Overview
Notes to the Consolidated Financial Statements of the Bayer Group
Bayer Links
Investor Relations
17. Goodwill and other intangible assets
Changes in intangible assets in 2009 were as follows:
| Changes in Intangible Assets | [Table 4.42] | |||||||
|---|---|---|---|---|---|---|---|---|
Acquired goodwill | Patents | Trade- marks | Marketing and distribution rights | Production rights | R&D projects | Other rights and advance payments | Total | |
| € million | € million | € million | € million | € million | € million | € million | € million | |
| Cost of acquisition or generation, December 31, 2008 | 8,647 | 10,265 | 3,985 | 1,004 | 2,142 | 1,359 | 1,925 | 29,327 |
| Changes in scope of consolidation | - | - | - | - | - | - | 1 | 1 |
| Acquisitions | 177 | 1 | 3 | 2 | 34 | 4 | 229 | 450 |
| Capital expenditures | - | 14 | - | 13 | 6 | 162 | 132 | 327 |
| Retirements | - | (5) | - | (2) | - | (172) | (41) | (220) |
| Transfers | - | 201 | 2 | (53) | 7 | (201) | 44 | - |
| Transfers (IFRS 5) | (92) | (225) | - | - | (20) | (5) | (2) | (344) |
| Changes from revaluation (IFRS 3) | - | - | - | - | - | - | - | - |
| Exchange differences | (28) | (11) | (24) | 2 | - | (9) | 8 | (62) |
| December 31, 2009 | 8,704 | 10,240 | 3,966 | 966 | 2,169 | 1,138 | 2,296 | 29,479 |
| Accumulated amortization and write-downs, December 31, 2008 | - | 2,766 | 833 | 386 | 1,166 | 173 | 1,405 | 6,729 |
| Changes in scope of consolidation | - | - | - | - | - | - | - | - |
| Retirements | - | (5) | - | - | - | (172) | (39) | (216) |
| Amortization and write-downs in 2009 | - | 938 | 171 | 121 | 151 | - | 156 | 1,537 |
| Amortization | - | 938 | 167 | 88 | 151 | - | 132 | 1,476 |
| Write-downs | - | - | 4 | 33 | - | - | 24 | 61 |
| Write-backs | - | - | - | - | - | - | - | - |
| Transfers | - | (5) | 4 | (53) | - | - | 54 | - |
| Transfers (IFRS 5) | (75) | - | - | (2) | - | - | (77) | |
| Exchange differences | - | (4) | (4) | 1 | - | - | (33) | (40) |
| December 31, 2009 | - | 3,615 | 1,004 | 455 | 1,315 | 1 | 1,543 | 7,933 |
| Carrying amounts, December 31, 2009 | 8,704 | 6,625 | 2,962 | 511 | 854 | 1,137 | 753 | 21,546 |
| Carrying amounts, December 31, 2008 | 8,647 | 7,499 | 3,152 | 618 | 976 | 1,186 | 520 | 22,598 |
Other rights and advance payments include internally generated software. Costs of €56 million for internally generated software incurred during the application development phase were capitalized in 2009 (2008: €20 million). The carrying amount of internally generated software was €79 million (2008: €31 million).
The research and development projects include €94 million relating to the active ingredient alemtuzumab for the treatment of multiple sclerosis (MS). Bayer has returned the worldwide distribution and development rights for alemtuzumab to Genzyme. Bayer is continuing to co-develop this drug. If it is approved in the MS indication, Bayer will have global co-promotion rights and will be entitled to royalties and revenue-based milestone payments.
Write-downs of intangible assets totaled €61 million. These were mainly attributable to the following two events. In light of the current development status and a market appraisal, the blood glucose monitoring device COMBOMETER is not expected to be launched before 2015. A write-down of €20 million was made accordingly in the Consumer Health segment. Also, the worldwide marketing rights for the recombinant human thrombin Recothrom® as an aid to hemostasis in surgery were returned to the cooperation partner except in Canada. The respective intangible asset of the Pharmaceuticals segment was written down by €32 million.
Details of acquisitions and divestitures are contained in Notes [6.2] and [6.3]. Details of the impairment testing procedure for goodwill are given in Note [4].
Changes in intangible assets in 2008 were as follows:
| Changes in Intangible Assets (Previous Year) | [Table 4.43] | |||||||
|---|---|---|---|---|---|---|---|---|
Acquired goodwill | Patents | Trade- marks | Marketing and distribution rights | Production rights | R&D projects | Other rights and advance payments | Total | |
| € million | € million | € million | € million | € million | € million | € million | € million | |
| Cost of acquisition or generation, December 31, 2007 | 8,215 | 10,008 | 3,726 | 819 | 2,012 | 1,345 | 1,888 | 28,013 |
| Changes in scope of consolidation | 1 | - | - | - | 3 | - | - | 4 |
| Acquisitions | 380 | 222 | 232 | 33 | 9 | 67 | 18 | 961 |
| Capital expenditures | 4 | 28 | - | 94 | - | 52 | 118 | 296 |
| Retirements | - | (7) | - | - | - | - | (93) | (100) |
| Transfers | - | - | (7) | 47 | 123 | (120) | (40) | 3 |
| Transfers (IFRS 5) | - | - | - | - | - | - | - | - |
| Changes from revaluation (IFRS 3) | - | - | - | 5 | 2 | - | - | 7 |
| Exchange differences | 47 | 14 | 34 | 6 | (7) | 15 | 34 | 143 |
| December 31, 2008 | 8,647 | 10,265 | 3,985 | 1,004 | 2,142 | 1,359 | 1,925 | 29,327 |
| Accumulated amortization and write-downs, December 31, 2007 | 1,811 | 662 | 295 | 987 | 155 | 1,333 | 5,243 | |
| Changes in scope of consolidation | - | - | - | - | - | - | - | |
| Retirements | - | (6) | - | - | - | - | (86) | (92) |
| Amortization and write-downs in 2008 | - | 962 | 173 | 87 | 174 | 20 | 134 | 1,550 |
| Amortization | - | 930 | 161 | 87 | 174 | - | 134 | 1,486 |
| Write-downs | - | 32 | 12 | - | - | 20 | - | 64 |
| Write-backs | - | - | - | - | - | - | - | |
| Transfers | - | (2) | 3 | 10 | (2) | (9) | - | |
| Transfers IFRS 5 | - | - | - | - | - | - | - | |
| Exchange differences | (1) | - | 1 | (5) | - | 33 | 28 | |
| December 31, 2008 | - | 2,766 | 833 | 386 | 1,166 | 173 | 1,405 | 6,729 |
| Carrying amounts, December 31, 2008 | 8,647 | 7,499 | 3,152 | 618 | 976 | 1,186 | 520 | 22,598 |
| Carrying amounts, December 31, 2007 | 8,215 | 8,197 | 3,064 | 524 | 1,025 | 1,190 | 555 | 22,770 |
Over the next five years, amortization of the intangible assets recognized in 2009 is expected to be as follows:
| Expected Amortization of Intangible Assets | [Table 4.44] |
|---|---|
| € million | |
| 2010 | 1,316 |
| 2011 | 1,231 |
| 2012 | 1,146 |
| 2013 | 1,031 |
| 2014 | 976 |
Possible future acquisitions and/or divestments of intangible assets are not taken into account in these amounts and may therefore cause them to vary.
Changes in the carrying amounts of goodwill for the operating segments in 2009 and 2008 were as follows:
| Goodwill by Reporting Segment | [Table 4.45] | |||||
|---|---|---|---|---|---|---|
Pharma- ceuticals | Consumer Health | HealthCare | Crop Protection | Environ- mental Science, BioScience | Crop- Science | |
| € million | € million | € million | € million | € million | € million | |
| Carrying amounts, January 1, 2008 | 5,413 | 1,051 | 6,464 | 1,114 | 486 | 1,600 |
| Change in scope of consolidation | 1 | - | 1 | - | - | - |
| Acquisitions | 107 | 253 | 360 | - | - | - |
| Capital expenditures | 1 | - | 1 | - | - | - |
| Retirements | - | - | - | - | - | - |
| Amortization and write-downs in 2008 | - | - | - | - | - | - |
| Transfers | - | - | - | 3 | (3) | - |
| Transfers (IFRS 5) | - | - | - | - | - | - |
| Exchange differences | 31 | 19 | 50 | (29) | 23 | (6) |
| Carrying amounts, December 31, 2008 | 5,553 | 1,323 | 6,876 | 1,088 | 506 | 1,594 |
| Change in scope of consolidation | - | - | - | - | - | - |
| Acquisitions | 4 | 17 | 21 | - | 132 | 132 |
| Capital expenditures | - | - | - | - | - | - |
| Retirements | - | - | - | - | - | - |
| Amortization and write-downs in 2009 | - | - | - | - | - | - |
| Transfers | - | - | - | - | - | - |
| Transfers (IFRS 5) | (92) | - | (92) | - | - | - |
| Exchange differences | (5) | (12) | (17) | 9 | (13) | (4) |
| Carrying amounts, December 31, 2009 | 5,460 | 1,328 | 6,788 | 1,097 | 625 | 1,722 |
| Goodwill by Reporting Segment | [Table 4.45] | ||
|---|---|---|---|
| Material-Science | Reconciliation | Bayer Group | |
| € million | € million | € million | |
| Carrying amounts, January 1, 2008 | 151 | - | 8,215 |
| Change in scope of consolidation | - | - | 1 |
| Acquisitions | 20 | - | 380 |
| Capital expenditures | 3 | - | 4 |
| Retirements | - | - | - |
| Amortization and write-downs in 2008 | - | - | - |
| Transfers | - | - | - |
| Transfers (IFRS 5) | - | - | - |
| Exchange differences | 3 | - | 47 |
| Carrying amounts, December 31, 2008 | 177 | - | 8,647 |
| Change in scope of consolidation | - | - | - |
| Acquisitions | 24 | - | 177 |
| Capital expenditures | - | - | - |
| Retirements | - | - | - |
| Amortization and write-downs in 2009 | - | - | - |
| Transfers | - | - | - |
| Transfers (IFRS 5) | - | - | (92) |
| Exchange differences | (7) | - | (28) |
| Carrying amounts, December 31, 2009 | 194 | - | 8,704 |
HealthCare has reorganized to meet the rapidly changing demands in the pharmaceutical industry. This has led to changes in the reporting structure at the level of the strategic business entities. The prior-year figures for the goodwill of the reporting segments have been restated accordingly.
Goodwill and other intangible assets with an indefinite useful life that are of material significance for the Bayer Group are allocated to the following strategic business entities or cash-generating units:
| Intangible Assets with Indefinite Useful Life | [Table 4.46] | ||
|---|---|---|---|
Reporting segment | Cash-generating unit | Goodwill | Intangible assets with indefinite useful life |
| € million | € million | ||
| Pharmaceuticals | Women’s Healthcare | 2,833 | 438 |
| Pharmaceuticals | Specialized Therapeutics | 1,200 | 228 |
| Consumer Health | OTC | 931 | 22 |
| Pharmaceuticals | Diagnostic Imaging | 915 | 129 |
| Pharmaceuticals | Oncology | 369 | 295 |
| Consumer Health | Medrad business | 268 | 510 |
Since it is uncertain whether acquired or in-licensed research and development projects will eventually result in the production of saleable products, the period over which the corresponding capitalized asset is expected to generate an economic benefit for the company cannot be determined. Development projects in the amount of €1,137 million were capitalized as of the end of 2009 (2008: €1,186 million).
The Bayer Cross, which was reacquired for the North America region in 1994, having been awarded to the United States and Canada under the reparations agreements at the end of the First World War, is recognized as an intangible asset with an indefinite useful life. The company names “Schering” and “Medrad,” which passed to Bayer with the acquisition of Schering AG, Berlin, Germany, in 2006, also have an indefinite useful life. The period for which the Bayer Group will derive an economic benefit from these names cannot be determined as it intends to make continued use of them. The Bayer Cross is capitalized at €107 million, while the “Schering” and “Medrad” names are carried at €405 million and €283 million respectively.
Patents
The Bayer Group endeavors to obtain patent protection for its products and technologies in the major markets. Depending on the jurisdiction, patent protection may be available for:
- individual active ingredients,
- specific compounds, formulations and combinations containing active ingredients,
- manufacturing processes,
- working methods,
- equipment,
- intermediates for the manufacture of active ingredients and products,
- isolated genes or proteins,
- new uses for existing active ingredients or products,
- material combinations and
- semi-finished products.
The protection that a patent provides varies from country to country, depending on the type of claim granted, the scope of the claim’s coverage and the legal remedies available for enforcement.
The Bayer Group currently owns some 78,000 patents or patent applications. Although in our Pharmaceuticals segment the patents on 
Avalox®/Avelox®, Betaferon®/Betaseron®, Kogenate®, Levitra®, Magnevist®, Mirena®, Nexavar®, Ultravist®, Xarelto®, YAZ®, Yasmin® and Yasminelle® are particularly important to our business, we believe that no single patent (or group of related patents) is crucial to our business as a whole.
Avalox®/Avelox®, Betaferon®/Betaseron®, Kogenate®, Levitra®, Magnevist®, Mirena®, Nexavar®, Ultravist®, Xarelto®, YAZ®, Yasmin® and Yasminelle® are particularly important to our business, we believe that no single patent (or group of related patents) is crucial to our business as a whole.Term and expiration of patents
Patents are valid for varying periods, depending on the laws of the jurisdiction granting the patent. In some jurisdictions, patent protection begins from the date a patent application was filed; in others, it begins on the date the patent is granted.
The European Union member countries as well as the United States, Japan and certain other countries extend patent terms or issue supplementary protection certificates to compensate for patent term loss due to regulatory review and for the substantial investments in product research and development. We endeavor to obtain such patent term extensions or supplementary certificates wherever possible. Apart from substance and product patents, we continue to seek
- patents on processes and intermediates used in manufacturing an active ingredient,
- patents relating to specific uses for an active ingredient,
- patents relating to novel compositions and formulations, and
- market exclusivity in countries where this is possible (such as the United States).
The following table sets forth the expiration dates in our major markets of the most important patents covering Avalox®/Avelox®, Betaferon®/Betaseron®, Kogenate®, Levitra®, Magnevist®, Mirena®, Nexavar®, Ultravist®, Xarelto®, YAZ®, Yasmin® and Yasminelle®.
| Expiration Dates of Most Important Patents | [Table 4.47] | |||||||
|---|---|---|---|---|---|---|---|---|
| MARKET | ||||||||
| Germany | France | U.K. | Italy | Spain | Japan | U.S.A. | Canada | |
| Products | ||||||||
| Avalox®/Avelox® | ||||||||
| Active ingredient | 2014 | 2014 | 2014 | 2014 | 2014 | 2014 | 2014 | 2015 |
| Active ingredient monohydrate | 2016 | 2016 | 2016 | 2016 | 2016 | 2016 | 2016 | 2016 |
| Tablets | 2019 | 2019 | 2019 | 2019 | 2019 | 2019 | 2019 | 2019 |
| Betaferon®/Betaseron® | ||||||||
| Active ingredient | - | - | - | - | - | - | - | 2016 |
| Kogenate® | ||||||||
| Active ingredient | 2009 | - | 2009 | - | - | - | 2014 | 2019 |
| Formulation | 2017 | 2017 | 2017 | 2017 | 2017 | 2017 | 2017 | 2017 |
| Levitra® | ||||||||
| Active ingredient | 2018 | 2018 | 2018 | 2018 | 2018 | 2020 | 2018 | 2018 |
| Magnevist® | ||||||||
| Active ingredient | - | - | - | - | - | - | 2011 | - |
| Formulation | - | - | - | - | - | - | 2009 | 2010 |
| Process | - | - | - | - | - | - | 2013 | - |
| Mirena® | ||||||||
| Applicator | 2015 | 2015 | 2015 | 2015 | 2015 | - | 2015 | 2015 |
| Process | 2013 | 2013 | 2013 | 2013 | 2013 | 2013 | 2013 | 2013 |
| Nexavar® | ||||||||
| Active ingredient | 2020a | 2021 | 2021 | 2021 | 2021 | 2020a | 2020d | 2020 |
| Ultravist® | ||||||||
| Active ingredient | - | - | - | 2009 | - | - | - | - |
| Xarelto® | ||||||||
| Active ingredient | 2020e | 2023d | 2020e | 2023d | 2020e | 2020 | 2021 | 2020 |
| YAZ® | ||||||||
| Formulation | 2020e | 2020e | 2020e | 2022d | 2020e | 2020 | 2020c | 2020 |
| Dosage regimen | 2014 | 2014 | 2014 | 2014 | 2014 | 2014b | 2014 | 2014 |
| Production process | 2025 | 2025 | 2025 | 2025 | 2025 | 2026b | 2025 | 2026b |
| Yasmin® | ||||||||
| Formulation | 2020 | 2020 | 2020 | 2020 | 2020 | 2020 | 2020c | 2020 |
| Production process | 2025 | 2025 | 2025 | 2025 | 2025 | 2026b | 2025 | 2026b |
| Yasminelle® | ||||||||
| Formulation | 2020 | 2020 | 2020 | 2020 | 2020 | 2020 | 2020c | 2020 |
| Production process | 2025 | 2025 | 2025 | 2025 | 2025 | 2026b | 2025 | 2026b |
a Current patent expiration. An application has been submitted to extend patent protection through 2021. b Patent pending c The patent was invalidated in March 2008. In August 2009, the U.S. Court of Appeals for the Federal Circuit affirmed this decision. Bayer has filed a petition for review in the U.S. Supreme Court. See Note [32]. d Patent term extended e Current patent expiration. An application has been submitted to extend patent protection. | ||||||||
Information on specific patent disputes is given in Note [32].
Trademarks
We seek to obtain extensive trademark protection for our products in all jurisdictions in which they are marketed or are to be marketed in the near future. As well as product names, we also register particularly distinctive slogans, logos, graphic elements and designs as global trademarks.
Wherever possible, trademarks are registered through supranational trademark protection systems, for example as European Community Trademarks or international trademarks, and additionally with the national trademark registration offices. The protection actually provided by a trademark may vary considerably from one country to another depending on the distinctiveness of the trademark.
Our trademarks include:
HealthCare: Adalat®, Advantage®, Aleve®/Flanax®/Apronax®, Alka-Seltzer®, Aspirin®, Avalox®/Avelox®, Baytril®, Bepanthen®/Bepanthol®, Berocca®, Betaferon®/Betaseron®, Canesten®, Ciprobay®/Ciproxin®/Baycip®/Cipro®, Contour®, Kogenate®, Levitra®, Magnevist®, Mirena®, Nexavar®, One-A-Day®, Redoxon®, Rennie®, Supradyn®, Ultravist®, Xarelto®, YAZ®, Yasmin® and Yasminelle®.
Adalat®, Advantage®, Aleve®/Flanax®/Apronax®, Alka-Seltzer®, Aspirin®, Avalox®/Avelox®, Baytril®, Bepanthen®/Bepanthol®, Berocca®, Betaferon®/Betaseron®, Canesten®, Ciprobay®/Ciproxin®/Baycip®/Cipro®, Contour®, Kogenate®, Levitra®, Magnevist®, Mirena®, Nexavar®, One-A-Day®, Redoxon®, Rennie®, Supradyn®, Ultravist®, Xarelto®, YAZ®, Yasmin® and Yasminelle®.CropScience: Basta®/Liberty®/Ignite®, Confidor®/Gaucho®/Admire®/Merit®, Flint®/Stratego®/Sphere®/Nativo®, InVigor® and Proline®/Input®/Prosaro®.
Basta®/Liberty®/Ignite®, Confidor®/Gaucho®/Admire®/Merit®, Flint®/Stratego®/Sphere®/Nativo®, InVigor® and Proline®/Input®/Prosaro®.MaterialScience: Bayblend®, BaySystems®, Desmodur®, Desmopan®, Desmophen®, Makrolon® and Vulkollan®.
Bayblend®, BaySystems®, Desmodur®, Desmopan®, Desmophen®, Makrolon® and Vulkollan®.We currently have more than 60,000 national registered or pending trademarks along with over 650 Community Trade Marks, which are valid throughout the European Union, and some 2,000 international trademarks, which provide protection in various countries. Trademarks are particularly important for those products that are not protected by patents and are exposed to strong competitive pressure from generic products. However, with the exception of the company name “Bayer” and the “Bayer Cross” logo, we do not believe that any single trademark is crucial to our business as a whole.
Advanced Search
