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Identifiable Intangible Assets

12 Months Ended

Dec. 31, 2023

NOTE 6—Identifiable intangible assets:

Identifiable intangible assets consisted of the following:


	Gross carrying amount net of impairment				Accumulated amortization				Net carrying amount
	December 31,
	2023		2022		2023		2022		2023		2022
	(U.S. $ in millions)
Product rights	$	17,981	$	18,067	$	13,274	$	12,630	$	4,707	$	5,437
Trade names		583		577		269		231		314		346
In-process research and development (IPR&D)		366		487		—		—		366		487

Total	$	18,930	$	19,131	$	13,543	$	12,861	$	5,387	$	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 from various categories with a weighted average life of approximately 9 years. Amortization of intangible assets was $616 million, $732 million and $802 million in the years ended December 31, 2023, 2022 and 2021, respectively.

As of December 31, 2023, the estimated aggregate amortization of intangible assets for the years 2024 to 2028 is as follows: 2024—$503 million; 2025—$460 million; 2026—$462 million; 2027—$451 million and 2028—$398 million. These estimates do not include the impact of IPR&D that is expected to be successfully completed and reclassified to product rights.

IPR&D

Teva’s IPR&D are assets that have not yet been approved in 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 impairment

Impairments of identifiable intangible assets were $350 million, $355 million and $424 million in the years ended December 31, 2023, 2022 and 2021, respectively. These amounts are recorded in the statement of income (loss) under intangible assets impairments.

The fair value measurement of the impaired intangible assets in 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.

Impairments in 2023 consisted of:

(a)

Identifiable product rights of $260 million due to: (i) $148 million related to updated market assumptions regarding price and volume of products; and (ii) $112 million in Japan, mainly related to regulatory pricing reductions; and

(b)

IPR&D assets of $90 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 2022 consisted of:

(a)

Identifiable product rights of $310 million due to: (i) $256 million related to updated market assumptions regarding price and volume of products, and (ii) $54 million related to a change in Teva’s commercial plans regarding a certain program, as part of portfolio optimization efforts, which also included an inventory

write-off

of $108 million; and

(b)

IPR&D assets of $45 million, due 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 2021 consisted of:

(a)

Identifiable product rights and trade names of $297 million due to: (i) $267 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 $127 million, mainly 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.