 Non-cash financing and investing activities:Beneficial interest obtained in exchange for securitized accounts receivables$329 320$641 632 *Adjustment in the three months period ended June 30,2024 was mainly related to an agreement with the Israeli Tax Authorities.See note 11.Amounts may not add up due to rounding.The accompanying notes are an integral part of the financial statements.8 TEVA PHARMACEUTICAL INDUSTRIES LIMITED Notes to Consolidated Financial Statements(Unaudited)Note 1 Basis of presentation:a.Basis of presentation The accompanying unaudited consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements.In the opinion of management,the financial statements reflect all normal and recurring adjustments necessary for a fair statement of the financial position and results of operations of Teva.The information included in this Quarterly Report on Form 10-Q should be read in conjunction with the consolidated financial statements and accompanying notes included in the Companys Annual Report on Form 10-K for the year ended December 31,2024,as filed with the Securities and Exchange Commission(“SEC”).The year-end balance sheet data was derived from the audited consolidated financial statements as of December 31,2024,but not all disclosures required by generally accepted accounting principles in the United States(“U.S.GAAP”)are included.In preparing the Companys consolidated financial statements,management is required to make estimates and assumptions that affect the reported amounts of assets,liabilities,equity and disclosure of contingent liabilities and assets at the dates of the financial statements and the reported amounts of revenues and expenses during the reported years.Actual results could differ from those estimates.In preparing the Companys consolidated financial statements,management also considered the economic implications of inflation expectations on its critical and significant accounting estimates.Government actions taken to address macroeconomic developments,as well as their economic impact on Tevas third-party manufacturers and suppliers,customers and markets,could also impact such estimates and may change in future periods.As applicable to these consolidated financial statements,the most significant estimates and assumptions relate to determining the valuation and recoverability of IPR&D and long-lived assets,marketed product rights,contingent consideration and goodwill,assessing sales reserves and allowances in the United States,uncertain tax positions,valuation allowances and contingencies.Some of these estimates could be impacted by higher costs and the ability to pass on such higher costs to customers,which is highly uncertain.As of the date of these consolidated financial statements,sustained conflict between Russia and Ukraine and disruption in the region is ongoing.The Russia and Ukraine markets are included in Tevas International Markets segment results.Teva has no manufacturing or R&D facilities in these markets.During the three and six months ended June 30,2025,the impact of this conflict on Tevas results of operation and financial condition continues to be immaterial.Since October 2023,Israel has been in a state of war on multiple fronts involving the Gaza Strip and other countries and regions in the Middle East,including most recently the Islamic Republic of Iran.As of the date of these consolidated financial statements,the situation remains ongoing.Israel is included in Tevas International Markets segment results.Tevas global headquarters and several manufacturing and R&D facilities are located in Israel.Currently,such activities in Israel remain largely unaffected.Teva continues to maintain contingency plans with backup production locations for key products.During the three and six months ended June 30,2025,the impact of this war on Tevas results of operations and financial condition is immaterial,but such impact may increase,which could be material,as a result of the continuation,escalation or expansion of such war.Tevas results of operations for the three and six months ended June 30,2025,are not necessarily indicative of results that could be expected for the entire fiscal year.Certain amounts in the consolidated financial statements and associated notes may not add up due to rounding.All percentages have been calculated using unrounded amounts.b.Significant accounting policies Recently adopted accounting pronouncements None.Recently issued accounting pronouncements,not yet adopted In May 2025,the FASB issued ASU 2025-03“Business Combinations and Consolidation:Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity,”which amends the guidance for determining the accounting acquirer in certain transactions.The guidance should be applied prospectively.The amendments in this update are effective for annual reporting periods beginning after December 15,2026,and interim reporting periods within those annual reporting periods,with early adoption permitted.The adoption of this guidance will affect acquisition transactions of variable interest entities that occur after the initial application date.9 TEVA PHARMACEUTICAL INDUSTRIES LIMITED Notes to Consolidated Financial Statements(Unaudited)In November 2024,the FASB issued ASU 2024-03“Income Statement:Reporting Comprehensive IncomeExpense Disaggregation Disclosures,”which requires more detailed information about specified categories of expenses(purchases of inventory,employee compensation,depreciation,amortization,and depletion)included in certain expense captions presented on the face of the income statement,as well as disclosures about selling expenses.Additionally,in January 2025,the FASB issued ASU 2025-01 to clarify the effective date of ASU 2024-03.ASU 2024-03 is effective for fiscal years beginning after December 15,2026 and for interim periods within fiscal years beginning after December 15,2027.Early adoption is permitted.The amendments may be applied either(1)prospectively to financial statements issued for reporting periods after the effective date of this ASU or(2)retrospectively to all prior periods presented in the financial statements.The Company is currently evaluating this guidance to determine the impact it may have on its consolidated financial statements disclosures.In December 2023,the FASB issued ASU 2023-09“Income Taxes(Topic 740):Improvements to Income Tax Disclosures.”This guidance is intended to enhance the transparency and decision-usefulness of income tax disclosures.The amendments in ASU 2023-09 address investor requests for enhanced income tax information primarily through changes to disclosure regarding rate reconciliation and income taxes paid both in the U.S.and in foreign jurisdictions.ASU 2023-09 is effective for fiscal years beginning after December 15,2024 on a prospective basis,with the option to apply the standard retrospectively.The Company expects the adoption of this standard to result in expanded disclosures in its consolidated financial statements.In October 2023,the FASB issued ASU 2023-06“Disclosure Improvements:Codification Amendments in Response to the SECs Disclosure Update and Simplification Initiative,”which incorporates certain SEC disclosure requirements into the FASB Accounting Standards Codification(“Codification”).The amendments in the ASU are expected to clarify or improve disclosure and presentation requirements of a variety of Codification topics,allow investors to more easily compare entities subject to the SECs existing disclosures with those entities that were not previously subject to the requirements,and align the requirements in the Codification with the SECs regulations.The effective date for each amendment will be the date on which the SECs removal of that related disclosure from Regulation S-X or Regulation S-K becomes effective,with early adoption prohibited.The amendments in this ASU should be applied prospectively.For all entities within the scope of the affected Codification subtopics,if by June 30,2027,the SEC has not removed the applicable requirement from Regulation S-X or Regulation S-K,the pending content of the associated amendment will be removed from the Codification and will not become effective for any entities.The Company does not expect ASU 2023-06 will have a material impact to its consolidated financial statements.NOTE 2 Certain transactions:The Company has entered into alliances and other arrangements with third parties to acquire rights to products it does not have,to access markets it does not operate in and to otherwise share development costs or business risks.The Companys most significant agreements of this nature are summarized below.mAbxience In April 2024,Teva announced it entered into a strategic licensing agreement with mAbxience for a biosimilar candidate currently in development for the treatment of multiple oncology indications.Under the terms of the licensing agreement,mAbxience will develop and produce the biosimilar product and Teva will lead the regulatory processes and commercialization in multiple global markets,including Europe and the U.S.In September 2024,Teva and mAbxience entered into an amendment to the licensing agreement whereby,similar to the initial licensing agreement,mAbxience will lead the development and production of an anti-PD-1 oncology biosimilar candidate and Teva will manage regulatory approvals and oversee commercialization in the designated markets.Under the initial agreement,Teva paid mAbxience an aggregate of$20 million in upfront and milestone payments in 2024,which were recorded as R&D expenses.Pursuant to the amendment of the licensing agreement,in the fourth quarter of 2024,Teva paid mAbxience further upfront and milestone payments in a total amount of$15 million,which were recorded as R&D expenses.In the second quarter of 2025,Teva recognized a milestone payment of$12 million as R&D expenses,which is expected to be paid in the third quarter of 2025.mAbxience may be eligible for additional future development,regulatory and commercial milestone payments,in an aggregate amount of up to$308 million.10 TEVA PHARMACEUTICAL INDUSTRIES LIMITED Notes to Consolidated Financial Statements(Unaudited)Launch Therapeutics and Abingworth On March 28,2024,Teva and Launch Therapeutics,Inc.(“Launch Therapeutics”)entered into a clinical collaboration agreement to further accelerate the clinical research program of Tevas Dual-Action Asthma Rescue Inhaler(“DARI”)(ICS-SABA;TEV-248).As part of this clinical collaboration agreement Teva also entered into a development funding agreement with funds affiliated with Abingworth LLP(“Abingworth”).Under the clinical collaboration agreement,Launch Therapeutics,a clinical development company backed by Abingworth and Carlyle,the global investment firm,will have the lead role in the operational execution and management of the planned clinical trials.Teva will retain primary responsibility for manufacturing,regulatory interactions in the U.S.,and commercialization.DARI(ICS-SABA)is currently in Phase 3 for the treatment of asthma symptoms addressing both immediate symptoms and long-term inflammation.Under the development funding agreement,Abingworth will provide Teva up to$150 million to fund ongoing development costs for DARI(ICS-SABA).In exchange and subject to regulatory approval,Teva will pay Abingworth a milestone payment in the amount actually funded by Abingworth up to$150 million,as well as success payments based on DARI(ICS-SABA)sales.During the first six months of 2025 and during 2024,Teva recorded$58 million and$42 million,respectively,as reimbursement for R&D expenses incurred in connection with this agreement.Biolojic Design On November 26,2023,Teva entered into a license agreement with Biolojic Design Ltd.(“Biolojic”),pursuant to which Teva received exclusive rights to develop,manufacture and globally commercialize a BD9 multibody for the potential treatment of atopic dermatitis and asthma.In exchange,Teva paid an upfront payment of$10 million in January 2024,which was recorded as R&D expenses in the fourth quarter of 2023.In the second quarter of 2025,Teva paid a milestone payment of$5 million,which was recorded as R&D expenses.Biolojic may be eligible to receive additional development and commercial milestone payments of approximately$500 million,over the next several years,based on the achievement of certain pre-clinical,clinical and regulatory milestones,with the majority of payments based on future sales achievements.On May 27,2025,Teva and Biolojic initiated IND-enabling studies of BD9.Royalty Pharma On November 9,2023,Teva entered into a funding agreement with Royalty Pharma plc.(“Royalty Pharma”)to further accelerate the clinical research program for Tevas olanzapine LAI(TEV-749).Under the terms of the funding agreement,Royalty Pharma will provide Teva up to$100 million to fund ongoing development costs for olanzapine LAI(TEV-749).In exchange and subject to regulatory approval,Teva will pay Royalty Pharma a milestone payment in the amount actually funded by Royalty Pharma,paid over 5 years,in addition to royalties upon commercialization.Teva will continue to lead the development and commercialization of the product globally.During 2023 and 2024,Teva recorded$100 million as reimbursement for R&D expenses incurred in connection with this agreement,which collectively amounted to the total funding Royalty Pharma was to provide Teva.Olanzapine LAI(TEV-749)is currently in Phase 3 for the treatment of schizophrenia(see also MedinCell transaction below).Sanofi On October 3,2023,Teva entered into an exclusive collaboration with Sanofi to co-develop and co-commercialize Tevas duvakitug(anti-TL1A,TEV-574)asset,a novel anti-TL1A therapy for the treatment of ulcerative colitis and Crohns disease,two types of inflammatory bowel disease.Under the terms of the collaboration agreement,in partial consideration of the licenses granted to Sanofi,Teva received an upfront payment of$500 million in the fourth quarter of 2023,which was recognized as revenue.Additionally,Teva may receive up to$1 billion in development and launch milestones.Each company will equally share the remaining development costs globally and net profits and losses in major markets,with other markets subject to a royalty arrangement,and Sanofi will lead the development of the Phase 3 program.Teva will lead commercialization of the product in Europe,Israel and specified other countries,and Sanofi will lead commercialization in North America,Japan,other parts of Asia and the rest of the world.On December 17,2024,Teva and Sanofi announced that the Phase 2b study for duvakitug met its primary endpoints in patients with ulcerative colitis and Crohns disease.Sanofi and Teva plan to initiate Phase 3 development in inflammatory bowel disease in the second half of 2025,pending regulatory discussions.11 TEVA PHARMACEUTICAL INDUSTRIES LIMITED Notes to Consolidated Financial Statements(Unaudited)MODAG In October 2021,Teva announced a license agreement with MODAG GmbH(“Modag”)providing Teva with an exclusive global license to develop,manufacture and commercialize Modags lead compound,emrusolmin(TEV-286)and a related compound(TEV-287).Teva paid an upfront payment of$10 million to Modag in the fourth quarter of 2021,recorded as R&D expenses.Emrusolmin(TEV-286)was developed for the treatment of Multiple System Atrophy(“MSA”)and Parkinsons disease.In the third quarter of 2024,Teva initiated a Phase 2 clinical trial for emrusolmin(TEV-286).In the second quarter of 2025,Teva initiated a Phase 1 clinical trial for TEV-287,which is being developed for Parkinsons disease,and consequently paid a milestone payment of$10 million,which was recorded as R&D expenses.Modag may be eligible for additional future development milestone payments in an aggregate amount of up to$20 million,as well as future commercial milestones and royalties.Alvotech In August 2020,Teva entered into an agreement with biopharmaceutical company Alvotech for the exclusive commercialization in the U.S.of five biosimilar product candidates.The initial pipeline for this collaboration contained biosimilar candidates addressing multiple therapeutic areas,including proposed biosimilars to Humira(adalimumab)and Stelara(ustekinumab).Under the terms of the agreement,Alvotech is responsible for the development,registration and supply of the biosimilar product candidates and Teva will exclusively commercialize the products in the U.S.In July 2023,Alvotech and Teva amended their collaboration agreement,adding two new biosimilar candidates as well as line extensions of two current biosimilar candidates to their partnership.Teva made upfront and milestone payments in an aggregate amount of$124 million between the years 2020 and 2024.In the first quarter of 2025,Teva made an additional milestone payment of$5 million,which was recognized as R&D expense in the fourth quarter of 2024.Additional development and commercial milestone payments of up to approximately$375 million,in addition to royalty and milestone payments related to the amendment of the collaboration agreement entered into in July 2023,may be payable by Teva over the next few years.Teva and Alvotech will share revenue from the commercialization of these biosimilars.The amendment of the collaboration agreement entered into in July 2023 includes increased involvement by Teva regarding manufacturing and quality at Alvotechs manufacturing facility.Additionally,pursuant to another amendment to the collaboration agreement entered into on September 29,2023,Teva purchased$40 million of subordinated convertible bonds of Alvotech,which were redeemed and paid by Alvotech to Teva for$44 million,including accrued interest,in July 2024.On February 24,2024,Alvotech and Teva announced that the FDA approved SIMLANDI(adalimumab-ryvk)injection,as an interchangeable biosimilar to Humira,for the treatment of adult rheumatoid arthritis,juvenile idiopathic arthritis,adult psoriatic arthritis,adult ankylosing spondylitis,Crohns disease,adult ulcerative colitis,adult plaque psoriasis,adult hidradenitis suppurativa and adult uveitis.On April 17,2024,Alvotech and Teva amended their collaboration agreement to enable the purchase by Quallent of a private label adalimumab-ryvk injection from Alvotech for the U.S.market,with Alvotech sharing profits with Teva on the private label sales.On May 20,2024,Alvotech and Teva announced that SIMLANDI is available in the United States.On April 16,2024,the FDA approved SELARSDITM(ustekinumab-aekn)injection for subcutaneous use,as a biosimilar to Stelara,for the treatment of moderate to severe plaque psoriasis and for active psoriatic arthritis in adults and pediatric patients six years and older.On October 22,2024,the FDA approved SELARSDI in a new presentation,130 mg/26 mL(5 mg/mL)solution in a single-dose vial for intravenous infusion,expanding its label to include the treatment of adults with Crohns disease and ulcerative colitis.On February 21,2025,Alvotech and Teva announced that SELARSDI was available in the United States,and on May 5,2025,the FDA approved SELARSDI(ustekinumab-aekn)injection as interchangeable with the reference biologic Stelara(ustekinumab)in all presentations matching the reference product,effective as of April 30,2025.In January 2025,the FDA accepted for review Biologic License Applications(“BLA”)for Alvotechs proposed biosimilars to Simponi and Simponi Aria(golimumab)and in February 2025,the FDA accepted for review a BLA for Alvotechs proposed biosimilar to Eylea(aflibercept).12 TEVA PHARMACEUTICAL INDUSTRIES LIMITED Notes to Consolidated Financial Statements(Unaudited)Takeda In December 2016,Teva entered into a license agreement with a subsidiary of Takeda Pharmaceutical Company Ltd.(“Takeda”),for the research,development,manufacture and commercialization of ATTENUKINETM technology.In 2017,Teva received an upfront payment of$30 million and a milestone payment of$20 million.During the second quarter of 2022,Takeda initiated its Phase 2 study of modakafusp alfa(formerly TAK-573 or TEV 573)and as a result paid Teva a milestone payment of$25 million,which was recognized as revenue in the second quarter of 2022.In April 2024,Takeda informed Teva of its intent to terminate the agreement with respect to such product candidate,and its product rights were reverted back to Teva in the first quarter of 2025.In December 2024,Takeda informed Teva of its intent to terminate the license agreement in its entirety,which termination became effective on May 31,2025,with all remaining rights to the ATTENUKINETM technology reverting back to Teva.MedinCell In November 2013,Teva entered into an agreement with MedinCell for the development and commercialization of multiple long-acting injectable(“LAI”)products.Teva leads the clinical development and regulatory process and is responsible for the commercialization of these products.The lead product is risperidone LAI(formerly known as TV-46000).On April 28,2023,the FDA approved UZEDY(risperidone)extended-release injectable suspension for the treatment of schizophrenia in adults,which was launched in the U.S.in May 2023.On February 25,2025,Teva and MedinCell announced that the supplemental New Drug Application(sNDA)for UZEDY extended-release injectable suspension for the maintenance treatment of Bipolar I disorder in adults had been accepted for filing by the FDA.MedinCell may be eligible for future sales-based milestone payments of up to$105 million with respect to UZEDY.Teva also pays MedinCell royalties on net sales.The second selected product candidate is olanzapine LAI(TEV-749)for the treatment of schizophrenia.In the third quarter of 2022,Teva decided to progress development of the product to Phase 3 and,as a result,paid a milestone payment of$3 million to MedinCell,which was recognized as R&D expenses.On May 8,2024,Teva and MedinCell announced positive Phase 3 efficacy results from a trial evaluating olanzapine LAI as a once-monthly subcutaneous long-acting injectable in adults with schizophrenia,and on March 31,2025,Teva announced survey results demonstrating patient and healthcare satisfaction with olanzapine LAI.Additional safety and efficacy results are planned to be presented in the second half of 2025.Teva paid a further$5 million milestone payment to MedinCell in the first quarter of 2025,which was recognized as R&D expenses.MedinCell may become eligible for further development and commercial milestones of up to$112 million,as well as royalties on sales of olanzapine LAI(TEV-749).Assets and Liabilities Held for Sale:General Assets and liabilities held for sale as of June 30,2025 included Tevas API business.Assets held for sale as of December 31,2024 included mainly Tevas API business and Tevas business venture in Japan.On December 31,2024,Teva classified its API business(including its R&D,manufacturing and commercial activities)as held for sale.The intention to divest is in alignment with Tevas Pivot to Growth strategy.However,there can be no assurance regarding the ultimate timing or structure of a potential divestiture or whether a divestiture will be agreed or completed at all.In connection with the held for sale classification of Tevas API business,in the first six months of 2025,Teva recorded expenses of$9 million in other assets impairments,restructuring and other items.See note 12.On March 31,2025,Teva divested its business venture in Japan,for which Teva recorded a marginal gain in the first quarter of 2025.Teva has elected the policy to include the currency translation adjustment related to the disposal group as part of the asset carrying amount.The Company has determined that the divestiture of its businesses does not represent a strategic shift that would have a major effect on the Companys operations and financial results and therefore the divestitures did not meet the criteria for discontinued operations classification.13 TEVA PHARMACEUTICAL INDUSTRIES LIMITED Notes to Consolidated Financial Statements(Unaudited)The table below summarizes all of Tevas assets and liabilities included as held for sale as of June 30,2025 and December 31,2024:June 30,December 31,2025 2024 (U.S.$in millions)Accounts receivables$118 222 Inventories 520$647 Property,plant and equipment,net and others 955 913 Identifiable intangible assets,net 21 83 Goodwill 207 255 Other current assets 107 99 Other non-current assets 198 236 Expected loss on sale*(284)(684)Total assets of the disposal group classified as held for sale in the consolidated balance sheets$1,842$1,771 Accounts payables(235)(283)Other current liabilities(21)(49)Other non-current liabilities(78)(85)Expected loss on sale*(281)Total liabilities of the disposal group classified as held for sale in the consolidated balance sheets$(334)$(698)*Includes an expected loss from reclassification of currency translation adjustments to the consolidated statements of income(loss)upon sale.NOTE 3 Revenue from contracts with customers:Disaggregation of revenue The following table disaggregates Tevas revenues by major revenue streams.For additional information on disaggregation of revenues,see note 15.Three months ended June 30,2025 United States Europe International Markets Other activities Total (U.S.$in millions)Sale of goods 1,755 1,275 469 136 3,636 Licensing arrangements 29 9 9 (1)46 Distribution 365 12 377 Other 2 13 5 98 117$2,151$1,298$495$232$4,176 Represents an amount less than$0.5 million.14 TEVA PHARMACEUTICAL INDUSTRIES LIMITED Notes to Consolidated Financial Statements(Unaudited)Three months ended June 30,2024 United States Europe International Markets Other activities Total (U.S.$in millions)Sale of goods 1,714 1,203 574 150 3,640 Licensing arrangements 23 6 6 1 36 Distribution 373 9 382 Other 3 4 99 106$2,110$1,213$593$249$4,164 Represents an amount less than$0.5 million.Six months ended June 30,2025 United States Europe International Markets Other activities Total (U.S.$in millions)Sale of goods 3,270 2,473 1,023 265 7,031 Licensing arrangements 50 16 16 82 Distribution 738 22 760 Other 2 2 17 173 194$4,060$2,492$1,077$438$8,067 Represents an amount less than$0.5 million.Six months ended June 30,2024 United States Europe International Markets Other activities Total (U.S.$in millions)Sale of goods 3,034 2,455 1,140 277 6,907 Licensing arrangements 45 18 11 1 75 Distribution 754 1 18 773 Other 1 12 20 195 228$3,835$2,485$1,190$474$7,983 Variable consideration Variable consideration mainly includes sales reserves and allowances(“SR&A”),comprised of rebates(including Medicaid and other governmental program discounts),chargebacks,returns and other promotional(including shelf stock adjustments)items.Provisions for prompt payment discounts are netted against accounts receivables.The Company recognizes these provisions at the time of sale and adjusts them if the actual amounts differ from the estimated provisions.15 TEVA PHARMACEUTICAL INDUSTRIES LIMITED Notes to Consolidated Financial Statements(Unaudited)SR&A to U.S.customers comprised approximately 69%of the Companys total SR&A as of June 30,2025,with the remaining balance primarily related to customers in Canada and Germany.The changes in SR&A for third-party sales for the six months ended June 30,2025 and 2024 were as follows:Sales Reserves and Allowances Reserves included in Accounts Receivable,net Rebates Medicaid and other governmental allowances Chargebacks Returns Other Total reserves included in Sales Reserves and Allowances Total(U.S.$in millions)Balance at January 1,2025$56$1,674$561$936$399$108$3,678$3,734 Provisions related to sales made in current year period 203 2,520 486 4,034 143 73 7,256 7,459 Provisions related to sales made in prior periods (46)30(28)(1)(7)(52)(52)Credits and payments(194)(2,363)(468)(3,962)(112)(48)(6,953)(7,147)Translation differences 64 17 18 5 17 121 121 Balance at June 30,2025$65$1,849$626$998$434$143$4,050$4,115 Sales Reserves and Allowances Reserves included in Accounts Receivable,net Rebates Medicaid and other governmental allowances Chargebacks Returns Other Total reserves included in Sales Reserves and Allowances Total(U.S.$in millions)Balance at January 1,2024$61$1,603$540$859$436$97$3,535$3,596 Provisions related to sales made in current year period 194 2,325 382 3,950 146 81 6,896 7,084 Provisions related to sales made in prior periods 12 26(11)(17)(1)9 9 Credits and payments(184)(2,183)(376)(3,923)(129)(82)(6,705)(6,884)Translation differences (19)(4)(6)(4)(2)(35)(35)Balance at June 30,2024$70$1,738$568$869$432$93$3,700$3,770 16 TEVA PHARMACEUTICAL INDUSTRIES LIMITED Notes to Consolidated Financial Statements(Unaudited)NOTE 4 Inventories:Inventories,net of reserves,consisted of the following:June 30,December 31,2025 2024 (U.S.$in millions)Finished products$2,106$1,783 Raw and packaging materials 724 671 Products in process 392 353 Materials in transit and payments on account 276 199$3,497$3,007 NOTE 5 Identifiable intangible assets:Identifiable intangible assets consisted of the following:Gross carrying amount net of impairment Accumulated amortization Net carrying amount June 30,2025 December 31,2024 June 30,2025 December 31,2024 June 30,2025 December 31,2024 (U.S.$in millions)Product rights$16,399$15,915$12,743$11,998$3,656$3,917 Trade names 595 568 322 300 273 268 In process research and development 213 233 213 233 Total$17,207$16,716$13,065$12,298$4,142$4,418 Product rights and trade names Product rights and trade names are assets presented at amortized cost.Product rights and trade names represent a portfolio of pharmaceutical products in various therapeutic categories from various acquisitions with a weighted average life period of approximately 8 years.Amortization of intangible assets was$148 million and$146 million in the three months ended June 30,2025 and 2024,respectively.Amortization of intangible assets was$292 million and$298 million in the six months ended June 30,2025 and 2024,respectively.IPR&D Tevas IPR&D are assets that have not yet been approved in its major markets.IPR&D carries intrinsic risks that the asset might not succeed in advanced phases and may be impaired in future periods.Intangible assets impairments Impairments of long-lived intangible assets for the three months ended June 30,2025 and 2024 were$42 million and$61 million,respectively.Impairments in the second quarter of 2025 consisted of:(a)Identifiable product rights of$40 million due to:(i)$25 million mainly related to updated market assumptions regarding price and volume of products mainly in Europe,and(ii)$15 million mainly related to a change in Tevas commercial plan regarding certain products as part of its optimization efforts,mainly in the U.S.;and (b)IPR&D assets of$2 million,mainly related to generic pipeline products resulting from development progress and changes in other key valuation indications mainly in Europe and the U.S.(e.g.,market size,competition assumptions,legal landscape and launch date).17 TEVA PHARMACEUTICAL INDUSTRIES LIMITED Notes to Consolidated Financial Statements(Unaudited)Impairments in the second quarter of 2024 consisted of:(a)Identifiable product rights of$51 million,mainly due to updated market assumptions regarding price and volume of products mainly in the U.S.;and (b)IPR&D assets of$10 million,mainly related to generic pipeline products resulting from development progress and changes in other key valuation indications(e.g.,market size,competition assumptions,legal landscape and launch date).Impairments of long-lived intangible assets for the six months ended June 30,2025 and 2024 were$163 million and$141 million,respectively.Impairments in the first six months of 2025 consisted of:(a)Identifiable product rights of$153 million due to:(i)$87 million mainly related to a change in Tevas commercial plan regarding certain products as part of its optimization efforts,mainly in the U.S.,and(ii)$66 million mainly related to updated market assumptions regarding price and volume of products in Europe;and (b)IPR&D assets of$10 million,mainly related to generic pipeline products resulting from development progress and changes in other key valuation indications mainly in the U.S.(e.g.,market size,competition assumptions,legal landscape and launch date).Impairments in the first six months of 2024 consisted of:(a)Identifiable product rights of$108 million,mainly due to updated market assumptions regarding price and volume of products mainly in the U.S.;and (b)IPR&D assets of$33 million,mainly related to generic pipeline products resulting from development progress and changes in other key valuation indications mainly in the U.S.(e.g.,market size,competition assumptions,legal landscape and launch date).The fair value measurement of the impaired intangible assets in the first six months ended June 30,2025 is based on significant unobservable inputs in the market and thus represents a Level 3 measurement within the fair value hierarchy.The discount rate applied ranged from 8.25%to 9.25%.A probability of success factor of 90%was used in the fair value calculation to reflect inherent regulatory and commercial risk of IPR&D.NOTE 6 Goodwill:Changes in the carrying amount of goodwill for the period ended June 30,2025,were as follows:United States Europe International Markets Other Total Tevas API Medis (U.S.$in millions)Balance as of December 31,2024(1)$5,732$8,075$1,110$232$15,147 Other changes during the period:Translation differences and other 731 12 59 802 Balance as of June 30,2025(1)$5,732$8,806$1,122$291$15,949 (1)Cumulative goodwill impairment as of June 30,2025 and December 31,2024,was each approximately$29.6 billion.Teva operates its business through three reporting segments:United States,Europe and International Markets.Each of these business segments is a reporting unit.Additional reporting units include Tevas production and sale of APIs to third parties(“Teva API”)and an out-licensing platform offering a portfolio of products to other pharmaceutical companies through its affiliate Medis.Tevas API and Medis reporting units are included under“Other”in the table above.See note 15 for additional segment information.18 TEVA PHARMACEUTICAL INDUSTRIES LIMITED Notes to Consolidated Financial Statements(Unaudited)Teva determines the fair value of its reporting units using the income approach.The income approach is a forward-looking approach for estimating fair value.Within the income approach,the method used is the discounted cash flow method.Teva begins with a forecast of all the expected net cash flows associated with the reporting unit,which includes the application of a terminal value,and then applies a discount rate to arrive at a net present value amount.Cash flow projections are based on Tevas estimates of revenue growth rates and operating margins,taking into consideration industry and market conditions.The discount rate used is based on the weighted average cost of capital(“WACC”),adjusted for the relevant risk associated with country-specific and business-specific characteristics.If any of these expectations were to vary materially from Tevas assumptions,Teva may record an impairment of goodwill allocated to these reporting units in the future.First Quarter Developments During the first quarter of 2025,management evaluated whether there were any developments that occurred during the quarter to determine if it was more likely than not that the fair value of any of its reporting units was below its carrying amount as of March 31,2025.Management concluded that no triggering event had occurred and,therefore,no quantitative assessment was performed.Second Quarter Developments Pursuant to Company policy,Teva conducted its annual goodwill impairment test for all reporting units during the second quarter of 2025.Management considered all information available,including information gathered from its latest long-range planning(“LRP”)process and annual operating plan(“AOP”),which are parts of Tevas internal financial planning and budgeting processes,as well as the recently announced“Accelerate Growth”phase under Tevas Pivot to Growth strategy(“Tevas Strategy”).The LRP,the AOP and Tevas Strategy were discussed and reviewed by Tevas management and its Board of Directors.Additionally,Teva conducted a quantitative analysis of all of its reporting units as part of its annual goodwill impairment test with the assistance of an independent valuation expert.Based on this quantitative analysis,no goodwill impairment charge was recorded in the second quarter of 2025.As of June 30,2025,Tevas United States,Europe,International Markets and Medis reporting units each had fair values in excess of 10%over their book values.In the second quarter of 2024,Teva recorded a goodwill impairment charge of$400 million related to Tevas API reporting unit.NOTE 7 Debt obligations:a.Short-term debt:Interest rate as of June 30,2025 Maturity June 30,2025 December 31,2024(U.S.$in millions)Convertible senior debentures 0.25 26 23 23 Current maturities of long-term liabilities and other 441 1,758 Total short-term debt$464$1,781 Convertible senior debentures The principal amount of Tevas 0.25%convertible senior debentures due in 2026 was$23 million as of June 30,2025 and as of December 31,2024.These convertible senior debentures include a“net share settlement”feature according to which the principal amount will be paid in cash and in case of conversion,only the residual conversion value above the principal amount will be paid in Teva shares.19 TEVA PHARMACEUTICAL INDUSTRIES LIMITED Notes to Consolidated Financial Statements(Unaudited)b.Long-term debt:Interest rate as of June 30,2025 Maturity June 30,2025 December 31,2024 (U.S.$in millions)Senior notes EUR 1,000 million(4)6.00 25 429 Senior notes USD 1,000 million(5)7.13 25 427 Senior notes EUR 900 million(6)4.50 25 515 Senior notes CHF 350 million 1.00 25 438 387 Senior notes USD 3,500 million(10)3.15 26 1,798 3,374 Senior notes EUR 700 million 1.88 27 820 730 Sustainability-linked senior notes USD 1,000 million(1)(*)(10)4.75 27 649 1,000 Sustainability-linked senior notes EUR 1,100 million(1)(*)3.75 27 1,289 1,144 Senior notes USD 1,250 million 6.75 28 1,250 1,250 Senior notes EUR 750 million 1.63 28 876 778 Sustainability-linked senior notes USD 1,000 million(2)(*)5.13 29 1,000 1,000 Sustainability-linked senior notes USD 600 million(3)(*)(10)7.88 29 398 600 Sustainability-linked senior notes EUR 800 million(3)(*)(10)7.38 29 775 835 Sustainability-linked senior notes EUR 1,500 million(2)(*)4.38 30 1,756 1,562 Senior notes USD 700 million(7)5.75 30 696 Sustainability-linked senior notes USD 500 million(3)(*)8.13 31 500 500 Sustainability-linked senior notes EUR 500 million(3)(*)7.88 31 585 521 Senior notes EUR 1,000 million(8)4.13 31 1,164 Senior notes USD 500 million(9)6.00 32 496 Senior notes USD 789 million 6.15 36 783 783 Senior notes USD 2,000 million 4.10 46 1,986 1,986 Total senior notes 17,259 17,821 Less current maturities(438)(1,758)Less debt issuance costs(11)(58)(61)Total senior notes and loans$16,763$16,002 (1)If Teva fails to achieve certain sustainability performance targets,a one-time premium payment of 0.15%-0.45%out of the principal amount will be paid at maturity or upon earlier redemption,if such redemption is on or after May 9,2026.(2)If Teva fails to achieve certain sustainability performance targets,the interest rate shall increase by 0.125%-0.375%per annum,from and including May 9,2026.(3)If Teva fails to achieve certain sustainability performance targets,the interest rate shall increase by 0.100%-0.300%per annum,from and including September 15,2026.(4)In January 2025,Teva repaid$426 million of its 6.00%senior notes due 2025 at maturity.(5)In January 2025,Teva repaid$427 million of its 7.13%senior notes due 2025 at maturity.(6)In March 2025,Teva repaid$515 million of its 4.50%senior notes due 2025 at maturity.(7)In May 2025,Teva issued senior notes in an aggregate principal amount of$700 million bearing 5.75%annual interest and due December 2030.(8)In May 2025,Teva issued senior notes in an aggregate principal amount of 1,000 million bearing 4.125%annual interest and due June 2031.(9)In May 2025,Teva issued senior notes in an aggregate principal amount of$500 million bearing 6.00%annual interest and due December 2032.(10)In June 2025,Teva consummated a cash tender offer and extinguished$1,579 million aggregate principal amount of its 3.15%senior notes due 2026;$351 million aggregate principal amount of its 4.75%senior notes due 2027;$202 million aggregate principal amount of its 7.88%senior notes due in 2029;and$157 million aggregate principal amount of its 7.38%senior notes due in 2029.The extinguishment resulted in a loss of$10 million which was recorded under financial expenses,net.(11)Debt issuance costs as of June 30,2025 include$13 million in connection with the issuance of the senior notes in May 2025,partially offset by$6 million acceleration of issuance costs related to the cash tender offer.(12)In July 2025,Teva repaid$444 million of its 1%senior notes due 2025 at maturity.*Interest rate adjustments and a potential one-time premium payment related to the sustainability-linked bonds are treated as bifurcated embedded derivatives.See note 8c.20 TEVA PHARMACEUTICAL INDUSTRIES LIMITED Notes to Consolidated Financial Statements(Unaudited)Long-term debt was issued by several indirect wholly-owned subsidiaries of the Company and is fully and unconditionally guaranteed by the Company as to payment of all principal,interest,discount and additional amounts,if any.The long-term debt outlined in the above table is generally redeemable at any time at varying redemption prices plus accrued and unpaid interest.Tevas debt as of June 30,2025 was effectively denominated in the following currencies:55%in U.S.dollars,42%in euro and 3%in Swiss franc.Tevas principal sources of short-term liquidity are its cash on hand,existing cash investments,liquid securities and available credit facilities,primarily its$1.8 billion unsecured syndicated sustainability-linked revolving credit facility entered into in April 2022,as amended in February 2023 and in May 2024(“RCF”).The RCF had an initial maturity date of April 2026 with two one-year extension options.In April 2024,an extension option was exercised and the RCF maturity date was extended to April 2027.The RCF contains certain covenants,including certain limitations on incurring liens and indebtedness and maintenance of certain financial ratios,including a maximum leverage ratio,which becomes more restrictive over time.On May 3,2024,the terms of the RCF were amended to update the Companys maximum permitted leverage ratio under the RCF for certain periods.Under the terms of the RCF,as amended,the Companys leverage ratio shall not exceed(i)4.00 x in 2025 and in the first quarter of 2026,(ii)3.75x in the second,third and fourth quarters of 2026 and(iii)3.50 x in the first quarter of 2027 and onwards.The RCF permits the Company to increase the maximum leverage ratio if it consummates or commences certain material transactions.Under the RCF,as amended,the applicable margin used to calculate the interest rate under the RCF is linked to one sustainability performance target,the number of new regulatory submissions in low and middle-income countries.Proceeds from borrowings under the RCF can be used for general corporate purposes,including repaying existing debt.As of June 30,2025,and as of the date of this Quarterly Report on Form 10-Q,no amounts were outstanding under the RCF.Based on current and forecasted results,the Company expects that it will not exceed the financial covenant thresholds set forth in the RCF within one year from the date the financial statements are issued.Under specified circumstances,including non-compliance with any of the covenants described above and the unavailability of any waiver,amendment or other modification thereto,the Company will not be able to borrow under the RCF.Additionally,violations of the covenants,under the circumstances referred to above,would result in an event of default in all borrowings under the RCF and,when greater than a specified threshold amount as set forth in each series of senior notes and sustainability-linked senior notes is outstanding,could lead to an event of default under the Companys senior notes and sustainability-linked senior notes due to cross-acceleration provisions.Teva expects that it will continue to have sufficient cash resources to support its debt service payments and all other financial obligations within one year from the date that the financial statements are issued.21 TEVA PHARMACEUTICAL INDUSTRIES LIMITED Notes to Consolidated Financial Statements(Unaudited)NOTE 8 Derivative instruments and hedging activities:a.Foreign exchange risk management:In the first six months of 2025,approximately 46%of Tevas revenues were denominated in currencies other than the U.S.dollar.As a result,Teva is subject to significant foreign currency risks.The Company enters into forward exchange contracts and purchases and writes options in order to hedge the currency exposure on balance sheet items,revenues and expenses.In addition,the Company takes measures to reduce its exposure by using natural hedging.The Company also acts to offset risks in opposite directions among the subsidiaries within Teva.The currency hedged items are usually denominated in the following main currencies:euro,Swiss franc,British pound,Russian ruble,Canadian dollar,Polish zoty,Japanese yen,new Israeli shekel,Indian rupee and other currencies.Depending on market conditions,foreign currency risk is also managed through the use of foreign currency debt.The Company may choose to hedge against possible fluctuations in foreign subsidiaries net assets(“net investment hedge”)and has entered into cross-currency swaps and forward-contracts in the past in order to hedge such an exposure.Most of the counterparties to the derivatives are major banks and the Company is monitoring the associated inherent credit risks.The Company enters into derivative transactions for hedging purposes only.b.Interest risk management:The Company raises capital through various debt instruments,including senior notes,sustainability-linked senior notes,bank loans and convertible debentures that bear fixed or variable interest rates,as well as a syndicated sustainability-linked revolving credit facility and securitization programs that bear a variable interest rate.In some cases,the Company has swapped from a fixed to a variable interest rate(“fair value hedge”)and from a fixed to a fixed interest rate with an exchange from a currency other than the functional currency(“cash flow hedge”),thereby reducing overall interest expenses or hedging risks associated with interest rate fluctuations.As of June 30,2025,all outstanding senior notes,sustainability-linked senior notes and convertible debentures bear a fixed interest rate.c.Bifurcated embedded derivatives:Upon the issuance of its sustainability-linked senior notes,Teva recognized embedded derivatives related to interest rate adjustments and a potential one-time premium payment upon failure to achieve certain sustainability performance targets,such as access to medicines in low-to-middle-income countries and reduction of absolute greenhouse gas emissions,which were bifurcated and are accounted for separately as derivative financial instruments.As of June 30,2025,the fair value of these derivative instruments is negligible.d.Derivative instruments outstanding:The following table summarizes the classification and fair values of derivative instruments:Fair value Fair value Designated as hedging instruments Not designated as hedging instruments June 30,2025 December 31,2024 June 30,2025 December 31,2024 Reported under(U.S.$in millions)(U.S.$in millions)Asset derivatives:Other current assets:Option and forward contracts$71$71 Liability derivatives:Other current liabilities:Option and forward contracts (50)(24)Other non-current liabilities:Cross-currency interest rate swap-cash flow hedge(1)(19)22 TEVA PHARMACEUTICAL INDUSTRIES LIMITED Notes to Consolidated Financial Statements(Unaudited)The table below provides information regarding the location and amount of pre-tax(gains)losses from derivatives designated in cash flow hedging relationships:Financial expenses,net Other comprehensive income(loss)Three months ended,Three months ended,June 30,2025 June 30,2024 June 30,2025 June 30,2024 Reported under(U.S.$in millions)Line items in which effects of hedges are recorded$252$241$244$(138)Cross-currency interest rate swap-cash flow hedge(1)17 1 Financial expenses,net Other comprehensive income(loss)Six months ended,Six months ended,June 30,2025 June 30,2024 June 30,2025 June 30,2024 Reported under(U.S.$in millions)Line items in which effects of hedges are recorded$477$491$744$(255)Cross-currency interest rate swap-cash flow hedge(1)17(8)1 1 The table below provides information regarding the location and amount of pre-tax(gains)losses from derivatives not designated as hedging instruments:Financial expenses,net Net revenues Three months ended,Three months ended,June 30,2025 June 30,2024 June 30,2025 June 30,2024 Reported under(U.S.$in millions)Line items in which effects of hedges are recorded$252$241$(4,176)$(4,164)Option and forward contracts(2)(58)(27)Option and forward contracts economic hedge(3)32 2 23 TEVA PHARMACEUTICAL INDUSTRIES LIMITED Notes to Consolidated Financial Statements(Unaudited)Financial expenses,net Net revenues Six months ended,Six months ended,June 30,2025 June 30,2024 June 30,2025 June 30,2024 Reported under(U.S.$in millions)Line items in which effects of hedges are recorded$477$491$(8,067)$(7,983)Option and forward contracts(2)4(37)Option and forward contracts economic hedge(3)60(10)(1)In May 2025,Teva entered into a$500 million notional amount of fixed to fixed cross-currency interest rate swaps relating to its 5.75%senior notes due 2030 to hedge the foreign currency exchange risk of future principal and interest payments associated with the USD denominated notes.The cross-currency swaps synthetically convert part of the USD debt into CHF,aligning debt servicing costs with Tevas inflows and reducing economic volatility.These swaps have been designated as cash flow hedges and the gain or loss on these swaps will be reported as a component of other comprehensive income and reclassified into earnings in each period during which the swaps affect earnings in the same line item associated with the USD denominated bonds.(2)Teva uses foreign exchange contracts(mainly option and forward contracts)to hedge balance sheet items from currency exposure.These foreign exchange contracts are not designated as hedging instruments for accounting purposes.In connection with these foreign exchange contracts,Teva recognizes gains or losses that offset the revaluation of the balance sheet items also recorded under financial expenses,net.(3)Teva entered into option and forward contracts designed to limit the exposure of foreign exchange fluctuations on projected revenues and expenses recorded in euro,Swiss franc,British pound,Russian ruble,Canadian dollar,Polish zoty,Japanese yen,new Israeli shekel,Indian rupee and some other currencies to protect its projected operating results for 2025.These derivative instruments do not meet the criteria for hedge accounting,however,they are accounted for as an economic hedge.These derivative instruments,which may include hedging transactions against future projected revenues and expenses,are recognized on the balance sheet at their fair value on a quarterly basis,while the foreign exchange impact on the underlying revenues and expenses may occur in subsequent quarters.In the three months ended June 30,2025,the negative impact from these derivatives recognized under revenues was$32 million.In the three months ended June 30,2024,the negative impact from these derivatives recognized under revenues was$2 million.In the six months ended June 30,2025,the negative impact from these derivatives recognized under revenues was$60 million.In the six months ended June 30,2024,the positive impact from these derivatives recognized under revenues was$10 million.Changes in the fair value of the derivative instruments are recognized in the same line item in the statements of income as the underlying exposure being hedged.Cash flows associated with these derivatives are reflected as cash flows from operating activities in the consolidated statements of cash flows.e.Amortizations due to terminated derivative instruments:Forward-starting interest rate swaps and treasury lock agreements In 2015,Teva entered into forward-starting interest rate swaps and treasury lock agreements to protect the Company from interest rate fluctuations in connection with a future debt issuance the Company was planning.These forward-starting interest rate swaps and treasury lock agreements were terminated in July 2016 upon the debt issuance.Termination of these transactions resulted in a loss position of$493 million,which was recorded as other comprehensive income(loss)and is amortized under financial expenses,net over the life of the debt.With respect to these forward-starting interest rate swaps and treasury lock agreements,losses of$17 million and$7 million were recognized under financial expenses,net,for each of the three months ended June 30,2025 and 2024,and losses of$24 million and$14 million were recognized under financial expenses,net for each of the six months ended June 30,2025 and 2024,respectively.24 TEVA PHARMACEUTICAL INDUSTRIES LIMITED Notes to Consolidated Financial Statements(Unaudited)f.Securitization:U.S.securitization program On November 7,2022,Teva and a bankruptcy-remote special purpose vehicle(“SPV”)entered into an accounts receivable securitization facility(“AR Facility”)with PNC Bank,National Association(“PNC”)with a three-year term.The AR Facility provided for purchases of accounts receivable by PNC in an amount of up to$1 billion through November 2023,and up to$500 million from November 2023 through November 2025.On June 30,2023,the AR Facility agreement was amended to include an additional receivables purchaser under the agreement,in an amount of up to$250 million through November 2025.As a result,the total commitment of PNC was reduced to an amount of up to$750 million,effective June 30,2023.Under the terms of the AR facility agreement,in November 2023,the total commitment of PNC was further reduced to an amount of up to$500 million through November 2025.On November 7,2023,the SPV amended the agreement and increased the commitment amount to a maximum of$1 billion by including an additional receivables purchaser in an amount of up to$250 million through March 2024,which was then reduced by$125 million through November 2025.As a result,the commitment amount was reduced to a maximum of$875 million without any additional purchasers participating in the AR facility.On October 29,2024,the SPV amended the agreement and increased the commitment amount to a maximum amount of$950 million by an existing receivables purchaser increasing its commitment by$75 million.Pledged accounts receivables In connection with the U.S.securitization program,accounts receivables,net of allowance for credit losses,include$673 million and$558 million as of June 30,2025 and December 31,2024,respectively,which are pledged by the SPV to PNC.g.Supplier Finance Program Obligation Teva maintains supply chain finance agreements with participating financial institutions.Under these agreements,participating suppliers may voluntarily elect to sell their accounts receivable with Teva to these financial institutions.Tevas suppliers negotiate their financing agreements directly with the respective financial institutions and Teva is not a party to these agreements.Teva has no economic interest in its suppliers decisions to participate in the program and Teva pays the financial institutions the stated amount of confirmed invoices on the maturity dates,which is generally within 120 days from the date the invoice was received.The agreements with the financial institutions do not require Teva to provide assets pledged as security or other forms of guarantees for the supplier finance program.All outstanding amounts related to suppliers participating in the supplier finance program are recorded under accounts payables in Tevas consolidated balance sheets.As of June 30,2025 and December 31,2024,the outstanding accounts payables to suppliers participating in these supplier finance programs were$196 million and$158 million,respectively.NOTE 9 Legal settlements and loss contingencies:In the second quarter of 2025,Teva recorded expenses of$166 million in legal settlements and loss contingencies,compared to expenses of$83 million in the second quarter of 2024.Expenses in the second quarter of 2025 were mainly related to an update to the estimated provision recorded for the claims brought by attorneys general representing states and territories throughout the United States in the generic drug antitrust litigation,an update to the estimated settlement provision for the opioid cases(mainly the effect of the passage of time on the net present value of the discounted payments),and a provision recorded in connection with the antitrust litigation related to QVAR.Expenses in the second quarter of 2024 were mainly related to an update to the estimated settlement provision for the opioid cases(mainly the effect of the passage of time on the net present value of the discounted payments),as well as an update in the estimated provision related to the settlement of several opt-out claims in connection with the Ontario Teachers Securities litigation,partially offset by an update to the estimated provision for the U.S.DOJ patient assistance program litigation.See note 10.25 TEVA PHARMACEUTICAL INDUSTRIES LIMITED Notes to Consolidated Financial Statements(Unaudited)In the first six months of 2025,Teva recorded expenses of$252 million in legal settlements and loss contingencies,compared to$188 million in the first six months of 2024.Expenses in the first six months of 2025 were mainly related to an update to the estimated settlement provision for the opioid cases(mainly the effect of the passage of time on the net present value of the discounted payments),an update to the estimated provision recorded for the claims brought by attorneys general representing states and territories throughout the United States in the generic drug antitrust litigation,as well a provision recorded in connection with the antitrust litigation related to QVAR.Expenses in the first six months of 2024 were mainly related to an update to the estimated settlement provision for the opioid cases(mainly the effect of the passage of time on the net present value of the discounted payments),as well as an update in the estimated provision related to the settlement of several opt-out claims in connection with the Ontario Teachers Securities litigation.As of June 30,2025 and December 31,2024,Tevas provision for legal settlements and loss contingencies recorded under accrued expenses and other taxes and long-term liabilities was$5,002 million and$4,881 million,respectively.NOTE 10 Commitments and contingencies:General From time to time,Teva and/or its subsidiaries are subject to claims for damages and/or equitable relief arising in the ordinary course of business.In addition,as described below,in large part as a result of the nature of its business,Teva is frequently subject to litigation.Teva generally believes that it has meritorious defenses to the actions brought against it and vigorously pursues the defense or settlement of each such action.Teva records a provision in its consolidated financial statements to the extent that it concludes that a contingent liability is probable and the amount thereof is reasonably estimable.Based upon the status of the cases described below,managements assessments of the likelihood of damages,and the advice of legal counsel,no material provisions have been made regarding the matters disclosed in this note,except as noted below.Litigation outcomes and contingencies are unpredictable,and substantial damages or other relief may be awarded.Accordingly,managements assessments involve complex judgments about future events and often rely heavily on estimates and assumptions.Teva continuously reviews the matters described below and may,from time to time,remove previously disclosed matters where the exposures were fully resolved in the prior year,or determined to no longer meet the materiality threshold for disclosure,or were substantially resolved.If one or more of such proceedings described below were to result in final judgments against Teva,such judgments could be material to its results of operations and cash flows in a given period.In addition,Teva incurs significant legal fees and related expenses in the course of defending its positions even if the facts and circumstances of a particular litigation do not give rise to a provision in the consolidated financial statements.In connection with third-party agreements,Teva may under certain circumstances be required to indemnify,and may be indemnified by,in unspecified amounts,the parties to such agreements against third-party claims.Among other things,Tevas agreements with third parties may require Teva to indemnify them,or require them to indemnify Teva,for the costs and damages incurred in connection with product liability claims,in specified or unspecified amounts.Except as otherwise noted,all of the litigation matters disclosed below involve claims arising in the United States.Except as otherwise noted,all third-party sales figures given below are based on IQVIA data.Intellectual Property Litigation From time to time,Teva seeks to develop generic and biosimilar versions of patent-protected pharmaceuticals and biopharmaceuticals for sale prior to patent expiration in various markets.In the United States,to obtain approval for most generics prior to the expiration of the originators patents,Teva must challenge the patents under the procedures set forth in the Hatch-Waxman Act of 1984,as amended.For many biosimilar products that are covered by patents,Teva participates in the“patent dance”procedures of the Biologics Price Competition and Innovation Act(“BPCIA”),which allow for the challenge to originator patents prior to obtaining biosimilar product approval.To the extent that Teva seeks to utilize such patent challenge procedures,Teva is and expects to be involved in patent litigation regarding the validity,enforceability or infringement of the originators patents.Teva may also be involved in patent litigation involving the extent to which its product or manufacturing process techniques may infringe other originator or third-party patents.26 TEVA PHARMACEUTICAL INDUSTRIES LIMITED Notes to Consolidated Financial Statements(Unaudited)Additionally,depending upon a complex analysis of a variety of legal and commercial factors,Teva may,in certain circumstances,elect to market a generic or biosimilar version of the product even though litigation is still pending.To the extent Teva elects to proceed in this manner,it could face substantial liability for patent infringement if the final court decision is adverse to Teva,which could be material to its results of operations and cash flows in a given period.Teva could also be sued for patent infringement outside of the context of the Hatch-Waxman Act or BPCIA.For example,Teva could be sued for patent infringement after commencing sales of a product.This type of litigation can involve any of Tevas pharmaceutical products,not just its generic and biosimilar products.The general rule for damages in patent infringement cases in the United States is that the patentee should be compensated by no less than a reasonable royalty and it may also be able,in certain circumstances,to be compensated for its lost profits.The amount of a reasonable royalty award would generally be calculated based on the sales of Tevas product.The amount of lost profits would generally be based on the lost sales of the patentees product.In addition,the patentee may seek consequential damages as well as enhanced damages of up to three times the profits lost by the patent holder for willful infringement,although courts have typically awarded much lower multiples.Teva is also involved in litigation regarding patents in other countries where it does business,particularly in Europe.The laws concerning generic pharmaceuticals and patents differ from country to country.Damages for patent infringement in Europe may include lost profits or a reasonable royalty,but enhanced damages for willful infringement are generally not available.In July 2014,GlaxoSmithKline(“GSK”)filed claims against Teva in the U.S.District Court for the District of Delaware for infringement of a patent directed to using carvedilol in a specified manner to decrease the risk of mortality in patients with congestive heart failure.Teva began selling its carvedilol tablets(the generic version of GSKs Coreg)in September 2007.A jury returned a verdict in GSKs favor,which was initially overturned by the U.S.District Court.The Court of Appeals for the Federal Circuit reinstated the$235.5 million jury verdict,not including pre-or post-judgment interest,finding Teva liable for patent infringement.The U.S.Supreme Court denied Tevas appeal for a rehearing.On December 12,2024,the U.S.District Court for the District of Delaware set a schedule for briefing on legal issues that remain in the case,and the briefings were completed on March 26,2025.In addition to those legal issues,there will need to be a trial regarding certain equitable issues that were never presented in the 2017 jury trial.Teva recognized a provision based on its offer to settle the matter.Product Liability Litigation Tevas business inherently exposes it to potential product liability claims.Teva maintains a program of insurance,which may include commercial insurance,self-insurance(including direct risk retention),or a combination of both types of insurance,in amounts and on terms that it believes are reasonable and prudent in light of its business and related risks.However,Teva sells,and will continue to sell,pharmaceuticals that are not covered by its product liability insurance;in addition,it may be subject to claims for which insurance coverage is denied,as well as claims that exceed its policy limits.Product liability coverage for pharmaceutical companies is becoming more expensive and increasingly difficult to obtain.As a result,Teva may not be able to obtain the type and amount of insurance it desires,or any insurance on reasonable terms,in certain or all of its markets.Since July 2018,Teva and its subsidiaries have been parties to litigation relating to previously unknown nitrosamine impurities discovered in certain products.The nitrosamine impurities were allegedly found in the active pharmaceutical ingredient(“API”)supplied to Teva by multiple API manufacturers.Subsequently,Teva initiated recalls of losartan in April 2019 and metformin in June 2020,due to the presence of nitrosamine impurities.Various nitrosamine litigations remain pending in the United States related to Tevas valsartan,losartan,metformin and ranitidine products.There are currently two Multi-District Litigations(“MDL”)pending against Teva and other manufacturers,including one MDL in the U.S.District Court for the District of New Jersey with respect to Tevas valsartan and losartan products,and another MDL in the U.S.District Court for the Southern District of Florida related to Tevas ranitidine products.The claims against Teva and other generic manufacturers in the ranitidine MDL have been dismissed on preemption and other grounds,and are currently on appeal in the Eleventh Circuit Court of Appeals.Teva was dismissed from all ranitidine claims pending in Illinois based on preemption grounds,which plaintiffs have appealed.State court ranitidine cases naming Teva are also pending in coordinated proceedings in California and Pennsylvania.27 TEVA PHARMACEUTICAL INDUSTRIES LIMITED Notes to Consolidated Financial Statements(Unaudited)The district court in the valsartan MDL originally scheduled the first trial to commence in the fourth quarter of 2024,but that trial has been postponed indefinitely.Bellwether trial workup based on personal injury claims involving Tevas valsartan product is underway,and Tevas first trial may occur no earlier than in the first quarter of 2026.Discovery is paused indefinitely in the MDL with respect to the losartan claims against Teva.Certain generic manufacturers,including Teva,have also been named in a small number of state court actions brought by single plaintiffs asserting allegations similar to those in the aforementioned valsartan MDL.All of these state court matters are stayed,aside from a single case pending in New Jersey.Similar lawsuits are pending in Canada.Teva was also named in a consolidated proceeding pending in the U.S.District Court for the District of New Jersey brought by individuals and end payors seeking economic damages on behalf of purported classes of consumers and end payors who purchased Tevas and other generic manufacturers metformin products.In December 2024,Teva reached a settlement on this matter that resolved all of the plaintiffs claims against Teva and the settlement agreement will be presented to the court for approval.Competition Matters As part of its generic pharmaceuticals business,Teva has challenged a number of patents covering branded pharmaceuticals,some of which are among the most widely-prescribed and well-known drugs on the market.Many of Tevas patent challenges have resulted in litigation relating to Tevas attempts to market generic versions of such pharmaceuticals under the federal Hatch-Waxman Act.Some of this litigation has been resolved through settlement agreements in which Teva obtained a license to market a generic version of the drug,often years before the patents expire.Teva and its subsidiaries have been named as defendants in cases that allege antitrust violations arising from such settlement agreements.The plaintiffs in these cases are usually direct and indirect purchasers of pharmaceutical products,some of whom assert claims on behalf of classes of all direct and indirect purchasers,and they typically allege that(i)Teva received something of value from the innovator in exchange for an agreement to delay generic entry,and(ii)significant savings could have been realized if there had been no settlement agreement and generic competition had commenced earlier.These plaintiffs seek various forms of injunctive and monetary relief,including damages based on the difference between the brand price and what the generic price allegedly would have been and disgorgement of profits,which are often automatically tripled under the relevant statutes,plus attorneys fees and costs.The alleged damages generally depend on the size of the branded market and the length of the alleged delay,and can be substantial,potentially measured in multiples of the annual brand sales,particularly where the alleged delays are lengthy or branded drugs with annual sales in the billions of dollars are involved.Teva believes that its settlement agreements are lawful and serve to increase competition,and has defended them vigorously.In Tevas experience to date,these cases have typically settled for a fraction of the high end of the damages sought,although there can be no assurance that such outcomes will continue.In June 2013,the U.S.Supreme Court held,in Federal Trade Commission(“FTC”)v.Actavis,Inc.,that a rule of reason test should be applied in analyzing whether such settlements potentially violate the federal antitrust laws.The Supreme Court held that a trial court must analyze each agreement in its entirety in order to determine whether it violates the U.S.antitrust laws.This test has resulted in increased scrutiny of Tevas patent settlements,additional action by the FTC and state and local authorities,and an increased risk of liability in Tevas currently pending antitrust litigations.In December 2011,three groups of plaintiffs filed claims against Wyeth and Teva for alleged violations of the U.S.antitrust laws in connection with their November 2005 settlement of patent litigation involving extended-release venlafaxine(generic Effexor XR).The cases were filed by a purported class of direct purchasers,a purported class of indirect purchasers and certain chain pharmacies in the U.S.District Court for the District of New Jersey.The plaintiffs claim that the settlement agreement between Wyeth and Teva unlawfully delayed generic entry.On September 18,2024,the district court lifted its stay of discovery and the case is now proceeding.Teva and one group of plaintiffs(the“Indirect Purchaser Plaintiffs”or“IPPs”)reached an agreement to resolve the IPPs claims against Teva,and on March 19,2025,that settlement was granted preliminary approval by the court.Annual sales of Effexor XR were approximately$2.6 billion at the time of settlement and at the time Teva launched its generic version of Effexor XR in July 2010.28 TEVA PHARMACEUTICAL INDUSTRIES LIMITED Notes to Consolidated Financial Statements(Unaudited)In February 2012,two purported classes of direct-purchaser plaintiffs filed claims against GSK and Teva in the U.S.District Court for the District of New Jersey for alleged violations of the antitrust laws in connection with their February 2005 settlement of patent litigation involving lamotrigine(generic Lamictal).The plaintiffs claimed that the settlement agreement unlawfully delayed generic entry and sought unspecified damages.During February 2023,a number of direct purchasers who were denied class certification filed suit as individual plaintiffs,which action was transferred to the U.S.District Court for the District of New Jersey.Discovery of the newly added individual plaintiffs is ongoing.Annual sales of Lamictal were approximately$950 million at the time of the settlement and approximately$2.3 billion at the time Teva launched its generic version of Lamictal in July 2008.In April 2013,purported classes of direct purchasers of,and end payers for,Niaspan(extended release niacin)filed claims against Teva and Abbott for violating the antitrust laws by entering into a settlement agreement in April 2005 to resolve patent litigation over the product.A multidistrict litigation has been established in the U.S.District Court for the Eastern District of Pennsylvania.Throughout 2015 and in January 2016,several individual direct-purchaser opt-out plaintiffs filed complaints with allegations nearly identical to those of the direct purchasers class.On April 24,2023,the U.S.District Courts denial of the indirect purchasers motion for class certification was affirmed by the Court of Appeals for the Third Circuit,and on June 5,2023,the Court of Appeals denied the indirect purchasers petition for re-hearing.The litigation remains ongoing.In October 2016,the District Attorney for Orange County,California,filed a similar complaint in California state court,alleging violations of state law and seeking restitution and civil penalties.The California state court case remains stayed.Annual sales of Niaspan were approximately$416 million at the time of the settlement and approximately$1.1 billion at the time Teva launched its generic version of Niaspan in September 2013.In November 2020,the European Commission issued a final decision in its proceedings against both Cephalon and Teva,finding that the 2005 settlement agreement between the parties had the object and effect of hindering the entry of generic modafinil,and imposed fines totaling euro 60.5 million on Teva and Cephalon,potentially subject to post-decision interest.Teva and Cephalon filed an appeal against the decision in February 2021,and a judgment was issued on October 18,2023 rejecting Tevas grounds of appeal.A provision for this matter was included in the financial statements.In lieu of posting a cash bond,Teva has provided the European Commission with a bank guarantee in the amount of the imposed fines,plus post-decision interest.On January 4,2024,Teva appealed the October 2023 judgment to the European Court of Justice.On March 27,2025,the advocate general to the European Court of Justice issued a non-binding opinion,recommending that Tevas appeal be dismissed.The appeal otherwise remains pending.Between September 2021 and April 2022,several private plaintiffs including retailers and health insurance providers filed claims in various courts against Teva and certain other defendants related to various medicines used to treat HIV,which were all removed and/or consolidated into the U.S.District Court for the Northern District of California.As they relate to Teva,the lawsuits challenged settlement agreements Teva entered into with Gilead in 2013 and/or 2014 to resolve patent litigation relating to Tevas generic versions of Viread and/or Truvada and Atripla,although plaintiffs abandoned any claim for damages relating to the Viread settlement.In May 2023,Teva and Gilead reached a settlement agreement with the retailer plaintiffs and Teva recognized a provision for this matter based on such settlement.On June 30,2023,the jury in the trial against the remaining plaintiffs issued a verdict in favor of Teva and Gilead,rejecting all of the remaining plaintiffs claims.On February 12,2024,the court enter
2025-09-22
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News ReleaseOne Amgen Center DriveThousand Oaks,CA 91320-1799Telephone 805-447-AMGEN REPORTS SECOND QUARTER 2025 FINANCIAL RESULTSTHOUSAND OAKS,Calif.(Aug.5,2025)-Amgen(NASDAQ:AMGN)today announced financial results for the second quarter of 2025.“Were delivering strong performance and reaching more patients with innovative medicines and biosimilars that address serious diseases.We continue to invest in science that enables longer,healthier lives and supports sustainable,long-term growth,”said Robert A.Bradway,chairman and chief executive officer.Key results include:For the second quarter,total revenues increased 9%to$9.2 billion in comparison to thesecond quarter of 2024.Product sales grew 9%,driven by 13%volume growth,partially offset by 3%lower netselling price.Fifteen products delivered at least double-digit sales growth in the second quarter,including Repatha(evolocumab),EVENITY(romosozumab-aqqg),IMDELLTRA(tarlatamab-dlle)/IMDYLLTRA(tarlatamab),BLINCYTO(blinatumomab),TEZSPIRE(tezepelumab-ekko),UPLIZNA(inebilizumab-cdon),and TAVNEOS(avacopan).GAAP earnings per share(EPS)increased 92%from$1.38 to$2.65,primarily driven byhigher revenues.GAAP operating income increased from$1.9 billion to$2.7 billion,and GAAPoperating margin increased 6.6 percentage points to 30.3%.Non-GAAP EPS increased 21%from$4.97 to$6.02,primarily driven by higher revenues,partially offset by higher operating expenses.Non-GAAP operating income increased from$3.9 billion to$4.3 billion,and non-GAAPoperating margin increased 0.7 percentage points to 48.9%.The Company generated$1.9 billion of free cash flow in the second quarter of 2025versus$2.2 billion in the second quarter of 2024,driven by 2024 tax payments deferred to2025 and higher capital expenditures,partially offset by business performance.References in this release to“non-GAAP”measures,measures presented“on a non-GAAP basis,”and“free cash flow”(computed by subtracting capital expenditures from operating cash flow)refer to non-GAAP financial measures.Adjustments to the most directly comparable GAAP financial measures and other items are presented in the attached reconciliations.Refer to Non-GAAP Financial Measures below for further discussion.Product Sales PerformanceGeneral MedicineRepatha(evolocumab)sales increased 31%year-over-year to$696 million in the second quarter,driven by 36%volume growth,partially offset by unfavorable changes to estimated sales deductions.EVENITY(romosozumab-aqqg)sales increased 32%year-over-year to$518 million in the second quarter,primarily driven by volume growth.Prolia(denosumab)sales decreased 4%year-over-year to$1.1 billion in the second quarter,driven by lower net selling price.For 2025,we expect sales erosion driven by biosimilar competition in the second half of the year,as biosimilars have now launched in the U.S.market.Rare DiseaseTEPEZZA(teprotumumab-trbw)sales increased 5%year-over-year to$505 million in the second quarter,primarily driven by higher inventory levels.KRYSTEXXA(pegloticase)sales increased 19%year-over-year,to$349 million in the second quarter,of which 12%was derived from higher inventory levels and 6%from volume growth.UPLIZNA(inebilizumab-cdon)sales increased 91%year-over-year to$176 million in the second quarter,driven by 79%volume growth with 16rived from higher inventory levels.Year-over-year sales benefited from the timing of shipments to our ex-U.S.partner that occurred in the third quarter of 2024.Excluding these shipments,sales grew by 56%year-over-year in the second quarter.TAVNEOS(avacopan)sales increased 55%year-over-year to$110 million in the second quarter,driven by volume growth.Ultra-Rare products,which consist of RAVICTI(glycerol phenylbutyrate),PROCYSBI(cysteamine bitartrate),ACTIMMUNE(interferon gamma-1b),QUINSAIR(levofloxacin),and BUPHENYL(sodium phenylbutyrate),generated$183 million of sales in the second quarter.Sales decreased 2%year-over-year for the second quarter,driven by lower net selling price.InflammationTEZSPIRE(tezepelumab-ekko)sales increased 46%year-over-year to$342 million in the second quarter,driven by volume growth.Otezla(apremilast)sales increased 14%year-over-year to$618 million in the second quarter,driven by 12vorable changes to estimated sales deductions and 4%volume growth.Enbrel(etanercept)sales decreased 34%year-over-year to$604 million in the second quarter,driven by 20%unfavorable changes to estimated sales deductions and 19%AMGEN REPORTS SECOND QUARTER 2025 FINANCIAL RESULTSPage 2lower net selling price resulting from increased 340B Program mix and the impact of the U.S.Medicare Part D redesign,partially offset by 3%volume growth.AMJEVITA(adalimumab-atto)/AMGEVITA(adalimumab)sales were flat year-over-year at$133 million in the second quarter.PAVBLU(aflibercept-ayyh)generated$130 million of sales in the second quarter.WEZLANA(ustekinumab-auub)/WEZENLA(ustekinumab)generated$35 million of sales in the second quarter.OncologyBLINCYTO(blinatumomab)sales increased 45%year-over-year to$384 million in the second quarter,driven by volume growth.Vectibix(panitumumab)sales increased 13%year-over-year to$305 million in the second quarter,driven by volume growth.KYPROLIS(carfilzomib)sales were flat year-over-year at$378 million in the second quarter.LUMAKRAS/LUMYKRAS(sotorasib)sales increased 6%year-over-year to$90 million in the second quarter,driven by 16%volume growth,partially offset by 10%lower net selling price.XGEVA(denosumab)sales decreased 5%year-over-year to$532 million in the second quarter,driven by 2%unfavorable changes to estimated sales deductions and volume decline.For 2025,we expect sales erosion driven by biosimilar competition in the second half of the year,as biosimilars have now launched in the U.S.market.Nplate(romiplostim)sales increased 7%year-over-year to$369 million in the second quarter,driven by volume growth.IMDELLTRA(tarlatamab-dlle)/IMDYLLTRA(tarlatamab)generated$134 million of sales in the second quarter.Sales increased 65%quarter-over-quarter,driven by volume growth.MVASI(bevacizumab-awwb)sales increased 22%year-over-year to$191 million in the second quarter,driven by 16vorable changes to estimated sales deductions,6%volume growth,and 5%higher net selling price,partially offset by lower inventory levels.In the quarter,MVASI benefited from competitor bevacizumab product shortages,and going forward,we expect to return to continued sales erosion driven by competition.Established ProductsOur established products,which consist of Aranesp(darbepoetin alfa),Parsabiv(etelcalcetide),and Neulasta(pegfilgrastim),generated$533 million of sales in the second quarter.Sales decreased 5%year-over-year for the second quarter,driven by 14%lower net selling price and 4%lower volume,partially offset by favorable changes to estimated sales deductions.AMGEN REPORTS SECOND QUARTER 2025 FINANCIAL RESULTSPage 3Product Sales Detail by Product and Geographic Region$Millions,except percentagesQ2 25Q2 24YOY U.S.ROWTOTALTOTALTOTALRepatha .$361$335$696$532 31%EVENITY .395 123 518 391 32%Prolia .745 377 1,122 1,165(4%)TEPEZZA .466 39 505 479 5%KRYSTEXXA .349 349 294 19%UPLIZNA .132 44 176 92 91%TAVNEOS .103 7 110 71 55%Ultra-Rare products(1).175 8 183 187(2%)TEZSPIRE .342 342 234 46%Otezla .512 106 618 544 14%Enbrel .597 7 604 909(34%)AMJEVITA/AMGEVITA.133 133 133%PAVBLU .126 4 130 N/AWEZLANA/WEZENLA .35 35 N/ABLINCYTO .270 114 384 264 45%Vectibix .144 161 305 270 13%KYPROLIS .232 146 378 377 0%LUMAKRAS/LUMYKRAS .52 38 90 85 6%XGEVA .347 185 532 562(5%)Nplate .228 141 369 346 7%IMDELLTRA/IMDYLLTRA .107 27 134 12*MVASI .142 49 191 157 22%Aranesp .107 252 359 348 3%Parsabiv .51 41 92 106(13%)Neulasta .63 19 82 105(22%)Other products(2).278 56 334 378(12%)Total product sales .$6,324$2,447$8,771$8,041 9%N/A=not applicable*Change in excess of 100%(1)Ultra-Rare products consist of RAVICTI,PROCYSBI,ACTIMMUNE,QUINSAIR and BUPHENYL.(2)Consists of Aimovig,KANJINTI,AVSOLA,EPOGEN,RIABNI,BKEMV/BEKEMV,IMLYGIC,NEUPOGEN,Corlanor,RAYOS,DUEXIS,PENNSAID and Sensipar/Mimpara,where Biosimilars total$172 million in Q2 25 and$183 million in Q2 24.AMGEN REPORTS SECOND QUARTER 2025 FINANCIAL RESULTSPage 4Operating Expense,Operating Margin and Tax Rate AnalysisOn a GAAP basis:Total Operating Expenses increased 1%year-over-year for the second quarter.Cost of Sales as a percentage of product sales decreased 5.9 percentage points driven by lower amortization expense from the fair value step-up of inventory acquired from Horizon and lower manufacturing costs,partially offset by higher profit share expense and changes in our sales mix.Research&Development(R&D)expenses increased 21%driven by investments in later-stage clinical programs,including those related to MariTide,for which four Phase 3 studies are underway.Selling,General&Administrative(SG&A)expenses decreased 5%driven by lower commercial product-related expenses and lower Horizon acquisition-related expenses.Other operating expenses include litigation expenses.Operating Margin as a percentage of product sales increased 6.6 percentage points in the second quarter to 30.3%.Tax Rate increased 2.7 percentage points in the second quarter 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 year.On a non-GAAP basis:Total Operating Expenses increased 8%year-over-year for the second quarter.Cost of Sales as a percentage of product sales increased 0.2 percentage points driven by higher profit share expense and changes in our sales mix,partially offset by lower manufacturing costs.R&D expenses increased 18%driven by investments in later-stage clinical programs,including those related to MariTide,for which four Phase 3 studies are underway.SG&A expenses decreased 2%primarily driven by lower commercial product-related expenses.Operating Margin as a percentage of product sales increased 0.7 percentage points in the second quarter to 48.9%.Tax Rate decreased 0.7 percentage points in the second quarter due to the change in earnings mix.AMGEN REPORTS SECOND QUARTER 2025 FINANCIAL RESULTSPage 5$Millions,except percentagesGAAPNon-GAAPQ2 25Q2 24YOY Q2 25Q2 24YOY Cost of Sales .$3,011$3,236(7%)$1,551$1,406 10%of product sales .34.3.2%(5.9)pts.17.7.5%0.2 pts.Research&Development .$1,744$1,447 21%$1,685$1,423 18%of product sales .19.9.0%1.9 pts.19.2.7%1.5 pts.Selling,General&Administrative .$1,691$1,785(5%)$1,650$1,686(2%)%of product sales .19.3.2%(2.9)pts.18.8!.0%(2.2)pts.Other .$77$11*$N/ATotal Operating Expenses .$6,523$6,479 1%$4,886$4,515 8%Operating Margin .Operating income as%of product sales .30.3#.7%6.6 pts.48.9H.2%0.7 pts.Tax Rate 8.7%6.0%2.7 pts.14.2.9%(0.7)pts.pts:percentage points*=Change in excess of 100%N/A=not applicableCash Flow and Balance SheetThe Company generated$1.9 billion of free cash flow in the second quarter of 2025 versus$2.2 billion in the second quarter of 2024,driven by timing of 2024 tax payments deferred to 2025 and higher capital expenditures,partially offset by business performance.The Company declared a second quarter 2025 dividend on March 4,2025 of$2.38 per share that was paid on June 6,2025 to all stockholders of record as of May16,2025,representing a 6%increase from the same period in 2024.The Company retired$1.4 billion of debt during the second quarter of 2025,and$4.3billion year to date.During the second quarter of 2025,there were no repurchases of shares of common stock.Cash and cash equivalents totaled$8.0 billion and debt outstanding totaled$56.2 billion as of June 30,2025.$Billions,except sharesQ2 25Q2 24YOY Operating Cash Flow .$2.3$2.5$(0.2)Capital Expenditures .$0.4$0.2$0.1 Free Cash Flow .$1.9$2.2$(0.3)Dividends Paid .$1.3$1.2$0.1 Share Repurchases .$0.0$0.0$0.0 Average Diluted Shares(millions)541 541 0 Note:Numbers may not add due to roundingAMGEN REPORTS SECOND QUARTER 2025 FINANCIAL RESULTSPage 6$Billions6/30/2512/31/24YTD Cash and Cash Equivalents .$8.0$12.0$(3.9)Debt Outstanding .$56.2$60.1$(3.9)Note:Numbers may not add due to rounding2025 GuidanceFor the full year 2025,the Company expects:Total revenues in the range of$35.0billion to$36.0billion.On a GAAP basis,EPS in the range of$10.97 to$12.11,and a tax rate in the range of 11.0%to 12.5%.On a non-GAAP basis,EPS in the range of$20.20 to$21.30,and a tax rate in the range of 14.5%to 16.0%.Capital expenditures to be approximately$2.3billion.Share repurchases not to exceed$500million.This guidance includes the estimated impact of implemented tariffs,but does not account for any tariffs or potential pricing actions announced or described but not implemented as well as any tariffs,sector specific tariffs,or pricing actions that could be implemented in the future.Second Quarter Product and Pipeline UpdateThe Company provided the following updates on selected product and pipeline programs:General MedicineMariTide(maridebart cafraglutide,AMG 133)MariTide is a differentiated peptide-antibody conjugate that activates the glucagon like peptide 1(GLP-1)receptor and antagonizes the glucose-dependent insulinotropic polypeptide receptor(GIPR).In June,the underlying details from Part 1 of the Phase 2 study of MariTide and complete results from the primary analysis of the Phase 1 pharmacokinetics low dose initiation(PK-LDI)study evaluating lower starting doses of MariTide were presented at the American Diabetes Association 85th Scientific Sessions and simultaneously published in the New England Journal of Medicine.In the Phase 2 study per the efficacy estimand1,MariTide demonstrated:up to 20%average weight loss in people living with obesity without Type 2 diabetes(T2D).up to 17%average weight loss in people living with obesity with T2D.no weight loss plateau by 52 weeks,indicating the potential for further weight reduction.robust and sustained reduction in hemoglobin A1c(HbA1c)of up to 2.2%in people living with obesity and T2D.improvements across pre-specified cardiometabolic measures,including waist circumference,blood pressure,high-sensitivity C-reactive protein(hs-CRP)and select lipid parameters.AMGEN REPORTS SECOND QUARTER 2025 FINANCIAL RESULTSPage 7No new safety signals were identified in the Phase 2 study and tolerability was consistent with the GLP-1 class.The most frequently reported adverse events(AEs)were gastrointestinal(GI)related,and most were mild to moderate,were predominantly limited to initial dosing and less frequent when dose escalation was used without compromising efficacy.Discontinuation rates of MariTide due to GI AEs in the dose escalation arms(up to 7.8%)were lower than non-dose escalation arms.The Phase 1 PK-LDI study showed participants that received 21 mg/70 mg/350 mg had an overall incidence of vomiting of 24.4%and participants that received 35 mg/70 mg/350 mg had an overall incidence of vomiting of 22.5%.There were no discontinuations due to GI AEs at any time during the study.Part 2 of the Phase 2 chronic weight management study is ongoing in adults living with obesity or overweight,with or without T2D.Data readout is anticipated in Q4 2025.A Phase 2 study investigating MariTide for the treatment of T2D is ongoing in adults living with and without obesity.Data readout is anticipated in Q4 2025.MARITIME-1,a Phase 3 study of MariTide is enrolling adults living with obesity or overweight,without T2D.MARITIME-2,a Phase 3 study of MariTide is enrolling adults living with obesity or overweight,with T2D.MARITIME-CV,a Phase 3 study of MariTide on cardiovascular(CV)outcomes was initiated and is enrolling adults living with established atherosclerotic cardiovascular disease and obesity or overweight.MARITIME-HF,a Phase 3 study of MariTide on reduction of heart failure events and cardiovascular risk was initiated and is enrolling adults living with heart failure with preserved or mildly reduced ejection fraction and obesity.The Company is planning to initiate Phase 3 study of obstructive sleep apnea in H2 2025.AMG 513A Phase 1 study of AMG 513 is enrolling adults living with obesity.Repatha VESALIUS-CV,a Phase 3 CV outcomes study of Repatha,is ongoing in patients at high CV risk without prior myocardial infarction or stroke.Data readout is event driven and anticipated in H2 2025.EVOLVE-MI,a Phase 4 study of Repatha administered within 10 days of an acute myocardial infarction to reduce the risk of CV events,is ongoing.Olpasiran(AMG 890)Olpasiran is a potentially best-in-class small interfering ribonucleic acid(siRNA)molecule that reduces lipoprotein(a)(Lp(a)synthesis in the liver.The OCEAN(a)-outcomes trial,a Phase 3 secondary prevention CV outcomes study,is ongoing in patients with atherosclerotic CV disease and elevated Lp(a).A Phase 3 CV outcomes study in patients with elevated Lp(a)and at high risk for a first CV event is expected to be initiated in H2 2025/H1 2026.AMGEN REPORTS SECOND QUARTER 2025 FINANCIAL RESULTSPage 8Rare DiseaseUPLIZNA U.S.Food and Drug Administration(FDA)review of the MINT Phase 3 data in patients with generalized myasthenia gravis is ongoing,with a PDUFA date of December 14,2025.TEPEZZAIn June,the European Commission granted marketing authorization approval of TEPEZZA for the treatment of adults with moderate to severe thyroid eye disease(TED).Regulatory review is underway in multiple additional geographies.A Phase 3 study of TEPEZZA in Japan is enrolling patients with chronic/low clinical activity score TED.A Phase 3 study evaluating the subcutaneous route of administration of teprotumumab has completed enrollment of patients with TED.TAVNEOS A Phase 3,open-label study of TAVNEOS in combination with rituximab or a cyclophosphamide-containing regimen is enrolling patients from 6 years to 25%)in patients treated with bemarituzumab plus chemotherapy were reduced visual acuity,punctate keratitis,anemia,neutropenia,nausea,corneal epithelium defect and dry eye.While ocular events were consistent with the Phase 2 experience and observed in both arms,they occurred with greater frequency and severity in the Phase 3 bemarituzumab arm.Detailed results from FORTITUDE 101 will be shared at a future medical meeting.FORTITUDE-102,a Phase 1b/3 study of bemarituzumab plus chemotherapy and nivolumab,is ongoing in patients with first-line gastric cancer.Phase 3 data readout is anticipated in H2 2025/H1 2026.AMGEN REPORTS SECOND QUARTER 2025 FINANCIAL RESULTSPage 12FORTITUDE-103,a Phase 1b/2 study of bemarituzumab plus oral chemotherapy regimens with or without nivolumab,is enrolling patients with first-line gastric cancer.FORTITUDE-301,a Phase 1b/2 basket study of bemarituzumab monotherapy,is ongoing in patients with solid tumors with FGFR2b overexpression.AMG 193AMG 193 is a first-in-class small molecule methylthioadenosine(MTA)-cooperative protein arginine methyltransferase 5(PRMT5)inhibitor.A Phase 2 study of AMG 193 is enrolling patients with methylthioadenosine phosphorylase(MTAP)-null previously treated advanced non-small cell lung cancer(NSCLC).A Phase 1/1b/2 study of AMG 193 is enrolling patients with advanced MTAP-null solid tumors in the dose-expansion portion of the study.A Phase 1b study of AMG 193 alone or in combination with other therapies is enrolling patients with advanced MTAP-null thoracic malignancies.A Phase 1b study of AMG 193 in combination with other therapies is enrolling patients with advanced MTAP-null gastrointestinal,biliary tract,or pancreatic cancers.KyprolisIn May,the FDA granted pediatric exclusivity to Kyprolis for studies conducted under a Written Request and approved updates to the Pediatric Use subsection of the Kyprolis prescribing information.LUMAKRAS/LUMYKRAS In May,the FDA granted Breakthrough Therapy Designation to LUMAKRAS in combination with Vectibix and FOLFIRI for the first-line treatment of patients with KRAS G12C-mutated metastatic colorectal cancer(CRC),as determined by an FDA-approved test.This is the third Breakthrough Therapy Designation granted by the FDA for LUMAKRAS.CodeBreaK 301,a Phase 3 study of LUMAKRAS in combination with Vectibix and FOLFIRI vs.FOLFIRI with or without bevacizumab-awwb,is enrolling patients with first-line KRAS G12Cmutated metastatic CRC.CodeBreaK 202,a Phase 3 study of LUMAKRAS plus chemotherapy vs.pembrolizumab plus chemotherapy,is enrolling patients with first-line KRAS G12Cmutated and PD-L1 negative advanced NSCLC.Nplate In June data were presented at ASCO from the final analysis of RECITE,a Phase 3 study of Nplate as supportive care for chemotherapy-induced thrombocytopenia(CIT)in gastrointestinal cancers:the study met its primary endpoint;more patients on Nplate had no chemotherapy dose modifications due to CIT compared to placebo(84.4%vs.35.7%,Odds Ratio 10.2;P0.001).Nplate was well tolerated in a highly comorbid population,with no treatment-related serious adverse events or treatment-related adverse events leading to death or discontinuation of Nplate or chemotherapy.AMGEN REPORTS SECOND QUARTER 2025 FINANCIAL RESULTSPage 13PROCLAIM,a Phase 3 study of Nplate for the treatment of CIT,is enrolling patients with NSCLC,ovarian cancer,or breast cancer.BiosimilarsA randomized,double-blind pharmacokinetic similarity study of ABP206 compared with OPDIVO(nivolumab)is ongoing in patients with resected stageIII or stageIV melanoma in the adjuvant setting.Data readout is anticipated in H2 2025.A randomized,double-blind comparative clinical study of ABP 206 compared with OPDIVO is enrolling patients with treatment-nave unresectable or metastatic melanoma.A randomized,double-blind pharmacokinetic similarity study of ABP 234 compared with KEYTRUDA(pembrolizumab)is enrolling patients with early-stage non-squamous NSCLC as adjuvant treatment.A randomized,double-blind combined pharmacokinetic/comparative clinical study of ABP 234 compared to KEYTRUDA is enrolling patients with advanced or metastatic non-squamous NSCLC.A randomized,double-blind,pharmacokinetic similarity/comparative clinical study of ABP 692 compared to OCREVUS(ocrelizumab)is enrolling patients with relapsing-remitting multiple sclerosis.TEZSPIRE is being developed in collaboration with AstraZeneca.AMG 104 is being developed in collaboration with AstraZeneca.Rocatinlimab,formerly AMG 451/KHK4083,is being developed in collaboration with Kyowa Kirin.Xaluritamig,formerly AMG 509,is being developed pursuant to a research collaboration with Xencor,Inc.YL201 is an investigational B7-H3 targeting antibody-drug conjugate being developed by MediLink.Etakafusp alfa(AB248)is a novel CD8 T cell selective interleukin-2(IL-2)being developed by Asher Biotherapeutics.OPDIVO is a registered trademark of Bristol-Myers Squibb Company.KEYTRUDA is a registered trademark of Merck&Co.,Inc.OCREVUS is a registered trademark of Genentech,Inc.1 The efficacy estimand represents the efficacy as if treated participants had adhered to MariTide for the entire 52-week study period.The efficacy estimand includes endpoint data so long as study drug is taken.Where endpoint data is missing with early discontinuation,the endpoint results for the patient are estimated using individual patient response and predicted performance after drug discontinuation.Non-GAAP Financial MeasuresIn this news release,management has presented its operating results for the second quarters of 2025 and 2024,in accordance with U.S.Generally Accepted Accounting Principles(GAAP)and on a non-GAAP basis.In addition,management has presented its full year 2025 EPS and tax guidance in accordance with GAAP and on a non-GAAP basis.These non-GAAP financial measures are computed by excluding certain items related to acquisitions,divestitures,restructuring and certain other items from the related GAAP financial measures.Management has presented Free Cash Flow(FCF),which is a non-GAAP financial measure,for the second quarters of 2025 and 2024.FCF is computed by subtracting capital expenditures from operating cash flow,each as determined in accordance with GAAP.AMGEN REPORTS SECOND QUARTER 2025 FINANCIAL RESULTSPage 14The Company believes that its presentation of non-GAAP financial measures provides useful supplementary information to and facilitates additional analysis by investors.The Company uses certain non-GAAP financial measures to enhance an investors overall understanding of the financial performance and prospects for the future of the Companys normal and recurring business activities by facilitating comparisons of results of normal and recurring business operations among current,past and future periods.The Company believes that FCF provides a further measure of the Companys liquidity.The Company uses the non-GAAP financial measures set forth in the news release in connection with its own budgeting and financial planning internally to evaluate the performance of the business,including to allocate resources and to evaluate results relative to incentive compensation targets.The non-GAAP financial measures are in addition to,not a substitute for,or superior to,measures of financial performance prepared in accordance with GAAP.About AmgenAmgen discovers,develops,manufactures and delivers innovative medicines to help millions of patients in their fight against some of the worlds toughest diseases.More than 40 years ago,Amgen helped to establish the biotechnology industry and remains on the cutting-edge of innovation,using technology and human genetic data to push beyond whats known today.Amgen is advancing a broad and deep pipeline that builds on its existing portfolio of medicines to treat cancer,heart disease,osteoporosis,inflammatory diseases and rare diseases.In 2024,Amgen was named one of the“Worlds Most Innovative Companies”by Fast Company and one of“Americas Best Large Employers”by Forbes,among other external recognitions.Amgen is one of the 30 companies that comprise the Dow Jones Industrial Average,and it is also part of the Nasdaq-100 Index,which includes the largest and most innovative non-financial companies listed on the Nasdaq Stock Market based on market capitalization.For more information,visit A and follow Amgen on X,LinkedIn,Instagram,YouTube and Threads.Forward-Looking StatementsThis news release contains forward-looking statements that are based on the current expectations and beliefs of Amgen.All statements,other than statements of historical fact,are statements that could be deemed forward-looking statements,including any statements on the outcome,benefits and synergies of collaborations,or potential collaborations,with any other company(including BeOne Medicines Ltd.or Kyowa Kirin Co.,Ltd.),the performance of Otezla(apremilast),our acquisitions of ChemoCentryx,Inc.or Horizon Therapeutics plc(including the prospective performance and outlook of Horizons business,performance and opportunities,and any potential strategic benefits,synergies or opportunities expected as a result of such acquisition),as well as estimates of revenues,operating margins,capital expenditures,cash,other financial metrics,expected legal,arbitration,political,regulatory or clinical results or practices,customer and prescriber patterns or practices,reimbursement activities and outcomes,effects of pandemics or other widespread health problems on our business,outcomes,progress,and other such estimates and results.Forward-looking statements involve significant risks and uncertainties,including those discussed below and more fully described in the Securities and Exchange Commission reports filed by Amgen,including our most recent annual report on Form 10-K and any subsequent periodic reports on Form 10-Q and current reports on Form 8-K.Unless otherwise noted,Amgen is providing this information as of the date of this news release and does not undertake any obligation to update any forward-looking statements contained in this document as a result of new information,future events or otherwise.AMGEN REPORTS SECOND QUARTER 2025 FINANCIAL RESULTSPage 15No forward-looking statement can be guaranteed and actual results may differ materially from those we project.Our results may be affected by our ability to successfully market both new and existing products domestically and internationally,clinical and regulatory developments involving current and future products,sales growth of recently launched products,competition from other products including biosimilars,difficulties or delays in manufacturing our products and global economic conditions,including those resulting from geopolitical relations and government actions.In addition,sales of our products are affected by pricing pressure,political and public scrutiny and reimbursement policies imposed by third-party payers,including governments,private insurance plans and managed care providers and may be affected by regulatory,clinical and guideline developments and domestic and international trends toward managed care and healthcare cost containment.Furthermore,our research,testing,pricing,marketing and other operations are subject to extensive regulation by domestic and foreign government regulatory authorities.We or others could identify safety,side effects or manufacturing problems with our products,including our devices,after they are on the market.Our business may be impacted by government investigations,litigation and product liability claims.In addition,our business may be impacted by the adoption of new tax legislation or exposure to additional tax liabilities.Further,while we routinely obtain patents for our products and technology,the protection offered by our patents and patent applications may be challenged,invalidated or circumvented by our competitors,or we may fail to prevail in present and future intellectual property litigation.We perform a substantial amount of our commercial manufacturing activities at a few key facilities,including in Puerto Rico,and also depend on third parties for a portion of our manufacturing activities,and limits on supply may constrain sales of certain of our current products and product candidate development.An outbreak of disease or similar public health threat,and the public and governmental effort to mitigate against the spread of such disease,could have a significant adverse effect on the supply of materials for our manufacturing activities,the distribution of our products,the commercialization of our product candidates,and our clinical trial operations,and any such events may have a material adverse effect on our product development,product sales,business and results of operations.We rely on collaborations with third parties for the development of some of our product candidates and for the commercialization and sales of some of our commercial products.In addition,we compete with other companies with respect to many of our marketed products as well as for the discovery and development of new products.Discovery or identification of new product candidates or development of new indications for existing products cannot be guaranteed and movement from concept to product is uncertain;consequently,there can be no guarantee that any particular product candidate or development of a new indication for an existing product will be successful and become a commercial product.Further,some raw materials,medical devices and component parts for our products are supplied by sole third-party suppliers.Certain of our distributors,customers and payers have substantial purchasing leverage in their dealings with us.The discovery of significant problems with a product similar to one of our products that implicate an entire class of products could have a material adverse effect on sales of the affected products and on our business and results of operations.Our efforts to collaborate with or acquire other companies,products or technology,and to integrate the operations of companies or to support the products or technology we have acquired,may not be successful.There can be no guarantee that we will be able to realize any of the strategic benefits,synergies or opportunities arising from the Horizon acquisition,and such benefits,synergies or opportunities may take longer to realize than expected.We may not be able to successfully integrate Horizon,and such integration may take longer,be more difficult or cost more than expected.A breakdown,cyberattack or information security breach of our information technology systems could compromise the confidentiality,integrity and availability of our systems and our data.Our stock price is volatile and may be affected by a number of events.Our business and operations may be negatively affected by the failure,or perceived AMGEN REPORTS SECOND QUARTER 2025 FINANCIAL RESULTSPage 16failure,of achieving our sustainability objectives.The effects of global climate change and related natural disasters could negatively affect our business and operations.Global economic conditions may magnify certain risks that affect our business.Our business performance could affect or limit the ability of our Board of Directors to declare a dividend or our ability to pay a dividend or repurchase our common stock.We may not be able to access the capital and credit markets on terms that are favorable to us,or at all.#CONTACT:Amgen,Thousand OaksElissa Snook,609-251-1407(media)Justin Claeys,805-313-9775(investors)AMGEN REPORTS SECOND QUARTER 2025 FINANCIAL RESULTSPage 17Amgen Inc.Consolidated Statements of Income-GAAP(In millions,except per-share data)(Unaudited)Three months endedJune 30,Six months endedJune 30,2025202420252024Revenues:Product sales .$8,771$8,041$16,644$15,159 Other revenues .408 347 684 676 Total revenues .9,179 8,388 17,328 15,835 Operating expenses:Cost of sales .3,011 3,236 5,979 6,436 Research and development .1,744 1,447 3,230 2,790 Selling,general and administrative .1,691 1,785 3,378 3,593 Other .77 11 907 116 Total operating expenses .6,523 6,479 13,494 12,935 Operating income .2,656 1,909 3,834 2,900 Other income(expense):Interest expense,net .(694)(808)(1,417)(1,632)Other(expense)income,net .(394)(307)1,124 (542)Income before income taxes .1,568 794 3,541 726 Provision for income taxes .136 48 379 93 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:Basic .538 537 538 537 Diluted .541 541 541 541 AMGEN REPORTS SECOND QUARTER 2025 FINANCIAL RESULTSPage 18Amgen Inc.Consolidated Balance Sheets-GAAP(In millions)June 30,December 31,20252024(Unaudited)AssetsCurrent assets:Cash and cash equivalents .$8,028$11,973 Trade receivables,net .8,701 6,782 Inventories .6,583 6,998 Other current assets .3,422 3,277 Total current assets .26,734 29,030 Property,plant and equipment,net .6,855 6,543 Intangible assets,net .24,614 27,699 Goodwill .18,674 18,637 Other noncurrent assets .11,020 9,930 Total assets .$87,897$91,839 Liabilities and Stockholders EquityCurrent liabilities:Accounts payable and accrued liabilities .$18,032$19,549 Current portion of long-term debt .2,444 3,550 Total current liabilities .20,476 23,099 Long-term debt .53,760 56,549 Long-term deferred tax liabilities .1,386 1,616 Long-term tax liabilities .2,511 2,349 Other noncurrent liabilities .2,336 2,349 Total stockholders equity .7,428 5,877 Total liabilities and stockholders equity .$87,897$91,839 Shares outstanding .538 537 AMGEN REPORTS SECOND QUARTER 2025 FINANCIAL RESULTSPage 19Amgen Inc.GAAP to Non-GAAP Reconciliations(Dollars in millions)(Unaudited)Three months endedJune 30,Six months endedJune 30,2025202420252024GAAP cost of sales .$3,011$3,236$5,979$6,436 Adjustments to cost of sales:Acquisition-related expenses(a).(1,460)(1,830)(3,008)(3,690)Non-GAAP cost of sales .$1,551$1,406$2,971$2,746 GAAP cost of sales as a percentage of product sales .34.3.25.9B.5quisition-related expenses(a).(16.6)(22.7)(18.0)(24.4)Non-GAAP cost of sales as a percentage of product sales .17.7.5.9.1%GAAP research and development expenses .$1,744$1,447$3,230$2,790 Adjustments to research and development expenses:Acquisition-related expenses(b).(59)(24)(70)(50)Non-GAAP research and development expenses .$1,685$1,423$3,160$2,740 GAAP research and development expenses as a percentage of product sales.19.9.0.4.4quisition-related expenses(b).(0.7)(0.3)(0.4)(0.3)Non-GAAP research and development expenses as a percentage of product sales .19.2.7.0.1%GAAP selling,general and administrative expenses .$1,691$1,785$3,378$3,593 Adjustments to selling,general and administrative expenses:Acquisition-related expenses(b).(30)(99)(62)(195)Certain net charges pursuant to our restructuring and cost-savings initiatives .(11)(11)Total adjustments to selling,general and administrative expenses .(41)(99)(73)(195)Non-GAAP selling,general and administrative expenses .$1,650$1,686$3,305$3,398 GAAP selling,general and administrative expenses as a percentage of product sales .19.3.2 .3#.7quisition-related expenses(b).(0.3)(1.2)(0.3)(1.3)Certain net charges pursuant to our restructuring and cost-savings initiatives .(0.2)0.0 (0.1)0.0 Non-GAAP selling,general and administrative expenses as a percentage of product sales .18.8!.0.9.4%GAAP operating expenses .$6,523$6,479$13,494$12,935 Adjustments to operating expenses:Adjustments to cost of sales .(1,460)(1,830)(3,008)(3,690)Adjustments to research and development expenses .(59)(24)(70)(50)Adjustments to selling,general and administrative expenses .(41)(99)(73)(195)Impairment of intangible assets(c).(800)(68)Certain net charges pursuant to our restructuring and cost-savings initiatives .(24)3 (23)4 Certain other expenses .(53)(14)(84)(52)Total adjustments to operating expenses .(1,637)(1,964)(4,058)(4,051)Non-GAAP operating expenses .$4,886$4,515$9,436$8,884 AMGEN REPORTS SECOND QUARTER 2025 FINANCIAL RESULTSPage 20Three months endedJune 30,Six months endedJune 30,2025202420252024GAAP operating income .$2,656$1,909$3,834$2,900 Adjustments to operating expenses .1,637 1,964 4,058 4,051 Non-GAAP operating income .$4,293$3,873$7,892$6,951 GAAP operating income as a percentage of product sales .30.3#.7#.0.1justments to cost of sales .16.6 22.7 18.0 24.4 Adjustments to research and development expenses .0.7 0.3 0.4 0.3 Adjustments to selling,general and administrative expenses .0.6 1.2 0.3 1.3 Impairment of intangible assets(c).0.0 0.0 4.9 0.4 Certain net charges pursuant to our restructuring and cost-savings initiatives .0.2 0.0 0.2 0.0 Certain other expenses .0.5 0.3 0.6 0.4 Non-GAAP operating income as a percentage of product sales .48.9H.2G.4E.9%GAAP other(expense)income,net .$(394)$(307)$1,124$(542)Adjustments to other(expense)income,netNet losses(gains)from equity investments(d).591 405 (700)915 Non-GAAP other income,net .$197$98$424$373 GAAP income before income taxes .$1,568$794$3,541$726 Adjustments to income before income taxes:Adjustments to operating expenses .1,637 1,964 4,058 4,051 Adjustments to other(expense)income,net .591 405 (700)915 Total adjustments to income before income taxes .2,228 2,369 3,358 4,966 Non-GAAP income before income taxes .$3,796$3,163$6,899$5,692 GAAP provision for income taxes .$136$48$379$93 Adjustments to provision for income taxes:Income tax effect of the above adjustments(e).401 420 618 779 Other income tax adjustments(f).1 4 (5)(11)Total adjustments to provision for income taxes .402 424 613 768 Non-GAAP provision for income taxes .$538$472$992$861 GAAP tax as a percentage of income before taxes .8.7%6.0.7.8justments to provision for income taxes:Income tax effect of the above adjustments(e).5.5 8.8 3.8 2.5 Other income tax adjustments(f).0.0 0.1 (0.1)(0.2)Total adjustments to provision for income taxes .5.5 8.9 3.7 2.3 Non-GAAP tax as a percentage of income before taxes .14.2.9.4.1%GAAP net income .$1,432$746$3,162$633 Adjustments to net income:Adjustments to income before income taxes,net of the income tax effect .1,827 1,949 2,740 4,187 Other income tax adjustments(f).(1)(4)5 11 Total adjustments to net income .1,826 1,945 2,745 4,198 Non-GAAP net income .$3,258$2,691$5,907$4,831 Note:Numbers may not add due to roundingAMGEN REPORTS SECOND QUARTER 2025 FINANCIAL RESULTSPage 21Amgen Inc.GAAP to Non-GAAP Reconciliations(In millions,except per-share data)(Unaudited)The following table presents the computations for GAAP and non-GAAP diluted earnings per share:Three months endedJune 30,2025Three months endedJune 30,2024GAAPNon-GAAPGAAPNon-GAAPNet income .$1,432$3,258$746$2,691 Weighted-average shares for diluted EPS .541 541 541 541 Diluted EPS .$2.65$6.02$1.38$4.97 Six months endedJune 30,2025Six months endedJune 30,2024GAAPNon-GAAPGAAPNon-GAAPNet income .$3,162$5,907$633$4,831 Weighted-average shares for diluted EPS 541 541 541 541 Diluted EPS .$5.84$10.92$1.17$8.93(a)The adjustments related primarily to noncash amortization of intangible assets and fair value step-up of inventory acquired from business acquisitions.(b)For the three and six months ended June 30,2025 and 2024,the adjustments related primarily to acquisition-related costs related to our Horizon acquisition.(c)For the six months ended June 30,2025,the adjustment related to an intangible asset impairment charge for Otezla.For the six months ended June 30,2024,the adjustment related to a net impairment charge for an in-process R&D asset related to our Teneobio,Inc.acquisition from 2021.(d)For the three and six months ended June 30,2025 and 2024,the adjustments related primarily to our BeOne Medicines Ltd.equity fair value adjustment.(e)The tax effect of the adjustments between our GAAP and non-GAAP results takes into account the tax treatment and related tax rate(s)that apply to each adjustment in the applicable tax jurisdiction(s).Generally,the tax impact of adjustments,including the amortization of intangible assets and acquired inventory,gains and losses on our investments in equity securities and expenses related to restructuring and cost-savings initiatives,depends on whether the amounts are deductible in the respective tax jurisdictions and the applicable tax rate(s)in those jurisdictions.Due to these factors,the effective tax rate for the adjustments to our GAAP income before income taxes for the three and six months ended June 30,2025,was 18.0%and 18.4%,respectively,compared to 17.7%and 15.7%,respectively,for the corresponding periods of the prior year.(f)The adjustments related to certain acquisition-related,prior-period and other items excluded from GAAP earnings.AMGEN REPORTS SECOND QUARTER 2025 FINANCIAL RESULTSPage 22Amgen Inc.Reconciliations of Cash Flows(In millions)(Unaudited)Three months endedJune 30,Six months endedJune 30,2025202420252024Net cash provided by operating activities .$2,280$2,459$3,671$3,148 Net cash used in investing activities .(389)(217)(836)(434)Net cash used in financing activities .(2,673)(2,649)(6,780)(4,357)Decrease in cash and cash equivalents .(782)(407)(3,945)(1,643)Cash and cash equivalents at beginning of period .8,810 9,708 11,973 10,944 Cash and cash equivalents at end of period .$8,028$9,301$8,028$9,301 Three months endedJune 30,Six months endedJune 30,2025202420252024Net cash provided by operating activities .$2,280$2,459$3,671$3,148 Capital expenditures .(369)(238)(780)(468)Free cash flow .$1,911$2,221$2,891$2,680 AMGEN REPORTS SECOND QUARTER 2025 FINANCIAL RESULTSPage 23Amgen Inc.Reconciliation of GAAP EPS Guidance to Non-GAAP EPS Guidance for the Year Ending December 31,2025(Unaudited)GAAP diluted EPS guidance .$10.97$12.11 Known adjustments to arrive at non-GAAP*:Acquisition-related expenses(a).8.56 8.60 Impairment of intangible assets(b).1.29Net gains from equity investments .(1.01)Other .0.35Non-GAAP diluted EPS guidance .$20.20$21.30*The known adjustments are presented net of their related tax impact,which amount to approximately$2.15 per share.(a)The adjustments primarily include noncash amortization of intangible assets and fair value step-up of inventory acquired in business acquisitions.(b)The adjustment relates to the Otezla intangible asset impairment charge recorded during the first quarter of 2025.Our GAAP diluted EPS guidance does not include the effect of GAAP adjustments triggered by events that may occur subsequent to this press release such as acquisitions,asset impairments,litigation,changes in fair value of our contingent consideration obligations and changes in fair value of our equity investments.This guidance includes the estimated impact of implemented tariffs,but does not account for any tariffs or potential pricing actions announced or described but not implemented as well as any tariffs,sector specific tariffs,or pricing actions that could be implemented in the future.Reconciliation of GAAP Tax Rate Guidance to Non-GAAPTax Rate Guidance for the Year Ending December 31,2025(Unaudited)GAAP tax rate guidance .11.0.5%Tax rate of known adjustments discussed above .3.5%Non-GAAP tax rate guidance .14.5.0%AMGEN REPORTS SECOND QUARTER 2025 FINANCIAL RESULTSPage 24
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PRESSRELEASEAbbVieReportsSecond-Quarter2025FinancialResultsReportsSecond-QuarterDilutedEPSof$0.52onaGAAPBasis,aDecreaseof32.5Percent;AdjustedDilutedEPSof$2.97,anIncreaseof12.1Percent;TheseResultsIncludeanUnfavorableImpactof$0.42PerShareRelatedtoAcquiredIPR&DandMilestonesExpenseDeliversSecond-QuarterNetRevenuesof$15.423Billion,anIncreaseof6.6PercentonaReportedBasisor6.5PercentonanOperationalBasisSecond-QuarterGlobalNetRevenuesfromtheImmunologyPortfolioWere$7.631Billion,anIncreaseof9.5PercentonaReportedBasis,or9.2PercentonanOperationalBasis;GlobalSkyriziNetRevenuesWere$4.423Billion;GlobalRinvoqNetRevenuesWere$2.028Billion;GlobalHumiraNetRevenuesWere$1.180BillionSecond-QuarterGlobalNetRevenuesfromtheNeurosciencePortfolioWere$2.683Billion,anIncreaseof24.2PercentonaReportedBasis,or24.0PercentonanOperationalBasis;GlobalVraylarNetRevenuesWere$900Million;GlobalBotoxTherapeuticNetRevenuesWere$928Million;CombinedGlobalUbrelvyandQuliptaNetRevenuesWere$605MillionSecond-QuarterGlobalNetRevenuesfromtheOncologyPortfolioWere$1.676Billion,anIncreaseof2.6PercentonaReportedBasis,or2.4PercentonanOperationalBasis;GlobalImbruvicaNetRevenuesWere$754Million;GlobalVenclextaNetRevenuesWere$691Million;GlobalElahereNetRevenuesWere$159MillionSecond-QuarterGlobalNetRevenuesfromtheAestheticsPortfolioWere$1.279Billion,aDecreaseof8.1PercentonaReportedBasis,or8.0PercentonanOperationalBasis;GlobalBotoxCosmeticNetRevenuesWere$692Million;GlobalJuvedermNetRevenuesWere$260MillionRaises2025AdjustedDilutedEPSGuidanceRangefrom$11.67-$11.87to$11.88-$12.08,whichIncludesanUnfavorableImpactof$0.55PerShareRelatedtoAcquiredIPR&DandMilestonesExpenseIncurredYear-To-DateThroughtheSecondQuarter2025NORTHCHICAGO,Ill.,July31,2025AbbVie(NYSE:ABBV)announcedfinancialresultsforthesecondquarterendedJune30,2025.AbbViedeliveredanotheroutstandingquarterwithstrongperformancefromourdiversifiedgrowthplatform.Wealsomademeaningfulpipelineprogresswithseveralregulatoryapprovals,encouragingclinicaldataandstrategicinvestmentsinpromisingexternalinnovation,saidRobertA.Michael,chairmanandchiefexecutiveofficer,AbbVie.Wereenteringthesecondhalfoftheyearwithsubstantialmomentumandareonceagainraisingourfull-yearoutlook.Note:Operationalcomparisonsarepresentedatconstantcurrencyratesthatreflectcomparativelocalcurrencynetrevenuesattheprioryearsforeignexchangerates.1Second-QuarterResultsWorldwidenetrevenueswere$15.423billion,anincreaseof6.6percentonareportedbasis,or6.5percentonanoperationalbasis.Globalnetrevenuesfromtheimmunologyportfoliowere$7.631billion,anincreaseof9.5percentonareportedbasis,or9.2percentonanoperationalbasis.GlobalSkyrizinetrevenueswere$4.423billion,anincreaseof62.2percentonareportedbasis,or61.8percentonanoperationalbasis.GlobalRinvoqnetrevenueswere$2.028billion,anincreaseof41.8percentonareportedbasis,or41.2percentonanoperationalbasis.GlobalHumiranetrevenueswere$1.180billion,adecreaseof58.1percentonareportedbasis,or58.2percentonanoperationalbasis.Globalnetrevenuesfromtheneuroscienceportfoliowere$2.683billion,anincreaseof24.2percentonareportedbasis,or24.0percentonanoperationalbasis.GlobalVraylarnetrevenueswere$900million,anincreaseof16.3percent.GlobalBotoxTherapeuticnetrevenueswere$928million,anincreaseof14.1percentonareportedbasis,or14.2percentonanoperationalbasis.GlobalUbrelvynetrevenueswere$338million,anincreaseof47.1percentonareportedbasis,or47.2percentonanoperationalbasis.GlobalQuliptanetrevenueswere$267million,anincreaseof77.5percentonareportedbasis,or76.9percentonanoperationalbasis.Globalnetrevenuesfromtheoncologyportfoliowere$1.676billion,anincreaseof2.6percentonareportedbasis,or2.4percentonanoperationalbasis.GlobalImbruvicanetrevenueswere$754million,adecreaseof9.5percent.GlobalVenclextanetrevenueswere$691million,anincreaseof8.5percentonareportedbasis,or8.3percentonanoperationalbasis.GlobalElaherenetrevenueswere$159million,anincreaseof24.2percentonareportedbasis,or23.7percentonanoperationalbasis.Globalnetrevenuesfromtheaestheticsportfoliowere$1.279billion,adecreaseof8.1percentonareportedbasis,or8.0percentonanoperationalbasis.GlobalBotoxCosmeticnetrevenueswere$692million,adecreaseof5.0percentonareportedbasis,or4.9percentonanoperationalbasis.GlobalJuvedermnetrevenueswere$260million,adecreaseof24.0percent.OnaGAAPbasis,grossmargininthesecondquarterwas71.8percent.Theadjustedgrossmarginwas84.4percent.OnaGAAPbasis,selling,generalandadministrative(SG&A)expensewas21.1percentofnetrevenues.TheadjustedSG&Aexpensewas21.0percentofnetrevenues.OnaGAAPbasis,researchanddevelopment(R&D)expensewas13.8percentofnetrevenues.TheadjustedR&Dexpensewas13.7percentofnetrevenues.AcquiredIPR&Dandmilestonesexpensewas5.3percentofnetrevenues.OnaGAAPbasis,operatingmargininthesecondquarterwas31.7percent.Theadjustedoperatingmarginwas44.3percent.Netinterestexpensewas$678million.OnaGAAPbasis,thetaxrateinthequarterwas39.4percent.Theadjustedtaxratewas16.2percent.DilutedEPSinthesecondquarterwas$0.52onaGAAPbasis.AdjusteddilutedEPS,excludingspecifieditems,was$2.97.Theseresultsincludeanunfavorableimpactof$0.42persharerelatedtoacquiredIPR&Dandmilestonesexpense.Note:Operationalcomparisonsarepresentedatconstantcurrencyratesthatreflectcomparativelocalcurrencynetrevenuesattheprioryearsforeignexchangerates.2RecentEventsAbbVieannouncedtheU.S.FoodandDrugAdministration(FDA)approvedRinvoq(upadacitinib)asthefirstoralJanusKinase(JAK)inhibitorapprovedforthetreatmentofadultswithgiantcellarteritis(GCA).TheapprovalwassupportedbydatafromthepivotalPhase3SELECT-GCAtrial,whichmettheprimaryendpointofsustainedremissionandkeysecondaryendpoints.ThismarkstheninthapprovedindicationforRinvoqintheU.S.,acrossrheumatology,gastroenterologyanddermatology.AbbVieannouncedpositivetoplineresultsfromthefirstoftwopivotalstudiesinthePhase3UP-AAclinicalprogramevaluatingthesafetyandefficacyofRinvoqinadultandadolescentpatientswithseverealopeciaareata(AA).Inthestudy,Rinvoqachievedtheprimaryendpoint,demonstratingthat44.6%and54.3%ofpatientswithsevereAAtreatedwithRinvoq15mgand30mg,respectively,reached80%ormorescalphaircoverageatweek24asdefinedbytheseverityofalopeciatool(SALT)score20.Keysecondaryendpoints,includingimprovementsineyebrowsandeyelashes,aswellasthepercentageofsubjectswith90%ormorescalpcoverage(SALT10)andcompletescalphaircoverage(SALT=0)atWeek24,werealsomet.RinvoqssafetyprofileinAAwasgenerallyconsistentwiththatinapprovedindications,andnonewsafetysignalswereidentifiedinthisstudy.AbbVieandCapstanTherapeutics,aclinical-stagebiotechnologycompanydedicatedtoadvancinginvivoengineeringofcellsthroughRNAdeliveryusingtargetedlipidnanoparticles(tLNPs),announcedadefinitiveagreementunderwhichAbbViewillacquireCapstan.ThetransactionincludesCPTX2309,apotentialfirst-in-classinvivotLNPanti-CD19CAR-Ttherapycandidate,currentlyinPhase1developmentforthetreatmentofBcell-mediatedautoimmunediseases.Additionally,AbbViewillacquireCapstansproprietarytLNPplatformtechnologydesignedtodeliverRNApayloads,suchasmRNA,capableofengineeringspecificcelltypesinvivo.AbbVieannouncednewdatafromitsPhase3TEMPLEhead-to-headstudyevaluatingthetolerability,safetyandefficacyofQulipta(atogepant)comparedtotopiramateforthepreventivetreatmentofmigraineinadultpatientswithahistoryoffourormoremigrainedayspermonth.Inthestudy,Quliptamettheprimaryendpointoffewertreatmentdiscontinuationsattributedtoadverseeventsversustopiramate,andallsixsecondaryendpointsachievedstatisticalsignificanceforsuperiorityversustopiramate,demonstratingclinicalefficacy.FullresultsfromtheTEMPLEstudywillbepresentedatanupcomingmedicalmeeting.AbbVieannouncedthatEmrelis(telisotuzumabvedotin-tllv)wasgrantedacceleratedapprovalbytheFDAforthetreatmentofadultpatientswithlocallyadvancedormetastatic,non-squamousnon-smallcelllungcancer(NSCLC)withhighc-Metproteinoverexpressionwhohavereceivedapriorsystemictherapy.EmrelisisthefirsttreatmentapprovedforpreviouslytreatedadvancedNSCLCpatientswithhighc-Metproteinoverexpression,apopulationthatoftenfacespoorprognosisandhaslimitedtreatmentoptions.AbbVieannouncedthesubmissionofasupplementalNewDrugApplication(sNDA)totheFDAforVenclexta(venetoclax)andacalabrutinibcombinationtherapyforthetreatmentofchroniclymphocyticleukemia(CLL).Thiscombinationtherapyhaspotentialtobethefirstalloral,fixed-durationregimenforpreviouslyuntreatedpatientswithCLL.ThesubmissionissupportedbydatafromthePhase3AMPLIFYtrialwhichdemonstratedthatthecombinationregimenofVenclextaandacalabrutinibimprovedprogression-freesurvival(PFS)comparedtostandardchemoimmunotherapyinpreviouslyuntreatedpatientswithCLL.AttheAmericanSocietyofClinicalOncology(ASCO)AnnualMeeting,AbbViepresentedkeydatathatshowcasedsignificantprogressacrossAbbViesrobustoncologypipeline,inarangeofdifficult-to-treatsolidtumorsandbloodcancers.HighlightsincludednewdatafromAbbViesnovelinvestigationalantibody-drugconjugates(ADCs)telisotuzumabadizutecan(ABBV-400,Temab-A)inadvancedNSCLC,ABBV-706inhigh-gradeneuroendocrineneoplasms(NENs)andpivekimabsunirine(PVEK)inblasticplasmacytoiddendriticcellneoplasm(BPDCN).3RecentEvents(Continued)AbbVieannouncedtheglobalPhase3VERONAtrialevaluatingVenclexta(venetoclax)incombinationwithazacitidineinthetreatmentofnewlydiagnosedhigher-riskmyelodysplasticsyndrome(MDS)didnotmeettheprimaryendpointofoverallsurvival.Nonewsafetysignalswereobservedandresultsfromthetrialwillbeavailableinafuturemedicalcongressand/orpublication.AbbVieandIchnosGlenmarkInnovation(IGI)announcedanexclusivelicensingagreementforIGIsleadinvestigationalasset,ISB2001,whichisbeinginvestigatedforthetreatmentofoncologyandautoimmunediseases.ISB2001isafirst-in-classtrispecificT-cellengagercurrentlyinPhase1developmentforrelapsed/refractory(r/r)multiplemyeloma(MM).AbbVieannouncedtheFDAapprovedalabelexpansionforMavyret(glecaprevir/pibrentasvir),anoralpangenotypicdirectactingantiviral(DAA)therapy.Mavyretisthefirstoraleight-weekpangenotypictreatmentoptionapprovedforpeoplewithacuteorchronichepatitisCvirus(HCV).Withthisapproval,providerscannowtreatHCVpatientsimmediatelyatthetimeofdiagnosis.AbbVieandADARxPharmaceuticals,alateclinical-stagebiotechnologycompanydevelopingnext-generationRNAtherapeutics,announcedacollaborationandlicenseoptionagreementtodevelopsmallinterferingRNA(siRNA)therapeuticsacrossmultiplediseaseareas.ThecollaborationwillleverageAbbViesexpertiseinbiotherapeuticdrugdevelopmentandcommercializationwithADARxsproprietaryRNAtechnologytoadvancenext-generationsiRNAtherapiesacrossneuroscience,immunologyandoncology.4Full-Year2025OutlookAbbVieisraisingitsadjusteddilutedEPSguidanceforthefullyear2025from$11.67-$11.87to$11.88-$12.08,whichincludesanunfavorableimpactof$0.55persharerelatedtoacquiredIPR&Dandmilestonesexpenseincurredyear-to-datethroughthesecondquarter2025.Thecompanys2025adjusteddilutedEPSguidanceexcludesanyimpactfromacquiredIPR&Dandmilestonesthatmaybeincurredbeyondthesecondquarterof2025,asbothcannotbereliablyforecasted.AboutAbbVieAbbViesmissionistodiscoveranddeliverinnovativemedicinesthatsolveserioushealthissuestodayandaddressthemedicalchallengesoftomorrow.Westrivetohavearemarkableimpactonpeopleslivesacrossseveralkeytherapeuticareas:immunology,neuroscience,oncology,andeyecare-andproductsandservicesacrossourAllerganAestheticsportfolio.FormoreinformationaboutAbbVie,.FollowabbvieonX(formerlyTwitter),Facebook,Instagram,YouTubeorLinkedIn.ConferenceCallAbbViewillhostaninvestorconferencecalltodayat8:00a.m.CentralTimetodiscussoursecond-quarterperformance.ThecallwillbewebcastthroughAbbViesInvestorR.Anarchivededitionofthecallwillbeavailableafter11:00a.m.CentralTime.Non-GAAPFinancialResultsFinancialresultsfor2025and2024arepresentedonbothareportedandanon-GAAPbasis.ReportedresultswerepreparedinaccordancewithGAAPandincludeallrevenueandexpensesrecognizedduringtheperiod.Non-GAAPresultsadjustforcertainnon-cashitemsandforfactorsthatareunusualorunpredictable,andexcludethosecosts,expenses,andotherspecifieditemspresentedinthereconciliationtableslaterinthisrelease.AbbViesmanagementbelievesnon-GAAPfinancialmeasuresprovideusefulinformationtoinvestorsregardingAbbViesresultsofoperationsandassistmanagement,analystsandinvestorsinevaluatingtheperformanceofthebusiness.Non-GAAPfinancialmeasuresshouldbeconsideredinadditionto,andnotasasubstitutefor,measuresoffinancialperformancepreparedinaccordancewithGAAP.5Forward-LookingStatementsSomestatementsinthisnewsreleaseare,ormaybeconsidered,forward-lookingstatementsforpurposesofthePrivateSecuritiesLitigationReformActof1995.Thewords“believe,”“expect,”“anticipate,”“project”andsimilarexpressionsandusesoffutureorconditionalverbs,generallyidentifyforward-lookingstatements.AbbViecautionsthattheseforward-lookingstatementsaresubjecttorisksanduncertaintiesthatmaycauseactualresultstodiffermateriallyfromthoseexpressedorimpliedintheforward-lookingstatements.Suchrisksanduncertaintiesinclude,butarenotlimitedto,challengestointellectualproperty,competitionfromotherproducts,difficultiesinherentintheresearchanddevelopmentprocess,adverselitigationorgovernmentaction,changestolawsandregulationsapplicabletoourindustry,theimpactofglobalmacroeconomicfactors,suchaseconomicdownturnsoruncertainty,internationalconflict,tradedisputesandtariffs,andotheruncertaintiesandrisksassociatedwithglobalbusinessoperations.Additionalinformationabouttheeconomic,competitive,governmental,technologicalandotherfactorsthatmayaffectAbbViesoperationsissetforthinItem1A,“RiskFactors,”ofAbbVies2024AnnualReportonForm10-K,whichhasbeenfiledwiththeSecuritiesandExchangeCommission,asupdatedbyitsQuarterlyReportsonForm10-QandinotherdocumentsthatAbbViesubsequentlyfileswiththeSecuritiesandExchangeCommissionthatupdate,supplementorsupersedesuchinformation.AbbVieundertakesnoobligation,andspecificallydeclines,toreleasepubliclyanyrevisionstoforward-lookingstatementsasaresultofsubsequenteventsordevelopments,exceptasrequiredbylaw.Media:Investors:GabbyTarbertLizShea(224)244-0111(847)935-2211ToddBosse(847)936-1182JeffreyByrne(847)938-29236AbbVieInc.KeyProductRevenuesQuarterEndedJune30,2025(Unaudited)%Changevs.2Q24NetRevenues(inmillions)ReportedOperationalaU.S.Intl.TotalU.S.Intl.TotalIntl.TotalNETREVENUES$11,762$3,661$15,4235.9%9.1%6.6%8.4%6.5%Immunology6,0971,5347,6316.722.39.520.79.2Skyrizi3,8435804,42364.349.762.247.261.8Rinvoq1,4525762,02842.739.641.837.541.2Humira8023781,180(66.0)(16.8)(58.1)(17.2)(58.2)Neuroscience2,3333502,68323.230.624.228.724.0Vraylar898290016.272.816.376.816.3BotoxTherapeutic77515392815.95.714.16.014.2Ubrelvy330833846.573.947.176.747.2Qulipta2373026762.8100.077.5100.076.9Vyalev227698n/m100.0100.0100.0100.0Duodopa207797(13.6)(13.7)(13.7)(16.3)(15.7)OtherNeuroscience51455(11.4)(23.3)(12.3)(21.3)(12.2)Oncology1,0266501,676(1.0)8.72.68.32.4Imbruvicab543211754(8.9)(11.2)(9.5)(11.2)(9.5)Venclexta3213706917.49.58.59.18.3Elahere138211598.0n/m24.2n/m23.7Epkinlyc22487057.4100.093.9100.092.3OtherOncology22n/mn/mn/mn/mn/mAesthetics7974821,279(7.8)(8.5)(8.1)(8.3)(8.0)BotoxCosmetic410282692(8.7)0.9(5.0)1.2(4.9)JuvedermCollection105155260(23.6)(24.4)(24.0)(24.4)(24.0)OtherAesthetics282453271.65.82.26.42.3EyeCare226288514(5.7)(2.4)(3.9)(1.5)(3.4)Ozurdex3095125(12.6)5.80.64.4(0.4)Lumigan/Ganfort525110319.9(15.4)(0.8)(15.2)(0.7)Alphagan/Combigan3636(91.6)(3.1)(25.6)(0.2)(23.5)OtherEyeCare144106250(4.3)(1.7)(3.2)0.9(2.1)OtherKeyProducts8352021,03711.2(4.4)7.8(5.8)7.5Mavyret1841913759.7(5.1)1.6(6.5)0.8Creon4044048.4n/m8.4n/m8.4Linzess/Constella2471125817.410.817.110.317.1aOperationalcomparisonsarepresentedatconstantcurrencyratesthatreflectcomparativelocalcurrencynetrevenuesattheprioryearsforeignexchangerates.bReflectsprofitsharingforImbruvicainternationalrevenues.cEpkinlyU.S.revenuesreflectprofitsharing.Internationalrevenuesreflectproductrevenuesaswellasprofitsharingfromcertaininternationalterritories.n/m=notmeaningful7AbbVieInc.KeyProductRevenuesSixMonthsEndedJune30,2025(Unaudited)%Changevs.6M24NetRevenues(inmillions)ReportedOperationalaU.S.Intl.TotalU.S.Intl.TotalIntl.TotalNETREVENUES$21,741$7,025$28,7667.9%6.0%7.4%8.3%8.0%Immunology10,9802,91513,89511.317.912.620.413.1Skyrizi6,7621,0867,84869.246.965.849.666.2Rinvoq2,6721,0743,74653.337.648.540.149.3Humira1,5467552,301(62.6)(20.8)(54.7)(18.4)(54.3)Neuroscience4,3056604,96519.327.420.329.820.6Vraylar1,66141,66513.441.813.547.413.5BotoxTherapeutic1,4982961,79417.05.214.98.615.5Ubrelvy5631557833.046.733.351.233.4Qulipta4095146049.5100.063.6100.063.6Vyalev28133161n/m100.0100.0100.0100.0Duodopa40153193(16.6)(14.9)(15.2)(14.0)(14.5)OtherNeuroscience1068114(10.4)(12.7)(10.5)(8.1)(10.2)Oncology2,0531,2563,3092.47.14.29.15.0Imbruvicab1,0724201,492(11.1)(9.7)(10.7)(9.7)(10.7)Venclexta6337231,3569.17.88.411.310.3Elahere3033533857.5n/m75.5n/m75.5Epkinlyc437812161.8100.092.1100.093.3OtherOncology22n/mn/mn/mn/mn/mAesthetics1,4379442,381(12.3)(5.6)(9.8)(3.6)(9.0)BotoxCosmetic7055431,248(15.9)3.7(8.4)5.8(7.6)JuvedermCollection180311491(25.9)(21.5)(23.2)(19.8)(22.2)OtherAesthetics55290642(1.0)11.70.614.50.9EyeCare4475731,020(4.2)(5.3)(4.8)(1.8)(2.8)Ozurdex60188248(12.4)0.8(2.8)2.7(1.4)Lumigan/Ganfort10010920939.4(11.0)7.5(7.7)9.6Alphagan/Combigan267096(3.6)(13.1)(10.6)(8.5)(7.2)OtherEyeCare261206467(12.8)(4.4)(9.3)0.3(7.3)OtherKeyProducts1,4713751,8462.5(12.0)(0.8)(10.4)(0.4)Mavyret3263556814.9(12.8)(5.1)(11.2)(4.2)Creon75975915.4n/m15.4n/m15.4Linzess/Constella38620406(17.4)7.0(16.5)9.7(16.4)aOperationalcomparisonsarepresentedatconstantcurrencyratesthatreflectcomparativelocalcurrencynetrevenuesattheprioryearsforeignexchangerates.bReflectsprofitsharingforImbruvicainternationalrevenues.cEpkinlyU.S.revenuesreflectprofitsharing.Internationalrevenuesreflectproductrevenuesaswellasprofitsharingfromcertaininternationalterritories.n/m=notmeaningful8AbbVieInc.ConsolidatedStatementsofEarnings(Unaudited)(inmillions,exceptpersharedata)SecondQuarterEndedJune30SixMonthsEndedJune302025202420252024Netrevenues$15,423$14,462$28,766$26,772Costofproductssold4,346 4,202 8,348 8,296Selling,generalandadministrative3,253 3,377 6,546 6,692Researchanddevelopment2,131 1,948 4,198 3,887AcquiredIPR&Dandmilestones823 937 1,071 1,101Otheroperatingincome(24)(24)Totaloperatingcostsandexpenses10,529 10,464 20,139 19,976Operatingearnings4,894 3,998 8,627 6,796Interestexpense,net678 506 1,305 959Netforeignexchangeloss23 1 27 5Otherexpense,net2,639 1,345 4,080 1,931Earningsbeforeincometaxexpense1,554 2,146 3,215 3,901Incometaxexpense613 773 985 1,156Netearnings941 1,373 2,230 2,745Netearningsattributabletononcontrollinginterest3 3 6 6NetearningsattributabletoAbbVieInc.$938$1,370$2,224$2,739DilutedearningspershareattributabletoAbbVieInc.$0.52$0.77$1.24$1.53Adjusteddilutedearningspersharea$2.97$2.65$5.43$4.96Weighted-averagedilutedsharesoutstanding1,771 1,771 1,772 1,772aRefertotheReconciliationofGAAPReportedtoNon-GAAPAdjustedInformationforfurtherdetails.9AbbVieInc.ReconciliationofGAAPReportedtoNon-GAAPAdjustedInformation(Unaudited)1.Specifieditemsimpactedresultsasfollows:QuarterEndedJune30,2025(inmillions,exceptpersharedata)EarningsDilutedPre-taxAfter-taxaEPSAsreported(GAAP)$1,554$938$0.52Adjustedforspecifieditems:Intangibleassetamortization1,8641,571 0.89Changeinfairvalueofcontingentconsideration2,7952,709 1.53Other9160 0.03Asadjusted(non-GAAP)$6,304$5,278$2.97aRepresentsnetearningsattributabletoAbbVieInc.Specifieditemsreflecttheimpactofapplicablestatutorytaxrates.ReportedGAAPearningsandadjustednon-GAAPearningsforthethreemonthsendedJune30,2025includedacquiredIPR&Dandmilestoneexpenseof$823milliononapre-taxand$737milliononanafter-taxbasis,representinganunfavorableimpactof$0.42tobothdilutedEPSandadjusteddilutedEPS.2.Theimpactofthespecifieditemsbylineitemwasasfollows:QuarterEndedJune30,2025(inmillions)CostofproductssoldSG&AR&DOtheroperatingincomeOtherexpense,netAsreported(GAAP)$4,346$3,253$2,131$(24)$2,639Adjustedforspecifieditems:Intangibleassetamortization(1,864)Changeinfairvalueofcontingentconsideration (2,795)Other(69)(14)(16)24(16)Asadjusted(non-GAAP)$2,413$3,239$2,115$(172)3.Theadjustedtaxrateforthesecondquarterof2025was16.2percent,asdetailedbelow:QuarterEndedJune30,2025(dollarsinmillions)Pre-taxearningsIncometaxesTaxrateAsreported(GAAP)$1,554$613 39.4%Specifieditems4,750 410 8.6%Asadjusted(non-GAAP)$6,304$1,023 16.2AbbVieInc.ReconciliationofGAAPReportedtoNon-GAAPAdjustedInformation(Unaudited)1.Specifieditemsimpactedresultsasfollows:QuarterEndedJune30,2024(inmillions,exceptpersharedata)EarningsDilutedPre-taxAfter-taxaEPSAsreported(GAAP)$2,146$1,370$0.77Adjustedforspecifieditems:Intangibleassetamortization1,947 1,651 0.93Acquisitionandintegrationcosts145 125 0.07Changeinfairvalueofcontingentconsideration1,476 1,438 0.81Other90 126 0.07Asadjusted(non-GAAP)$5,804$4,710$2.65aRepresentsnetearningsattributabletoAbbVieInc.Specifieditemsreflecttheimpactofapplicablestatutorytaxrates.AcquisitionandintegrationcostsprimarilyreflectcostsrelatedtotheImmunoGenacquisition.ReportedGAAPearningsandadjustednon-GAAPearningsforthethreemonthsendedJune30,2024includedacquiredIPR&Dandmilestoneexpenseof$937milliononapre-taxand$924milliononanafter-taxbasis,representinganunfavorableimpactof$0.52tobothdilutedEPSandadjusteddilutedEPS.2.Theimpactofthespecifieditemsbylineitemwasasfollows:QuarterEndedJune30,2024(inmillions)CostofproductssoldSG&AR&DOtherexpense,netAsreported(GAAP)$4,202$3,377$1,948$1,345Adjustedforspecifieditems:Intangibleassetamortization(1,947)Acquisitionandintegrationcosts(79)(35)(31)Changeinfairvalueofcontingentconsideration (1,476)Other(41)(27)(22)Asadjusted(non-GAAP)$2,135$3,315$1,917$(153)3.Theadjustedtaxrateforthesecondquarterof2024was18.8percent,asdetailedbelow:QuarterEndedJune30,2024(dollarsinmillions)Pre-taxearningsIncometaxesTaxrateAsreported(GAAP)$2,146$773 36.0%Specifieditems3,658 318 8.7%Asadjusted(non-GAAP)$5,804$1,091 18.8AbbVieInc.ReconciliationofGAAPReportedtoNon-GAAPAdjustedInformation(Unaudited)1.Specifieditemsimpactedresultsasfollows:SixMonthsEndedJune30,2025(inmillions,exceptpersharedata)EarningsDilutedPre-taxAfter-taxaEPSAsreported(GAAP)$3,215$2,224$1.24Adjustedforspecifieditems:Intangibleassetamortization3,722 3,145 1.78Changeinfairvalueofcontingentconsideration4,313 4,186 2.36Other153 93 0.05Asadjusted(non-GAAP)$11,403$9,648$5.43aRepresentsnetearningsattributabletoAbbVieInc.Specifieditemsreflecttheimpactofapplicablestatutorytaxrates.ReportedGAAPearningsandadjustednon-GAAPearningsforthesixmonthsendedJune30,2025includedacquiredIPR&Dandmilestonesexpenseof$1.1billiononapre-taxand$975milliononanafter-taxbasis,representinganunfavorableimpactof$0.55tobothdilutedEPSandadjusteddilutedEPS.2.Theimpactofthespecifieditemsbylineitemwasasfollows:SixMonthsEndedJune30,2025(inmillions)CostofproductssoldSG&AR&DOtheroperatingincomeOtherexpense,netAsreported(GAAP)$8,348$6,546$4,198$(24)$4,080Adjustedforspecifieditems:Intangibleassetamortization(3,722)Changeinfairvalueofcontingentconsideration (4,313)Other(97)(27)(32)24(21)Asadjusted(non-GAAP)$4,529$6,519$4,166$(254)3.Theadjustedtaxrateforthefirstsixmonthsof2025was15.3percent,asdetailedbelow:SixMonthsEndedJune30,2025(dollarsinmillions)Pre-taxearningsIncometaxesTaxrateAsreported(GAAP)$3,215$985 30.6%Specifieditems8,188 764 9.3%Asadjusted(non-GAAP)$11,403$1,749 15.3AbbVieInc.ReconciliationofGAAPReportedtoNon-GAAPAdjustedInformation(Unaudited)1.Specifieditemsimpactedresultsasfollows:SixMonthsEndedJune30,2024(inmillions,exceptpersharedata)EarningsDilutedPre-taxAfter-taxaEPSAsreported(GAAP)$3,901$2,739$1.53Adjustedforspecifieditems:Intangibleassetamortization3,838 3,254 1.84Acquisitionandintegrationcosts656 611 0.34Changeinfairvalueofcontingentconsideration2,136 2,081 1.17Other111 145 0.08Asadjusted(non-GAAP)$10,642$8,830$4.96aRepresentsnetearningsattributabletoAbbVieInc.Specifieditemsreflecttheimpactofapplicablestatutorytaxrates.AcquisitionandintegrationcostsprimarilyreflectcostsrelatedtotheImmunoGenacquisition.ReportedGAAPearningsandadjustednon-GAAPearningsforthesixmonthsendedJune30,2024includedacquiredIPR&Dandmilestonesexpenseof$1.1billiononapre-taxandafter-taxbasis,representinganunfavorableimpactof$0.60tobothdilutedEPSandadjusteddilutedEPS.2.Theimpactofthespecifieditemsbylineitemwasasfollows:SixMonthsEndedJune30,2024(inmillions)CostofproductssoldSG&AR&DInterestexpense,netOtherexpense,netAsreported(GAAP)$8,296$6,692$3,887$959$1,931Adjustedforspecifieditems:Intangibleassetamortization(3,838)Acquisitionandintegrationcosts(158)(315)(159)(24)Changeinfairvalueofcontingentconsideration 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