GOODWILL AND INTANGIBLE ASSETS

3 Months Ended

Mar. 31, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill

The following table summarizes the changes in the carrying amount of Goodwill:


(in millions)	Amount
Balance as of December 31, 2021	$	8,332
Measurement period adjustments	(18)
Balance as of March 31, 2022	$	8,314

During the three months ended March 31, 2022, goodwill decreased by $18 million as a result of finalizing the amount of acquired net operating losses of MYR, which resulted in a decrease to the net deferred tax liability acquired.

Intangible Assets

The following table summarizes our Intangible assets, net:


	March 31, 2022								December 31, 2021
(in millions)	Gross Carrying Amount		Accumulated Amortization		Foreign Currency Translation Adjustment		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Foreign Currency Translation Adjustment		Net Carrying Amount
Finite-lived assets:
Intangible asset - sofosbuvir	$	10,720	$	(5,826)	$	—	$	4,894	$	10,720	$	(5,651)	$	—	$	5,069
Intangible asset - axicabtagene ciloleucel	7,110		(1,603)		—		5,507		7,110		(1,501)		—		5,609
Intangible asset - Trodelvy	5,630		(623)		—		5,007		5,630		(507)		—		5,123
Intangible asset - Hepcludex	845		(93)		—		752		845		(72)		—		773
Other	1,632		(682)		1		951		1,610		(650)		1		961
Total finite-lived assets	25,937		(8,827)		1		17,111		25,915		(8,381)		1		17,535
Indefinite-lived assets - IPR&D	13,220		—		—		13,220		15,920		—		—		15,920
Total intangible assets	$	39,157	$	(8,827)	$	1	$	30,331	$	41,835	$	(8,381)	$	1	$	33,455

Aggregate amortization expense related to finite-lived intangible assets was $445 million and $395 million for the three months ended March 31, 2022 and 2021, respectively, and is primarily included in Cost of goods sold on our Condensed Consolidated Statements of Income.

The following table summarizes the estimated future amortization expense associated with our finite-lived intangible assets as of March 31, 2022:


(in millions)	Amount
2022 (remaining nine months)	$	1,336
2023	1,781
2024	1,781
2025	1,776
2026	1,768
Thereafter	8,669
Total	$	17,111

IPR&D Impairment

In connection with our acquisition of Immunomedics in 2020, we allocated a portion of the purchase price to acquired IPR&D intangible assets. Approximately $8.8 billion was assigned to IPR&D intangible assets related to Trodelvy for treatment of patients with hormone receptor-positive, human epidermal growth factor receptor 2-negative (“HR+/HER2-”) metastatic breast cancer. In March 2022, we received data from the Phase 3 TROPiCS-02 study evaluating Trodelvy in patients with HR+/HER2- metastatic breast cancer who have received prior endocrine therapy, cyclin-dependent kinase 4/6 inhibitors and two to four lines of chemotherapy (“third-line plus patients”). Based on our evaluation of the study results, and in connection with the preparation of the financial statements for the quarter, we updated our estimate of the fair value of our HR+/HER2- IPR&D intangible asset to $6.1 billion as of March 31, 2022. Our estimate of fair value used a probability-weighted income approach that discounts expected future cash flows to the present value, which requires the use of Level 3 fair value measurements and inputs, including estimated revenues, costs, and probability of technical and regulatory success. The expected cash flows included cash flows from HR+/HER2- metastatic breast cancer for third-line plus patients and patients in earlier lines of therapy which are the subject of separate clinical studies. Our revised discounted cash flows were lower primarily due to a delay in launch timing for third-line plus patients which caused a decrease in our market share assumptions based on the expected competitive environment. There were no changes in our plans or assumptions related to our estimated cash flows for patients in the earlier lines of therapy. We used a discount rate of 6.75% which is based on the estimated weighted-average cost of capital for companies with profiles similar to ours and represents the rate that market participants would use to value the intangible assets. We determined the revised estimated fair value was below the carrying value of the asset and, as a result, we recognized a partial impairment charge of $2.7 billion in In-process research and development impairment on our Condensed Consolidated Statements of Income during the three months ended March 31, 2022.