2.2.0.25falsefalse0202 - Disclosure - Acquisitionstruefalsefalse1falsefalseUSDfalsefalse1/1/2011 - 3/31/2011
USD ($)
USD ($) / shares
$Jan-01-2011_Mar-31-2011http://www.sec.gov/CIK0000318154duration2011-01-01T00:00:002011-03-31T00:00:00USDStandardhttp://www.xbrl.org/2003/iso4217USDiso42170SharesStandardhttp://www.xbrl.org/2003/instancesharesxbrli0USDEPSDividehttp://www.xbrl.org/2003/iso4217USDiso4217http://www.xbrl.org/2003/instancesharesxbrli0PureStandardhttp://www.xbrl.org/2003/instancepurexbrli0USDUSD$2true0amgn_AcquisitionsAbstractamgnfalsenadurationAcquisitions.falsefalsefalsefalsefalsefalsefalsefalsefalsefalse1falsefalsefalse00falsefalsefalsefalsefalseOtherxbrli:stringItemTypestringAcquisitions.falsefalse3false0us-gaap_BusinessCombinationDisclosureTextBlockus-gaaptruenadurationNo definition available.falsefalsefalsefalsefalsefalsefalsefalsefalsefalseverboselabel1falsefalsefalse00<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
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<td width="1%" nowrap="nowrap" align="left"><b>2.</b></td>
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<td><b>Acquisitions</b></td>
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<div align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent:8%">On March 4, 2011, we acquired all of the outstanding stock of BioVex Group, Inc. (BioVex), a
privately held biotechnology company developing treatments for cancer and the prevention of
infectious disease, including OncoVEX<sup style="font-size: 85%; vertical-align: text-top">GM-CSF</sup>, a novel oncolytic vaccine in phase 3
clinical development for the treatment of melanoma and head and neck cancer. This transaction,
which was accounted for as a business combination, provides us with an opportunity to expand our efforts to bring novel therapeutics to market. Upon its acquisition, BioVex became a
wholly owned subsidiary of Amgen.
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<div align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent:8%">The aggregate acquisition date consideration to acquire BioVex consisted of (in millions):
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<div style="margin-left:15px; text-indent:-15px">Cash paid to former shareholders of BioVex
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">407</td>
<td></td>
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<div style="margin-left:15px; text-indent:-15px">Fair value of contingent consideration obligations
</div></td>
<td> </td>
<td> </td>
<td align="right">190</td>
<td></td>
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<div style="margin-left:15px; text-indent:-15px"> 
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<div style="margin-left:30px; text-indent:-15px">Total consideration
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">597</td>
<td></td>
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<div align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent:8%">The cash consideration reflects a reduction in the purchase price related to changes in
working capital and excludes amounts that have been and may be paid to the employees of BioVex who
became Amgen employees upon the acquisition, including $7 million paid to settle unvested employee
options to acquire stock in BioVex which we expensed at the acquisition date.
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<div align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent:8%">In connection with this acquisition, we are obligated to make additional payments to the
former shareholders of BioVex of up to $575 million contingent upon the achievement of certain
regulatory and sales milestones with regard to OncoVEX<sup style="font-size: 85%; vertical-align: text-top">GM-CSF</sup>, including the filing of a
biologics license application with the U.S. Food and Drug Administration (FDA), the first commercial
sale in each of the United States and the European Union following receipt of marketing approval, which
includes use of the product in specified patient populations, and upon achieving specified levels of
sales. The estimated aggregate fair value of the contingent consideration obligations as of the
acquisition date of $190 million was determined using a combination of valuation techniques. The
contingent consideration obligations to make regulatory milestone payments were valued based on
assumptions regarding the probability of achieving the milestones and making the related payments
with such amounts discounted to present value. The contingent consideration obligations to make
sales milestone payments were valued based on assumptions regarding the probability of achieving specified
product sales thresholds to determine the required payments with such amounts discounted to present value.
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<div align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent:8%">We allocated the total consideration to the acquisition date fair values of assets acquired
and liabilities assumed as follows (in millions):
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<div style="margin-left:15px; text-indent:-15px">Intangible assets — IPR&D
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">675</td>
<td></td>
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<div style="margin-left:15px; text-indent:-15px">Goodwill
</div></td>
<td> </td>
<td> </td>
<td align="right">170</td>
<td></td>
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<div style="margin-left:15px; text-indent:-15px">Deferred tax liabilities
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(246</td>
<td nowrap="nowrap">)</td>
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<div style="margin-left:15px; text-indent:-15px">Other assets and liabilities acquired, net
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(2</td>
<td nowrap="nowrap">)</td>
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<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
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<div style="margin-left:30px; text-indent:-15px">Total consideration
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">597</td>
<td></td>
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<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
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<div align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent:8%">Intangible assets are composed of the estimated fair value of acquired IPR&D related to
OncoVEX<sup style="font-size: 85%; vertical-align: text-top">GM-CSF</sup>. The estimated fair value was determined using a probability-weighted
income approach, which discounts expected future cash flows to present value. The estimated net
cash flows were discounted to present value using a discount rate of 11%, which is based on the
estimated weighted average cost of capital for companies with characteristics similar to BioVex.
This is comparable to the estimated internal rate of return on BioVex operations and represents the
rate that market participants would use to value the intangible assets. The projected cash flows
from OncoVEX<sup style="font-size: 85%; vertical-align: text-top">GM-CSF </sup>were based on certain key assumptions, including estimates of future
revenue and expenses taking into account the stage of development of OncoVEX<sup style="font-size: 85%; vertical-align: text-top">GM-CSF </sup>at
the acquisition date, the time and resources needed to complete development and the probabilities
of obtaining marketing approval from the FDA and other regulatory agencies. IPR&D intangible assets
acquired in a business combination are considered to be indefinite-lived until the completion or
abandonment of the associated R&D efforts.
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<div align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent:8%">The excess of the acquisition date consideration over the fair values assigned to the assets
acquired and the liabilities assumed of $170 million was recorded as goodwill, which is not
deductible for tax purposes. Goodwill is primarily attributable to the deferred tax consequences of
acquired IPR&D recorded for financial statement purposes.
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<div align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent:8%">The amounts initially recorded for acquired IPR&D intangible assets and tax-related
liabilities are preliminary. The amounts will be finalized upon collection of the appropriate information with respect to the BioVex intercompany
arrangements related to the acquired IPR&D and the tax impacts thereof.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent:8%">BioVex is included in our condensed consolidated financial statements commencing on the
acquisition date. Pro forma supplemental condensed consolidated financial information assuming the
acquisition occurred on January 1, 2011 and 2010 is not provided as the impact would not be
material to our condensed consolidated results of operations.
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<!-- Begin Block Tagged NotefalsefalsefalsefalsefalseOtherus-types:textBlockItemTypestringDescription of a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. This element may be used as a single block of text to encapsulate the entire disclosure (including data and tables) regarding business combinations, including leverage buyout transactions (as applicable).Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 141
-Paragraph 51, 52
Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Emerging Issues Task Force (EITF)
-Number 88-16
Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 141R
-Paragraph 67-73
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-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 141R
-Paragraph F4
-Subparagraph e
-Appendix F
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