ACQUISITIONS, DIVESTITURES, LICENSING AND OTHER ARRANGEMENTS (Tables)

12 Months Ended

Dec. 31, 2023

Acquisitions, Divestitures and Other Arrangements [Abstract]

Total Consideration for the Acquisition

Total consideration for the acquisition consisted of the following:

Dollars in millions
Cash consideration for outstanding shares	$	3,811
Cash consideration for equity awards	302
Consideration paid	4,113
Less: unvested stock awards (a)	153
Total consideration allocated	$	3,960

(a)    Included unvested equity awards of $73 million expensed in Marketing, selling, and administrative and $80 million expensed in Research and development in 2022.

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed

The purchase price allocation resulted in the following amounts being allocated to the assets acquired and liabilities assumed as of the acquisition date based upon their respective fair values summarized below:

Dollars in millions
Cash and cash equivalents	$	795
Other current assets	14
Intangible assets (a)	2,971
Deferred income tax assets	229
Other non-current assets	10
Deferred income tax liabilities	(643)
Other current liabilities	(111)
Identifiable net assets acquired	$	3,265
Goodwill (b)	695
Total consideration allocated	$	3,960

(a)    Intangible assets included $2.8 billion of IPRD allocated to repotrectinib (Augtyro). The estimated fair value of IPRD assets was determined using income approach valuation method.

(b)    Goodwill resulted primarily from the recognition of deferred tax liabilities and is not deductible for tax purposes.

Divestitures

Divestitures

The following table summarizes the financial impact of divestitures including royalty income, which is included in Other (income)/expense, net. Revenue and pretax earnings related to all divestitures were not material in all periods presented (excluding divestiture gains or losses).

	Net Proceeds						Divestiture (Gains)/Losses						Royalty Income
Dollars in millions	2023		2022		2021		2023		2022		2021		2023		2022		2021
Diabetes business - royalties	$	846	$	767	$	612	$	—	$	—	$	—	$	(862)	$	(810)	$	(622)
Mature products and other(a)	12		390		136		—		(211)		(9)		—		(22)		(44)
Total	$	858	$	1,157	$	748	$	—	$	(211)	$	(9)	$	(862)	$	(832)	$	(666)

(a)    Includes cash proceeds of $221 million and a divestiture gain of $211 million related to the sale of several mature products of Cheplapharm in 2022.

Royalty and Licensing Income

The following table summarizes the financial impact of Keytruda* royalties, Tecentriq* royalties, upfront licensing fees and milestones for products that have not obtained commercial approval, which are included in Other (income)/expense, net.

	Year Ended December 31,
Dollars in millions	2023		2022		2021
Keytruda* royalties	$	(1,186)	$	(1,001)	$	(841)
Tecentriq* royalties	(107)		(93)		(90)
Upfront licensing fees	—		—		(34)
Contingent milestone income	(91)		(50)		(18)
Amortization of deferred income	(51)		(53)		(39)
Biohaven sublicense income	—		(55)		—
Other royalties	(53)		(31)		(45)
Total	$	(1,488)	$	(1,283)	$	(1,067)