AbbVie 2013 Annual Report Download - page 76

In addition to the collaborations described above, in 2013, AbbVie entered several other arrangements
resulting in charges to IPR&D of $48 million and upon the achievement of certain development,
regulatory and commercial milestones, could make additional payments of up to $894 million. It is not
possible to predict with reasonable certainty whether these milestones will be achieved or the timing for
achievement.
Action Pharma A/S
In May 2012, AbbVie recorded a charge to IPR&D of $110 million as a result of the acquisition of
ABT-719 (previously referred to as AP214), a drug under development for the prevention of acute
kidney injury associated with major cardiac surgery in patients at increased risk.
Reata Pharmaceuticals, Inc.
In the fourth quarter of 2011, AbbVie entered into a collaboration with Reata Pharmaceuticals, Inc.
(Reata) for the joint development and commercialization of second-generation oral antioxidant
inflammation modulators resulting in a charge to IPR&D of $400 million, which was paid in the first
quarter of 2012.
Pursuant to a series of transactions with Reata in 2010, AbbVie acquired licensing rights outside the
United States, excluding certain Asian markets, to bardoxolone methyl. In addition, AbbVie acquired
equity interests in Reata of $62 million each in 2010 and 2011. The achievement of certain
development milestones under the license agreement resulted in charges of $50 million in 2012 to
R&D and $188 million in 2011 to IPR&D. On October 17, 2012, Reata informed AbbVie that it was
discontinuing a Phase III clinical study for bardoxolone methyl for chronic kidney disease. As a result,
AbbVie recorded an impairment charge of $52 million related to AbbVie’s equity investment in Reata.
The charge was classified in in other (income) expense, net in the combined statement of earnings for
2012. Reata and AbbVie continue to evaluate the development of bardoxolone methyl in other
indications.
Biotest AG
In June 2011, AbbVie entered into a global agreement with Biotest AG to develop and commercialize
an anit-CD4, a treatment for rheumatoid arthritis and psoriasis, resulting in an $85 million charge to
IPR&D. AbbVie could, in the future, be required to make additional payments totaling up to
$395 million based on the achievement of certain development, regulatory and commercial milestones
under this agreement.
Note 6 Goodwill and Intangible Assets
Goodwill
The following table summarizes changes in the carrying amount of AbbVie’s goodwill.
(in millions)
Balance at December 31, 2011 $6,100
Currency translation and other adjustments 30
Balance at December 31, 2012 6,130
Additions 25
Currency translation and other adjustments 122
Balance at December 31, 2013 $6,277
Goodwill additions in 2013 related to product rights acquired during the second quarter. As of
December 31, 2013, there were no accumulated goodwill impairment losses. Future impairment tests
for goodwill will be performed annually in the third quarter, or earlier if indicators of impairment exist.
72