Identifiable Intangible Assets

6 Months Ended

Jun. 30, 2022

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,		December 31,		June 30,		December 31,		June 30,		December 31,
	2022		2021		2022		2021		2022		2021
	(U.S. $ in millions)
Product rights	$	17,987	$	18,815	$	12,181	$	12,318	$	5,806	$	6,497
Trade names		570		590		211		198		359		392
In process research and development		535		577		—		—		535		577

Total	$	19,092	$	19,982	$	12,392	$	12,516	$	6,700	$	7,466

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 from various therapeutic categories from various acquisitions with a weighted average life of approximately 10 years.

Amortization of intangible assets was $212 million and $173 million in the three months ended June 30, 2022 and 2021, respectively.

Amortization of intangible assets was $412 million and $414 million in the six months ended June 30, 2022 and 2021, respectively.

IPR&D

Teva’s IPR&D are assets that have not yet been approved in major markets. Teva’s IPR&D is comprised mainly of various generic products from the Actavis Generics acquisition of $503 million. 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, 2022 and 2021 were $51 million and $195 million, respectively.

Impairments in the second quarter of 2022 consisted of:

(a)

Identifiable product rights of $32 million related to updated market assumptions regarding price and volume of products acquired from Actavis Generics, and

(b)

IPR&D assets of $19 million due to generic pipeline products acquired from Actavis Generics resulting from development progress and changes in other key valuation indications (e.g., market size, competition assumptions, legal landscape, launch date).

Impairments in the second quarter of 2021 consisted of:

(a)

Identifiable product rights of $168 million due to:

(i) $138 million, mainly related to updated market assumptions regarding price and

volume of products acquired from Actavis Generics that are primarily marketed in the United States, and (ii)

$30 million related to

lenalidomide (generic equivalent of Revlimid

), resulting from modified competition assumptions as a result of settlements between the

innovator and other generic filers, and

(b)

IPR&D assets of $27 million due to generic pipeline products acquired from Actavis Generics resulting from development progress and changes in other key valuation indications (e.g., market size, competition assumptions, legal landscape, launch date) in the United States.

Impairments of long-lived intangible assets for the six months ended June 30, 2022 and 2021 were $199 million and $274 million, respectively.

Impairments in the first

six

months of

2022

consisted mainly of:

(a)

Identifiable product rights of $161 million related to updated market assumptions regarding price and volume of products acquired from Actavis Generics, and

(b)

IPR&D assets of $21 million due to generic pipeline products acquired from Actavis Generics resulting from development progress and changes in other key valuation indications (e.g., market size, competition assumptions, legal landscape, launch date) in the United States.

Impairments in the first six months of 2021 consisted of:

(a)

Identifiable product rights of $196 million

due to: (i) $166 million

, mainly related to updated market assumptions regarding price and

volume of products acquired from Actavis Generics that are primarily marketed in the United States

and (ii)

$30 million related to lenalidomide (generic equivalent of Revlimid

), resulting from modified competition assumptions as a result of settlements between the innovator and other generic filers

(b)

IPR&D assets of $78 million, due to generic pipeline products acquired from Actavis Generics resulting from development progress and changes in other key valuation indications (e.g., market size, competition assumptions, legal landscape, launch date) in the United States.

The fair value measurement of the impaired intangible assets in the first six months of 2022 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 7.25% to 8.25%. A probability of success factor ranging from 20% to 90% was used in the fair value calculation to reflect inherent regulatory and commercial risk of IPR&D.