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Acquisition, Collaborations and Other Arrangements | 9 Months Ended
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Sep. 30, 2018
Acquisition, Collaborations And Other Arrangements [Abstract] |
Acquisition, Collaborations and Other Arrangements | ACQUISITION, COLLABORATIONS AND OTHER ARRANGEMENTS Acquisition On October 3, 2017 (the Kite acquisition date), we completed a tender offer for all of the outstanding common stock of Kite Pharma, Inc. (Kite) for $180 per share in cash. As a result, Kite became our wholly-owned subsidiary. The acquisition of Kite helps establish our foundation for improving the treatment of hematological malignancies and solid tumors. The consideration transferred for the acquisition of Kite was $11,155 million, consisting of $10,420 million in cash to the outstanding Kite common stockholders, $645 million cash payment to vested equity award holders, $15 million to warrant holders and $75 million representing the portion of the replaced stock-based awards attributable to the pre-combination period. In addition, $733 million was excluded from the consideration transferred, representing the portion of the replaced stock-based awards attributable to the post combination period, which is expected to be recognized through 2021. The acquisition of Kite was accounted for as a business combination using the acquisition method of accounting. This method requires, among other things, that assets acquired and liabilities assumed be recognized at fair value as of the Kite acquisition date. The determination of estimated fair value requires us to make significant estimates and assumptions. During the nine months ended September 30, 2018, we recorded a $42 million reduction to goodwill primarily due to revision of deferred income taxes as a result of finalization of Kite’s pre-acquisition federal income tax return. The fair value estimates for the assets acquired and liabilities assumed in the acquisition have been completed. The following table summarizes the Kite acquisition date fair values of assets acquired and liabilities assumed, and the consideration transferred (in millions):
Cash and cash equivalents |  | $ | 652 |
Identifiable intangible assets: |  |
Indefinite-lived intangible assets - in-process research and development (IPR&D) |  | 8,950 |
Outlicense acquired |  | 91 |
Deferred income taxes |  | (1,564 | )
Other assets acquired (liabilities assumed), net |  | 81 |
Total identifiable net assets |  | 8,210 |
Goodwill |  | 2,945 |
Total consideration transferred |  | $ | 11,155 |
Collaborations and Other Arrangements We enter into collaborations and other arrangements with third parties for the research and development of certain products and product candidates. These arrangements may include non-refundable up-front payments, payments by us for options to acquire certain rights, contingent obligations by us for potential development and regulatory milestone payments and/or sales-based milestone payments, royalty payments, revenue or profit sharing arrangements, cost sharing arrangements and equity investments. While we do not consider any collaborations and other arrangements entered into during 2018 to be individually material, notable terms of these arrangements are described below. Amounts related to collaborations entered into during 2018 that are not specifically presented are included in the aggregate as Other Collaboration Arrangements. Gadeta B.V. (Gadeta): In July 2018, we entered into a collaboration arrangement with Gadeta, a privately-held company based in Utrecht, the Netherlands, to develop gamma delta T cell receptor therapies for various cancers. Under the financial terms, we will provide research and development (R&D) funding for the collaboration and Gadeta will be eligible to receive future payments upon achievement of certain regulatory milestones. In addition, we made an upfront purchase of equity in Gadeta from Gadeta’s shareholders upon entering into the collaboration arrangement and may acquire additional equity in Gadeta upon achievement of certain R&D milestones. We also have the exclusive option to acquire the remaining equity in Gadeta for €300 million, adjusted for closing cash, transaction expenses and closing indebtedness. The option is exercisable at our discretion. Gadeta is a VIE, and we are its primary beneficiary because we have the power to direct the activities of Gadeta that most significantly impact its economic performance and as a result of the financial terms described above. Upon the initial consolidation of Gadeta we recorded $82 million to noncontrolling interest, primarily reflecting acquired intangible assets related to IPR&D with a fair value of $117 million. Gadeta does not meet the definition of a business as defined in ASC 805 - Business Combinations, and as a result, no goodwill was recognized. Other Collaboration Arrangements: For the nine months ended September 30, 2018, we entered into several other collaboration arrangements that resulted in cash payments of $333 million, of which $160 million was recorded as up-front collaboration expense within Research and development expenses on our Condensed Consolidated Statements of Income and the remaining amounts were recorded in current and other long-term assets on our Condensed Consolidated Balance Sheets. Under the financial terms of these arrangements, we may be required to make payments upon achievement of various developmental, regulatory and commercial milestones, which could be significant. In addition, we may be required to pay significant royalties on future sales if products related to these arrangements are commercialized. The payment of these amounts, however, is contingent upon the occurrence of various future events, which have a high degree of uncertainty of occurrence.

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- Definition Acquisition, Collaborations And Other Arrangements [Abstract] + References No definition available. + Details
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- Definition The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable). + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -URI http://asc.fasb.org/topic&trid=2303972 + Details
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