Fair Value Measurement (Tables)

12 Months Ended

Dec. 31, 2017

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis

As of December 31, 2017 and December 31, 2016, the following financial assets and liabilities are measured at fair value on a recurring basis using quoted prices in active markets for identical assets (Level 1); significant other observable inputs (Level 2); and significant unobservable inputs (Level 3).



	Fair value
(In millions)	Total		Level 1		Level 2		Level 3
As of December 31, 2017
Financial assets:
Marketable equity securities	$	89.7	$	89.7	$	—	$	—
Marketable debt securities	17.9		3.8		14.1		—
Derivative instruments	17.9		—		17.9		—
Total assets	$	125.5	$	93.5	$	32.0	$	—

Financial liabilities:
Joint venture net written option	$	40.0	$	—	$	—	$	40.0
Derivative instruments	14.2		—		14.2		—
Contingent consideration payable	1,168.2		—		—		1,168.2
Total liabilities	$	1,222.4	$	—	$	14.2	$	1,208.2



	Fair value
(In millions)	Total		Level 1		Level 2		Level 3
As of December 31, 2016
Financial assets:
Marketable equity securities	$	65.8	$	65.8	$	—	$	—
Marketable debt securities	15.5		3.6		11.9		—
Derivative instruments	18.0		—		18.0		—
Total assets	$	99.3	$	69.4	$	29.9	$	—

Financial liabilities:
Derivative instruments	$	8.3	$	—	$	8.3	$	—
Contingent consideration payable	1,058.0		—		—		1,058.0
Total liabilities	$	1,066.3	$	—	$	8.3	$	1,058.0

Liabilities Measured at Fair Value on a Recurring Basis Using Significant Unobservable Inputs (Level 3)



Contingent consideration payable
(In millions)	2017			2016
Balance as of January 1,	$	1,058.0		$	475.9
Acquisitions	(4.0		)	565.4
Change in fair value included in earnings	120.7			11.1
Other	(6.5		)	5.6
Balance as of December 31,	$	1,168.2		$	1,058.0

Fair Value Inputs, Liabilities Quantitative Information Table



Financial liabilities:	Fair value as of the measurement date
As of December 31, 2017
(In millions, except %)	Fair value		Valuation technique	Significant unobservable inputs	Range
Contingent consideration payable	$	1,168.2	Income approach (probability weighted discounted cash flow)	• Cumulative probability of milestones being achieved	• 21.9 to 90%
				• Assumed market participant discount rate	• 1.8 to 8.7%
				• Periods in which milestones are expected to be achieved	• 2018 to 2040
				• Forecast quarterly royalties payable on net sales of relevant products	• $0.1 to $6.5 million

Contingent consideration payable represents future milestones and royalties the Company may be required to pay in conjunction with various business combinations and license agreements. The fair value of the Company’s contingent consideration payable could significantly increase or decrease due to changes in certain assumptions which underpin the fair value measurements. Each set of assumptions is specific to the individual contingent consideration payable.



Financial liabilities:	Fair value as of the measurement date
As of December 31, 2017
(In millions, except %)	Fair value		Valuation technique	Significant unobservable inputs	Range
Joint venture net written option	$	40.0	Income approach (probability weighted discounted cash flow)	• Cash flow scenario probability weighting	• 0 to 80%
				• Assumed market participant discount rate	• 16%

Schedule of Fair Value, Assets and Liabilities Not Measured at Fair Value on Recurring Basis

The carrying amounts and estimated fair values as of December 31, 2017 and December 31, 2016 of the Company’s financial assets and liabilities that are not measured at fair value on a recurring basis are as follows:



	December 31, 2017				December 31, 2016
(In millions)	Carrying amount		Fair value		Carrying amount		Fair value
Financial liabilities:
SAIIDAC notes	$	12,050.2	$	11,913.7	$	12,039.2	$	11,633.8
Baxalta notes	5,057.7		5,229.9		5,063.6		5,066.5
Capital lease obligation	349.2		349.2		353.6		353.6