Amgen 2015 Annual Report Download - page 106

F-28
Developed product technology rights consist of rights related to marketed products acquired in business combinations.
Licensing rights consist primarily of contractual rights acquired as part of the acquisition of Onyx to receive future milestones
(see Note 3, Business combinations), royalties and profit sharing payments, capitalized payments to third parties for milestones
related to regulatory approvals to commercialize products and upfront payments associated with royalty obligations for marketed
products. R&D technology rights consist of technology used in R&D with alternative future uses. Marketing-related intangible
assets consist primarily of rights related to the sale and distribution of marketed products, including licenses to filgrastim and
pegfilgrastim acquired from Roche (see Note 3, Business combinations). Marketing-related intangible assets also includes $275
million paid to Glaxo during the year ended December 31, 2014, for the early termination of our agreement with them to
commercialize denosumab in certain geographic areas (see Note 7, Collaborative arrangements). This transaction represents the
reacquisition of a previously shared economic interest in geographic territories where we were already marketing denosumab and
accordingly was accounted for as an acquisition of identifiable intangible assets.
IPR&D consists of R&D projects acquired in a business combination which are not complete at the time of acquisition due
to remaining technological risks and/or lack of receipt of the required regulatory approvals. As of December 31, 2015, these
projects include: AMG 899 acquired in the acquisition of Dezima (see Note 3, Business combinations), oprozomib acquired in
the acquisition of Onyx (see Note 3, Business combinations), and Parsabiv™ (etelcalcetide) acquired in the acquisition of KAI
Pharmaceuticals.
In October 2015, we announced that the FDA has granted approval of IMLYGIC™ (talimogene laherparepvec) acquired in
the acquisition of BioVex Group, Inc. (BioVex), for the local treatment of unresectable cutaneous, subcutaneous and nodal lesions
in patients with melanoma recurrent after initial surgery. As a result, the $675 million carrying value of IMLYGIC™ was reclassified
from IPR&D to Developed product technology rights during the fourth quarter of 2015, and is being amortized over its estimated
useful life.
In November 2015, we announced that the European Commission granted marketing authorization for Kyprolis® in
combination with lenalidomide and dexamethasone for the treatment of adult patients with multiple myeloma who have received
at least one prior therapy. As a result, the $850 million carrying value of Kyprolis® in the territories outside the United States
(excluding Japan) was reclassified from IPR&D to Developed product technology rights during the fourth quarter of 2015, and
is being amortized over its useful life.
All IPR&D projects have major risks and uncertainties associated with the timely and successful completion of development
and commercialization of these product candidates, including our ability to confirm their safety and efficacy based on data from
clinical trials, our ability to obtain necessary regulatory approvals and our ability to successfully complete these tasks within
budgeted costs. We are not permitted to market a human therapeutic without obtaining regulatory approvals, and such approvals
require completing clinical trials that demonstrate a product candidate is safe and effective. In addition, the availability and extent
of coverage and reimbursement from third-party payers, including government healthcare programs and private insurance plans,
impact the revenues a product can generate. Consequently, the eventual realized value, if any, of these acquired IPR&D projects
may vary from their estimated fair values. We review IPR&D projects for impairment annually, whenever events or changes in
circumstances indicate that the carrying amount may not be recoverable and upon establishment of technological feasibility or
regulatory approval.
During the years ended December 31, 2015, 2014 and 2013, we recognized amortization charges associated with our finite-
lived intangible assets, included primarily in Cost of sales in the Consolidated Statements of Income, of $1.4 billion, $1.4 billion
and $642 million, respectively. The total estimated amortization for each of the next five years for our intangible assets is $1.4
billion, $1.3 billion, $1.1 billion, $1.1 billion and $1.0 billion in 2016, 2017, 2018, 2019 and 2020, respectively.
13. Accrued liabilities
Accrued liabilities consisted of the following (in millions):
December 31,
2015 2014
Sales deductions $ 1,486 $ 1,379
Employee compensation and benefits 916 920
Dividends payable 754 601
Clinical development costs 491 445
Sales returns reserve 390 361
Other 1,415 1,807
Total accrued liabilities $ 5,452 $ 5,513