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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended March 31, 2024
COMMISSION FILE NUMBER 001-6351
ELI LILLY AND COMPANY
(Exact name of Registrant as specified in its charter)
Indiana 35-0470950
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Lilly Corporate Center, Indianapolis, Indiana 46285
(Address and zip code of principal executive offices)
Registrant's telephone number, including area code (317276-2000
Securities registered pursuant to Section 12(b) of the Exchange Act:
Title of Each ClassTrading SymbolsName of Each Exchange On Which Registered
Common Stock (no par value)LLYNew York Stock Exchange
7 1/8% Notes due 2025LLY25New York Stock Exchange
1.625% Notes due 2026LLY26New York Stock Exchange
2.125% Notes due 2030LLY30New York Stock Exchange
0.625% Notes due 2031LLY31New York Stock Exchange
0.500% Notes due 2033LLY33New York Stock Exchange
6.77% Notes due 2036LLY36New York Stock Exchange
1.625% Notes due 2043LLY43New York Stock Exchange
1.700% Notes due 2049LLY49ANew York Stock Exchange
1.125% Notes due 2051LLY51New York Stock Exchange
1.375% Notes due 2061LLY61New York Stock Exchange
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.
Yes No
Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files).
Yes No
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes No
The number of shares of common stock outstanding as of April 25, 2024:
Class Number of Shares Outstanding
Common 950,405,386 



Eli Lilly and Company
Form 10-Q
For the Quarter Ended March 31, 2024
Table of Contents
Page
2


Forward-Looking Statements
This Quarterly Report on Form 10-Q and our other publicly available documents include forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 (Exchange Act), and are subject to the safe harbor created thereby under the Private Securities Litigation Reform Act of 1995. Forward-looking statements include all statements that do not relate solely to historical or current facts, and generally can be identified by the use of words such as "may," "could," "aim," "seek," "believe," "will," "expect," "project," "estimate," "intend," "target," "anticipate," "plan," "continue," or similar expressions or future or conditional verbs.
Forward-looking statements inherently involve many risks and uncertainties that could cause actual results to differ from those expressed in forward-looking statements. Forward-looking statements are based on management's current plans and expectations, expressed in good faith and believed to have a reasonable basis. However, we can give no assurance that any expectation or belief will result or will be achieved or accomplished. Investors therefore should not place undue reliance on forward-looking statements. The following include some but not all of the factors that could cause actual results or events to differ from those anticipated:
the significant costs and uncertainties in the pharmaceutical research and development process, including with respect to the timing and process of obtaining regulatory approvals;
the impact and uncertain outcome of acquisitions and business development transactions and related costs;
intense competition affecting our products, pipeline, or industry;
market uptake of launched products and indications;
continued pricing pressures and the impact of actions of governmental and private payers affecting pricing of, reimbursement for, and patient access to pharmaceuticals, or reporting obligations related thereto;
safety or efficacy concerns associated with our products;
dependence on relatively few products or product classes for a significant percentage of our total revenue and an increasingly consolidated supply chain;
the expiration of intellectual property protection for certain of our products and competition from generic and biosimilar products, and risks from the proliferation of counterfeit or illegally compounded products;
our ability to protect and enforce patents and other intellectual property and changes in patent law or regulations related to data package exclusivity;
information technology system inadequacies, inadequate controls or procedures, security breaches, or operating failures;
unauthorized access, disclosure, misappropriation, or compromise of confidential information or other data stored in our information technology systems, networks, and facilities, or those of third parties with whom we share our data and violations of data protection laws or regulations;
issues with product supply and regulatory approvals stemming from manufacturing difficulties, disruptions, or shortages, including as a result of unpredictability and variability in demand, labor shortages, third-party performance, quality, cyber-attacks, or regulatory actions related to our and third-party facilities;
reliance on third-party relationships and outsourcing arrangements;
the use of artificial intelligence or other emerging technologies in various facets of our operations which may exacerbate competitive, regulatory, litigation, cybersecurity, and other risks;
the impact of global macroeconomic conditions, including uneven economic growth or downturns or uncertainty, trade disruptions, international tension, conflicts, regional dependencies, or other costs, uncertainties, and risks related to engaging in business globally;
devaluations in foreign currency exchange rates or changes in interest rates and inflation;
litigation, investigations, or other similar proceedings involving past, current, or future products or activities;
changes in tax law and regulation, tax rates, or events that differ from our assumptions related to tax positions;
regulatory changes and developments;
regulatory actions regarding our operations and products;
regulatory compliance problems or government investigations;
actual or perceived deviation from environmental-, social-, or governance-related requirements or expectations;
asset impairments and restructuring charges; and
changes in accounting and reporting standards.
3


More information on factors that could cause our actual results or events to differ from those expressed in forward looking statements is included from time to time in our reports filed with the Securities and Exchange Commission, including in our Annual Report on Form 10-K for the year ended December 31, 2023, particularly under Part I, Item 1A, "Risk Factors." Investors should understand that it is not possible to predict or identify all such factors and should not consider the risks described above and under Part I, Item 1A, "Risk Factors" of our Annual Report on Form 10-K to be a complete statement of all potential risks and uncertainties.
All forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q and are expressly qualified in their entirety by the cautionary statements included in or incorporated by reference into this Quarterly Report on Form 10-Q. Except as is required by law, we expressly disclaim any obligation to publicly release any revisions to forward-looking statements to reflect events after the date of this Quarterly Report on Form 10-Q.
4


PART I. Financial Information
Item 1. Financial Statements
Consolidated Condensed Statements of Operations
(Unaudited)
ELI LILLY AND COMPANY AND SUBSIDIARIES
(Dollars and shares in millions, except per-share data)
 
 Three Months Ended March 31,
 20242023
Revenue (Note 2)$8,768.0 $6,960.0 
Costs, expenses, and other:
Cost of sales1,673.5 1,626.7 
Research and development2,522.8 1,985.1 
Marketing, selling, and administrative1,952.2 1,749.2 
Acquired in-process research and development (Note 3)110.5 105.0 
Other–net, (income) expense (Note 11)(27.1)(35.7)
6,231.9 5,430.3 
Income before income taxes2,536.1 1,529.7 
Income taxes (Note 7)293.2 184.8 
Net income$2,242.9 $1,344.9 
Earnings per share:
Basic$2.49 $1.49 
Diluted$2.48 $1.49 
Shares used in calculation of earnings per share:
Basic900.8901.0
Diluted903.8903.3
See notes to consolidated condensed financial statements.
5


Consolidated Condensed Statements of Comprehensive Income
(Unaudited)
ELI LILLY AND COMPANY AND SUBSIDIARIES
(Dollars in millions)
 
Three Months Ended March 31,
20242023
Net income$2,242.9 $1,344.9 
Other comprehensive income, net of tax (Note 10)27.5 67.3 
Comprehensive income$2,270.4 $1,412.2 
See notes to consolidated condensed financial statements.


6


Consolidated Condensed Balance Sheets
ELI LILLY AND COMPANY AND SUBSIDIARIES
(Dollars in millions)
March 31, 2024December 31, 2023
Assets(Unaudited) 
Current Assets
Cash and cash equivalents (Note 6)$2,460.2 $2,818.6 
Short-term investments (Note 6)126.1 109.1 
Accounts receivable, net of allowances of $14.3 (2024) and $14.8 (2023)
7,885.6 9,090.5 
Other receivables2,127.9 2,245.7 
Inventories (Note 5)6,101.8 5,772.8 
Prepaid expenses6,348.6 5,540.8 
Other current assets138.6 149.5 
Total current assets25,188.8 25,727.0 
Investments (Note 6)3,086.9 3,052.2 
Goodwill4,939.6 4,939.7 
Other intangibles, net6,762.2 6,906.6 
Deferred tax assets5,633.9 5,477.3 
Property and equipment, net of accumulated depreciation of $11,235.0 (2024) and $11,099.3 (2023)
13,624.0 12,913.6 
Other noncurrent assets4,708.1 4,989.9 
Total assets$63,943.5 $64,006.3 
Liabilities and Equity
Current Liabilities
Short-term borrowings and current maturities of long-term debt$1,651.5 $6,904.5 
Accounts payable2,473.7 2,598.8 
Employee compensation844.2 1,650.4 
Sales rebates and discounts9,429.6 11,689.0 
Dividends payable 1,169.2 
Other current liabilities4,199.1 3,281.3 
Total current liabilities18,598.1 27,293.2 
Noncurrent Liabilities
Long-term debt24,559.9 18,320.8 
Accrued retirement benefits (Note 8)1,427.9 1,438.8 
Long-term income taxes payable4,189.4 3,849.2 
Other noncurrent liabilities2,270.8 2,240.6 
Total noncurrent liabilities32,448.0 25,849.4 
Commitments and Contingencies (Note 9)
Eli Lilly and Company Shareholders' Equity
Common stock594.2 593.6 
Additional paid-in capital7,009.5 7,250.4 
Retained earnings12,553.9 10,312.3 
Employee benefit trust(3,013.2)(3,013.2)
Accumulated other comprehensive loss (Note 10)(4,299.5)(4,327.0)
Cost of common stock in treasury(32.7)(44.2)
Total Eli Lilly and Company shareholders' equity12,812.2 10,771.9 
Noncontrolling interests85.2 91.8 
Total equity12,897.4 10,863.7 
Total liabilities and equity$63,943.5 $64,006.3 
See notes to consolidated condensed financial statements.
7


Consolidated Condensed Statements of Shareholders' Equity
(Unaudited)
ELI LILLY AND COMPANY AND SUBSIDIARIES
Equity of Eli Lilly and Company Shareholders

(Dollars in millions, except per-share data, and shares in thousands)
Common StockAdditional
Paid-in
Capital
Retained
Earnings
Employee Benefit TrustAccumulated Other Comprehensive Loss
Common Stock in Treasury(1)
Noncontrolling Interests
SharesAmountSharesAmount
Balance at January 1, 2023
950,632 $594.1 $6,921.4 $10,042.6 $(3,013.2)$(3,844.6)450 $(50.5)$125.6 
Net income1,344.9 10.0 
Other comprehensive income, net of tax67.3 
Retirement of treasury shares(2,299)(1.4)(748.6)(2,299)750.0 
Purchase of treasury shares2,299 (750.0)
Issuance of stock under employee stock plans, net1,336 0.8 (259.5)(48)8.8 
Stock-based compensation131.2 
Other 0.4 (3.3)(31.1)
Balance at March 31, 2023
949,669 $593.5 $6,793.1 $10,639.3 $(3,013.2)$(3,777.3)402 $(45.0)$104.5 
Balance at January 1, 2024
949,781 $593.6 $7,250.4 $10,312.3 $(3,013.2)$(4,327.0)402 $(44.2)$91.8 
Net income (loss)2,242.9 (5.1)
Other comprehensive income, net of tax27.5 
Issuance of stock under employee stock plans, net987 0.6 (400.3)(37)11.5 
Stock-based compensation159.4 
Other(1.3)(1.5)
Balance at March 31, 2024
950,768 $594.2 $7,009.5 $12,553.9 $(3,013.2)$(4,299.5)365 $(32.7)$85.2 
(1) As of March 31, 2024, there was $2.50 billion remaining under our $5.00 billion share repurchase program authorized in May 2021.
See notes to consolidated condensed financial statements.

8


Consolidated Condensed Statements of Cash Flows
(Unaudited)
ELI LILLY AND COMPANY AND SUBSIDIARIES
(Dollars in millions)
 
Three Months Ended March 31,
 20242023
Cash Flows from Operating Activities
Net income$2,242.9 $1,344.9 
Adjustments to Reconcile Net Income to Cash Flows from Operating Activities:
Depreciation and amortization400.6 362.3 
Change in deferred income taxes(279.0)(559.4)
Stock-based compensation expense159.4 131.2 
Net investment (gains) losses
(15.8)14.2 
Acquired in-process research and development110.5 105.0 
Other changes in operating assets and liabilities, net of acquisitions and divestitures(1,751.2)164.1 
Other operating activities, net298.6 168.3 
Net Cash Provided by Operating Activities1,166.0 1,730.6 
Cash Flows from Investing Activities
Purchases of property and equipment(986.3)(668.5)
Proceeds from sales and maturities of short-term investments41.4 61.5 
Purchases of short-term investments(24.4)(23.0)
Proceeds from sales of and distributions from noncurrent investments70.5 281.9 
Purchases of noncurrent investments(117.1)(146.0)
Purchases of in-process research and development(96.5)(235.0)
Other investing activities, net(65.2)40.3 
Net Cash Used for Investing Activities(1,177.6)(688.8)
Cash Flows from Financing Activities
Dividends paid(1,169.2)(1,017.2)
Net change in short-term borrowings(5,204.8)(1,498.0)
Proceeds from issuance of long-term debt6,452.5 3,958.5 
Purchases of common stock (750.0)
Other financing activities, net(389.8)(281.0)
Net Cash Provided by (Used for) Financing Activities
(311.3)412.3 
Effect of exchange rate changes on cash and cash equivalents(35.5)24.8 
Net increase (decrease) in cash and cash equivalents(358.4)1,478.9 
Cash and cash equivalents at January 12,818.6 2,067.0 
Cash and Cash Equivalents at March 31
$2,460.2 $3,545.9 
See notes to consolidated condensed financial statements.


9


Notes to Consolidated Condensed Financial Statements
(Tables present dollars in millions)
Note 1: Basis of Presentation and Implementation of New Financial Accounting Standards
We have prepared the accompanying unaudited consolidated condensed financial statements in accordance with the requirements of Form 10-Q and, therefore, they do not include all information and footnotes necessary for a fair presentation of financial position, results of operations, and cash flows in conformity with accounting principles generally accepted in the United States (GAAP). In our opinion, the consolidated condensed financial statements reflect all adjustments (including those that are normal and recurring) that are necessary for a fair presentation of the results of operations for the periods shown. In preparing financial statements in conformity with GAAP, we must make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses, and related disclosures at the date of the financial statements and during the reporting period. Actual results could differ from those estimates.
The information included in this Quarterly Report on Form 10-Q should be read in conjunction with our consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the year ended December 31, 2023. We issued our financial statements by filing them with the Securities and Exchange Commission and have evaluated subsequent events up to the time of the filing of this Quarterly Report on Form 10-Q.
All per-share amounts, unless otherwise noted in the footnotes, are presented on a diluted basis; that is, based on the weighted-average number of common shares outstanding plus the effect of incremental shares from our stock-based compensation programs.
We operate as a single operating segment engaged in the discovery, development, manufacturing, marketing, and sales of pharmaceutical products worldwide. A global research and development organization and a supply chain organization are responsible for the discovery, development, manufacturing, and supply of our products. Regional commercial organizations market, distribute, and sell the products. The business is also supported by global corporate staff functions. Our determination that we operate as a single segment is consistent with the financial information regularly reviewed by the chief operating decision maker for purposes of evaluating performance, allocating resources, setting incentive compensation targets, and planning and forecasting for future periods.
Implementation of New Financial Accounting Standards
Accounting Standards Update (ASU) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, establishes incremental disaggregation of income tax disclosures pertaining to the effective tax rate reconciliation and income taxes paid. This standard is effective for fiscal years beginning after December 15, 2024, and requires prospective application with the option to apply it retrospectively. Early adoption is permitted. We intend to adopt this standard in our Annual Report on Form 10-K for the year ending December 31, 2025. We are currently evaluating the potential impact of adopting this standard on our disclosures.
ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, requires disclosures about significant segment expenses and additional interim disclosure requirements. This standard also requires a single reportable segment to provide all disclosures required by Accounting Standards Codification Topic 280. This standard is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted, and the amendments should be applied retrospectively for all prior periods presented in the consolidated financial statements. We intend to adopt this standard in our Annual Report on Form 10-K for the year ending December 31, 2024. We are currently evaluating the potential impact of adopting this standard on our disclosures.
10


Note 2: Revenue
The following table summarizes our revenue recognized in our consolidated condensed statements of operations:
Three Months Ended March 31,
 20242023
Net product revenue$7,796.5 $6,238.2 
Collaboration and other revenue
971.5 721.8 
Revenue$8,768.0 $6,960.0 
We recognize revenue primarily from two different types of contracts, product sales to customers (net product revenue) and collaborations and other arrangements. Revenue recognized from collaborations and other arrangements includes our share of profits from the collaborations, as well as royalties, upfront and milestone payments we receive under these types of contracts. See Note 4 for additional information related to our collaborations and other arrangements. Collaboration and other revenue disclosed above includes the revenue from the Jardiance® and Trajenta® families of products resulting from our collaboration with Boehringer Ingelheim discussed in Note 4, as well as the sale of product rights. Substantially all of the remainder of collaboration and other revenue is related to contracts accounted for as contracts with customers. Collaboration and other revenue associated with intellectual property licensed in prior periods was not material during the three months ended March 31, 2024 and 2023.
Adjustments to Revenue
Adjustments to revenue recognized as a result of changes in estimates for our most significant United States (U.S.) sales returns, rebates, and discounts liability balances for products shipped in previous periods were 3 percent and less than 1 percent of U.S. revenue during the three months ended March 31, 2024 and 2023, respectively.
Contract Liabilities
Our contract liabilities result from arrangements where we have received payment in advance of performance under the contract and do not include sales returns, rebates, and discounts. Changes in contract liabilities are generally due to either receipt of additional advance payments or our performance under the contract.
The following table summarizes contract liability balances:
 March 31, 2024December 31, 2023
Contract liabilities$186.7 $193.6 
During the three months ended March 31, 2024 and 2023, revenue recognized from contract liabilities as of the beginning of the respective year was not material. Revenue expected to be recognized in the future from contract liabilities as the related performance obligations are satisfied is not expected to be material in any one year.

11


Disaggregation of Revenue
The following table summarizes revenue, including net product revenue and collaboration and other revenue, by product for the three months ended March 31, 2024 and 2023:
Three Months Ended March 31,
 20242023
U.S.
Outside U.S.Total
U.S.
Outside U.S.Total
Diabetes and obesity:
Mounjaro®
$1,520.4 $286.2 $1,806.5 $536.4 $32.0 $568.5 
Trulicity®
1,081.9 374.4 1,456.3 1,547.4 429.7 1,977.1 
Jardiance(1)
368.2 318.3 686.5 329.4 248.1 577.5 
Humalog® (2)
338.3 200.4 538.7 271.6 189.3 460.9 
Zepbound®
517.4  517.4    
Humulin®
153.1 53.1 206.2 198.8 53.2 252.0 
Basaglar® (3)
83.2 74.3 157.6 135.4 73.9 209.3 
Other diabetes and obesity27.5 96.3 123.8 56.0 89.2 145.1 
Total diabetes and obesity4,090.0 1,403.0 5,493.0 3,075.0 1,115.4 4,190.4 
Oncology:
Verzenio®
638.2 412.1 1,050.3 461.1 289.8 750.9 
Cyramza®
107.2 122.6 229.9 100.6 136.1 236.8 
Erbitux®
132.1 12.5 144.6 118.8 11.1 129.9 
Tyvyt®
 116.7 116.7  61.0 61.0 
Other oncology120.8 147.8 268.5 72.9 104.6 177.4 
Total oncology998.3 811.7 1,810.0 753.4 602.6 1,356.0 
Immunology:
Taltz®
347.1 257.0 604.1 312.2 214.8 527.0 
Olumiant®
46.3 171.0 217.4 42.3 186.5 228.9 
Other immunology3.8 8.8 12.5  22.0 22.0 
Total immunology397.2 436.8 834.0 354.5 423.3 777.8 
Neuroscience:
Emgality®
125.0 100.7 225.7 108.7 45.6 154.3 
Other neuroscience38.2 125.2 163.4 35.8 170.4 206.2 
Total neuroscience163.2 225.9 389.1 144.5 216.0 360.5 
Other:
Cialis®
5.9 133.4 139.3 7.6 92.7 100.3 
Forteo®
21.7 39.5 61.3 70.7 51.7 122.3 
Other18.1 23.3 41.3 30.5 22.2 52.8 
Total other45.7 196.2 241.9 108.7 166.6 275.3 
Revenue$5,694.4 $3,073.7 $8,768.0 $4,436.2 $2,523.9 $6,960.0 
Numbers may not add due to rounding.
(1) Jardiance revenue includes Glyxambi®, Synjardy®, and Trijardy® XR.
(2) Humalog revenue includes insulin lispro.
(3) Basaglar revenue includes Rezvoglar®.






12


The following table summarizes revenue by geographical area:
Three Months Ended March 31,
20242023
Revenue(1):
U.S.$5,694.4 $4,436.2 
Europe1,440.7 1,090.9 
China376.2 372.7 
Japan363.9 387.2 
Other foreign countries892.9 673.1 
Revenue$8,768.0 $6,960.0 
Numbers may not add due to rounding.
(1) Revenue is attributed to the countries based on the location of the customer or other party.

Note 3: Acquisitions
We engage in various forms of business development activities to enhance or refine our product pipeline, including acquisitions, collaborations, investments, and licensing arrangements. In connection with these arrangements, our partners may be entitled to future royalties and/or commercial milestones based on sales should products be approved for commercialization and/or milestones based on the successful progress of compounds through the development process. We account for each arrangement as either a business combination or an asset acquisition in accordance with GAAP.
Business Combination
POINT Acquisition
Overview of Transaction
In December 2023, we acquired all shares of POINT Biopharma Global Inc. (POINT) for a purchase price of $12.50 per share in cash (or an aggregate of $1.04 billion, net of cash acquired). POINT has capabilities in radiopharmaceutical discovery, development, and manufacturing efforts, as well as clinical and pre-clinical radioligand therapies in development for the treatment of cancer.
Since this acquisition met the definition of a business under GAAP, the assets acquired and liabilities assumed were recorded at their respective fair values as of the acquisition date in our consolidated condensed financial statements. The determination of estimated fair value required management to make significant estimates and assumptions. The excess of the purchase price over the fair value of the acquired net assets was recorded as goodwill. The results of operations of this acquisition is included in our consolidated condensed financial statements from the date of acquisition.
Assets Acquired and Liabilities Assumed
Our access to POINT information was limited prior to the acquisition. As a consequence, we are in the process of determining fair values and tax bases of a significant portion of the assets acquired and liabilities assumed, including the identification and valuation of intangible assets and tax exposures. The final determination of these amounts will be completed as soon as possible but no later than one year from the acquisition date. The final determination may result in asset and liability fair values and tax bases that differ from the preliminary estimates and require changes to the preliminary amounts recognized.

13


The following table summarizes the preliminary amounts recognized for assets acquired and liabilities assumed as of the acquisition date:
Estimated Fair Value at December 27, 2023
Cash$302.7 
Acquired in-process research and development (IPR&D)
196.0
Goodwill (1)
859.1
Other assets and liabilities, net(19.3)
Acquisition date fair value of consideration transferred 1,338.5 
Less:
Cash acquired(302.7)
Cash paid, net of cash acquired$1,035.8 
(1) The goodwill recognized from this acquisition is attributable primarily to the radiopharmaceutical discovery, development, and manufacturing capabilities and the assembled workforce for POINT, which is not deductible for tax purposes.
The results of operations attributable to POINT for the three months ended March 31, 2024 were not material.
Pro forma information has not been included as this acquisition did not have a material impact on our consolidated condensed statements of operations for the three months ended March 31, 2023.
Asset Acquisitions
Upon each asset acquisition, the cost allocated to acquired IPR&D was immediately expensed as acquired IPR&D if the compound had no alternative future use. Milestone payment obligations incurred prior to regulatory approval of the compound were expensed as acquired IPR&D when the event triggering an obligation to pay the milestone occurred. We recognized acquired IPR&D charges of $110.5 million and $105.0 million for the three months ended March 31, 2024 and 2023, respectively.

Note 4: Collaborations and Other Arrangements
We often enter into collaborative and other arrangements to develop and commercialize drug candidates. See Note 2 for a discussion of our recognition of revenue from our collaborations and other arrangements.
Collaborative activities may include research and development, marketing and selling, manufacturing, and distribution for which we may receive from or pay to the collaboration partner expense reimbursements. Operating expenses for costs incurred pursuant to these arrangements are reported in their respective expense line item, net of any payments due to or reimbursements due from our collaboration partners, with such reimbursements being recognized at the time the party becomes obligated to pay. Each arrangement is unique in nature, and our more significant arrangements are discussed below.
Boehringer Ingelheim Diabetes Collaboration
We and Boehringer Ingelheim have a global agreement to jointly develop and commercialize a portfolio of diabetes compounds. Currently included in the collaboration are Boehringer Ingelheim's oral diabetes products: Jardiance, Glyxambi, Synjardy, Trijardy XR, Trajenta, and Jentadueto® as well as our basal insulins, Basaglar and Rezvoglar. Glyxambi, Synjardy, and Trijardy XR are included in the Jardiance product family. Jentadueto is included in the Trajenta product family. Rezvoglar is included in the Basaglar product family.
In connection with the regulatory approvals of Jardiance, Trajenta, and Basaglar in the U.S., Europe, and Japan, milestone payments made for Jardiance and Trajenta were capitalized as intangible assets and are being amortized to cost of sales, and milestone payments received for Basaglar were recorded as contract liabilities and are being amortized to collaboration and other revenue. Net milestones capitalized with respect to Jardiance and Trajenta and net milestones deferred with respect to Basaglar are not material.
14


For the Jardiance product family, we and Boehringer Ingelheim generally share equally the ongoing development and commercialization costs in the most significant markets, and we record our portion of the development and commercialization costs as research and development expense and marketing, selling, and administrative expense, respectively. We receive a royalty on net sales of Boehringer Ingelheim's products in the most significant markets and recognize the royalty as collaboration and other revenue. Boehringer Ingelheim is entitled to potential performance payments depending on the net sales of the Jardiance product family; therefore, our reported revenue for Jardiance may be reduced by any potential performance payments we make related to this product family. The royalty received by us related to the Jardiance product family may also be increased or decreased depending on whether net sales for this product family exceed or fall below certain thresholds. We pay to Boehringer Ingelheim a royalty on net sales for the Basaglar product family in the U.S. We record our sales of the Basaglar product family to third parties as net product revenue with the royalty payments made to Boehringer Ingelheim recorded as cost of sales. The following table summarizes our revenue recognized:
Three Months Ended March 31,
20242023
Jardiance$686.5 $577.5 
Basaglar157.6 209.3 
Trajenta88.9 85.8 
Olumiant
We have a worldwide license and collaboration agreement with Incyte Corporation (Incyte), which provides us the development and commercialization rights to baricitinib, which is branded and trademarked as Olumiant, and certain follow-on compounds, for the treatment of inflammatory and autoimmune diseases and COVID-19. Incyte has the right to receive tiered, double digit royalty payments on worldwide net sales with rates ranging up to 20 percent. Incyte has the right to receive an additional royalty ranging up to the low teens on worldwide net sales for the treatment of COVID-19 that exceed a specified aggregate worldwide net sales threshold. The agreement calls for payments by us to Incyte associated with certain development, success-based regulatory, and sales-based milestones.
In connection with the regulatory approvals of Olumiant in the U.S., Europe, and Japan, as well as achievement of a sales-based milestone, milestone payments were capitalized as intangible assets and are being amortized to cost of sales through the term of the collaboration. Net milestones capitalized are not material. As of March 31, 2024, Incyte is eligible to receive up to $100.0 million of additional payments from us in potential sales-based milestones.
We record our sales of Olumiant to third parties as net product revenue with the royalty payments made to Incyte recorded as cost of sales. The following table summarizes our net product revenue recognized:
Three Months Ended March 31,
20242023
Olumiant$217.4 $228.9 
15


Tyvyt
We have a collaboration agreement with Innovent Biologics, Inc. (Innovent) to jointly develop and commercialize sintilimab injection in China, where it is branded and trademarked as Tyvyt. We record our sales of Tyvyt to third parties as net product revenue, with payments made to Innovent for its portion of the gross margin reported as cost of sales. We report as collaboration and other revenue our portion of the gross margin for Tyvyt sales made by Innovent to third parties. The following table summarizes our revenue recognized:
Three Months Ended March 31,
20242023
Tyvyt$116.7 $61.0 
Ebglyss®
We have a license agreement with F. Hoffmann-La Roche Ltd and Genentech, Inc. (collectively, Roche), which provides us the worldwide development and commercialization rights to lebrikizumab, which is branded and trademarked as Ebglyss. Roche receives tiered royalty payments on worldwide net sales ranging in percentages from high single digits to high teens, which we recognize as cost of sales. As of March 31, 2024, Roche is eligible to receive additional payments from us, including up to $115.0 million contingent upon the achievement of additional success-based regulatory milestones and up to $1.03 billion in potential sales-based milestones. During the three months ended March 31, 2024 and 2023, milestone payments to Roche were not material.
We have a license agreement with Almirall, S.A. (Almirall), under which Almirall licensed the rights to develop and commercialize lebrikizumab for the treatment or prevention of dermatology indications, including, but not limited to, atopic dermatitis in Europe. We receive tiered royalty payments on net sales in Europe ranging in percentages from low double digits to low twenties, which we recognize as collaboration and other revenue. During the three months ended March 31, 2024 and 2023, collaboration and other revenue recognized under this license agreement was not material. As of March 31, 2024, we are eligible to receive additional payments up to $1.25 billion in a series of sales-based milestones.
Orforglipron
We have a license agreement with Chugai Pharmaceutical Co., Ltd (Chugai), which provides us with the worldwide development and commercialization rights to orforglipron. Chugai has the right to receive tiered royalty payments on future worldwide net sales from mid single digits to low teens if the product is successfully commercialized. As of March 31, 2024, Chugai is eligible to receive up to $140.0 million contingent upon the achievement of success-based regulatory milestones and up to $250.0 million in a series of sales-based milestones, contingent upon the commercial success of orforglipron.

Note 5: Inventories
The following table summarizes components of inventories:
March 31, 2024December 31, 2023
Finished products$699.6 $791.7 
Work in process3,611.9 3,248.6 
Raw materials and supplies1,693.8 1,630.1 
Total (approximates replacement cost)6,005.3 5,670.4 
Increase to last-in, first-out (LIFO) cost
96.5 102.4 
Inventories$6,101.8 $5,772.8 

16


Note 6: Financial Instruments
Investments in Equity and Debt Securities
Our equity investments are accounted for using three different methods depending on the type of equity investment:
Investments in companies over which we have significant influence but not a controlling interest are accounted for using the equity method, with our share of earnings or losses reported in other-net, (income) expense.
For equity investments that do not have readily determinable fair values, we measure these investments at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for the identical or similar investment of the same issuer. Any change in recorded value is recorded in other-net, (income) expense.
Our public equity investments are measured and carried at fair value. Any change in fair value is recognized in other-net, (income) expense.
We adjust our equity investments without readily determinable fair values based upon changes in the equity instruments' values resulting from observable price changes in orderly transactions for an identical or similar investment of the same issuer. Downward adjustments resulting from an impairment are recorded based upon impairment considerations, including the financial condition and near-term prospects of the issuer, general market conditions, and industry specific factors. Adjustments recorded for the three months ended March 31, 2024 and 2023 were not material.
The net gains (losses) recognized in our consolidated condensed statements of operations for equity securities were $16.0 million and $(13.7) million for the three months ended March 31, 2024 and 2023, respectively. The net gains (losses) recognized for the three months ended March 31, 2024 and 2023 on equity securities sold during the respective periods were not material.
As of March 31, 2024, we had approximately $880 million of unfunded commitments to invest in venture capital funds, which we anticipate will be paid over a period of up to 10 years.
We record our available-for-sale debt securities at fair value, with changes in fair value reported as a component of accumulated other comprehensive income (loss). We periodically assess our investment in available-for-sale securities for impairment losses and credit losses. The amount of credit losses are determined by comparing the difference between the present value of future cash flows expected to be collected on these securities and the amortized cost. Factors considered in assessing credit losses include the position in the capital structure, vintage and amount of collateral, delinquency rates, current credit support, and geographic concentration. Impairment and credit losses related to available-for-sale securities were not material for the three months ended March 31, 2024 and 2023.
The table below summarizes the contractual maturities of our investments in debt securities measured at fair value as of March 31, 2024:
 Maturities by Period
TotalLess Than
1 Year
1-5
Years
6-10
Years
More Than
10 Years
Fair value of debt securities$650.2 $83.7 $222.4 $98.3 $245.8 
A summary of the amount of unrealized gains and losses in accumulated other comprehensive loss and the fair value of available-for-sale securities in an unrealized gain or loss position follows: 
March 31, 2024December 31, 2023
Unrealized gross gains$1.9 $3.4 
Unrealized gross losses42.5 37.9 
Fair value of securities in an unrealized gain position111.8 159.2 
Fair value of securities in an unrealized loss position477.9 452.0 
17


As of March 31, 2024, the available-for-sale securities in an unrealized loss position include primarily fixed-rate debt securities of varying maturities, which are sensitive to changes in the yield curve and other market conditions. Substantially all of the fixed-rate debt securities in a loss position are investment-grade debt securities. As of March 31, 2024, we do not intend to sell, and it is not more likely than not that we will be required to sell, the securities in a loss position before the market values recover or the underlying cash flows have been received, and there is no indication of a material default on interest or principal payments for our debt securities.
Realized gains and losses on sales of available-for-sale investments are computed based upon specific identification of the initial cost adjusted for any other-than-temporary declines in fair value that were recorded in earnings and were not material for the three months ended March 31, 2024 and 2023. Proceeds from sales of available-for-sale investments were $24.4 million and $27.6 million for the three months ended March 31, 2024 and 2023, respectively.
18


Fair Value of Investments
The following table summarizes certain fair value information at March 31, 2024 and December 31, 2023 for investment assets measured at fair value on a recurring basis, as well as the carrying amount and amortized cost of certain other investments: 
   Fair Value Measurements Using 
Carrying
Amount
Cost(1)
Quoted Prices in Active Markets for Identical Assets
(Level 1)
Significant Other
Observable Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Fair
Value
March 31, 2024
Cash equivalents(2)
$1,321.1 $1,321.1 $1,308.4 $12.7 $ $1,321.1 
Short-term investments:
U.S. government and agency securities$30.6 $30.8 $30.6 $ $ $30.6 
Corporate debt securities51.0 51.1  51.0  51.0 
Asset-backed securities2.1 2.2  2.1  2.1 
Other securities42.4 42.4  9.2 33.2 42.4 
Short-term investments$126.1 
Noncurrent investments:
U.S. government and agency securities$139.0 $154.0 $139.0 $ $ $139.0 
Corporate debt securities217.3 231.7  217.3  217.3 
Mortgage-backed securities155.7 167.4  155.7  155.7 
Asset-backed securities54.6 55.6  54.6  54.6 
Other securities184.5 86.4  6.2 178.3 184.5 
Marketable equity securities700.4 490.8 700.4   700.4 
Equity investments without readily determinable fair values(3)
619.6 
Equity method investments(3)
1,015.8 
Noncurrent investments$3,086.9 
December 31, 2023
Cash equivalents(2)
$1,088.4 $1,088.4 $1,079.3 $9.1 $ $1,088.4 
Short-term investments:
U.S. government and agency securities$32.1 $32.3 $32.1 $ $ $32.1 
Corporate debt securities52.0 52.1  52.0  52.0 
Other securities25.0 25.0  13.6 11.4 25.0 
Short-term investments$109.1 
Noncurrent investments:
U.S. government and agency securities$148.1 $161.0 $148.1 $ $ $148.1 
Corporate debt securities214.3 226.6  214.3  214.3 
Mortgage-backed securities157.3 167.1  157.3  157.3 
Asset-backed securities53.5 54.4  53.5  53.5 
Other securities197.4 100.2  23.5 173.9 197.4 
Marketable equity securities711.3 493.2 711.3   711.3 
Equity investments without readily determinable fair values(3)
608.0 
Equity method investments(3)
962.3 
Noncurrent investments$3,052.2 
(1) For available-for-sale debt securities, amounts disclosed represent the securities' amortized cost.
(2) We consider all highly liquid investments with a maturity of three months or less from the date of purchase to be cash equivalents. The cost of these investments approximates fair value.
(3) Fair value disclosures are not applicable for equity method investments and investments accounted for under the measurement alternative for equity investments.
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We determine our Level 1 and Level 2 fair value measurements based on a market approach using quoted market values, significant other observable inputs for identical or comparable assets or liabilities, or discounted cash flow analyses. Level 3 fair value measurements for other investment securities are determined using unobservable inputs, including the investments' cost adjusted for impairments and price changes from orderly transactions. Fair values are not readily available for certain equity investments measured under the measurement alternative.
Debt
In February 2024, we issued $1.00 billion of 4.500 percent fixed-rate notes due in 2027, $1.00 billion of 4.500 percent fixed-rate notes due in 2029, $1.50 billion of 4.700 percent fixed-rate notes due in 2034, $1.50 billion of 5.000 percent fixed-rate notes due in 2054, and $1.50 billion of 5.100 percent fixed-rate notes due in 2064, all with interest to be paid semi-annually. We used, or will be using, the net cash proceeds from the offering of $6.45 billion for general business purposes, including the repayment of outstanding commercial paper, repayment of current maturities of long-term debt, and repayment of the $750.0 million of 5.000 percent fixed-rate notes due in 2026, which became callable at par beginning February 27, 2024.
In February 2023, we issued $750.0 million of 5.000 percent fixed-rate notes due in 2026, which are callable at par after one year, $1.00 billion of 4.700 percent fixed-rate notes due in 2033, $1.25 billion of 4.875 percent fixed-rate notes due in 2053, and $1.00 billion of 4.950 percent fixed-rate notes due in 2063, all with interest to be paid semi-annually. We used the net cash proceeds from the offering of $3.96 billion for general business purposes, including the repayment of outstanding commercial paper.
Fair Value of Debt
The following table summarizes certain fair value information at March 31, 2024 and December 31, 2023 for our short-term and long-term debt:
  Fair Value Measurements Using 
Carrying
Amount
Quoted Prices in Active Markets for Identical Assets
(Level 1)
Significant
Other Observable Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Fair
Value
Short-term commercial paper borrowings
March 31, 2024$(984.6)$ $(982.8)$ $(982.8)
December 31, 2023(6,189.4) (6,166.4) (6,166.4)
Long-term debt, including current portion
March 31, 2024(25,226.8) (22,961.3) (22,961.3)
December 31, 2023(19,035.9) (17,221.7) (17,221.7)
Risk Management and Related Financial Instruments
Financial instruments that potentially subject us to credit risk consist principally of trade receivables and interest-bearing investments. Wholesale distributors of life science products account for a substantial portion of our trade receivables; collateral is generally not required. We seek to mitigate the risk associated with this concentration through our ongoing credit-review procedures and insurance. The majority of our cash is held by a few major financial institutions that have been identified as Global Systemically Important Banks (G-SIBs) by the Financial Stability Board. G-SIBs are subject to rigorous regulatory testing and oversight and must meet certain capital requirements. We monitor our exposures with these institutions and do not expect any of these institutions to fail to meet their obligations. In accordance with documented corporate risk-management policies, we monitor the amount of credit exposure to any one financial institution or corporate issuer based on credit rating of our counterparty. We are exposed to credit-related losses in the event of nonperformance by counterparties to risk-management instruments but do not expect significant counterparties to fail to meet their obligations given their investment grade credit ratings.
We have entered into accounts receivable factoring agreements with financial institutions to sell certain of our non-U.S. accounts receivable. These transactions are accounted for as sales and result in a reduction in accounts receivable because the agreements transfer effective control over, and risk related to, the receivables to the buyers. We derecognized $399.0 million and $431.9 million of accounts receivable as of March 31, 2024 and December 31, 2023, respectively, under these factoring arrangements. The costs of factoring such accounts receivable as well as estimated credit losses were not material for the three months ended March 31, 2024 and 2023.
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Our derivative activities are initiated within the guidelines of documented corporate risk-management policies and are intended to offset losses and gains on the assets, liabilities, and transactions being hedged. Management reviews the correlation and effectiveness of our derivatives on a quarterly basis.
For derivative instruments that are designated and qualify as fair value hedges, the derivative instrument is marked to market, with gains and losses recognized currently in income to offset the respective losses and gains recognized on the underlying exposure. For derivative instruments that are designated and qualify as cash flow hedges, gains and losses are reported as a component of accumulated other comprehensive income (loss) (see Note 10) and reclassified into earnings in the same period the hedged transaction affects earnings. For derivative and non-derivative instruments that are designated and qualify as net investment hedges, the foreign currency translation gains or losses due to spot rate fluctuations are reported as a component of accumulated other comprehensive income (loss) (see Note 10). Derivative contracts that are not designated as hedging instruments are recorded at fair value with the gain or loss recognized in earnings during the period of change.
We may enter into foreign currency forward or option contracts to reduce the effect of fluctuating currency exchange rates (primarily the euro, Chinese yuan, and Japanese yen). Foreign currency derivatives used for hedging are put in place using the same or like currencies and duration as the underlying exposures. Forward and option contracts are principally used to manage exposures arising from subsidiary trade and loan payables and receivables denominated in foreign currencies. These contracts are recorded at fair value with the gain or loss recognized in other–net, (income) expense. Forward contracts generally have maturities not exceeding 12 months. At March 31, 2024, we had outstanding foreign currency forward commitments as follows, all of which have settlement dates within 180 days:
March 31, 2024
PurchaseSell
CurrencyAmount
(in millions)
CurrencyAmount
(in millions)
Euro7,557.6U.S. dollars8,223.3
U.S. dollars3,538.5Euro3,239.6
British pounds193.9U.S. dollars248.7
U.S. dollars167.1Japanese yen24,690.1
Foreign currency exchange risk is also managed through the use of foreign currency debt, cross-currency interest rate swaps, and foreign currency forward contracts. Our foreign currency-denominated notes had carrying amounts of $6.91 billion and $7.14 billion as of March 31, 2024 and December 31, 2023, respectively, of which $5.54 billion and $5.67 billion have been designated as, and are effective as, economic hedges of net investments in certain of our foreign operations as of March 31, 2024 and December 31, 2023, respectively. At March 31, 2024, we had outstanding cross-currency swaps with notional amounts of $728.6 million swapping U.S. dollars to euro and $1.00 billion swapping Swiss francs to U.S. dollars which have settlement dates ranging through 2028. Our cross-currency interest rate swaps, for which a significant amount convert a portion of our U.S. dollar-denominated fixed-rate debt to foreign-denominated fixed-rate debt, have also been designated as, and are effective as, economic hedges of net investments. At March 31, 2024, we had outstanding foreign currency forward contracts to sell 3.70 billion euro and to sell 2.70 billion Chinese yuan with settlement dates ranging through 2025, which have been designated as, and are effective as, economic hedges of net investments.
In the normal course of business, our operations are exposed to fluctuations in interest rates which can vary the costs of financing, investing, and operating. We seek to address a portion of these risks through a controlled program of risk management that includes the use of derivative financial instruments. The objective of controlling these risks is to limit the impact of fluctuations in interest rates on earnings. Our primary interest-rate risk exposure results from changes in short-term U.S. dollar interest rates. In an effort to manage interest-rate exposures, we strive to achieve an acceptable balance between fixed- and floating-rate debt and investment positions and may enter into interest rate swaps or collars to help maintain that balance.
Interest rate swaps or collars that convert our fixed-rate debt to a floating rate are designated as fair value hedges of the underlying instruments. Interest rate swaps or collars that convert floating-rate debt to a fixed rate are designated as cash flow hedges. Interest expense on the debt is adjusted to include the payments made or received under the swap agreements. Cash proceeds from or payments to counterparties resulting from the termination of interest rate swaps are classified as operating activities in our consolidated condensed statements of cash flows. At March 31, 2024, all of our total long-term debt is at a fixed rate. We have converted approximately 8 percent of our long-term fixed-rate notes to floating rates through the use of interest rate swaps.
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We also may enter into forward-starting interest rate swaps and treasury locks, which we designate as cash flow hedges, as part of any anticipated future debt issuances in order to reduce the risk of cash flow volatility from future changes in interest rates. The change in fair value of these instruments is recorded as part of other comprehensive income (loss) (see Note 10) and, upon completion of a debt issuance and termination of the instrument, is amortized to interest expense over the life of the underlying debt. Cash proceeds or payments from the termination of these instruments are classified as operating activities in our consolidated condensed statements of cash flows.
The Effect of Risk-Management Instruments on the Consolidated Condensed Statements of Operations
The following effects of risk-management instruments were recognized in other–net, (income) expense:
Three Months Ended March 31,
20242023
Fair value hedges:
Effect from hedged fixed-rate debt$(16.7)$35.3 
Effect from interest rate contracts16.7 (35.3)
Cash flow hedges:
Effective portion of losses on interest rate contracts reclassified from accumulated other comprehensive loss2.4 3.8 
Cross-currency interest rate swaps84.0 (12.9)
Net (gains) losses on foreign currency exchange contracts not designated as hedging instruments2.4 (52.8)
Total$88.8 $(61.9)
During the three months ended March 31, 2024 and 2023, the amortization of losses related to the portion of our risk management hedging instruments, fair value hedges, and cash flow hedges that was excluded from the assessment of effectiveness was not material.

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The Effect of Risk-Management Instruments on Other Comprehensive Income (Loss)
The effective portion of risk-management instruments that was recognized in other comprehensive income (loss) is as follows:
Three Months Ended March 31,
20242023
Net investment hedges:
Foreign currency-denominated notes$131.8 $(131.8)
Cross-currency interest rate swaps17.0 (11.8)
Foreign currency forward contracts99.1 (46.1)
Cash flow hedges:
Forward-starting interest rate swaps77.4 23.8 
Cross-currency interest rate swaps13.7 (7.8)
During the next 12 months, we expect to reclassify $5.4 million of pretax net losses on cash flow hedges from accumulated other comprehensive loss to other–net, (income) expense. During the three months ended March 31, 2024 and 2023, the amounts excluded from the assessment of hedge effectiveness recognized in other comprehensive income (loss) were not material.
Fair Value of Risk-Management Instruments
The following table summarizes certain fair value information at March 31, 2024 and December 31, 2023 for risk management assets and liabilities measured at fair value on a recurring basis:
  Fair Value Measurements Using 
Carrying
Amount
Quoted Prices in Active Markets for Identical Assets
(Level 1)
Significant
Other Observable Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Fair
Value
March 31, 2024
Risk-management instruments:
Interest rate contracts designated as fair value hedges:
Other noncurrent liabilities$(119.5)$ $(119.5)$ $(119.5)