Revenue Recognition, Milestone Method, Potential Future Milestone payments

  
We made an upfront payment of $400 million to KKC that was recognized in R&D expense in the third quarter of 2021. Amgen and KKC will share equally the global development costs, except in Japan, and the U.S. commercialization costs. Outside the United States and Japan, any commercialization costs incurred by KKC will be reimbursed by Amgen. We may also be required to make milestone payments of up to $850 million contingent upon the achievement of certain regulatory events and commercial thresholds. We will also pay KKC significant double-digit royalties on global sales, except in Japan. Net costs due to KKC were not material during the year ended December 31, 2021.OtherIn addition to the collaborations discussed above, we have various other collaborations that are not individually significant to our business at this time. Pursuant to the terms of those agreements, we may be required to pay additional amounts or we may receive additional amounts upon the achievement of various development and commercial milestones that in the aggregate could be significant. We may also incur or have reimbursed to us significant R&D costs if a related product candidate were to advance to late-stage clinical trials. In addition, if any products related to these collaborations are approved for sale, we may be required to pay significant royalties or we may receive significant royalties on future sales. The payments of these amounts, however, are contingent upon the occurrence of various future events that have high degrees of uncertainty of occurrence.9. InvestmentsAvailable-for-sale investmentsThe amortized cost, gross unrealized gains, gross unrealized losses and fair values of interest-bearing securities, all of which are considered available-for-sale, by type of security were as follows (in millions):

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Types of securities as of December 31, 2021 |  | Amortizedcost |  | Grossunrealizedgains |  | Grossunrealizedlosses |  | Fairvalues |
| U.S. Treasury notes |  | $ | 47  |  |  | $ | —  |  |  | $ | —  |  |  | $ | 47  |  |
| U.S. Treasury bills |  | 1,400  |  |  | —  |  |  | —  |  |  | 1,400  |  |
|  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  |
| Money market mutual funds |  | 5,856  |  |  | —  |  |  | —  |  |  | 5,856  |  |
| Other short-term interest-bearing securities |  | 1  |  |  | —  |  |  | —  |  |  | 1  |  |
| Total available-for-sale investments |  | $ | 7,304  |  |  | $ | —  |  |  | $ | —  |  |  | $ | 7,304  |  |



|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Types of securities as of December 31, 2020 |  | Amortizedcost |  | Grossunrealizedgains |  | Grossunrealizedlosses |  | Fairvalues |
| U.S. Treasury notes |  | $ | 129  |  |  | $ | 1  |  |  | $ | —  |  |  | $ | 130  |  |
| U.S. Treasury bills |  | 4,948  |  |  | —  |  |  | —  |  |  | 4,948  |  |
|  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  |
| Money market mutual funds |  | 4,765  |  |  | —  |  |  | —  |  |  | 4,765  |  |
| Other short-term interest-bearing securities |  | 2  |  |  | —  |  |  | —  |  |  | 2  |  |
|  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  |
| Total available-for-sale investments |  | $ | 9,844  |  |  | $ | 1  |  |  | $ | —  |  |  | $ | 9,845  |  |

The fair values of available-for-sale investments by location in the Consolidated Balance Sheets were as follows (in millions):

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  | December 31, |
| Consolidated Balance Sheets locations |  | 2021 |  | 2020 |
| Cash and cash equivalents |  | $ | 7,256  |  |  | $ | 5,464  |  |
| Marketable securities |  | 48  |  |  | 4,381  |  |
|  |  |  |  |  |
| Total available-for-sale investments |  | $ | 7,304  |  |  | $ | 9,845  |  |

Cash and cash equivalents in the above table excludes bank account cash of $733 million and $802 million as of December 31, 2021 and 2020, respectively.F-26
