Operating Assets, Liabilities, and Contingent Liabilities

(19) Other intangible assets

Accounting and measurement policies
Recognition and initial measurement of purchased intangible assets

In in-licensing, the portion of the consideration paid by the Group to acquire intellectual property is recognized as an intangible asset. If research and development services to be performed by the seller are also agreed in conjunction with the transaction, the related share of consideration is separated and recognized in research and development costs in line with the service performance.

Contingent consideration linked to milestone payments in connection with the purchase of intangible assets is recognized as an intangible asset and as a financial liability once the milestone is reached. Contingent consideration in the form of sales-based royalties is expensed when incurred.

Intangible assets acquired in business combinations are recognized at fair value on the acquisition date.

Recognition and initial measurement of internally generated intangible assets

Owing to the high level of uncertainty until pharmaceutical products are approved, the criteria for the capitalization of development costs in accordance with IAS 38 are not met in the Healthcare business sector for the development of drug candidates. Costs incurred after regulatory approval are insignificant and are therefore not recognized as intangible assets. In the Life Science and Electronics business sectors, development expenses are capitalized as soon as all the recognition criteria are met and can be verified accordingly. This also includes expenses that are required for REACH registration. Furthermore, development expenses for internal software projects and the enhancement of purchased ERP programs are capitalized providing that the relevant criteria have been fulfilled.

Subsequent measurement

Subsequent measurement is at amortized cost.

Purchased and internally generated intangible assets with finite useful lives are amortized using the straight-line method over their useful lives. The useful lives of customer relationships, brand names and trademarks, as well as marketing authorizations, patents, licenses, and similar rights and software are usually between three and 24 years. In determining these useful lives, the Group considers factors including the typical product life cycles for each asset and publicly available information about the estimated useful lives of similar assets. The amortization expense is allocated to the respective functional costs or, if this is not possible, recognized under other operating expenses.

Indications of impairment are identified with the involvement of the responsible departments, taking external and internal information sources into consideration. The Group examines the existence of indications of impairment using various factors, particularly deviations from sales forecasts and the analysis of changes in medium-term planning. An impairment test is performed if there are indications of impairment. In the event of impairment, an impairment loss is recognized under other operating expenses. Impairment losses are reversed up to amortized cost and reported in other operating income if the original reasons for impairment no longer apply.

Intangible assets with indefinite useful lives and purchased, as well as internally generated intangible assets not yet available for use, are not amortized, but instead are tested for impairment when a triggering event arises or at least once a year.

Significant discretionary decisions and sources of estimation uncertainty
Purchased intangible assets

The identification and measurement of intangible assets acquired in the course of business combinations are subject to significant discretion and estimation uncertainty.

In connection with in-licensing agreements in the Healthcare business sector, a discretionary estimate is made of the extent to which upfront and milestone payments are remuneration for development services yet to be performed or whether such payments are acquisition costs of an intangible asset to be capitalized.

Government grants

The Group receives monetary and non-monetary government grants. It does not exercise the option of recognizing non-monetary grants, such as allocated emission certificates, at fair value.

In fiscal 2025, the Group was selected by the U.S. Food and Drug Administration (FDA) as a member of the Commissioner’s National Priority Voucher (CNPV) program for the product Pergoveris®. This grants the Group the right to a fast-tracked review of its approval application for Pergoveris®. In addition, the Group will have increased opportunities to communicate with FDA reviewers throughout the review process. This selection for the program is a significant regulatory advantage geared toward accelerating access to important medications that are of high national interest for U.S. health policy. Pergoveris® meets the criteria of the CNPV program as an innovative treatment option for women with complex fertility disorders.

The Group recorded the grants awarded under the program at nominal amount.

The fair value of the CNPV rights cannot be reliably determined for the following reasons:

  • These rights are non-transferable

  • These rights can only be exercised in connection with the specific rights to Pergoveris®

  • There is no active market for them, and

  • The valuation would be highly uncertain due to the unique nature of the program

The exercise of CNPV rights is contingent upon the submission of a full application for approval of Pergoveris® to the FDA in accordance with the terms of the CNPV program. Submission of data in support of the application is already underway.

Determination of amortization

Significant assumptions and estimates are required to determine the appropriate amount of amortization of other intangible assets. This relates in particular to the determination of the underlying useful life.

If the amortization of intangible assets from customer relationships, brands, trademarks, marketing authorizations, patents, licenses and similar rights, and other had been 10% higher, for example, due to shortened useful lives, profit before income tax would have been € 77 million lower in fiscal 2025 (2024: € 71 million).

Identification of a need to recognize impairment loss and reverse impairment loss

Discretionary decisions are required in assessing substantial evidence of impairment as well as in identifying the need to reverse the impairment of other intangible assets. Significant valuation-related assumptions and estimates are also required to calculate the appropriate write-down amount in impairment testing.

Other intangible assets

 

 

Customer relationships, brands and trademarks

 

Marketing authorizations, patents, licenses, similar rights, and other items

 

Software and software in development

 

Advance payments

 

Total

€ million

 

 

 

Finite useful life

 

Not yet available for use

 

 

 

 

 

 

Cost as of Jan. 1, 2024

 

10,043

 

11,200

 

1,637

 

1,165

 

–

 

24,044

Additions due to business combinations1

 

12

 

268

 

37

 

–

 

–

 

318

Other additions

 

–

 

4

 

141

 

103

 

3

 

251

Disposals due to divestments/Reclassification to assets held for sale

 

-2

 

-35

 

–

 

-5

 

–

 

-41

Other disposals

 

–

 

-3

 

-1

 

-11

 

–

 

-16

Transfers

 

3

 

38

 

-37

 

9

 

-1

 

12

Currency translation1

 

506

 

84

 

11

 

28

 

–

 

629

Cost as of Dec. 31, 20241

 

10,563

 

11,556

 

1,788

 

1,288

 

2

 

25,198

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated amortization and impairment losses as of Jan. 1, 2024

 

-5,196

 

-10,619

 

-908

 

-770

 

–

 

-17,493

Depreciation, amortization, and write-downs1

 

-553

 

-161

 

–

 

-110

 

–

 

-824

Impairment losses

 

-3

 

-34

 

-192

 

-15

 

–

 

-243

Reversals of impairment losses

 

–

 

–

 

–

 

–

 

–

 

–

Disposals due to divestments/Reclassification to assets held for sale

 

2

 

33

 

–

 

3

 

–

 

38

Other disposals

 

–

 

1

 

–

 

10

 

–

 

12

Transfers

 

-2

 

1

 

–

 

12

 

–

 

10

Currency translation1

 

-263

 

-63

 

-3

 

-16

 

–

 

-345

Accumulated amortization and impairment losses as of Dec. 31, 20241

 

-6,015

 

-10,843

 

-1,103

 

-885

 

–

 

-18,846

 

 

 

 

 

 

 

 

 

 

 

 

 

Net carrying amounts as of Dec. 31, 20241

 

4,548

 

713

 

685

 

404

 

2

 

6,351

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost as of Jan. 1, 2025

 

10,563

 

11,556

 

1,788

 

1,288

 

2

 

25,198

Additions due to business combinations

 

–

 

2,687

 

–

 

9

 

–

 

2,696

Other additions

 

–

 

24

 

261

 

104

 

3

 

393

Disposals due to divestments/Reclassification to/from assets held for sale

 

–

 

29

 

–

 

–

 

–

 

28

Other disposals

 

–

 

-106

 

-1

 

-100

 

–

 

-208

Transfers

 

–

 

69

 

-69

 

1

 

-1

 

-1

Currency translation

 

-1,054

 

-281

 

-24

 

-61

 

–

 

-1,421

Cost as of Dec. 31, 2025

 

9,508

 

13,979

 

1,955

 

1,240

 

3

 

26,686

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated depreciation and impairment losses as of Jan. 1, 2025

 

-6,015

 

-10,843

 

-1,103

 

-885

 

–

 

-18,846

Depreciation, amortization, and write-downs

 

-518

 

-252

 

–

 

-109

 

–

 

-879

Impairment losses

 

–

 

-6

 

-247

 

–

 

–

 

-253

Reversals of impairment losses

 

–

 

–

 

–

 

–

 

–

 

–

Disposals due to divestments/Reclassification to/from assets held for sale

 

–

 

-29

 

–

 

-1

 

–

 

-30

Other disposals

 

–

 

15

 

–

 

98

 

–

 

113

Transfers

 

–

 

–

 

–

 

1

 

–

 

1

Currency translation

 

580

 

243

 

8

 

40

 

–

 

871

Accumulated depreciation and impairment losses as of Dec. 31, 2025

 

-5,954

 

-10,873

 

-1,342

 

-855

 

–

 

-19,024

 

 

 

 

 

 

 

 

 

 

 

 

 

Net carrying amounts as of Dec. 31, 2025

 

3,555

 

3,105

 

614

 

385

 

3

 

7,662

1

Previous-year figures have been adjusted owing to the finalization of the purchase price allocation in connection with the acquisitions of Mirus Bio LLC, USA, Unity-SC SAS, France, as well as Hub Organoids Holding B.V., Netherlands (see Note (6) Acquisitions and divestments).

Additions and disposals

The additions from business combinations primarily resulted from the acquisition of SpringWorks Therapeutics, Inc., United States (see Note (6) Acquisitions and divestments).

As in the previous year, additions for intangible assets not yet available for use essentially related to the in-licensing of intellectual property in the Healthcare business sector. The acquisition of the global marketing rights for pimicotinib resulted in the recognition of an intangible asset not yet available for use in the amount of € 79 million in fiscal 2025 (see Note (7) Licensing agreements).

Additions to software and software in development mainly related to the internal development of IT applications. The gross carrying amounts and accumulated amortization for the capitalized software primarily related to purchased software as well as internally generated applications and enhancements of purchased ERP programs that were already available for use. These were mainly included in administrative expenses.

Due to the refinement in the scope of the assets to be divested in connection with the sale of the Surface Solutions business unit, intangible assets classified as assets held for sale in 2024 were reclassified in fiscal 2025. The corresponding intangible assets were already fully amortized.

Loss allowances

Impairment losses were mainly attributable to discontinued development projects in the Healthcare and Electronics business sectors, of which € 174 million related to the termination of the in-licensing agreement with Jiangsu Hengrui Pharmaceuticals Co., Ltd., China, on drug candidates for the treatment of metastatic colorectal cancer (see Note (7) Licensing agreements). In 2024, € 140 million was attributable to the termination of the xevinapant program (see Note (7) Licensing agreements).

Other significant information

As in the previous year, the currency translation effects essentially resulted from the translation of other intangible assets denominated in U.S. dollars.

Marketing authorizations, patents, licenses, similar rights and other items not yet available for use were attributable to ongoing development projects that were not yet in the commercialization phase and thus did not yet have a defined useful life. These primarily related to the Healthcare business sector and to internally generated intangible assets under development in the Electronics business sector.

Transfers of market authorizations, patents, licenses, similar rights, and other items not yet available for use to assets with a finite useful life were primarily attributable to the intangible asset that was capitalized under the in-licensing agreement with Abbisko Therapeutics Co. Ltd., China. This agreement includes an exclusive license to commercialize pimicotinib in China, Hong Kong, Macau, and Taiwan as well as an exclusive commercialization option for the rest of the world. The reclassification was prompted by the granting of the world’s first approval for pimicotinib for the treatment of tenosynovial giant cell tumor by the Chinese regulatory authority (see Note (7) Licensing agreements).

Overview of material other intangible assets

The carrying amounts of customer relationships, brands and trademarks as well as marketing authorizations, patents, licenses, similar rights and other items were attributable to the business sectors as follows:

Other intangible assets – attributable to the business sectors

€ million

 

Remaining useful life in years

 

Life Science

 

Healthcare

 

Electronics

 

Total Dec. 31, 2025

 

Total Dec. 31, 20241

Customer relationships, brands and trademarks

 

 

 

2,328

 

–

 

1,226

 

3,555

 

4,548

Customer relationships

 

 

 

2,191

 

–

 

1,220

 

3,411

 

4,307

thereof from the following acquisitions:

 

 

 

 

 

 

 

 

 

 

 

 

Sigma-Aldrich Corporation

 

10.8 – 11.8

 

2,081

 

–

 

95

 

2,176

 

2,669

Versum Materials, Inc.

 

0.8 – 12.8

 

–

 

–

 

1,124

 

1,124

 

1,434

Millipore Corporation

 

0.5 – 1.5

 

41

 

–

 

–

 

41

 

109

Brands and trademarks

 

 

 

138

 

–

 

6

 

144

 

241

thereof from the following acquisition:

 

 

 

 

 

 

 

 

 

 

 

 

Sigma-Aldrich Corporation

 

1.9

 

130

 

–

 

–

 

130

 

222

 

 

 

 

 

 

 

 

 

 

 

 

 

Marketing authorizations, patents, licenses and similar rights and other

 

 

 

 

 

 

 

 

 

 

 

 

Finite useful life

 

 

 

357

 

2,646

 

101

 

3,105

 

713

Marketing authorizations

 

 

 

–

 

2,514

 

–

 

2,514

 

20

thereof from the following acquisitions:

 

 

 

 

 

 

 

 

 

 

 

 

SpringWorks Therapeutics, Inc.

 

8.5 – 10

 

–

 

2,440

 

–

 

2,440

 

–

Others

 

 

 

357

 

132

 

101

 

591

 

693

thereof from the following acquisitions:

 

 

 

 

 

 

 

 

 

 

 

 

AZ Electronic Materials S.A.

 

0.3 – 7.3

 

–

 

–

 

10

 

10

 

35

Versum Materials, Inc.

 

0.8

 

–

 

–

 

31

 

31

 

67

SpringWorks Therapeutics, Inc.

 

 

 

–

 

128

 

–

 

128

 

–

Not yet available for use

 

 

 

29

 

432

 

154

 

614

 

685

thereof from the following acquisitions:

 

 

 

 

 

 

 

 

 

 

 

 

Versum Materials, Inc.

 

–

 

–

 

–

 

93

 

93

 

106

1

Previous-year figures have been adjusted owing to the finalization of the purchase price allocation in connection with the acquisitions of Mirus Bio LLC, USA, Unity-SC SAS, France, as well as Hub Organoids Holding B.V., Netherlands (see Note (6) Acquisitions and divestments).

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