Identifiable Intangible Assets

9 Months Ended

Sep. 30, 2023

NOTE 5 – Identifiable intangible assets:

Identifiable intangible assets consisted of the following:


	Gross carrying amount net of impairment				Accumulated amortization				Net carrying amount
	September 30, 2023		December 31, 2022		September 30, 2023		December 31, 2022		September 30, 2023		December 31, 2022

	(U.S. $ in millions)
Product rights	$	17,746	$	18,067	$	12,932	$	12,630	$	4,814	$	5,437
Trade names		574		577		257		231		317		346
In process research and development		394		487		—		—		394		487

Total	$	18,714	$	19,131	$	13,189	$	12,861	$	5,525	$	6,270

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 in various therapeutic categories from various acquisitions with a weighted average life period of approximately 9 years.

Amortization of intangible assets was $145 million and $165 million in the three months ended September 30, 2023 and 2022, respectively.

Amortization of intangible assets was $471 million and $576 million in the nine months ended September 30, 2023 and 2022, respectively.

IPR&D

Teva’s IPR&D are assets that have not yet been approved in its major markets. 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 September 30, 2023 and 2022 were $47 million and $24 million, respectively.

Impairments in the third quarter of 2023 consisted of:

(a)	IPR&D assets of $29 million, mainly related to generic pipeline products resulting from development progress and changes in other key valuation indications (e.g., market size, competition assumptions, legal landscape and launch date); and

(b)	Identifiable product rights of $18 million mainly due to updated market assumptions regarding price and volume of products.

Impairments of long-lived intangible assets for the nine months ended September 30, 2023 and 2022 were $289 million and $223 million, respectively.

Impairments in the first nine months of 2023 consisted of:

(a)	Identifiable product rights of $206 million due to: (i) $112 million in Japan, mainly related to regulatory pricing reductions; and (ii) $94 million related to updated market assumptions regarding price and volume of products; and

(b)	IPR&D assets of $83 million, mainly related to generic pipeline products resulting from development progress and changes in other key valuation indications (e.g., market size, competition assumptions, legal landscape and launch date).

Impairments in the first nine months of 2022 consisted mainly of:

(a)	Identifiable product rights of $169 million related to updated market assumptions regarding price and volume of products acquired from Actavis Generics, and

(b)	IPR&D assets of $37 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 and launch date).

The fair value measurement of the impaired intangible assets in the first nine months of 2023 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 8.5% to 10%. 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.