Biogen (BIIB) 10-K risk factor changes: FY2015 vs FY2014

Our current revenues depend upon continued sales of our principal [removed: products, TECFIDERA, AVONEX, TYSABRI, and RITUXAN.][added: products.]

We may be substantially dependent on sales from our principal products for many years, including an increasing reliance on sales and growth of TECFIDERA as we [removed: continue to] [added: further] expand into additional markets.

Any [added: of the following] negative developments relating to any of [removed: these products, including the following, and as discussed in greater detail in these “Risk Factors”,] [added: our principal products] may adversely affect our revenues and results of operations or could cause a decline in our stock price:

More specifically, our ability to [removed: compete and] [added: compete,] maintain and grow our share in the MS market may be adversely affected due to a number of factors, including:

| • | the introduction of more efficacious, safer, less expensive or more convenient alternatives to our MS products, including our own [removed: products;] [added: products and products of our collaborators;] |

| • | the introduction of lower-cost biosimilars, follow-on products or generic versions of branded MS products sold by our competitors, and the possibility of future competition from generic versions or [removed: related prodrug derivatives] [added: prodrugs of existing therapeutics] or from off-label use by physicians of therapies indicated for other conditions to treat MS patients; |

| • | difficulty in penetrating this market if our therapies are not regarded as offering [removed: substantial] [added: significant] benefits over current treatments; |

| • | our limited marketing experience within the hemophilia treatment market, which may impact our ability to develop [removed: well-established] relationships with the associated medical and scientific community; [added: or] |

| • | if one of several companies that are working to develop additional treatments for hemophilia obtains marketing approval of its treatment in the E.U. before we do, our application [added: for ALPROLIX] with the EMA could be barred under operation of the EMA’s [removed: Orphan Medicines Regulation.] [added: orphan medicinal product regulation.] |

Failure to qualify for regulatory exclusivity, or failure to obtain or maintain the extent or duration of such protections that we expect in each of the markets for our [removed: products,] [added: products due to challenges, changes or interpretations in the law or otherwise,] could affect our revenue for our products or our decision on whether to market our products in a particular country or countries or could otherwise have an adverse impact on our results of operations.

Litigation, [removed: interference, oppositions] [added: interferences, oppositions, inter partes reviews] or other proceedings [added: are,] have been and may in the future be necessary in some instances to determine the validity and scope of certain of our proprietary rights, and in other instances to determine the validity, scope or non-infringement of certain patent rights claimed by third parties to be pertinent to the manufacture, use or sale of our products.

Litigation, interference, [removed: oppositions] [added: oppositions, inter partes reviews] or other similar types of proceedings are unpredictable and may be protracted, expensive and distracting to management.

Sales of our products depend, to a significant extent, on adequate coverage, pricing and reimbursement from [removed: third party] [added: third-party] payors, which are subject to increasing and intense pressure from political, social, competitive and other sources.

Sales of our products are dependent, in large part, on the availability and extent of coverage, pricing and reimbursement from government health administration authorities, private health insurers and other [removed: organizations, and drug prices are under significant scrutiny in the markets where our products are prescribed.][added: organizations.]

Our ability to set the price for our products can vary significantly from country to country and as a result so can the price of our [removed: products, and we may continue to face increasing pressure to lower the prices for our products in many markets.][added: products.]

[removed: In addition, when] [added: When] a new [removed: medical] [added: pharmaceutical] product is approved, the availability of government and private reimbursement for that product [removed: is] [added: may be] uncertain, as is the pricing and amount for which that product will be reimbursed.

For example, provisions of the [removed: PPACA] [added: Patient Protection and Affordable Care Act (PPACA)] have resulted in changes in the way health care is paid for by both governmental and private insurers, including increased rebates owed by manufacturers under the Medicaid Drug Rebate Program, annual fees and taxes on manufacturers of certain branded prescription drugs, the requirement that manufacturers participate in a discount program for certain outpatient drugs under Medicare Part D and the expansion of the number of hospitals eligible for discounts under Section 340B of the Public Health Service Act.

In recent years, some states have considered legislation [added: and ballot initiatives] that would control the prices of drugs, including laws to allow importation of pharmaceutical products from lower cost jurisdictions outside the U.S. [removed: State Medicaid programs are increasingly requesting manufacturers to pay supplemental rebates] and [removed: requiring prior authorization by the] [added: laws intended to impose price controls on] state [removed: program for use of any] drug [removed: for which supplemental rebates are not being paid.][added: purchases.]

In the [removed: European Union] [added: E.U.] and some other international markets, the government provides health care at low cost to consumers and regulates pharmaceutical prices, patient eligibility or reimbursement levels to control costs for the government-sponsored health care system.

[removed: In addition, certain] [added: Certain] countries set prices by reference to the prices in other countries where our products are marketed.

This may create the opportunity for [removed: third party] [added: third-party] cross-border trade or influence our decision to sell or not to sell a product, thus adversely affecting our geographic expansion plans and revenues.

Discovery of safety issues with our products could create product liability and could cause additional regulatory scrutiny and requirements for additional [removed: labeling,] [added: labeling or safety monitoring,] withdrawal of products from the market, and the imposition of fines or criminal penalties.

Restrictions on use or significant safety warnings that may be required to be included in the label of our products, such as the risk of developing progressive multifocal leukoencephalopathy (PML), a serious brain infection, in the label for [removed: TYSABRI and in the U.S. label for TECFIDERA,] [added: certain of our products,] may significantly reduce expected revenues for those products and require significant expense and management time.

Our long-term success depends upon the successful [removed: development, license or acquisition] [added: development] of new products and additional indications for existing products.

Our long-term viability and growth will depend upon [removed: the] successful development of [added: additional indications for our existing products as well as successful development of] new products and technologies from our research and development activities, [removed: including those licensed or acquired from third parties and biosimilars developed through] our [added: biosimilars] joint venture with Samsung [removed: Biologics, and approval of additional indications for our existing products.][added: Biologics or licenses or acquisitions from third parties.]

[removed: Success] [added: Additionally, success] in preclinical work or early stage clinical trials does not ensure that later stage or larger scale clinical trials will be successful or that regulatory approval will be obtained.

[removed: Our ability to complete our clinical trials in a timely fashion depends in large part on a number of key] [added: These] factors [removed: including] [added: include] protocol design, regulatory and institutional review board approval, patient enrollment rates, and compliance with extensive current Good Clinical Practices.

In most cases, we use the services of third [removed: party clinical trial providers and third party contract research organizations, or CROs,] [added: parties] to carry out [removed: most of] our clinical trial related activities and [added: rely on such parties to] accurately report their [removed: results, which may impact our ability to control the timing, conduct, expense and quality of our clinical trials.][added: results.]

We may [removed: also] need to replace our CROs.

Although we believe [removed: that] there are a number of other [removed: third-party] CROs we could engage to continue these activities, the replacement of an existing CRO may result in [added: the] delay of the affected trials or otherwise adversely affect our efforts to obtain regulatory approvals and commercialize our [removed: drug] [added: product] candidates.

If we fail to adequately manage [removed: the design, execution and regulatory aspects of] our [removed: large, complex and diverse] clinical [removed: trials,] [added: activities,] our [removed: studies and any] [added: clinical trials or] potential regulatory approvals may be [removed: delayed,] [added: delayed] or [removed: we may fail to gain approvals for our product candidates.][added: denied.]

Clinical trials may indicate that our product candidates lack efficacy, have harmful side [removed: effects] [added: effects, result in unexpected adverse events,] or raise [removed: safety or] other concerns that may significantly reduce the likelihood of regulatory [removed: approval, result in significant restrictions on use and safety warnings in the approved label, adversely affect placement within the treatment paradigm, or otherwise significantly diminish the commercial potential of the product candidate.][added: approval.]

[removed: Also, positive] [added: Positive] results in a [removed: registrational] trial may not be replicated in [removed: any] subsequent [added: or] confirmatory trials.

The occurrence of any [removed: such] [added: of these] events could result in [removed: the incurrence of] significant costs and expenses, have an adverse effect on our business, [removed: including our] financial condition and results of [removed: operations, or] [added: operations and] cause our stock price to decline or experience periods of volatility.

[removed: Even if we are able to successfully develop new products or indications, we] [added: We] may [added: also] make a strategic decision to discontinue development of [removed: such] [added: a] product or indication if, for example, we believe commercialization will be difficult relative to [added: the standard of care or] other opportunities in our pipeline.

We depend on relationships with collaborators and other third-parties for [removed: product and royalty] revenue, and the development, [added: regulatory approval,] commercialization and marketing of certain products, which are outside of our full control.

We rely on a number of significant collaborative relationships for [removed: product and royalty] revenue, and the development, [added: regulatory approval,] commercialization, and marketing of certain of our products and product candidates.

| • | disputes may arise with respect to ownership of rights to technology developed with our [removed: collaboration partner,] [added: collaborator,] and the underlying contract with our collaborator may fail to provide significant protection or may fail to be effectively enforced if the collaborator fails to perform; |

| • | our [removed: collaborators’] [added: collaborator’s] interests may not always be aligned with our interests and [removed: they] [added: a collaborator] may not [added: pursue regulatory approvals or] market a product in the same manner or to the same extent that we would, which could adversely affect our revenues; |

| • | collaborations often require the parties to cooperate, and failure to do so effectively could adversely affect product sales by our [removed: collaborators] [added: collaborator] or the clinical development or regulatory approvals of products under joint control or could result in termination of the research, development or commercialization of product candidates or result in litigation or arbitration; and |

Pricing and reimbursement for our products may be adversely affected by a number of factors, including:

| • | changes in federal, state or foreign government regulations or private third-party payors' reimbursement policies; |

| • | pressure by employers on private health insurance plans to reduce costs; and |

| • | consolidation and increasing assertiveness of payors, including managed care organizations, health insurers, pharmacy benefit managers, government health administration authorities, private health insurers and other organizations, seeking price discounts or rebates in connection with the placement of our products on their formularies and, in some cases, the imposition of restrictions on access or coverage of particular drugs or pricing determined based on perceived value. |

Drug prices are under significant scrutiny in the markets in which our products are prescribed.

Drug pricing and other health care costs continue to be subject to intense political and societal pressures which we anticipate will continue and escalate on a global basis.

As a result, our business and reputation may be harmed, our stock price may be adversely impacted and experience periods of volatility, and our results of operations may be adversely impacted.

Our results of operations may be adversely affected by current and potential future healthcare reforms.

State Medicaid programs are increasingly requesting manufacturers to pay supplemental rebates and requiring prior authorization by the state program for use of any drug for which supplemental rebates are not being paid.

This may result in significant restrictions on use and safety warnings in an approved label, adverse placement within the treatment paradigm, or significant reduction in the commercial potential of the product candidate.

Clinical trials and the development of biopharmaceutical products is a lengthy and complex process.

Our ability to complete clinical trials in a timely fashion depends in large part on a number of key factors.

If we or our third-party clinical trial providers or third-party contract research organizations, or CROs, do not successfully carry out these clinical activities, our clinical trials or the potential regulatory approval of a product candidate may be delayed or be unsuccessful.

Our reliance on third parties for these activities may impact our ability to control the timing, conduct, expense and quality of our clinical trials.

If this CRO does not adequately perform, many of our trials may be affected.

Successful preclinical work or early stage clinical trials does not ensure success in later stage trials, regulatory approval or commercial viability of a product.

In addition, even if later stage clinical trials are successful, regulatory authorities may delay or decline approval of our product candidates.

Regulatory authorities may disagree with our view of the data, require additional studies or disagree with our trial design or endpoints.

Regulatory authorities may also fail to approve the facilities or the processes used to manufacture a product candidate, our dosing or delivery methods or companion devices.

Regulatory authorities may grant marketing approval that is more restricted than anticipated.

These restrictions may include limiting indications to narrow patient populations and the imposition of safety monitoring, educational requirements and risk evaluation and mitigation strategies.

Even if we are able to successfully develop new products or indications, sales of new products or products with additional indications may not meet investor expectations.

We may fail to achieve the expected financial and operating benefits of our corporate restructuring and the restructuring may harm our business and financial results.

We face significant risks associated with our corporate restructuring actions that may impair our ability to achieve anticipated savings and operational efficiencies or that may otherwise harm our business.

These risks include loss of workforce capabilities, loss of continuity, decreases in employee focus and morale, attrition of necessary or key employees, higher than anticipated separation expenses, litigation and the failure to meet financial and operational targets.

In addition, the calculation of the anticipated cost savings and other benefits resulting from our corporate restructuring actions are subject to many estimates and assumptions.

These estimates and assumptions are subject to significant business, economic, competitive and other uncertainties and contingencies, many of which are beyond our control.

If these estimates and assumptions are incorrect or if we experience delays or unforeseen events, our business and financial results could be adversely affected.

We may fail to complete transactions for other reasons, including if we are unable to obtain desired financing on favorable terms, if at all.

We may face difficulty in attracting and retaining key talent for a number of reasons, such as the underperformance or discontinuation of one or more late stage programs or recruitment by competitors.

These risks may be heightened as we continue to expand our global operations and enter new therapeutic areas with different patient populations, which may have product distribution methods differing from those we currently utilize.

Our indebtedness could adversely affect our business and limit our ability to plan for or respond to changes in our business.

Our indebtedness, together with our significant contingent liabilities, including milestone and royalty payment obligations, could have important consequences to our business; for example, such obligations could:

| • | increase our vulnerability to general adverse economic and industry conditions; |

| • | limit our ability to access capital markets and incur additional debt in the future; |

| • | require us to dedicate a substantial portion of our cash flow from operations to payments on our indebtedness, thereby reducing the availability of our cash flow for other purposes, including business development efforts, research and development and mergers and acquisitions; and |

| • | limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate, thereby placing us at a competitive disadvantage compared to our competitors that have less debt. |

| | |

| --- | --- |

| | |

| • | our failure to receive positive pediatric data from our ongoing global pediatric studies, which is required for filing our planned MAA for ALPROLIX with the EMA; or |

Changes in government regulations or private third-party payors' reimbursement policies, as well as pressure by employers on private health insurance plans to reduce costs, may reduce pricing and reimbursement for our products and adversely affect our future results.

We also cannot predict the availability, pricing or amount of reimbursement for our product candidates.

Managed care organizations continue to seek price discounts and, in some cases, to impose restrictions on the coverage of particular drugs.

For example, health insurers, pharmacy benefit managers and other payors may seek price discounts or rebates in connection with the placement of our products on their formularies.

They could also impose restrictions on access to our products, and could even choose to exclude coverage of our products entirely.

The sustainability of growth in our business is dependent in part upon our ability to continue to build a strong early and mid-stage pipeline of product candidates in our core competencies as well as additional areas of unmet need.

Further, it is possible that we may experience delays, uncertainties or difficulties developing biosimilars as the legislative and regulatory pathways for approval of biosimilars continue to evolve in many markets.

If our CROs do not successfully carry out their activities or meet expected deadlines, our trials may be delayed.

Even if later stage clinical trials are successful, regulatory authorities may disagree with our view of the data or require additional studies, may disagree with trial design or the endpoints employed in the trials, may fail to approve the facilities or the processes used to manufacture a product candidate, may fail to approve or delay approval of our product candidates, dosing or delivery methods, companion devices or may otherwise grant marketing approval that is more restricted than anticipated, including indications covering narrow patient populations and the imposition of safety monitoring or educational requirements or risk evaluation and mitigation strategies.

We have experienced significant growth in our headcount and operations, which has placed, and will continue to place, significant demands on our management and our operational and financial infrastructure.

In order to pursue such opportunities, we may require significant additional financing, which may not be available to us on favorable terms, if at all.

environmental matters.

These risks may be heightened as we continue to expand our global operations and introduce additional products to the market.

Examples of previously enacted and possible future changes in laws that could adversely affect our business include the enactment in the U.S. of health care reform, potential regulations easing the entry of competing biosimilars in the marketplace, new legislation or implementation of existing statutory provisions on importation of lower-cost competing drugs from other jurisdictions, enhanced penalties for and investigations into non-compliance with U.S. fraud and abuse laws, and compliance with the Physician Payment Sunshine Act in the U.S. and similar foreign rules and regulations that require collection and reporting of payments or other transfers of value made to physicians and teaching hospitals.

We recognize foreign currency gains or losses arising from our operations in the period in which we incur those gains or losses.

In addition, in the event we expand our manufacturing capacity and we do not fully utilize our manufacturing facilities, this may result in idle time at facilities or substantial excess manufacturing capacity.

on favorable terms.

Biogen [removed: Idec] is a global biopharmaceutical company focused on discovering, developing, manufacturing and delivering therapies [added: to patients] for [removed: neurological, autoimmune and] [added: the treatment of neurodegenerative diseases,] hematologic [added: conditions and autoimmune] disorders.

Our [removed: principal] marketed products include [added: TECFIDERA,] AVONEX, PLEGRIDY, [removed: TECFIDERA, TYSABRI,] [added: TYSABRI] and FAMPYRA for multiple sclerosis (MS), [removed: ALPROLIX] [added: ELOCTATE] for hemophilia [removed: B] [added: A] and [removed: ELOCTATE] [added: ALPROLIX] for hemophilia [removed: A.][added: B, and FUMADERM for the treatment of severe plaque psoriasis.]

We may be substantially dependent on sales from our principal products for many years, including an increasing reliance on sales [added: and growth] of TECFIDERA as we [added: continue to] expand into additional markets.

In the longer term, our revenue growth will be dependent upon the successful clinical development, regulatory approval and launch of new commercial [added: products as well as additional indications for our existing] products, our ability to obtain and maintain patents and other rights related to our marketed products and assets originating from our research and development efforts, and successful execution of external business development opportunities.

| | For the Years Ended December 31, | | | | | | | | [removed: % Change] | | [added: |]

| | [added: 2015 compared to] 2014 [added: | | | 2014] compared to 2013 | | | | | | | | | | [added: | | | |]

| (In millions, except [removed: per share amounts and] percentages) | [added: 2015 | | | |] 2014 | | | | 2013 [removed: (1)] | | | | | | [added: | | |]

| Total revenues | $ | [added: 10,763.8 | | | $ |] 9,703.3 | | | $ | 6,932.2 | | | [added: 10.9 | % | |] 40.0 | % |

As described below under “Results of Operations,” our income from operations for the year ended December 31, [removed: 2014, reflect] [added: 2015, reflects] the following:

| • | Total cost and expenses [removed: increased 29.4%] [added: totaled $5,872.8 million] for [removed: 2014] [added: 2015, representing an increase of 2.2%] compared to [removed: 2013. This increase resulted from a 42.8% increase in] the [removed: amortization of acquired intangible assets, a 36.5% increase] [added: same period] in [removed: cost of sales,] [added: 2014. This increase was driven by] a [removed: 31.1%] [added: 6.3%] increase in research and development [removed: expense and a 30.4% increase in selling, general and administrative] expense, [removed: partially offset by] a [removed: 100.0% decrease in collaboration profit sharing and an] [added: 5.9%] increase in [removed: the gain] [added: cost of sales, losses recognized] on fair value remeasurement of contingent consideration [removed: compared with] [added: as well as] the [removed: same period] [added: recognition of a $93.4 million charge related to our recent corporate restructuring. These increases were partially offset by a 21.9% decrease] in [removed: 2013.] [added: the amortization of acquired intangible assets and a 5.3% decrease in selling, general and administrative expenses.] |

[removed: The] [added: For 2014 compared to 2013, the] change in amortization of acquired intangible assets was primarily driven by a $60.2 million increase in amortization of acquired and in-licensed rights and patents as we recognized a full year of expense related to our TYSABRI rights in 2014 versus nine months of expense in 2013, total impairment charges of $50.9 million related to one of our out-licensed patents and one of our [removed: in-process research and development] [added: IPR&D] intangible assets, and [removed: higher amortization of our developed technology intangible asset as a result of] lower expected lifetime revenues of [removed: AVONEX versus the prior year.][added: AVONEX.]

[removed: The] [added: For 2014 compared to 2013, the] increase in [added: product] cost of sales was [removed: primarily] driven by higher unit sales volume, including [added: due to] recent product launches and [removed: higher royalty payments due to Elan.][added: our contract and biosimilars manufacturing arrangements.]

[removed: The] [added: For 2014 compared to 2013, the] increase in research and development expense was primarily related to [removed: an increase] [added: increases] in costs incurred in connection with our early stage [removed: programs and] [added: programs,] milestone and upfront [removed: payments.][added: expenses, research and discovery and marketed products, partially offset by a decrease in costs incurred in connection with our late stage programs.]

We generated [removed: $2,942.1] [added: $3,716.1] million of net cash flows from operations for [removed: 2014,] [added: 2015,] which were primarily driven by [removed: earnings offset by an increase in working capital.][added: earnings.]

Cash, cash equivalents and marketable securities totaled approximately [removed: $3,316.0] [added: $6,188.9] million as of December 31, [removed: 2014.][added: 2015.]

In addition, the commercialization of certain of our own approved MS [added: products,] products [added: of our collaborators] and pipeline product candidates may negatively impact future sales of our [added: existing] MS products.

Our products may also face increased competitive pressures from the introduction of generic versions, [removed: related prodrug derivatives] [added: prodrugs of existing therapeutics] or biosimilars of existing products and other technologies, such as gene therapies.

During [removed: the third quarter of 2014,] [added: 2014] the Internal Revenue Service issued final regulations related to the [removed: Branded Pharmaceutical Drug (BPD) Fee,] [added: BPD fee,] which had the effect of changing the recognition of the fee for accounting purposes, from the period in which the fee was paid, to the period when the sale occurs.

As a result of these final regulations, we recognized an incremental BPD fee [removed: of $43.6 million during] [added: in] 2014 for the periods [removed: of] 2013 [removed: and] [added: through the end of the third quarter of] 2014.

| | [removed: 2014] [added: 2015] compared to [removed: 2013] [added: 2014] | | | [removed: 2013] [added: 2014] compared to [removed: 2012] [added: 2013] | | | | | | | | | | | | | |

| (In millions, except percentages) | [removed: 2014] [added: 2015] | | | | [removed: 2013] [added: 2014] | | | | [removed: 2012] [added: 2013] | | | | | | | | |

| United States | $ | [removed: 5,566.7] [added: 6,545.8] | | | $ | [removed: 3,581.0] [added: 5,566.7] | | | $ | [removed: 2,176.8] [added: 3,581.0] | | | [removed: 55.5] [added: 17.6] | % | | [removed: 64.5] [added: 55.5] | % |

| Rest of world | [removed: 2,636.7] [added: 2,642.7] | | | | [removed: 1,961.3] [added: 2,636.7] | | | | [removed: 1,989.3] [added: 1,961.3] | | | | [removed: 34.4] [added: 0.2] | % | | [removed: (1.4] [added: 34.4] | [removed: )%] [added: %] |

| Total product revenues | [removed: 8,203.4] [added: 9,188.5] | | | | [removed: 5,542.3] [added: 8,203.4] | | | | [removed: 4,166.1] [added: 5,542.3] | | | | [removed: 48.0] [added: 12.0] | % | | [removed: 33.0] [added: 48.0] | % |

| Unconsolidated joint business revenues | [removed: 1,195.4] [added: 1,339.2] | | | | [removed: 1,126.0] [added: 1,195.4] | | | | [removed: 1,137.9] [added: 1,126.0] | | | | [removed: 6.2] [added: 12.0] | % | | [removed: (1.0] [added: 6.2] | [removed: )%] [added: %] |

| Other revenues | [removed: 304.5] [added: 236.1] | | | | [removed: 263.9] [added: 304.5] | | | | [removed: 212.5] [added: 263.9] | | | | [removed: 15.4] [added: (22.5] | [removed: %] [added: )%] | | [removed: 24.2] [added: 15.4] | % |

| Multiple [removed: Sclerosis (MS):] [added: Sclerosis:] | | | | | | | | | | | | | | | | | |

[removed: |] PLEGRIDY [removed: | 44.5 | | | | — | | | | — | | | | | | | | |]

| TECFIDERA | [removed: 2,909.2] [added: $] | [added: 3,638.4] | | | [removed: 876.1] [added: $] | [added: 2,909.2] | | | [removed: —] [added: $] | [added: 876.1] | | | [removed: 232.1] [added: 25.1] | % | | [added: 232.1] | [added: %] |

| TYSABRI | [removed: 1,959.5] [added: 1,886.1] | | | | [removed: 1,526.5] [added: 1,959.5] | | | | [removed: 1,135.9] [added: 1,526.5] | | | | [removed: 28.4] [added: (3.7] | [removed: %] [added: )%] | | [removed: 34.4] [added: 28.4] | % |

| FAMPYRA | [removed: 80.2] [added: 89.7] | | | | [removed: 74.0] [added: 80.2] | | | | [removed: 57.4] [added: 74.0] | | | | [removed: 8.4] [added: 11.8] | % | | [removed: 28.9] [added: 8.4] | % |

| ALPROLIX | [removed: 76.0] [added: 234.5] | | | | [removed: —] [added: 76.0] | | | | — | | | | [added: 208.6] | [added: %] | | | |

| ELOCTATE | [removed: 58.4] [added: 319.7] | | | | [removed: —] [added: 58.4] | | | | — | | | | [added: 447.4] | [added: %] | | | |

| FUMADERM | [removed: 62.5] [added: 51.4] | | | | [removed: 60.2] [added: 62.5] | | | | [removed: 59.7] [added: 60.2] | | | | [removed: 3.8] [added: (17.8] | [removed: %] [added: )%] | | [removed: 0.8] [added: 3.8] | % |

| Total product revenues | $ | [removed: 8,203.4] [added: 9,188.5] | | | $ | [removed: 5,542.3] [added: 8,203.4] | | | $ | [removed: 4,166.1] [added: 5,542.3] | | | [removed: 48.0] [added: 12.0] | % | | [removed: 33.0] [added: 48.0] | % |

[removed: | AVONEX: | | | | | | | | | | | | | | | | | |][added: AVONEX]

[removed: | (1) | E.U. sales] [added: Sales of PLEGRIDY] began in the [removed: third quarter of 2014] [added: E.U.] and [removed: in] the U.S. in the [added: third and] fourth [removed: quarter] [added: quarters] of [removed: 2014. |][added: 2014, respectively.]

For [removed: 2013] [added: 2015] compared to [removed: 2012,] [added: 2014,] the [removed: increase] [added: decrease] in U.S. AVONEX revenues was primarily due to [removed: price increases, partially offset by] a decrease in unit sales volume of [removed: 8%,] [added: 17%,] which [removed: were] [added: was] attributable in part to patients transitioning to [added: PLEGRIDY and] oral [removed: therapies] [added: MS therapies,] including [removed: TECFIDERA.][added: TECFIDERA, partially offset by gross price increases.]

For 2014 compared to 2013, the decrease in rest of world AVONEX revenues was due to a 7% decrease in unit [removed: demand] [added: sales volume] in Europe primarily attributable to patients transitioning to oral therapies including TECFIDERA, partially offset by a 6% increase in unit demand in the [removed: Emerging Markets] [added: emerging markets] region.

| | [removed: 2014] [added: 2015] compared to [removed: 2013] [added: 2014] | | | [removed: 2013] [added: 2014] compared to [removed: 2012] [added: 2013] | | | | | | | | | | | | | [added: |]

We also have a collaboration agreement with Genentech, Inc. (Genentech), a wholly-owned member of the Roche Group, which entitles us to certain business and financial rights with respect to RITUXAN for the treatment of non-Hodgkin's lymphoma, chronic lymphocytic leukemia (CLL) and other conditions, GAZYVA indicated for the treatment of CLL, and other potential anti-CD20 therapies.

In addition to our innovative drug development efforts, we aim to leverage our manufacturing capabilities and scientific expertise to extend our mission to improve the lives of patients living with serious diseases through the development, manufacture and marketing of biosimilars through

Samsung Bioepis, our joint venture with Samsung BioLogics Co. Ltd. (Samsung Biologics).


Diluted earnings per share attributable to Biogen Inc. were $15.34 for 2015, representing an increase of 24.0% over the same period in 2014.

| • | Total revenues were $10,763.8 million for 2015, representing an increase of 10.9% over the same period in 2014. |

| • | Product revenues, net totaled $9,188.5 million for 2015, representing an increase of 12.0% over the same period in 2014. This increase was driven by a 25.1% increase in worldwide TECFIDERA revenues as well as revenue from our recent product additions PLEGRIDY, ELOCTATE and ALPROLIX, partially offset by a decrease in worldwide AVONEX and TYSABRI revenues. In addition, product revenues, net for 2015, compared to the same period in 2014, were negatively impacted by foreign currency exchange losses of $388.1 million, partially offset by comparative net gains recognized under our foreign currency hedging program of $166.3 million. |

| • | Our share of RITUXAN and GAZYVA operating profits totaled $1,339.2 million for 2015, representing an increase of 12.0% over the same period in 2014. This increase was primarily due to a 4% increase in U.S. product sales of RITUXAN and price increases. |

| • | Other revenues totaled $236.1 million for 2015, representing a decrease of 22.5% from the same period in 2014. This decrease was driven by a 73.1% decrease in royalty revenues primarily due to the expiration of U.S. patent rights that gave rise to royalty payments related to ANGIOMAX, partially offset by a 47.6% increase in corporate partner revenues primarily due to an increase in contract manufacturing activities. |

On September 15, 2015, we issued senior unsecured notes for an aggregate principal amount of $6.0 billion.

During the year ended December 31, 2015, we repurchased and retired approximately 16.8 million shares of common stock at a cost of $5.0 billion under our share repurchase programs.

Restructuring

On October 21, 2015, we announced a corporate restructuring, which includes the termination of certain pipeline programs and an 11% reduction in workforce.

Acquisitions

On February 12, 2015, we completed the acquisition of all of the outstanding stock of Convergence Pharmaceuticals (Convergence), a clinical-stage biopharmaceutical company with a focus on developing product candidates for neuropathic pain.

Collaborative and Other Relationships

On July 2, 2015, we announced a collaboration and license agreement to develop gene-based therapies for multiple ophthalmic diseases with Applied Genetic Technologies Corporation (AGTC).

On September 9, 2015, we announced an agreement with Mitsubishi Tanabe Pharma Corporation (MTPC) to exclusively license amiselimod (MT-1303), a late stage experimental medicine with potential in multiple autoimmune indications.

Amiselimod is an oral compound that targets the sphingosine 1-phosphate receptor.

The biopharmaceutical industry and the markets in which we operate are intensely competitive.

In addition, sales of our products are dependent, in large part, on the availability and extent of coverage, pricing and reimbursement from government health administration authorities, private health insurers and other organizations.

For additional information related to our competition and pricing risks that could negatively impact our products, please read the “Risk Factors” section of this report.

| Interferon* | 2,968.7 | | | | 3,057.6 | | | | 3,005.5 | | | | (2.9 | )% | | 1.7 | % |

* Interferon includes AVONEX and PLEGRIDY.

Percentage not meaningful.


For 2015 compared to 2014, the increase in U.S. TECFIDERA revenues was primarily due to an increase in unit sales volume of 13% as TECFIDERA penetrated the U.S. market, and increases in gross price partially offset by higher discounts and allowances.

For 2015 compared to 2014, the increase in rest of world TECFIDERA revenues was primarily due to increases in unit sales volume in existing markets and in additional markets as we continue to launch the product and expand our presence around the world.

These increases were partially offset by pricing reductions in Germany as described below.

Rest of world TECFIDERA revenues for 2015 compared to 2014 were negatively impacted by foreign currency exchange losses totaling $74.1 million.

These foreign currency exchange losses were partially offset by comparative net gains recognized under our foreign currency hedging program totaling $47.5 million.

Under German legislation related to the pricing of new drug products introduced in the German market, pricing is unregulated for the first 12 months after launch.

We launched TECFIDERA in Germany in February 2014, and our unregulated pricing ended in the first quarter of 2015, at which time we began recognizing revenue at the fixed price established through our negotiations with the German regulatory authorities.

The negotiated annual price is fixed for three years.

While we continue to see a strong uptake of TECFIDERA in newly launched territories, total market growth and patient switch rates in our maturing markets, such as the U.S. and Germany, have returned to historical averages for MS.

Interferon


For 2015 compared to 2014, the decrease in rest of world AVONEX revenues was primarily due to a decrease in unit sales volume of 11% primarily in Europe, attributable to patients transitioning to PLEGRIDY and oral MS therapies, including TECFIDERA.

Rest of world AVONEX revenues for 2015 compared to 2014, were negatively impacted by foreign currency exchange losses of $153.1 million.

These foreign currency exchange losses were partially offset by comparative net gains recognized under our foreign currency hedging program of $58.4 million.

We also collaborate on the development and commercialization of RITUXAN for the treatment of non-Hodgkin's lymphoma, chronic lymphocytic leukemia and other conditions and share profits and losses for GAZYVA which is approved for the treatment of chronic lymphocytic leukemia.

The following table is a summary of financial results achieved:

| | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Income from operations | $ | 3,972.4 | | | $ | 2,515.5 | | | 57.9 | % |

| Net income attributable to Biogen Idec Inc. | $ | 2,934.8 | | | $ | 1,862.3 | | | 57.6 | % |

| Diluted earnings per share attributable to Biogen Idec Inc. | $ | 12.37 | | | $ | 7.81 | | | 58.3 | % |

| | |

| --- | --- |

| (1) | Commencing in the second quarter of 2013, product and total revenues include 100% of net revenues related to TYSABRI as a result of our acquisition of all remaining rights to TYSABRI from Elan and net revenues related to sales of TECFIDERA. |

| • | Worldwide AVONEX revenues totaled $3,013.1 million for 2014, representing an increase of 0.3% over 2013. |

| • | Worldwide PLEGRIDY revenues totaled $44.5 million for 2014. |

| • | Worldwide TECFIDERA revenues totaled $2,909.2 million for 2014, representing an increase of 232.1% over 2013. |

| • | Worldwide TYSABRI revenues totaled $1,959.5 million for 2014, representing an increase of 28.4% over 2013. |

| • | Worldwide FAMPYRA revenues totaled $80.2 million for 2014, representing an increase of 8.4% over 2013. |

| • | Worldwide ALPROLIX revenues totaled $76.0 million for 2014. |

| • | Worldwide ELOCTATE revenues totaled $58.4 million for 2014. |

| • | Our share of revenues from unconsolidated joint business totaled $1,195.4 million for 2014, representing an increase of 6.2% from 2013. |

Higher selling, general and administrative expense resulted from increased costs incurred in connection with our recent product launches.

We conduct our business within the biopharmaceutical industry, which is highly competitive.

The Patient Protection and Affordable Care Act (PPACA)

The PPACA included a significant expansion of the Medicaid program, as well as the creation of new state-based health benefit exchanges, or marketplaces, through which individuals and small businesses may purchase health insurance.

Premium and cost-sharing credits and subsidies are available to those who qualify based on income.

Marketplace plans began to enroll new members in October 2013, and coverage began on January 1, 2014.

Although the effects of the legislation are still unclear, PPACA will result in a greater number of individuals with health insurance under Medicaid and the marketplace health plans.

The impact on manufacturers, including us, will depend in part on the formulary and benefit design decisions made by insurance sponsors or plans participating in the programs.

It is possible that individuals who were previously unable to access insurance may now become insured, thus increasing coverage for our products.

This potential increase in coverage, however, may be offset by the added discounts that could be required in these channels as well as the number of patients who over time move from commercial insurance to the health insurance marketplaces.

It is also possible that we may need to provide discounts or rebates to such plans in order to maintain favorable formulary access for our products for this patient population, which could have an adverse impact on our sales and results of operations.

Our products that are subject to the BPD fee include PLEGRIDY, TECFIDERA and TYSABRI, which are recorded in selling, general and administrative expenses, and RITUXAN, which is recorded in unconsolidated joint business.

| | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | For the Years Ended December 31, | | | | | | | | | | | | % Change | | | | |

| Total revenues | $ | 9,703.3 | | | $ | 6,932.2 | | | $ | 5,516.5 | | | 40.0 | % | | 25.7 | % |

| AVONEX | $ | 3,013.1 | | | $ | 3,005.5 | | | $ | 2,913.1 | | | 0.3 | % | | 3.2 | % |

AVONEX and PLEGRIDY

Revenues from AVONEX and PLEGRIDY are summarized as follows:

| United States | $ | 1,956.7 | | | $ | 1,902.4 | | | $ | 1,793.7 | | | 2.9 | % | | 6.1 | % |

| Rest of world | 1,056.4 | | | | 1,103.1 | | | | 1,119.4 | | | | (4.2 | )% | | (1.5 | )% |

| Total AVONEX revenues | $ | 3,013.1 | | | $ | 3,005.5 | | | $ | 2,913.1 | | | 0.3 | % | | 3.2 | % |

Market Risk

We are subject to certain risks which may affect our results of operations, cash flows and fair values of assets and liabilities, including volatility in foreign currency exchange rates, interest rate movements, pricing pressures worldwide and weak economic conditions in the foreign markets in which we operate.

We manage the impact of foreign currency exchange rates and interest rates through various financial instruments, including derivative instruments such as foreign currency forward contracts, interest rate lock contracts and interest rate swap contracts.

We do not enter into financial instruments for trading or speculative purposes.

Further, we only enter into contracts with counterparties that have at least an "A" (or equivalent) credit rating.

The counter-parties to these contracts are major financial institutions and there is no significant concentration of exposure with any one counter-party.

Foreign Currency Exchange Risk

Our results of operations are subject to foreign currency exchange rate fluctuations due to the global nature of our operations.

We have operations or maintain distribution relationships in the U.S., Europe, Canada, Switzerland, Denmark, Japan, Australia, New Zealand and Central and South America.

In addition, we receive royalty revenues based on sales of RITUXAN in Canada.

As a result, our financial position, results of operations and cash flows can be affected by market fluctuations in foreign exchange rates, primarily with respect to the Euro, British pound sterling, Canadian dollar, Swiss franc, Danish krone, Japanese yen and Australian dollar.

While the financial results of our global activities are reported in U.S. dollars, the functional currency for most of our foreign subsidiaries is their respective local currency.

Fluctuations in the foreign currency exchange rates of the countries in which we do business will affect our operating results, often in ways that are difficult to predict.

In particular, as the U.S. dollar strengthens versus other currencies, the value of the non-U.S. revenue will decline when reported in U.S. dollars.

The impact to net income as a result of a strengthening U.S. dollar will be partially mitigated by the value of non-U.S. expense which will also decline when reported in U.S. dollars.

As the U.S. dollar weakens versus other currencies, the value of the non-U.S. revenue and expenses will increase when reported in U.S. dollars.

We have established revenue and operating expense hedging and balance sheet risk management programs to protect against volatility of future foreign currency cash flows and changes in fair value caused by volatility in foreign exchange rates.

Revenue and Operating Expense Hedging Program

Our foreign currency hedging program is designed to mitigate, over time, a portion of the impact resulting from volatility in exchange rate changes on revenues and operating expenses.

We use foreign currency forward contracts to manage foreign currency risk, with the majority of our forward contracts used to hedge certain forecasted revenue and operating expense transactions denominated in foreign currencies in the next 18 months.

We do not engage in currency speculation.

For a more detailed disclosure of our revenue and operating expense hedging program, please read Note 9, Derivative Instruments to our consolidated financial statements included in this report.

Our ability to mitigate the impact of exchange rate changes on revenues and net income diminishes as significant exchange rate fluctuations are sustained over extended periods of time.

In particular, devaluation or significant deterioration of foreign currency exchange rates are difficult to mitigate and likely to negatively impact earnings.

The cash flows from these contracts are reported as operating activities in our consolidated statements of cash flows.

Balance Sheet Risk Management Hedging Program

We also use forward contracts to mitigate the foreign currency exposure related to certain balance sheet items.

The primary objective of our balance sheet risk management program is to mitigate the exposure of foreign currency denominated net monetary assets of foreign affiliates.

In these instances, we principally utilize currency forward

contracts.

We have not elected hedge accounting for the balance sheet related items.

The cash flows from these contracts are reported as operating activities in our consolidated statement of cash flows.

The following quantitative information includes the impact of currency movements on forward contracts used in our revenue, operating expense and balance sheet hedging programs.

As of December 31, 2015 and 2014, a hypothetical adverse 10% movement in foreign currency rates compared to the U.S. dollar across all maturities would result in a hypothetical decrease in the fair value of forward contracts of approximately $185.0 million and $160.0 million, respectively.

The estimated fair value change was determined by measuring the impact of the hypothetical exchange rate movement on outstanding forward contracts.

Our use of this methodology to quantify the market risk of such instruments is subject to assumptions and actual impact could be significantly different.

The quantitative information about market risk is limited because it does not take into account all foreign currency operating transactions.

Interest Rate Risk

Our investment portfolio includes cash equivalents and short-term investments.

The fair value of our marketable securities is subject to change as a result of potential changes in market interest rates.

The information required by this Item is incorporated by reference to the discussion under “Market Risk” in Item 7.

“Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

| | |

| --- | --- |

Biogen [removed: Idec] is a global biopharmaceutical company focused on discovering, developing, manufacturing and delivering therapies [added: to patients] for [removed: neurological, autoimmune and] [added: the treatment of neurodegenerative diseases,] hematologic [added: conditions and autoimmune] disorders.

Our [removed: principal] marketed products include [added: TECFIDERA,] AVONEX, PLEGRIDY, [removed: TECFIDERA, TYSABRI,] [added: TYSABRI] and FAMPYRA for multiple sclerosis (MS), [removed: ALPROLIX] [added: ELOCTATE] for hemophilia [removed: B] [added: A] and [removed: ELOCTATE] [added: ALPROLIX] for hemophilia [removed: A.][added: B, and FUMADERM for the treatment of severe plaque psoriasis.]

We support our [removed: mission] [added: drug discovery and development efforts] through the commitment of significant resources to [added: discovery,] research and development programs and business development opportunities, particularly within areas of our scientific, manufacturing and technical expertise [removed: - neurology, immunology] and [removed: hematology, and] scientific adjacencies.

In [removed: 2003,] [added: March 2015,] we [removed: acquired Biogen, Inc. and] changed our [removed: corporate] name [removed: to] [added: from] Biogen Idec Inc. [added: to Biogen Inc.]

The following [removed: charts] [added: graphs] show our product sales and unconsolidated joint business revenues by principal product and geography as a percentage of revenue for the years ended December 31, [removed: 2014, 2013] [added: 2015, 2014] and [removed: 2012.][added: 2013.]

[removed: ][added: |  |]

(1) Other includes FAMPYRA, [removed: ALPROLIX, ELOCTATE] [added: ELOCTATE, ALPROLIX] and [removed: FUMADERM.][added: FUMADERM]

[removed: ][added: |  |]

Product sales for [removed: AVONEX, TECFIDERA] [added: TECFIDERA, AVONEX] and TYSABRI and unconsolidated joint business revenues for RITUXAN each accounted for more than 10% of our total revenue for the years ended December 31, [added: 2015,] 2014 and [removed: 2013, and AVONEX, TYSABRI and RITUXAN each accounted for more than 10% of our total revenue for the year ended December 31, 2012.][added: 2013.]

For additional financial information about our product and other revenues and geographic areas in which we operate, please read Note [removed: 25,] [added: 24,] Segment Information to our consolidated financial statements, Item 6.

[added: |] Multiple Sclerosis [removed: (MS) Products][added: | |]

Our MS products [added: and major markets] include:

[added: |] Hemophilia [removed: Products][added: | |]

Prophylactic infusions of Factor VIII or Factor IX, as applicable, temporarily replace clotting factor necessary to control bleeding and [removed: prevent] [added: help protect against] new bleeding episodes.

Our products for hemophilia [removed: A] and [removed: B] [added: major markets] include:

We collaborate with [removed: Swedish Orphan Biovitrum AB (Sobi)] [added: Sobi] to jointly develop and commercialize Factor VIII and Factor IX hemophilia products, including ELOCTATE and ALPROLIX.

For information about our [added: unconsolidated joint business and] agreement with [removed: Sobi,] [added: Genentech,] please read Note [removed: 20,] [added: 1, Summary of Significant Accounting Policies and Note 19,] Collaborative and Other Relationships to our consolidated financial statements included in this report.

We promote our products [added: worldwide, including] in the U.S., most of the major countries of the E.U. and [removed: Japan] [added: Japan,] primarily through our own sales forces and marketing groups.

[removed: We] [added: Among other things, we] provide customer service and other related programs for our products, such as disease and product specific websites, insurance research services and order, delivery and fulfillment services.

[removed: We] [added: In the U.S., we] have [removed: also] established programs [removed: in the U.S. which] [added: that] provide qualified uninsured or underinsured patients with marketed products at no or reduced charge, based on specific eligibility criteria.

In other countries, the distribution of our products varies from country to country, including through wholesale distributors of pharmaceutical products and [removed: third party] [added: third-party] distribution partners who are responsible for most marketing and distribution activities.

Our product sales to two wholesale distributors, AmerisourceBergen and McKesson, each accounted for more than 10% of our total revenues for the years ended December 31, [removed: 2014, 2013] [added: 2015, 2014] and [removed: 2012,] [added: 2013,] and on a combined basis, [removed: these wholesale distributors] accounted for approximately [removed: 60%, 56% and 30%] [added: 60%] of our gross product revenues for such years, respectively.

A commitment to research is fundamental to our [removed: company’s] mission.

By applying our expertise in biologics and our growing capabilities in small molecule, antisense, gene therapy, gene editing and other technologies, we target specific medical needs where [added: we believe] new or better treatments are needed.

The table below highlights our current research and development programs that are in clinical [removed: trials.][added: trials and the current phase of such programs.]

| [removed: | |] [added: TYSABRI] | [added: None] | Acute Ischemic Stroke | | [removed: None] | | [removed: Phase 2] | [added: | | | | | |]

| [added: Nusinersen] | [added: Ionis Pharmaceuticals] | [removed: ISIS - SMNRx] [added: Spinal Muscular Atrophy] | | [removed: Spinal muscular atrophy] | | [removed: Isis Pharmaceuticals] | | [removed: Phase 3] | [added: | | | |]

| [removed: | |] Anti-LINGO | [added: None] | [removed: Acute] Optic [removed: Neuritis] [added: Neuritis; Multiple Sclerosis] | | [removed: None] | | [removed: Phase 2] | [added: | | | | | |]

| [added: Aducanumab] | [added: Neurimmune SubOne AG] | [removed: BIIB037] [added: Alzheimer's Disease] | | [removed: Alzheimer’s disease] | | [removed: Neurimmune SubOne AG] | | [removed: Phase 1b; Preparing for Phase 3] | [added: | | | |]

| [added: BAN2401] | [added: Eisai] | [removed: BAN2401] [added: Alzheimer's Disease] | | [removed: Alzheimer’s disease] | | [removed: Eisai] | | [removed: Phase 2] | [added: | | | |]

| [added: E2609] | [added: Eisai] | [removed: E2609] [added: Alzheimer's Disease] | | [removed: Alzheimer’s disease] | | [removed: Eisai] | | [removed: Phase 2] | [added: | | | |]

| [removed: | | ISIS - DMPKRx] [added: IONIS-DMPKRx] | [added: Ionis Pharmaceuticals] | Myotonic Dystrophy | | [removed: Isis Pharmaceuticals] | | [removed: Phase 1] | [added: | | | | | |]

| [added: BIIB061] | [added: None] | [removed: BIIB061] [added: Multiple Sclerosis] | | [removed: MS] | | [removed: None] | | [removed: Phase 1] | [added: | | | |]

| [removed: Immunology] [added: BG00011 (STX-100)] | [added: None] | [removed: STX-100] [added: Idiopathic Pulmonary Fibrosis] | | [removed: Idiopathic pulmonary fibrosis] | | [removed: None] | | [removed: Phase 2a] | [added: | | | |]

[removed: | | | Anti-BDCA2 | |] [added: *] Systemic lupus erythematosus [removed: | | None | | Phase 1 |]

| [removed: Other] [added: GAZYVA] | [added: Genentech (Roche Group)] | [removed: GAZYVA (obinutuzumab)] [added: RITUXAN-Refractory Indolent Non Hodgkin’s Lymphoma] | | [removed: Non-Hodgkin’s lymphoma] | | [removed: Genentech (Roche Group)] | | [removed: Phase 3] | [added: | | | |]

[removed: | | | | | Lupus nephritis | |] Genentech (Roche Group) [removed: | | Phase 2 |]

[removed: | (1) |] For information about certain of our agreements with collaborators and other third parties, please see “Business Relationships” below and Note [removed: 20,] [added: 19,] Collaborative and Other Relationships to our consolidated financial statements included in this report. [removed: |]

[added: |] ZINBRYTA (daclizumab high yield process) [added: | |]

[added: | l |] ZINBRYTA is a monoclonal antibody [removed: that is being tested in] [added: for the treatment of] RRMS. [added: |]

We also have a collaboration agreement with Genentech, Inc. (Genentech), a wholly-owned member of the Roche Group (Roche Group), which entitles us to certain business and financial rights with respect to RITUXAN for the treatment of non-Hodgkin's lymphoma, chronic lymphocytic leukemia (CLL) and other conditions, GAZYVA indicated for the treatment of CLL, and other potential anti-CD20 therapies.

In addition to our innovative drug development efforts, we aim to leverage our manufacturing capabilities and scientific expertise to extend our mission to improve the lives of patients living with serious diseases through the development, manufacture and marketing of biosimilars through Samsung Bioepis, our joint venture with Samsung BioLogics Co. Ltd. (Samsung Biologics).

Key Developments

During 2015 and early 2016, we had a number of key developments affecting our business.

Corporate Matters

Company Name Change

Corporate Restructuring

In October 2015, we announced a corporate restructuring, which includes a reduction in workforce and discontinuation of certain programs.

We are reinvesting the resulting savings to support key commercial activities and the advancement of our pipeline candidates.

Capital Allocation

In 2015, our capital allocation strategy included the following elements:

| Share Repurchase Program | l | Returned approximately $5.0 billion to our shareholders through our share repurchase program |

| l | Utilized a portion of the proceeds from our $6.0 billion senior unsecured debt offering completed in September 2015 to fund our share repurchase program | |

| Acquisitions and Collaborations | l | Acquired Convergence Pharmaceuticals (Convergence), a clinical-stage biopharmaceutical company with a focus on developing product candidates for neuropathic pain |

| l | Obtained exclusive worldwide license, excluding Asia, from Mitsubishi Tanabe Pharma Corporation (MTPC) to amiselimod (MT-1303), a late stage experimental medicine with potential in multiple autoimmune indications | |

| l | Entered into a collaboration agreement with Applied Genetic Technologies Corporation (AGTC) to develop gene-based therapies for multiple ophthalmic diseases | |

| Investment in Manufacturing | l | Acquired land in Solothurn, Switzerland, where we plan to build a biologics manufacturing facility in the Commune of Luterbach over the next several years |

| l | Acquired the drug product manufacturing facility and supporting infrastructure of Eisai, Inc. (Eisai) in Research Triangle Park (RTP), North Carolina | |

Corporate Responsibility

| |

| --- |

| |

| Environmental Sustainability |

In 2015, we were named the biotechnology industry leader on the Dow Jones Sustainability World Index, an index that tracks the economic, environmental and social strategy and performance of the 2,500 largest companies in the S&P Global Broad Market Index.

In 2015, we announced that we achieved carbon neutrality, meaning we believe we have effectively neutralized all of the carbon emissions associated with our business.

| |

| --- |

| |

| Humanitarian Aid |

In 2014, we and Swedish Orphan Biovitrum AB (publ) (Sobi) began working with the World Federation of Hemophilia (WFH) to help people with hemophilia in the developing world through our pledge to donate up to one billion international units (IUs) of clotting factor therapy for humanitarian use, of which up to 500 million IUs will be donated to WFH USA over a period of five years.

In 2015, we made the first shipments of hemophilia therapy to WFH USA.

Product/Pipeline Developments

| l | In March 2015, the European Medicines Agency (EMA) validated our marketing authorization application (MAA) for ZINBRYTA for the treatment of relapsing forms of MS in the European Union (E.U.). |

| l | In April 2015, the U.S. Food and Drug Administration (FDA) accepted our Biologics License Application (BLA) for ZINBRYTA for the treatment of relapsing forms of MS in the United States (U.S.). |

| l | In July 2015, the results of ACTION, our Phase 2 trial investigating TYSABRI in acute ischemic stroke, did not demonstrate an impact on change in infarct volume, the primary endpoint. Exploratory endpoints suggested that TYSABRI had a beneficial impact on patient functional deficits. |

| l | In October 2015, the results of ASCEND, our Phase 3 study evaluating TYSABRI in secondary progressive MS (SPMS), did not achieve its primary and secondary endpoints, and the development of TYSABRI in SPMS was discontinued. |

| Anti-LINGO | |

| l | In January 2015, we announced top-line results from RENEW, our Phase 2 acute optic neuritis trial. |

| l | In November 2015, the European Commission (EC) approved ELOCTA, the approved trade name for ELOCTATE in the E.U., for the treatment of hemophilia A. |

| l | Sobi has assumed final development and commercialization of ELOCTA in their territory, which essentially includes Europe, North Africa, Russia, and certain markets in the Middle East (Sobi Territory). |

We also collaborate on the development and commercialization of RITUXAN for the treatment of non-Hodgkin's lymphoma, chronic lymphocytic leukemia and other conditions and share profits and losses for GAZYVA which is approved for the treatment of chronic lymphocytic leukemia.

We are focused on discovering and developing new therapies that improve the lives of patients having diseases with high unmet medical needs.

We were formed as a corporation in the State of California in 1985 under the name IDEC Pharmaceuticals Corporation and reincorporated as a Delaware corporation in 1997.

| --- | --- |

| • | AVONEX (interferon beta-1a), an intramuscular injectable therapy, indicated for the treatment of patients with relapsing forms of MS. AVONEX is a recombinant form of the interferon beta protein produced in the body in response to viral infection. The principal markets for AVONEX are the U.S., United Kingdom, France, Germany, Italy and Spain. |

| • | PLEGRIDY (peginterferon beta-1a), a subcutaneous injectable therapy, indicated in the U.S. for the treatment of patients with relapsing forms of MS and in the European Union (E.U.) for relapsing-remitting MS (RRMS). PLEGRIDY received approval from the European Commission (EC) in July 2014 and the U.S. Food and Drug Administration (FDA) in August 2014. |

| • | TECFIDERA (dimethyl fumarate), an oral therapy indicated in the U.S. for the treatment of patients with relapsing forms of MS and in the EU for people with RRMS. TECFIDERA was approved by the FDA in March 2013 and the EC in February 2014. |

| • | TYSABRI (natalizumab), a monoclonal antibody approved in numerous countries as a monotherapy for the treatment of patients with relapsing forms of MS. TYSABRI is also approved in the U.S. to treat Crohn's disease, an inflammatory disease of the intestines. The principal markets for TYSABRI in MS are the U.S., the United Kingdom, France, Germany, Italy and Spain. TYSABRI was approved in Japan in March 2014. |

| • | FAMPYRA (prolonged-release fampridine tablets), is indicated for the improvement of walking ability in adult patients with MS. FAMPYRA is a prolonged-release tablet formulation of the drug fampridine. We have a license from Acorda Therapeutics, Inc. (Acorda) to develop and commercialize FAMPYRA in all markets outside the U.S. Our principal markets for FAMPRYA are France, Germany, Spain and Canada. For information about our agreement with Acorda, please read Note 20, Collaborative and Other Relationships to our consolidated financial statements included in this report. |

| • | ALPROLIX \[Coagulation Factor IX (Recombinant), Fc Fusion Protein\], a recombinant DNA-derived, coagulation Factor IX concentrate indicated in the U.S. for treatment in adults and children with hemophilia B for control and prevention of bleeding episodes, perioperative management and routine prophylaxis to prevent or reduce the frequency of bleeding episodes. ALPROLIX was approved by the FDA in March 2014 and in Japan in June 2014. |

| • | ELOCTATE \[Antihemophilic Factor (Recombinant), Fc Fusion Protein\], a recombinant DNA-derived, antihemophilic factor indicated in the U.S. for treatment in adults and children with hemophilia A for control and prevention of bleeding episodes, perioperative management and routine prophylaxis to prevent or reduce the frequency of bleeding episodes. ELOCTATE was approved by the FDA in June 2014 and in Japan in December 2014. |

Genentech Collaboration

We collaborate with Genentech, Inc. (Genentech), a wholly-owned member of the Roche Group, on the development and commercialization of RITUXAN.

We also share operating profits and losses relating to GAZYVA with Genentech in the U.S. The Roche Group and its sub-licensees maintain sole responsibility for the development, manufacturing and commercialization of GAZYVA in the U.S. For information about our unconsolidated joint business and agreement with Genentech, please read Note 1, Summary of Significant Accounting Policies and Note 20, Collaborative and Other Relationships to our consolidated financial statements included in this report.

| • | RITUXAN (rituximab), a widely prescribed monoclonal antibody used to treat non-Hodgkin's lymphoma, rheumatoid arthritis, chronic lymphocytic leukemia (CLL) and two forms of ANCA-associated vasculitis. Non-Hodgkin's lymphoma and CLL are cancers that affect lymphocytes, which are a type of white blood cell that help to fight infection. Rheumatoid arthritis is a chronic disease that occurs when the immune system mistakenly attacks the body's joints, resulting in inflammation, pain and joint damage. ANCA-associated vasculitis is a rare autoimmune disease that largely affects the small blood vessels of the kidneys, lungs, sinuses, and a variety of other organs. |

| • | GAZYVA (obinutuzumab), in combination with chlorambucil, is indicated for the treatment of patients with previously untreated CLL. The FDA granted GAZYVA breakthrough therapy designation due to the significance of the positive progression-free survival results from the Phase 3 CLL11 clinical trial and the serious and life threatening nature of CLL. GAZYVA was approved by the FDA in November 2013. |

| • | FUMADERM (fumaric acid esters), a prolonged-release tablet formulation approved in Germany only for the treatment of adult patients with moderate to severe plaque psoriasis. Psoriasis is a skin disease in which cells build up on the skin surface and form scales and red patches. |

Our research and development strategy is to discover and develop differentiated molecules that improve safety or efficacy for unmet medical needs.

For the years ended December 31, 2014, 2013 and 2012, research and development expenses were $1,893.4 million, $1,444.1 million and $1,334.9 million, respectively.

| | | | | | | | | |

| Therapeutic Area | | Product Candidate | | Targeted Indications | | Collaborator (1) | | Status |

| Neurology | | ZINBRYTA (daclizumab high yield process) | | MS | | AbbVie Biotherapeutics | | Phase 3 completed; Expect to submit MAA to FDA and EMA in 2015 |

| | | TYSABRI (natalizumab) | | Secondary progressive MS | | None | | Phase 3 |

| | | | | MS | | None | | Phase 2 |

| | | Neublastin | | Neuropathic pain | | None | | Phase 2 |

| Hematology | | ALPROLIX \[Coagulation Factor IX (Recombinant), Fc Fusion Protein\] | | Hemophilia B | | Swedish Orphan Biovitrum | | Expect to submit MAA to EMA in 2015 |

| | | ELOCTATE \[Antihemophilic Factor (Recombinant), Fc Fusion Protein\] | | Hemophilia A | | Swedish Orphan Biovitrum | | MAA submitted and under regulatory review by EMA |

| | | Anti-TWEAK | | Lupus nephritis | | None | | Phase 2 |

| | | Anti-CD40 Ligand | | Systemic lupus erythematosus | | UCB Pharma | | Phase 1b |

Results showed that ZINBRYTA was superior on the study's primary endpoint, demonstrating a statistically significant reduction in annualized relapse rates when compared to interferon beta-1a (AVONEX).

In May 2013, we completed patient enrollment in a Phase 3 study of TYSABRI in secondary progressive MS, known as ASCEND.

The study has a duration of approximately two years and involves approximately 875 patients.

Secondary progressive MS is characterized by a steady progression of nerve damage, symptoms and disability.

In October 2014, we submitted a marketing authorization application (MAA) to the European Medicines Agency (EMA) for ELOCTA, the trade name for ELOCTATE in the E.U. The regulatory application included results from A-LONG, the pivotal Phase 3 clinical study that examined the efficacy, safety and pharmacokinetics of rFVIIIFc in males 12 years of age and older with severe hemophilia A and from Kids A-LONG, the Phase 3 clinical study that evaluated the efficacy and safety of rFVIIIFc in children with hemophilia A under the age of 12.

In March 2014, ALPROLIX was approved by the FDA for the treatment of hemophilia B.

Pediatric data will be required as part of the MAA for ALPROLIX that we plan to submit to the EMA.

We have initiated Kids B-LONG, a global pediatric study evaluating the efficacy and safety of recombinant factor IX Fc fusion protein (rFIXFc) in children with hemophilia B under the age of 12.

In August 2014, Isis Pharmaceuticals, Inc. (Isis) announced the initiation of a pivotal Phase 3 study evaluating ISIS-SMNRx in infants with spinal muscular atrophy (SMA), the most common genetic cause of infant mortality.

The study will evaluate the efficacy and safety of a 12mg dose of ISIS-SMNRx with a primary endpoint of survival or permanent ventilation.

In November 2014, Isis announced the initiation of a pivotal Phase 3 study evaluating the efficacy and safety of ISIS-SMNRx in non-ambulatory children with SMA.

For a discussion of legal matters as of December 31, [removed: 2014,] [added: 2015,] please read Note [removed: 21,] [added: 20,] Litigation to our consolidated financial statements included in this report, which is incorporated into this item by reference.

| | |

| --- | --- |

| [removed: þ] [added: x] | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |

| | For the fiscal year ended December 31, [removed: 2014] [added: 2015] |

| [removed: ¨] [added: o] | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |

BIOGEN [removed: IDEC] INC.

Yes [removed: þ] [added: x] No [removed: ¨][added: o]

Yes [removed: ¨] [added: o] No [removed: þ][added: x]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files): Yes [removed: þ] [added: x] No [removed: ¨][added: o]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [added: x]

| Large accelerated filer [removed: þ] [added: x] | | Accelerated filer [removed: ¨] [added: o] | | Non-accelerated filer [removed: ¨] [added: o] | | Smaller reporting company [removed: ¨] [added: o] |

The aggregate market value of the registrant’s common stock held by non-affiliates of the registrant (without admitting that any person whose shares are not included in such calculation is an affiliate) computed by reference to the price at which the common stock was last sold as of the last business day of the registrant’s most recently completed second fiscal quarter was [removed: $74,386,280,444.][added: $94,898,425,323.]

As of January [removed: 30, 2015,] [added: 29, 2016,] the registrant had [removed: 234,614,474] [added: 218,672,717] shares of common stock, $0.0005 par value, outstanding.

Portions of the definitive proxy statement for our [removed: 2015] [added: 2016] Annual Meeting of Stockholders are incorporated by reference into Part III of this report.

For the Year Ended December 31, [removed: 2014][added: 2015]

| [Item [removed: 1.](#sE1DE6ECF77A5AA37EE2A5D2ED6A1BDA5)] [added: 1.](#sA30F171FDE9DE638C657B512B1605F7B)] | [removed: [Business](#sE1DE6ECF77A5AA37EE2A5D2ED6A1BDA5)] [added: [Business](#sA30F171FDE9DE638C657B512B1605F7B)] | [removed: [1](#sE1DE6ECF77A5AA37EE2A5D2ED6A1BDA5)] [added: [1](#sA30F171FDE9DE638C657B512B1605F7B)] |

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| [PART [removed: III](#sFE2AE7E9466EA7C0D95F5D2EDC7DF2F6)] [added: III](#s8BB64F87AB14E13A6619B512B71A9914)] | | |

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| [Exhibit [removed: Index](#s97E0C2686B13BD2EBDE85D2EE59AB1FC)] [added: Index](#sC7CE2221B2FBA0FCC50DB512BFE57186)] | | [A- [removed: 1](#s97E0C2686B13BD2EBDE85D2EE59AB1FC)] [added: 1](#sC7CE2221B2FBA0FCC50DB512BFE57186)] |

This report contains forward-looking statements that are being made pursuant to the provisions of the Private Securities Litigation Reform Act of 1995 (the [removed: “Act”)] [added: Act)] with the intention of obtaining the benefits of the “Safe Harbor” provisions of the Act.

| • | the anticipated amount, timing and accounting of revenues, contingent payments, milestone, royalty and other payments under licensing, collaboration or acquisition agreements, tax positions and contingencies, collectability of receivables, pre-approval inventory, cost of sales, research and development costs, compensation and other [added: selling, general and administrative] expenses, amortization of intangible assets, foreign currency exchange [removed: risk] [added: risk, estimated fair value of assets] and [added: liabilities, and] impairment assessments; |

| • | the potential impact of increased product competition in the [removed: multiple sclerosis (MS), hemophilia and oncology markets;] [added: markets in which we compete;] |

| • | patent terms, patent term extensions, patent office [removed: actions,] [added: actions] and expected availability and period of regulatory exclusivity; |

10-K 1 biib-20151231x10k.htm 10-K


Yes x No o

Yes o No x

BIOGEN INC.

| [PART I](#s1FF29E08DDAF0F7C756BB512B13F13FE) | | |

| [PART II](#s3D24CA0B08FF4F441AECB512B25A6EB0) | | |

| [PART IV](#sC9ADA8D49A749C17E525B512B814F67B) | | |

| [Signatures](#sAB131B415CFDEFD36707B512B8672AA5) | | [88](#sAB131B415CFDEFD36707B512B8672AA5) |

| • | expectations, plans and prospects relating to sales, pricing, growth and launch of our marketed and pipeline products; |

| • | the anticipated benefits, cost savings, and charges related to our corporate restructuring initiatives; |

| • | our manufacturing capacity, use of third-party contract manufacturing organizations and plans and timing relating to the expansion of our manufacturing capabilities, including anticipated investments and activities in new manufacturing facilities; |

Other trademarks referenced in this report are the property of their respective owners.

10-K 1 biib-20141231x10k.htm 10-K

| [PART I](#s40981D0FC73B7D8F7FF95D2ED6842536) | | |

| [PART II](#s8B1FD6341A64C5281D035D2ED79BDD75) | | |

| [PART IV](#sAE55CB0F98B8FE96F0775D2EDD76219E) | | |

| [Signatures](#s34C567DB7507FFAD7DE35D2EDDC9258B) | | [67](#s34C567DB7507FFAD7DE35D2EDDC9258B) |

| • | our manufacturing capacity and use of third party contract manufacturing organizations to provide manufacturing services; |

| • | the drivers for growing our business, including our plans to pursue business development and research opportunities; |

The following are trademarks of the respective companies listed: ACTEMRA® - Chugai Seiyaku Kabushiki Kaisha; ADVATE® \- Baxter International Inc.; ANGIOMAX® and ANGIOXTM - The Medicines Company; ARZERRA® - Glaxo Group Limited; BENLYSTA® - GlaxoSmithKline Intellectual Property Limited; AUBAGIO® - Sanofi Societe Anonyme France; BENEFIX® - Genetics Institute LLC; BETASERON®\- Bayer Pharma AG; CIMZIA® - UCB Pharma, S.A.; COPAXONE® - Teva Pharmaceutical Industries Limited; ENBREL® - Immunex Corporation; EXTAVIA® and GILENYA® - Novartis AG; FAMPYRATM - Acorda Therapeutics, Inc.; GAZYVA® - Genentech, Inc.; HELIXATE® \- CSL Behring LLC; HUMIRA® - AbbVie Biotechnology Ltd.; IMBRUVICA® \- Pharmacyclics, Inc.; KOGENATE® \- Bayer AG; LEMTRADA® - Genzyme Corporation; ORENCIA® - Bristol-Myers Squibb Company; REBIF® - Ares Trading S.A.; REMICADE® - Janssen Biotech, Inc.; RIXUBIS - Baxter International Inc.; SIMPONI® and SIMPONI ARIATM - Johnson & Johnson; TREANDA® - Cephalon, Inc.; XELJANZ® - Pfizer Inc.; XYNTHA® \- Wyeth LLC; and ZYDELIG® \- Gilead Sciences.

| | |

| --- | --- |

Below is a summary of our owned and leased properties as of December 31, [removed: 2014.][added: 2015.]

In addition, we lease a total of approximately [removed: 1,225,000] [added: 1,312,000] square feet in Massachusetts, which is summarized as follows:

| • | [removed: 822,000] [added: 909,000] square feet in Cambridge, Massachusetts, which is comprised of a 67,000 square foot biologics manufacturing facility and [removed: 755,000] [added: 842,000] square feet for our corporate headquarters, laboratory and additional office space; |

In RTP, North Carolina, we own approximately [removed: 740,000] [added: 834,000] square feet of real estate space, which is summarized as follows:

| • | [removed: 60,000] [added: 84,000] square feet of warehouse [removed: space;] [added: space] and [added: utilities;] |

In addition, we lease [removed: 48,000] [added: 188,000] square feet of a facility in RTP, North Carolina from Eisai to manufacture our and Eisai's oral solid dose [removed: products.][added: products and 10,000 square feet of warehouse space in Durham, North Carolina.]

We [removed: have] [added: own] a large-scale biologics manufacturing facility totaling approximately 228,000 square feet located in Hillerød, Denmark.

We also own approximately 306,000 square feet of additional [removed: space] [added: space,] which is [removed: currently in use at this location and is] summarized as follows:

| • | 70,000 square feet related to a parenteral fill-finish facility; and |

Switzerland

In December 2015, we acquired land in Solothurn, Switzerland, where we plan to build a biologics manufacturing facility in the Commune of Luterbach over the next several years.

| | |

| --- | --- |

Our common stock trades on The NASDAQ Global Select Market under the symbol “BIIB.” The following table shows the high and low sales price for our common stock as reported by The NASDAQ Global Select Market for each quarter in the years ended December 31, [removed: 2014] [added: 2015] and [removed: 2013:][added: 2014:]

| First Quarter | $ | [removed: 358.89] [added: 480.18] | | | $ | [removed: 270.62] [added: 334.40] | | | $ | [removed: 192.92] [added: 358.89] | | | $ | [removed: 139.72] [added: 270.62] | |

| Second Quarter | $ | [removed: 322.25] [added: 432.88] | | | $ | [removed: 272.02] [added: 368.88] | | | $ | [removed: 242.64] [added: 322.25] | | | $ | [removed: 191.80] [added: 272.02] | |

| Third Quarter | $ | [removed: 349.00] [added: 412.24] | | | $ | [removed: 298.31] [added: 265.00] | | | $ | [removed: 248.95] [added: 349.00] | | | $ | [removed: 203.55] [added: 298.31] | |

| Fourth Quarter | $ | [removed: 361.93] [added: 311.65] | | | $ | [removed: 290.85] [added: 254.00] | | | $ | [removed: 298.82] [added: 361.93] | | | $ | [removed: 221.07] [added: 290.85] | |

As of January [removed: 30, 2015,] [added: 29, 2016,] there were approximately [removed: 816] [added: 742] stockholders of record of our common stock.

The following table summarizes our common stock repurchase activity [added: under our 2015 Share Repurchase Program] during the fourth quarter of [removed: 2014:][added: 2015:]

| Period | Total Number of Shares Purchased (#) | | | Average Price Paid per Share ($) | | | Total Number of Shares Purchased as Part of Publicly Announced Programs (#) | | | Maximum [removed: Number] [added: Approximate Dollar Value] of Shares That May Yet Be Purchased Under Our Programs [added: ($ in millions)] | | [added: |]

[removed: This authorization] [added: The 2011 Share Repurchase Program] does not have an expiration date.

The graph below compares the five-year cumulative total stockholder return on our common stock, the S&P 500 Index, the Nasdaq Pharmaceutical Index and the Nasdaq Biotechnology Index assuming the investment of $100.00 on December 31, [removed: 2009] [added: 2010] with dividends being reinvested.

[removed: ][added: ]

| | [removed: 2009 | |] 2010 | | 2011 | | 2012 | | 2013 | | 2014 | | [added: 2015 | |]

| | 2015 | | | | | | | | 2014 | | | | | | |

In May 2015, our Board of Directors authorized a program to repurchase up to $5.0 billion of our common stock (2015 Share Repurchase Program).

| October 2015 | 4,976,270 | | | 275.87 | | | 4,976,270 | | | $ | 629.0 | |

| November 2015 | 2,131,417 | | | 295.12 | | | 2,131,417 | | | $ | — | |

| December 2015 | — | | | — | | | — | | | $ | — | |

| Total | 7,107,687 | | | 281.64 | | | | | | | | |

As of December 31, 2015, the 2015 Share Repurchase Program was completed and we repurchased and retired approximately 16.8 million shares of common stock at a cost of $5.0 billion during the year ended December 31, 2015.

In February 2011, our Board of Directors authorized a program to repurchase up to 20.0 million shares of our common stock (2011 Share Repurchase Program), which has been used principally to offset common stock issuances under our share-based compensation plans.

We did not repurchase any shares of common stock under our 2011 Share Repurchase Program during the year ended December 31, 2015 and have approximately 1.3 million shares remaining available for repurchase under this authorization.

| | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | | |

| Biogen Inc. | 100.00 | | 164.13 | | 218.30 | | 416.96 | | 506.26 | | 456.90 | |

| NASDAQ Pharmaceutical | 100.00 | | 107.59 | | 123.00 | | 166.89 | | 203.30 | | 214.35 | |

| S&P 500 Index | 100.00 | | 102.11 | | 118.45 | | 156.82 | | 178.28 | | 180.75 | |

| NASDAQ Biotechnology | 100.00 | | 112.09 | | 148.78 | | 247.01 | | 331.99 | | 371.06 | |

| | 2014 | | | | | | | | 2013 | | | | | | |

In addition, as of January 30, 2015, 30 stockholders of record of Biogen, Inc. common stock have yet to exchange their shares of Biogen, Inc. common stock for our common stock as contemplated by the merger of Biogen, Inc. and IDEC Pharmaceuticals Corporation in November 2003.

| | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| October 2014 | 7,862 | | | 297.72 | | | 7,771 | | | 2,939,869 | |

| November 2014 | 1,395,731 | | | 314.38 | | | 1,395,731 | | | 1,544,138 | |

| December 2014 | 279,982 | | | 305.98 | | | 279,982 | | | 1,264,156 | |

| Total | 1,683,575 | | | 312.90 | | | | | | | |

On February 11, 2011, we announced that our Board of Directors authorized the repurchase of up to 20.0 million shares of common stock.

As of December 31, 2014, approximately 18.7 million shares of our common stock at a cost of $2,770.0 million have been repurchased under this authorization and approximately 1.3 million shares of our common stock remain available for repurchase.

| Biogen Idec Inc. | 100.00 | | 125.33 | | 205.70 | | 273.59 | | 522.56 | | 634.49 | |

| NASDAQ Pharmaceutical | 100.00 | | 108.40 | | 116.03 | | 154.38 | | 254.51 | | 332.21 | |

| S&P 500 Index | 100.00 | | 115.06 | | 117.49 | | 136.30 | | 180.44 | | 205.14 | |

| NASDAQ Biotechnology | 100.00 | | 116.06 | | 130.08 | | 172.67 | | 286.67 | | 385.29 | |

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| --- | --- |

BIOGEN [removed: IDEC] INC. AND SUBSIDIARIES

| | [removed: 2014] [added: 2015] | | | | [removed: 2013] [added: 2014] | | | | [removed: 2012] [added: 2013] | | | | [removed: 2011] [added: 2012] | | | | [removed: 2010] [added: 2011] | | |

| (In millions, except per share amounts) | [added: (3) (4)] | | | | [removed: (2) (4)] | | | | [added: (1) (2)] | | | | [removed: (2) (3)] | | | | (1) | | |

| Product [removed: revenues] [added: revenues, net] | $ | [removed: 8,203.4] [added: 9,188.5] | | | $ | [removed: 5,542.3] [added: 8,203.4] | | | $ | [removed: 4,166.1] [added: 5,542.3] | | | $ | [removed: 3,836.1] [added: 4,166.1] | | | $ | [removed: 3,470.1] [added: 3,836.1] | |

| Revenues from unconsolidated joint business | [removed: 1,195.4] [added: 1,339.2] | | | | [removed: 1,126.0] [added: 1,195.4] | | | | [removed: 1,137.9] [added: 1,126.0] | | | | [removed: 996.6] [added: 1,137.9] | | | | [removed: 1,077.2] [added: 996.6] | | |

| Other revenues | [removed: 304.5] [added: 236.1] | | | | [removed: 263.9] [added: 304.5] | | | | [removed: 212.5] [added: 263.9] | | | | [removed: 215.9] [added: 212.5] | | | | [removed: 169.1] [added: 215.9] | | |

| Total revenues | [removed: 9,703.3] [added: 10,763.8] | | | | [removed: 6,932.2] [added: 9,703.3] | | | | [removed: 5,516.5] [added: 6,932.2] | | | | [removed: 5,048.6] [added: 5,516.5] | | | | [removed: 4,716.4] [added: 5,048.6] | | |

| Total cost and expenses | [removed: 5,747.7] [added: 5,872.8] | | | | [removed: 4,441.6] [added: 5,747.7] | | | | [removed: 3,707.4] [added: 4,441.6] | | | | [removed: 3,323.9] [added: 3,707.4] | | | | [removed: 3,467.5] [added: 3,323.9] | | |

| Gain on sale of rights | [removed: 16.8] [added: —] | | | | [removed: 24.9] [added: 16.8] | | | | [removed: 46.8] [added: 24.9] | | | | [removed: —] [added: 46.8] | | | | — | | |

| Income from operations | [removed: 3,972.4] [added: 4,891.0] | | | | [removed: 2,515.5] [added: 3,972.4] | | | | [removed: 1,855.9] [added: 2,515.5] | | | | [removed: 1,724.7] [added: 1,855.9] | | | | [removed: 1,248.9] [added: 1,724.7] | | |

| Other income (expense), net | [removed: (25.8] [added: (123.7] | | ) | | [removed: (34.9] [added: (25.8] | | ) | | [removed: (0.7] [added: (34.9] | | ) | | [removed: (13.5] [added: (0.7] | | ) | | [removed: (19.0] [added: (13.5] | | ) |

| Income before income tax expense and equity in loss of investee, net of tax | [removed: 3,946.6] [added: 4,767.3] | | | | [removed: 2,480.6] [added: 3,946.6] | | | | [removed: 1,855.1] [added: 2,480.6] | | | | [removed: 1,711.2] [added: 1,855.1] | | | | [removed: 1,229.9] [added: 1,711.2] | | |

| Income tax expense | [removed: 989.9] [added: 1,161.6] | | | | [removed: 601.0] [added: 989.9] | | | | [removed: 470.6] [added: 601.0] | | | | [removed: 444.5] [added: 470.6] | | | | [removed: 331.3] [added: 444.5] | | |

| Equity in loss of investee, net of tax | [removed: 15.1] [added: 12.5] | | | | [removed: 17.2] [added: 15.1] | | | | [removed: 4.5] [added: 17.2] | | | | [removed: —] [added: 4.5] | | | | — | | |

| Net income | [removed: 2,941.5] [added: 3,593.2] | | | | [removed: 1,862.3] [added: 2,941.6] | | | | [removed: 1,380.0] [added: 1,862.3] | | | | [removed: 1,266.7] [added: 1,380.0] | | | | [removed: 898.6] [added: 1,266.7] | | |

| Net income (loss) attributable to noncontrolling interests, net of tax | [removed: 6.8] [added: 46.2] | | | | [removed: —] [added: 6.8] | | | | — | | | | [removed: 32.3] [added: —] | | | | [removed: (106.7] [added: 32.3] | | [removed: )] |

| Net income attributable to Biogen [removed: Idec] Inc. | $ | [removed: 2,934.8] [added: 3,547.0] | | | $ | [removed: 1,862.3] [added: 2,934.8] | | | $ | [removed: 1,380.0] [added: 1,862.3] | | | $ | [removed: 1,234.4] [added: 1,380.0] | | | $ | [removed: 1,005.2] [added: 1,234.4] | |

| Diluted earnings per share attributable to Biogen [removed: Idec] Inc. | $ | [removed: 12.37] [added: 15.34] | | | $ | [removed: 7.81] [added: 12.37] | | | $ | [removed: 5.76] [added: 7.81] | | | $ | [removed: 5.04] [added: 5.76] | | | $ | [removed: 3.94] [added: 5.04] | |

| Weighted-average shares used in calculating diluted earnings per share attributable to Biogen [removed: Idec] Inc. | [removed: 237.2] [added: 231.2] | | | | [removed: 238.3] [added: 237.2] | | | | [removed: 239.7] [added: 238.3] | | | | [removed: 245.0] [added: 239.7] | | | | [removed: 254.9] [added: 245.0] | | |

| Cash, cash equivalents and marketable securities | $ | [removed: 3,316.0] [added: 6,188.9] | | | $ | [removed: 1,848.5] [added: 3,316.0] | | | $ | [removed: 3,742.4] [added: 1,848.5] | | | $ | [removed: 3,107.4] [added: 3,742.4] | | | $ | [removed: 1,950.8] [added: 3,107.4] | |

| Total assets | $ | [removed: 14,316.6] [added: 19,504.8] | | | $ | [removed: 11,863.3] [added: 14,314.7] | | | $ | [removed: 10,130.1] [added: 11,863.3] | | | $ | [removed: 9,049.6] [added: 10,130.1] | | | $ | [removed: 8,092.5] [added: 9,049.6] | |

| Notes payable, line of credit and other financing arrangements, less current portion | $ | [removed: 582.1] [added: 6,521.5] | | | $ | [removed: 592.4] [added: 580.3] | | | $ | [removed: 687.4] [added: 592.4] | | | $ | [removed: 1,060.8] [added: 687.4] | | | $ | [removed: 1,066.4] [added: 1,060.8] | |

| Total Biogen [removed: Idec] Inc. shareholders’ equity | $ | [removed: 10,809.0] [added: 9,372.8] | | | $ | [removed: 8,620.2] [added: 10,809.0] | | | $ | [removed: 6,961.5] [added: 8,620.2] | | | $ | [removed: 6,425.5] [added: 6,961.5] | | | $ | [removed: 5,396.5] [added: 6,425.5] | |

| [removed: (2)] [added: (1)] | Our share of revenues from unconsolidated joint business reflects charges of $50.0 million in 2011 and $49.7 million in 2013 for damages and interest awarded to Hoechst in Genentech's arbitration with Hoechst for RITUXAN. |

| [removed: (4)] [added: (2)] | Commencing in the second quarter of 2013, product and total revenues include 100% of net revenues related to sales of TYSABRI as a result of our acquisition of all remaining rights to TYSABRI from Elan [removed: and net revenues related to sales] [added: Pharma International, Ltd (Elan), an affiliate] of [removed: TECFIDERA. In addition, upon] [added: Elan Corporation, plc. Upon] the [removed: closing of our acquisition of all remaining rights to TYSABRI,] [added: closing,] our collaboration agreement was terminated, and we no longer record collaboration profit [removed: sharing.] [added: sharing expense. We recognized collaboration profit sharing expense of $85.4 million, $317.9 million and $317.8 million during the years ended December 31, 2013, 2012 and 2011, respectively. In addition, product and total revenues includes net revenues related to sales of TECFIDERA.] |

| | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | |

| | As of December 31, | | | | | | | | | | | | | | | | | | |

| | 2015 | | | | 2014 | | | | 2013 | | | | 2012 | | | | 2011 | | |

| (In millions) | (5) (6) | | | | | | | | | | | | | | | | | | |

| (3) | Other revenues reflects a decrease in royalty revenues due to the December 2014 expiration of U.S. patent rights that gave rise to royalty payments related to ANGIOMAX. |

| (4) | Included in total cost and expenses is a restructuring charge of $93.4 million incurred in connection with our corporate restructuring announced on October 21, 2015, which included the termination of certain pipeline programs and an 11% reduction in workforce. |

| (5) | Notes payable, line of credit and other financing arrangements, less current portion reflects the issuance of our senior unsecured notes for an aggregate principal amount of $6.0 billion on September 15, 2015. |

| | |

| --- | --- |

| (6) | Biogen Inc.'s shareholders' equity reflects a reduction in additional paid in capital and retained earnings totaling $5.0 billion resulting from the repurchase and retirement of our common stock under our 2015 Share Repurchase Program. |

| (1) | Included in total cost and expenses are charges to acquired in-process research and development (IPR&D) totaling $245.0 million. Of this amount, $205.0 million was incurred in connection with the license agreement entered into with Knopp Neurosciences Inc. (Knopp), which we consolidated as we determined that we were the primary beneficiary of the entity. The $205.0 million charge was partially offset by an attribution of $145.0 million to the noncontrolling interest. We also incurred a charge of $40.0 million in connection with our acquisition of Biogen Idec Hemophilia Inc. (BIH), formerly Syntonix, related to the initiation of patient enrollment in a registrational trial of ALPROLIX. |

| (3) | Biogen Idec Inc.’s shareholders’ equity reflects a reduction in additional paid in capital and noncontrolling interests totaling $187.3 million resulting from our purchase of the noncontrolling interest in our joint venture investments in Biogen Dompé SRL and Biogen Dompé Switzerland GmbH. |

The information required by this Item 8 is contained on pages F-1 through [removed: F-65] [added: F-71] of this report and is incorporated herein by reference.

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| --- | --- |

| | |

| --- | --- |

We have carried out an evaluation, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended), as of December 31, [removed: 2014.][added: 2015.]

There were no changes in our internal control over financial reporting during the quarter ended December 31, [removed: 2014] [added: 2015] that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Internal control over financial reporting is defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act as a process designed by, or under the supervision of, a company’s principal executive and principal financial officers and effected by a company’s board of directors, management and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with [removed: U.S. GAAP.]

Our management assessed the effectiveness of our internal control over financial reporting as of December 31, [removed: 2014.][added: 2015.]

Based on our assessment, our management has concluded that, as of December 31, [removed: 2014,] [added: 2015,] our internal control over financial reporting is effective based on those criteria.

The effectiveness of our internal control over financial reporting as of December 31, [removed: 2014] [added: 2015] has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their attestation report, which is included herein.

U.S. GAAP.

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| --- | --- |

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| --- | --- |

The text of our code of business conduct, which includes the code of ethics that applies to our principal executive officer, principal financial officer, principal accounting officer or controller, and persons performing similar functions, is posted on our website, [removed: www.biogenidec.com,] [added: www.biogen.com,] under the “Corporate Governance” subsection of the “About Us” section of the site.

The response to the remainder of this item is incorporated by reference from the discussion responsive thereto in the sections entitled “Proposal 1 - Election of Directors,” “Corporate Governance,” “Stock Ownership - Section 16(a) Beneficial Ownership Reporting Compliance” and “Miscellaneous - Stockholder Proposals” contained in the proxy statement for our [removed: 2015] [added: 2016] annual meeting of stockholders.

| | |

| --- | --- |

The response to this item is incorporated by reference from the discussion responsive thereto in the sections entitled “Executive Compensation and Related Information” and “Corporate Governance” contained in the proxy statement for our [removed: 2015] [added: 2016] annual meeting of stockholders.

| | |

| --- | --- |

The response to this item is incorporated by reference from the discussion responsive thereto in the sections entitled “Stock Ownership” and “Equity Compensation Plan Information” contained in the proxy statement for our [removed: 2015] [added: 2016] annual meeting of stockholders.

| | |

| --- | --- |

The response to this item is incorporated by reference from the discussion responsive thereto in the sections entitled “Certain Relationships and Related Person Transactions” and “Corporate Governance” contained in the proxy statement for our [removed: 2015] [added: 2016] annual meeting of stockholders.

| | |

| --- | --- |

The response to this item is incorporated by reference from the discussion responsive thereto in the section entitled “Proposal 2 — Ratification of the Selection of our Independent Registered Public Accounting Firm” contained in the proxy statement for our [removed: 2015] [added: 2016] annual meeting of stockholders.

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| --- | --- |

[removed: | a. |] (1) Consolidated Financial Statements: [removed: |]

| Report of Independent Registered Public Accounting Firm | | [removed: F-64] [added: F-71] |

| BIOGEN [removed: IDEC] INC. | |

Date: February [removed: 4, 2015][added: 3, 2016]

| /S/ GEORGE A. SCANGOS | | Director and Chief Executive Officer (principal executive officer) | | February [removed: 4, 2015] [added: 3, 2016] |

| /S/ PAUL J. CLANCY | | Executive Vice President, Finance and Chief Financial Officer (principal financial officer) | | February [removed: 4, 2015] [added: 3, 2016] |

| /S/ GREGORY F. COVINO | | Vice President, Finance, Chief Accounting Officer (principal accounting officer) | | February [removed: 4, 2015] [added: 3, 2016] |

| /S/ STELIOS PAPADOPOULOS | | Director and Chairman of the Board of Directors | | February [removed: 4, 2015] [added: 3, 2016] |

| /S/ ALEXANDER J. DENNER | | Director | | February [removed: 4, 2015] [added: 3, 2016] |

| /S/ CAROLINE D. DORSA | | Director | | February [removed: 4, 2015] [added: 3, 2016] |

| /S/ NANCY L. LEAMING | | Director | | February [removed: 4, 2015] [added: 3, 2016] |

| /S/ RICHARD C. MULLIGAN | | Director | | February [removed: 4, 2015] [added: 3, 2016] |

| /S/ ROBERT W. PANGIA | | Director | | February [removed: 4, 2015] [added: 3, 2016] |

| /S/ BRIAN S. POSNER | | Director | | February [removed: 4, 2015] [added: 3, 2016] |

| /S/ ERIC K. ROWINSKY | | Director | | February [removed: 4, 2015] [added: 3, 2016] |

| /S/ LYNN SCHENK | | Director | | February [removed: 4, 2015] [added: 3, 2016] |

| /S/ STEPHEN A. SHERWIN | | Director | | February [removed: 4, 2015] [added: 3, 2016] |

BIOGEN [removed: IDEC] INC. AND SUBSIDIARIES

(In [removed: thousands,] [added: millions,] except per share amounts)

| | [removed: 2014] [added: 2015] | | | | [removed: 2013] [added: 2014] | | | | [removed: 2012] [added: 2013] | | |

| Cost of sales, excluding amortization of acquired intangible assets | [removed: 1,171,036] [added: 1,240.4] | | | | [removed: 857,726] [added: 1,171.0] | | | | [removed: 545,494] [added: 857.7] | | |

| Collaboration profit sharing | — | | | | [removed: 85,357] [added: —] | | | | [removed: 317,895] [added: 85.4] | | |

| (Gain) loss on fair value remeasurement of contingent consideration | [removed: (38,893] [added: 30.5] | | [removed: )] | | [removed: (547] [added: (38.9] | | ) | | [removed: 27,202] [added: (0.5] | | [added: )] |

| Restructuring charges | [removed: —] [added: 93.4] | | | | — | | | | [removed: 2,225] [added: —] | | |

| Other income (expense), net | [removed: (25,781] [added: (123.7] | | ) | | [removed: (34,930] [added: (25.8] | | ) | | [removed: (744] [added: (34.9] | | ) |

| Income before income tax expense and equity in loss of investee, net of tax | [removed: 3,946,633] [added: 4,767.3] | | | | [removed: 2,480,579] [added: 3,946.6] | | | | [removed: 1,855,105] [added: 2,480.6] | | |

| Equity in loss of investee, net of tax | [removed: 15,126] [added: 12.5] | | | | [removed: 17,224] [added: 15.1] | | | | [removed: 4,518] [added: 17.2] | | |

| Net income attributable to noncontrolling interests, net of tax | [removed: 6,781] [added: 46.2] | | | | [removed: —] [added: 6.8] | | | | — | | |

| Basic earnings per share attributable to Biogen [removed: Idec] Inc. | $ | [removed: 12.42] [added: 15.38] | | | $ | [removed: 7.86] [added: 12.42] | | | $ | [removed: 5.80] [added: 7.86] | |

| Diluted earnings per share attributable to Biogen [removed: Idec] Inc. | $ | [removed: 12.37] [added: 15.34] | | | $ | [removed: 7.81] [added: 12.37] | | | $ | [removed: 5.76] [added: 7.81] | |

| Basic earnings per share attributable to Biogen [removed: Idec] Inc. | [removed: 236,359] [added: 230.7] | | | | [removed: 236,919] [added: 236.4] | | | | [removed: 237,938] [added: 236.9] | | |

| Diluted earnings per share attributable to Biogen [removed: Idec] Inc. | [removed: 237,176] [added: 231.2] | | | | [removed: 238,308] [added: 237.2] | | | | [removed: 239,740] [added: 238.3] | | |

| Unrealized gains (losses) recognized during the period, net of tax [removed: of $80, $6,394 and $2,940] | [removed: 411] [added: (1.7] | | [added: )] | | [removed: 11,770] [added: 0.4] | | | | [removed: 5,080] [added: 11.8] | | |

| Less: reclassification adjustment for (gains) losses included in net income, net of tax [removed: of $3,462, $5,576 and $486] | [removed: (6,429] [added: 1.3] | | [removed: )] | | [removed: (10,355] [added: (6.4] | | ) | | [removed: (903] [added: (10.4] | | ) |