Intangible Assets and Goodwill

12 Months Ended

Jan. 01, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

At the end of fiscal years 2022 and 2021, the gross and net amounts of intangible assets were:


(Dollars in Millions)	2022		2021
Intangible assets with definite lives:
Patents and trademarks — gross	$	44,012	38,572
Less accumulated amortization	(22,266)		(20,088)
Patents and trademarks — net(1)	$	21,746	18,484
Customer relationships and other intangibles — gross	$	22,987	23,011
Less accumulated amortization	(12,901)		(11,925)
Customer relationships and other intangibles — net(2)	$	10,086	11,086
Intangible assets with indefinite lives:
Trademarks	$	6,807	6,985
Purchased in-process research and development(3)	9,686		9,837
Total intangible assets with indefinite lives	$	16,493	16,822
Total intangible assets — net	$	48,325	46,392

(1)The change was primarily related to the intangible assets acquired with the acquisition of Abiomed, Inc. which was partially offset by amortization expense of previously existing intangible assets and the result of currency translation effects.

(2)The majority is comprised of customer relationships

(3)The reduction was primarily related to an intangible asset impairment charge of approximately $0.8 billion recorded in the fiscal year 2022 related to an in-process research and development asset, bermekimab (JnJ-77474462), an investigational drug for the treatment of Atopic Dermatitis (AD) and Hidradenitis Suppurativa (HS) acquired with the acquisition of XBiotech, Inc. in the fiscal year 2020. Additional information regarding efficacy of the AD and HS indications became available which led the Company to the decision to terminate the development of bermekimab for AD and HS. An additional reduction of $0.7 billion was driven by Monarch assets that reached commercialization and are now classified as having definite lives. This was partially offset by approximately $1.1 billion of IPR&D acquired with Abiomed, Inc.

Goodwill as of January 1, 2023 and January 2, 2022, as allocated by segment of business, was as follows:


(Dollars in Millions)	Consumer Health		Pharmaceutical	MedTech	Total
Goodwill at January 3, 2021	$	10,336	11,009	15,048	36,393
Goodwill, related to acquisitions	—		—	—	—
Goodwill, related to divestitures	(9)		—	—	(9)
Currency translation/other	(517)		(429)	(192)	(1,138)
Goodwill at January 2, 2022	$	9,810	10,580	14,856	35,246
Goodwill, related to acquisitions	—		—	11,056	11,056
Goodwill, related to divestitures	—		—	—	—
Currency translation/other	(626)		(396)	(49)	(1,071)
Goodwill at January 1, 2023	$	9,184	10,184	25,863	45,231

The weighted average amortization period for patents and trademarks is 12 years. The weighted average amortization period for customer relationships and other intangible assets is 21 years. The amortization expense of amortizable assets included in Cost of products sold was $4.3 billion, $4.7 billion and $4.7 billion before tax, for the fiscal years ended January 1, 2023, January 2, 2022 and January 3, 2021, respectively. Intangible asset write-downs are included in Other (income) expense, net.

The estimated amortization expense for approved products, before tax, for the five succeeding years is approximately:


(Dollars in Millions)
2023	2024	2025	2026	2027
$4,600	4,400	3,600	3,000	2,400

See Note 18 to the Consolidated Financial Statements for additional details related to acquisitions and divestitures.