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Acquisitions | 12 Months Ended
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Dec. 31, 2019
Acquisition [Abstract] |
Business Combination Disclosure [Text Block] | ACQUISITIONS Kite Pharma, Inc. In October 2017 (the Acquisition Date), we completed a tender offer for all of the outstanding common stock of 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 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 (Replacement Awards), which is expected to be recognized through 2021. As of December 31, 2019, unrecognized compensation cost related to the Replacement Awards was not material. 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 acquisition date. The determination of estimated fair value requires us to make significant estimates and assumptions. During 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 have been completed. The following table summarizes the 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 - 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 |
Identifiable Intangible Assets We acquired intangible assets primarily related to IPR&D for axicabtagene ciloleucel, KITE-585 program, and KTE-X19 (formerly KTE-C19, being evaluated for the treatment of acute lymphoblastic leukemia (ALL)), which had an estimated aggregate fair value of $8,950 million as of the Acquisition Date. Intangible assets related to IPR&D projects are considered to be indefinite-lived assets until the completion or abandonment of the associated R&D efforts. In October 2017, axicabtagene ciloleucel, now known commercially as Yescarta, was approved by FDA for the treatment of adult patients with relapsed or refractory diffuse large B-cell lymphoma (DLBCL) after two or more lines of systemic therapy. Upon FDA approval of Yescarta, $6,200 million of the purchased IPR&D was reclassified as a finite-lived intangible asset and is being amortized over an estimated useful life of 18 years using the straight-line method. In 2019, we recognized an impairment charge of $800 million primarily related to axicabtagene ciloleucel for the treatment of iNHL. In 2018, we recognized an impairment charge of $820 million to write down to zero the carrying value of the KITE-585 program. See Note 9. Intangible Assets for additional information. Additionally, we acquired an outlicensing arrangement with Daiichi Sankyo Company Limited, which had an estimated fair value of $91 million as of the Acquisition Date. This definite-lived intangible asset is being amortized over an estimated useful life of 14 years on a straight-line basis. The fair value was determined by estimating the probability-weighted net cash flows attributable to the outlicense discounted to present value using a discount rate that represents the estimated rate that market participants would use to value this intangible asset. Goodwill The $2,945 million goodwill represents the excess of the consideration transferred over the fair values of assets acquired and liabilities assumed and represents the future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. None of the goodwill is deductible for income tax purposes. Cell Design Labs, Inc. In December 2017, we acquired all of the issued and outstanding stock of Cell Design Labs, Inc., a privately held company (Cell Design Labs), which was in addition to the approximately 12.2% of shares in Cell Design Labs we obtained in the acquisition of Kite. With this acquisition, we gained new technology platforms that will enhance R&D efforts in cellular therapy. The cash consideration totaled $150 million, net of acquired cash. Additionally, the shareholders of Cell Design Labs, other than us, are eligible to receive contingent development and regulatory milestone-based payments of up to $322 million. Our 12.2% equity interest in Cell Design Labs had a carrying value of $30 million. The transaction was accounted for as an asset acquisition. As a result, $172 million was expensed as acquired IPR&D within Research and development expenses on our Consolidated Statements of Income.

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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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