filings.toolsItem 16. FORM 10-K SUMMARY
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Item 16. FORM 10-K SUMMARY
Not applicable.
EXHIBIT INDEX
| * | Management contract or compensatory plan or arrangement. |
| † | Confidential treatment has been granted or requested with respect to portions of this exhibit. |
| + | Filed herewith. |
| ++ | Furnished herewith. |
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| BIOGEN INC. | |||||
| By: | /S/ CHRISTOPHER A. VIEHBACHER | ||||
| Christopher A. Viehbacher | |||||
| Chief Executive Officer |
Date: February 6, 2026
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
| Name | Capacity | Date | ||||||||||||
| /S/ CHRISTOPHER A. VIEHBACHER | Director and Chief Executive Officer (principal executive officer) | February 6, 2026 | ||||||||||||
| Christopher A. Viehbacher | ||||||||||||||
| /S/ ROBIN C. KRAMER | Executive Vice President and Chief Financial Officer (principal financial officer) | February 6, 2026 | ||||||||||||
| Robin C. Kramer | ||||||||||||||
| /S/ SEAN GODBOUT | Vice President, Chief Accounting Officer and Global Corporate Controller (principal accounting officer) | February 6, 2026 | ||||||||||||
| Sean Godbout | ||||||||||||||
| /S/ CAROLINE D. DORSA | Director and Chair of the Board of Directors | February 6, 2026 | ||||||||||||
| Caroline D. Dorsa | ||||||||||||||
| /S/ MARIA C. FREIRE | Director | February 6, 2026 | ||||||||||||
| Maria C. Freire | ||||||||||||||
| /S/ WILLIAM A. HAWKINS | Director | February 6, 2026 | ||||||||||||
| William A. Hawkins | ||||||||||||||
| /S/ SUSAN LANGER | Director | February 6, 2026 | ||||||||||||
| Susan Langer | ||||||||||||||
| /S/ JESUS B. MANTAS | Director | February 6, 2026 | ||||||||||||
| Jesus B. Mantas | ||||||||||||||
| /S/ LLOYD B. MINOR | Director | February 6, 2026 | ||||||||||||
| Lloyd B. Minor | ||||||||||||||
| /S/ SIR MENELAS PANGALOS | Director | February 6, 2026 | ||||||||||||
| Sir Menelas Pangalos | ||||||||||||||
| /S/ MONISH PATOLAWALA | Director | February 6, 2026 | ||||||||||||
| Monish Patolawala | ||||||||||||||
| /S/ ERIC K. ROWINSKY | Director | February 6, 2026 | ||||||||||||
| Eric K. Rowinsky | ||||||||||||||
| /S/ STEPHEN A. SHERWIN | Director | February 6, 2026 | ||||||||||||
| Stephen A. Sherwin |
BIOGEN INC. AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
| Page Number | ||||||||
| Consolidated Statements of Income | F-2 | |||||||
| Consolidated Statements of Comprehensive Income | F-3 | |||||||
| Consolidated Balance Sheets | F-4 | |||||||
| Consolidated Statements of Cash Flow | F-5 | |||||||
| Consolidated Statements of Equity | F-6 | |||||||
| Notes to Consolidated Financial Statements | F-8 | |||||||
| Report of Independent Registered Public Accounting Firm (PCAOB ID 238) | F-80 |
F-1
BIOGEN INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In millions, except per share amounts)
| For the Years Ended December 31, | ||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||
| Revenue: | ||||||||||||||||||||
| Product revenue, net | $ | 7,119.4 | $ | 7,213.5 | $ | 7,246.7 | ||||||||||||||
| Revenue from anti-CD20 therapeutic programs | 1,860.6 | 1,749.9 | 1,689.6 | |||||||||||||||||
| Alzheimer's collaboration revenue | 177.7 | 59.9 | — | |||||||||||||||||
| Contract manufacturing, royalty and other revenue | 732.9 | 652.6 | 899.3 | |||||||||||||||||
| Total revenue | 9,890.6 | 9,675.9 | 9,835.6 | |||||||||||||||||
| Cost and expense: | ||||||||||||||||||||
| Cost of sales, excluding amortization and impairment of acquired intangible assets | 2,404.2 | 2,310.4 | 2,533.4 | |||||||||||||||||
| Research and development | 1,778.6 | 1,980.3 | 2,445.4 | |||||||||||||||||
| Acquired in-process research and development, upfront and milestone expense | 471.8 | 61.5 | 16.6 | |||||||||||||||||
| Selling, general and administrative | 2,433.6 | 2,403.7 | 2,549.7 | |||||||||||||||||
| Amortization and impairment of acquired intangible assets | 515.0 | 446.7 | 240.6 | |||||||||||||||||
| Collaboration profit sharing/(loss reimbursement) | 290.2 | 254.4 | 218.8 | |||||||||||||||||
| (Gain) loss on fair value remeasurement of contingent consideration | 33.6 | 27.7 | — | |||||||||||||||||
| Impairment of ROU asset | 52.9 | — | — | |||||||||||||||||
| Restructuring charges | 48.6 | 30.2 | 218.8 | |||||||||||||||||
| Gain on sale of priority review voucher, net | — | (88.6) | — | |||||||||||||||||
| Other (income) expense, net | 305.6 | 343.6 | 315.5 | |||||||||||||||||
| Total cost and expense | 8,334.1 | 7,769.9 | 8,538.8 | |||||||||||||||||
| Income before income tax (benefit) expense | 1,556.5 | 1,906.0 | 1,296.8 | |||||||||||||||||
| Income tax (benefit) expense | 263.6 | 273.8 | 135.3 | |||||||||||||||||
| Net income | 1,292.9 | 1,632.2 | 1,161.5 | |||||||||||||||||
| Net income attributable to noncontrolling interests, net of tax | — | — | 0.4 | |||||||||||||||||
| Net income attributable to Biogen Inc. | $ | 1,292.9 | $ | 1,632.2 | $ | 1,161.1 | ||||||||||||||
| Net income per share: | ||||||||||||||||||||
| Basic earnings per share attributable to Biogen Inc. | $ | 8.83 | $ | 11.21 | $ | 8.02 | ||||||||||||||
| Diluted earnings per share attributable to Biogen Inc. | $ | 8.79 | $ | 11.18 | $ | 7.97 | ||||||||||||||
| Weighted-average shares used in calculating: | ||||||||||||||||||||
| Basic earnings per share attributable to Biogen Inc. | 146.5 | 145.6 | 144.7 | |||||||||||||||||
| Diluted earnings per share attributable to Biogen Inc. | 147.1 | 145.9 | 145.6 |
See accompanying notes to these consolidated financial statements.
F-2
BIOGEN INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In millions)
| For the Years Ended December 31, | ||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||
| Net income attributable to Biogen Inc. | $ | 1,292.9 | $ | 1,632.2 | $ | 1,161.1 | ||||||||||||||
| Other comprehensive income (loss): | ||||||||||||||||||||
| Unrealized gains (losses) on securities available for sale, net of tax | 0.2 | — | 15.7 | |||||||||||||||||
| Unrealized gains (losses) on cash flow hedges, net of tax | (110.5) | 76.6 | (40.1) | |||||||||||||||||
| Unrealized gains (losses) on pension benefit obligation, net of tax | 7.2 | (14.0) | (1.5) | |||||||||||||||||
| Currency translation adjustments, net of tax | 57.3 | (45.1) | 37.1 | |||||||||||||||||
| Total other comprehensive income (loss), net of tax | (45.8) | 17.5 | 11.2 | |||||||||||||||||
| Comprehensive income (loss) attributable to Biogen Inc. | 1,247.1 | 1,649.7 | 1,172.3 | |||||||||||||||||
| Comprehensive income attributable to noncontrolling interests, net of tax | — | — | 0.4 | |||||||||||||||||
| Comprehensive income (loss) | $ | 1,247.1 | $ | 1,649.7 | $ | 1,172.7 |
See accompanying notes to these consolidated financial statements.
F-3
BIOGEN INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In millions, except per share amounts)
| As of December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| ASSETS | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 3,008.5 | $ | 2,375.0 | |||||||
| Current portion of marketable securities | 807.2 | — | |||||||||
| Accounts receivable, net of allowance for doubtful accounts of $3.0 and $2.2, respectively | 1,342.4 | 1,404.8 | |||||||||
| Due from anti-CD20 therapeutic programs | 524.6 | 464.0 | |||||||||
| Inventory | 2,168.1 | 2,460.5 | |||||||||
| Other current assets | 1,123.3 | 752.5 | |||||||||
| Total current assets | 8,974.1 | 7,456.8 | |||||||||
| Marketable securities | 431.9 | — | |||||||||
| Property, plant and equipment, net | 3,055.4 | 3,181.3 | |||||||||
| Operating lease assets | 265.4 | 356.4 | |||||||||
| Intangible assets, net | 9,178.5 | 9,691.2 | |||||||||
| Goodwill | 6,491.1 | 6,478.9 | |||||||||
| Deferred tax asset | 292.5 | 324.2 | |||||||||
| Investments and other assets | 750.6 | 560.5 | |||||||||
| Total assets | $ | 29,439.5 | $ | 28,049.3 | |||||||
| LIABILITIES AND EQUITY | |||||||||||
| Current liabilities: | |||||||||||
| Current portion of notes payable | $ | — | $ | 1,748.6 | |||||||
| Taxes payable | 114.8 | 548.3 | |||||||||
| Accounts payable | 432.0 | 424.2 | |||||||||
| Accrued expense and other | 2,802.6 | 2,807.7 | |||||||||
| Total current liabilities | 3,349.4 | 5,528.8 | |||||||||
| Notes payable | 6,286.8 | 4,547.2 | |||||||||
| Deferred tax liability | 507.6 | 190.5 | |||||||||
| Long-term operating lease liabilities | 290.4 | 334.5 | |||||||||
| Other long-term liabilities | 748.5 | 732.3 | |||||||||
| Total liabilities | 11,182.7 | 11,333.3 | |||||||||
| Commitments, contingencies and guarantees (Notes 22 and 23) | |||||||||||
| Equity: | |||||||||||
| Biogen Inc. shareholders’ equity: | |||||||||||
| Preferred stock, par value $0.001 per share | — | — | |||||||||
| Common stock, par value $0.0005 per share | 0.1 | 0.1 | |||||||||
| Additional paid-in capital | 863.1 | 569.4 | |||||||||
| Accumulated other comprehensive income (loss) | (182.0) | (136.2) | |||||||||
| Retained earnings | 20,552.7 | 19,259.8 | |||||||||
| Treasury stock, at cost; 23.8 million and 23.8 million shares, respectively | (2,977.1) | (2,977.1) | |||||||||
| Total equity | 18,256.8 | 16,716.0 | |||||||||
| Total liabilities and equity | $ | 29,439.5 | $ | 28,049.3 |
See accompanying notes to these consolidated financial statements.
F-4
BIOGEN INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOW
(In millions)
| For the Years Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Cash flow from operating activities: | |||||||||||||||||
| Net income | $ | 1,292.9 | $ | 1,632.2 | $ | 1,161.5 | |||||||||||
| Adjustments to reconcile net income to net cash flow from operating activities: | |||||||||||||||||
| Depreciation and amortization | 779.9 | 673.2 | 494.8 | ||||||||||||||
| Impairment of intangible assets | 7.9 | 60.2 | — | ||||||||||||||
| Impairment of ROU asset | 52.9 | — | — | ||||||||||||||
| Excess and obsolescence charges related to inventory | 29.2 | 101.9 | 124.4 | ||||||||||||||
| Amortization of acquired inventory step-up | 240.8 | 230.0 | 31.5 | ||||||||||||||
| Acquired in-process research and development | 85.0 | — | — | ||||||||||||||
| Share-based compensation | 290.8 | 291.2 | 264.2 | ||||||||||||||
| Contingent consideration | 33.6 | 27.7 | — | ||||||||||||||
| Deferred income taxes | 361.6 | (158.1) | (305.8) | ||||||||||||||
| (Gain) loss on strategic investments | 19.3 | 101.4 | 277.1 | ||||||||||||||
| Gain on sale of priority review voucher, net | — | (88.6) | — | ||||||||||||||
| Other | 68.3 | 159.6 | 148.2 | ||||||||||||||
| Changes in operating assets and liabilities, net of effects of business acquired: | |||||||||||||||||
| Accounts receivable | 102.7 | 222.3 | 61.3 | ||||||||||||||
| Due from anti-CD20 therapeutic programs | (60.6) | (28.1) | (4.6) | ||||||||||||||
| Inventory | (64.7) | (273.8) | (130.9) | ||||||||||||||
| Accrued expense and other current liabilities | 171.1 | 24.6 | (201.6) | ||||||||||||||
| Income tax assets and liabilities | (958.1) | 78.5 | (299.0) | ||||||||||||||
| Other changes in operating assets and liabilities, net | (248.0) | (178.7) | (73.9) | ||||||||||||||
| Net cash flow provided by (used in) operating activities | 2,204.6 | 2,875.5 | 1,547.2 | ||||||||||||||
| Cash flow from investing activities: | |||||||||||||||||
| Purchases of property, plant and equipment | (153.8) | (153.7) | (277.0) | ||||||||||||||
| Proceeds from sales and maturities of marketable securities | 23.0 | — | 7,380.8 | ||||||||||||||
| Purchases of marketable securities | (1,258.3) | — | (5,140.7) | ||||||||||||||
| Acquisition of Reata, net of cash acquired | — | — | (6,926.1) | ||||||||||||||
| Acquisition of HI-Bio, net of cash acquired | — | (1,074.8) | — | ||||||||||||||
| Proceeds from sale of equity interest in Samsung Bioepis | — | 406.8 | 788.1 | ||||||||||||||
| Proceeds from sale of priority review voucher, net | — | 88.6 | — | ||||||||||||||
| Acquired in-process research and development | (50.0) | — | — | ||||||||||||||
| Acquisitions of intangible assets | (31.6) | (206.1) | (34.4) | ||||||||||||||
| Proceeds from sales of strategic investments | 56.7 | 144.7 | 119.6 | ||||||||||||||
| Other | 42.9 | (4.7) | (11.3) | ||||||||||||||
| Net cash flow provided by (used in) investing activities | (1,371.1) | (799.2) | (4,101.0) | ||||||||||||||
| Cash flow from financing activities: | |||||||||||||||||
| Payments related to issuance of stock for share-based compensation arrangements, net | (10.0) | (31.3) | (44.3) | ||||||||||||||
| Proceeds from borrowings | 1,733.1 | — | 997.2 | ||||||||||||||
| Repayments of borrowings | (1,750.0) | (650.0) | (809.9) | ||||||||||||||
| Net (distribution) contribution to noncontrolling interest | — | — | 12.3 | ||||||||||||||
| Contingent consideration payments | (280.0) | — | — | ||||||||||||||
| Other | 5.0 | (2.2) | (6.0) | ||||||||||||||
| Net cash flow provided by (used in) financing activities | (301.9) | (683.5) | 149.3 | ||||||||||||||
| Net increase (decrease) in cash and cash equivalents | 531.6 | 1,392.8 | (2,404.5) | ||||||||||||||
| Effect of exchange rate changes on cash and cash equivalents | 101.9 | (67.7) | 35.1 | ||||||||||||||
| Cash and cash equivalents, beginning of the year | 2,375.0 | 1,049.9 | 3,419.3 | ||||||||||||||
| Cash and cash equivalents, end of the year | $ | 3,008.5 | $ | 2,375.0 | $ | 1,049.9 |
See accompanying notes to these consolidated financial statements.
F-5
BIOGEN INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EQUITY
(In millions)
| For the Year Ended December 31, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Preferred stock | Common stock | Additional paid-in capital | Accumulated other comprehensive income (loss) | Retained earnings | Treasury stock | Total equity | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance, December 31, 2024 | — | $ | — | 169.5 | $ | 0.1 | $ | 569.4 | $ | (136.2) | $ | 19,259.8 | (23.8) | $ | (2,977.1) | $ | 16,716.0 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | — | 1,292.9 | — | — | 1,292.9 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income (loss), net of tax | — | — | — | — | — | (45.8) | — | — | — | (45.8) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock under stock option and stock purchase plans | — | — | 0.3 | — | 34.0 | — | — | — | — | 34.0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock under stock award plan | — | — | 0.7 | — | (44.0) | — | — | — | — | (44.0) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Compensation related to share-based payments | — | — | — | — | 303.1 | — | — | — | — | 303.1 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other | — | — | — | — | 0.6 | — | — | — | — | 0.6 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance, December 31, 2025 | — | $ | — | 170.5 | $ | 0.1 | $ | 863.1 | $ | (182.0) | $ | 20,552.7 | (23.8) | $ | (2,977.1) | $ | 18,256.8 |
| For the Year Ended December 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Preferred stock | Common stock | Additional paid-in capital | Accumulated other comprehensive income (loss) | Retained earnings | Treasury stock | Total equity | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance, December 31, 2023 | — | $ | — | 168.7 | $ | 0.1 | $ | 302.5 | $ | (153.7) | $ | 17,627.6 | (23.8) | $ | (2,977.1) | $ | 14,799.4 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | — | 1,632.2 | — | — | 1,632.2 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income (loss), net of tax | — | — | — | — | — | 17.5 | — | — | — | 17.5 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock under stock option and stock purchase plans | — | — | 0.2 | — | 36.3 | — | — | — | — | 36.3 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock under stock award plan | — | — | 0.6 | — | (67.7) | — | — | — | — | (67.7) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Compensation related to share-based payments | — | — | — | — | 301.5 | — | — | — | — | 301.5 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other | — | — | — | — | (3.2) | — | — | — | — | (3.2) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance, December 31, 2024 | — | $ | — | 169.5 | $ | 0.1 | $ | 569.4 | $ | (136.2) | $ | 19,259.8 | (23.8) | $ | (2,977.1) | $ | 16,716.0 |
See accompanying notes to these consolidated financial statements.
F-6
BIOGEN INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EQUITY - (Continued)
(In millions)
| For the Year Ended December 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Preferred stock | Common stock | Additional paid-in capital | Accumulated other comprehensive income (loss) | Retained earnings | Treasury stock | Total Biogen Inc. shareholders’ equity | Noncontrolling interests | Total equity | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance, December 31, 2022 | — | $ | — | 167.9 | $ | 0.1 | $ | 73.3 | $ | (164.9) | $ | 16,466.5 | (23.8) | $ | (2,977.1) | $ | 13,397.9 | $ | (9.5) | $ | 13,388.4 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | — | 1,161.1 | — | — | 1,161.1 | 0.4 | 1,161.5 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income (loss), net of tax | — | — | — | — | — | 11.2 | — | — | — | 11.2 | — | 11.2 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Capital contribution from noncontrolling interest | — | — | — | — | — | — | — | — | — | — | 12.3 | 12.3 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Deconsolidation of noncontrolling interest | — | — | — | — | — | — | — | — | — | — | (3.2) | (3.2) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock under stock option and stock purchase plans | — | — | 0.2 | — | 45.1 | — | — | — | — | 45.1 | — | 45.1 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock under stock award plan | — | — | 0.6 | — | (89.5) | — | — | — | — | (89.5) | — | (89.5) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Compensation related to share-based payments | — | — | — | — | 274.4 | — | — | — | — | 274.4 | — | 274.4 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other | — | — | — | — | (0.8) | — | — | — | — | (0.8) | — | (0.8) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance, December 31, 2023 | — | $ | — | 168.7 | $ | 0.1 | $ | 302.5 | $ | (153.7) | $ | 17,627.6 | (23.8) | $ | (2,977.1) | $ | 14,799.4 | $ | — | $ | 14,799.4 |
See accompanying notes to these consolidated financial statements.
F-7
BIOGEN INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
| Note 1: | Summary of Significant Accounting Policies |
References in these notes to "Biogen," the "company," "we," "us" and "our" refer to Biogen Inc. and its consolidated subsidiaries.
Business Overview
Biogen is a global biopharmaceutical company focused on discovering, developing and delivering innovative therapies for people living with serious and complex diseases. We have a broad portfolio of medicines to treat MS, have introduced the first approved treatment for SMA, co-developed treatments to address a defining pathology of Alzheimer’s disease and launched the first approved treatment to target a genetic cause of ALS. We market the first and only drug approved in the U.S., the E.U. and certain international markets for the treatment of FA in adults and adolescents aged 16 years and older. We are focused on advancing our pipeline in neurology, specialized immunology and rare diseases. We support our drug discovery and development efforts through internal research and development programs, external collaborations and acquisitions.
Our marketed products include VUMERITY, TYSABRI, TECFIDERA, AVONEX and PLEGRIDY for the treatment of MS; SPINRAZA for the treatment of SMA; SKYCLARYS for the treatment of FA; and QALSODY for the treatment of ALS.
We also have collaborations with Eisai on the commercialization of LEQEMBI for the treatment of Alzheimer's disease and Supernus on the commercialization of ZURZUVAE for the treatment of PPD. We have certain business and financial rights with respect to RITUXAN for the treatment of non-Hodgkin's lymphoma, CLL and other conditions; RITUXAN HYCELA for the treatment of non-Hodgkin's lymphoma and CLL; GAZYVA for the treatment of CLL, follicular lymphoma and, following its approval in October 2025, lupus nephritis; OCREVUS for the treatment of PPMS and RMS; LUNSUMIO for the treatment of relapsed or refractory follicular lymphoma; COLUMVI, a bispecific antibody for the treatment of non-Hodgkin's lymphoma; and have the option to add other potential anti-CD20 therapies, pursuant to our collaboration arrangements with Genentech, a wholly owned member of the Roche Group.
We commercialize a portfolio of biosimilars of advanced biologics including: BENEPALI, an etanercept biosimilar referencing ENBREL; IMRALDI, an adalimumab biosimilar referencing HUMIRA; and FLIXABI, an infliximab biosimilar referencing REMICADE.
For additional information on our collaboration arrangements, please read Note 19, Collaborative and Other Relationships, to these consolidated financial statements.
Consolidation
Our consolidated financial statements reflect our financial statements, those of our wholly owned subsidiaries and variable interest entities where we are the primary beneficiary. For consolidated entities where we own or are exposed to less than 100.0% of the economics, we record net income attributable to noncontrolling interests, net of tax in our consolidated statements of income equal to the percentage of the economic or ownership interest retained in such entities by the respective noncontrolling parties. Intercompany balances and transactions are eliminated in consolidation.
In determining whether we are the primary beneficiary of a variable interest entity, we apply a qualitative approach that determines whether we have both (1) the power to direct the economically significant activities of the entity and (2) the obligation to absorb losses of, or the right to receive benefits from, the entity that could potentially be significant to that entity. We continuously assess whether we are the primary beneficiary of a variable interest entity as changes to existing relationships or future transactions may result in us consolidating or deconsolidating one or more of our collaborators or partners. In November 2023 we terminated the Neurimmune Agreement, which resulted in the deconsolidation of our variable interest entity, Neurimmune.
Use of Estimates
The preparation of our consolidated financial statements requires us to make estimates, judgments and assumptions that may affect the reported amounts of assets, liabilities, equity, revenue and expense and related disclosure of contingent assets and liabilities. On an ongoing basis we evaluate our estimates, judgments and assumptions. We base our estimates on historical experience and on various other assumptions that we believe are
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reasonable, the results of which form the basis for making judgments about the carrying values of assets, liabilities and equity and the amount of revenue and expense. Actual results may differ from these estimates.
Revenue Recognition
We recognize revenue when our customer obtains control of promised goods or services, in an amount that reflects the consideration which we expect to receive in exchange for those goods or services. We recognize revenue following the five-step model prescribed under FASB ASC 606, Revenue from Contracts with Customers: (i) identify contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) we satisfy the performance obligations.
Product Revenue
In the U.S., we sell our products primarily to wholesale and specialty distributors and specialty pharmacies. In other countries, we sell our products primarily to wholesale distributors, hospitals, pharmacies and other third-party distribution partners. These customers subsequently resell our products to health care providers and patients. In addition, we enter into arrangements with health care providers and payors that provide for government-mandated or privately-negotiated discounts and allowances related to our products.
Product revenue is recognized when the customer obtains control of our product, which occurs at a point in time, typically upon delivery to the customer. We expense incremental costs of obtaining a contract as and when incurred if the expected amortization period of the asset that we would have recognized is one year or less or the amount is immaterial.
Reserves for Discounts and Allowances
Product revenue is recorded net of reserves established for applicable discounts and allowances that are offered within contracts with our customers, health care providers or payors, including those associated with the implementation of pricing actions in certain of the international markets in which we operate.
Product revenue reserves, which are classified as a reduction in product revenue, are generally characterized in the following categories: discounts, contractual adjustments and returns.
These reserves are based on estimates of the amounts earned or to be claimed on the related sales and are classified as reductions of accounts receivable (if the amount is payable to our customer) or a liability (if the amount is payable to a party other than our customer). Our estimates of reserves established for variable consideration are calculated based upon a consistent application of our methodology utilizing the expected value method. These estimates reflect our historical experience, current contractual and statutory requirements, specific known market events and trends, industry data and forecasted customer buying and payment patterns. The transaction price, which includes variable consideration reflecting the impact of discounts and allowances, may be subject to constraint and is included in the net sales price only to the extent that it is probable that a significant reversal of the amount of the cumulative revenue recognized will not occur in a future period. Actual amounts may ultimately differ from our estimates. If actual results vary, we adjust these estimates, which could have an effect on earnings in the period of adjustment.
Discounts include trade term discounts, wholesaler incentives and volume related discounts. Trade term discounts and wholesaler incentives primarily relate to estimated obligations for credits to be granted to wholesalers for remitting payment on their purchases within established incentive periods and credits to be granted to wholesalers for compliance with various contractually-defined inventory management practices, respectively. We determine these reserves based on our historical experience, including the timing of customer payments. Volume related discounts primarily relate to incentives offered to downstream customers who earn discounts based upon the quarterly or annual volume of units purchased.
Contractual adjustments primarily relate to Medicaid, Medicare and managed care rebates in the U.S., pharmacy rebates, co-payment (copay) assistance, VA and PHS discounts, specialty pharmacy program fees and other governmental rebates or applicable allowances.
- Medicaid rebates: relate to our estimated obligations to states under established reimbursement arrangements. Rebate accruals are recorded in the same period the related revenue is recognized, resulting in a reduction of product revenue and the establishment of a liability which is included in accrued expense and other current liabilities in our consolidated balance sheets. Our liability for Medicaid rebates consists of estimates for claims
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that a state will make for the current quarter, claims for prior quarters that have been estimated for which an invoice has not been received, invoices received for claims from the prior quarters that have not been paid and an estimate of potential claims that will be made for inventory that exists in the distribution channel at period end.
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Governmental rebates: or chargebacks, including VA and PHS discounts, represent our estimated obligations resulting from contractual commitments to sell products to qualified healthcare providers at prices lower than the list prices we charge to wholesalers which provide those products. The wholesaler charges us for the difference between what the wholesaler pays for the products and the ultimate selling price to the qualified healthcare providers. Rebate and chargeback reserves are established in the same period as the related revenue is recognized, resulting in a reduction of product revenue and a reduction in the net accounts receivable. Chargeback amounts are generally determined at the time of resale to the qualified healthcare provider from the wholesaler, and we generally issue credits for such amounts within a few weeks of the wholesaler notifying us about the resale. Our reserves for VA, PHS and other chargebacks consist of amounts for inventory that exists at the wholesalers that we expect will be sold to qualified healthcare providers and chargebacks that wholesalers have claimed for which we have not issued a credit.
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Managed care rebates: represent our estimated obligations to third parties, primarily pharmacy benefit managers. Rebate accruals are recorded in the same period the related revenue is recognized, resulting in a reduction of product revenue and the establishment of a liability which is included in accrued expense and other current liabilities in our consolidated balance sheets. These rebates result from performance-based goals, formulary position and price increase limit allowances (price protection). The calculation of the accrual for these rebates is based on an estimate of the coverage patterns and the resulting applicable contractual rebate rate(s) to be earned over a contractual period.
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Copay assistance: represents financial assistance to qualified patients, assisting them with prescription drug co-payments required by insurance. The calculation of the accrual for copay is based on an estimate of claims and the cost per claim that we expect to receive associated with inventory that exists in the distribution channel at period end.
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Pharmacy rebates: represent our estimated obligations resulting from contractual commitments to sell products to specific pharmacies. Rebate accruals are recorded in the same period the related revenue is recognized, resulting in a reduction of product revenue and the establishment of a liability which is included in accrued expense and other current liabilities in our consolidated balance sheets. These rebates result from contracted discounts on product purchased or product dispensed. The calculation of the accrual for these rebates is based on an estimate of the pharmacy’s buying or dispensing patterns and the resulting applicable contractual rebate rate(s) to be earned over the contractual period.
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IRA Medicare rebates: relate to our estimated obligation under the IRA for the manufacturer’s portion of the Medicare Part D redesign. Rebate accruals are recorded in the same period the related revenue is recognized, resulting in a reduction of product revenue and the establishment of a liability which is included in accrued expense and other within our consolidated balance sheets. The calculation of the accrual for these rebates is based on an estimate of our Medicare population and the estimated manufacturer portion of our obligation under the Part D Redesign.
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Other governmental rebates: non-U.S. pharmaceutical taxes or applicable allowances primarily relate to mandatory rebates and discounts in international markets where government-sponsored healthcare systems are the primary payors for healthcare.
Product return reserves are established for returns made by wholesalers and are recorded in the period the related revenue is recognized, resulting in a reduction to product revenue. In accordance with contractual terms, wholesalers are permitted to return product for reasons such as damaged or expired product. The majority of wholesaler returns are due to product expiration. Expired product return reserves are estimated through a comparison of historical return data to their related sales on a production lot basis. Historical rates of return are determined for each product and are adjusted for known or expected changes in the marketplace specific to each product.
In addition to discounts, rebates and product returns, we also maintain certain customer service contracts with distributors and other customers in the distribution channel that provide us with inventory management, data and distribution services, which are generally reflected as a reduction of revenue. To the extent we can demonstrate a
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separable benefit and fair value for these services we classify these payments in selling, general and administrative expense in our consolidated statements of income.
Revenue from Anti-CD20 Therapeutic Programs
Our collaboration with Genentech is within the scope of ASC 808, Collaborative Agreements, which provides guidance on the presentation and disclosure of collaborative arrangements. For purposes of this footnote, we refer to RITUXAN and RITUXAN HYCELA collectively as RITUXAN.
Our share of the pre-tax co-promotion profits on RITUXAN, GAZYVA and LUNSUMIO and royalty revenue on sales of OCREVUS, resulted from an exchange of a license. As we do not have future performance obligations under the license or collaboration agreement, revenue is recognized as the underlying sales occur.
Revenue from anti-CD20 therapeutic programs consist of:
(i) our share of pre-tax profits and losses in the U.S. for RITUXAN, GAZYVA and LUNSUMIO;
(ii) royalty revenue on sales of OCREVUS; and
(ii) other revenue from anti-CD20 therapeutic programs, which consists of our share of pre-tax co-promotion profits on RITUXAN in Canada, royalties on net sales of COLUMVI in the U.S. and royalties on sales of LUNSUMIO outside the U.S.
Pre-tax co-promotion profits on RITUXAN, GAZYVA and LUNSUMIO are calculated and paid to us by Genentech and the Roche Group. Pre-tax co-promotion profits consist of net sales to third-party customers less applicable costs to manufacture, third-party royalty expense, distribution, selling and marketing expense and joint development expense incurred by Genentech and the Roche Group. Our share of the pre-tax profits on RITUXAN, GAZYVA and LUNSUMIO include estimates that are based on information received from Genentech and the Roche Group. These estimates are subject to change and actual results may differ.
We recognize royalty revenue on sales of OCREVUS based on our estimates from third party and market research data of OCREVUS sales occurring during the corresponding period. Differences between actual and estimated royalty revenue will be adjusted for in the period in which they become known, which is generally expected to be the following quarter.
Prior to regulatory approval, we record our share of the expense incurred by the collaboration for the development of anti-CD20 products within research and development expense and pre-commercialization costs within selling, general and administrative expense in our consolidated statements of income. After an anti-CD20 product is approved, we record our share of the development and sales and marketing expense related to that product as a reduction of our share of pre-tax profits in revenue from anti-CD20 therapeutic programs.
For additional information on our relationship with Genentech, please read Note 19, Collaborative and Other Relationships, to these consolidated financial statements.
Alzheimer's Collaboration Revenue
Alzheimer's collaboration revenue consists of our 50.0% share of LEQEMBI product revenue, net and cost of sales, including royalties, as we are not the principal. We began recognizing Alzheimer's collaboration revenue upon the accelerated approval of LEQEMBI in the U.S. during the first quarter of 2023.
Contract Manufacturing, Royalty and Other Revenue
Contract Manufacturing Revenue
We record contract manufacturing revenue primarily from amounts earned under contract manufacturing agreements with our strategic customers. Revenue under contract manufacturing agreements is recognized when the customer obtains control of the product, which may occur at a point in time or over time depending on the terms and conditions of the agreement.
Royalty and Other Revenue
Royalty and other revenue primarily reflects royalty revenue on biosimilar products from our license arrangements with Samsung Bioepis and royalties we receive from net sales on products related to patents that we have out-licensed.
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As the royalties we receive relate to arrangements that resulted from an exchange of a license and utilize the sales and usage based royalty exception, the royalties are recognized as the underlying sales occur.
Collaborative and Other Relationships
We also have a number of significant collaborative and other third-party relationships for revenue and for the development, regulatory approval, commercialization and marketing of certain of our products and product candidates. Where we are the principal on sales transactions with third parties, we recognize revenue, cost of sales and operating expense on a gross basis in their respective lines in our consolidated statements of income. Where we are not the principal on sales transactions with third parties, our share of the revenue, cost of sales and operating expense is recorded on a net basis as a component of other revenue in our consolidated statements of income.
Our development and commercialization arrangements with Genentech, Eisai, Supernus and Samsung Bioepis represent collaborative arrangements as each party is an active participant in one or more joint operating activities and is exposed to significant risks and rewards of these arrangements. These arrangements resulted from an exchange of a license and utilize the sales and usage based royalty exception, as applicable. Therefore, revenue relating to royalties or profit-sharing amounts received is recognized as the underlying sales occur.
For additional information on our collaboration arrangements with Genentech, Eisai, Supernus and Samsung Bioepis, please read Note 19, Collaborative and Other Relationships, to these consolidated financial statements.
Fair Value Measurements
We have certain financial assets and liabilities recorded at fair value which have been classified as Level 1, 2 or 3 within the fair value hierarchy as described in the accounting standards for fair value measurements.
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Level 1 — Fair values are determined utilizing quoted prices (unadjusted) in active markets for identical assets or liabilities that we have the ability to access;
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Level 2 — Fair values are determined by utilizing quoted prices for identical or similar assets and liabilities in active markets or other market observable inputs such as interest rates, yield curves, foreign currency spot rates and option pricing valuation models; and
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Level 3 — Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable.
The majority of our financial assets have been classified as Level 2, and have been initially valued at the transaction price and subsequently valued, at the end of each reporting period, utilizing third-party pricing services or option pricing valuation models. The pricing services utilize industry standard valuation models, including both income and market-based approaches and observable market inputs to determine value. These observable market inputs include reportable trades, benchmark yields, credit spreads, broker/dealer quotes, bids, offers, current spot rates and other industry and economic events.
We validate the prices provided by our third-party pricing services by understanding the models used, obtaining market values from other pricing sources and analyzing pricing data in certain instances. The option pricing valuation models use assumptions within the model, including the term, stock price volatility, constant maturity risk-free interest rate and dividend yield. After completing our validation procedures, we did not adjust or override any fair value measurements provided by our pricing services as of December 31, 2025 and 2024.
Other Assets and Liabilities
The carrying amounts reflected in our consolidated balance sheets for current accounts receivable, due from anti-CD20 therapeutic programs, other current assets, accounts payable and accrued expense and other, approximate fair value due to their short-term maturities.
Cash and Cash Equivalents
We consider only those investments that are highly liquid, readily convertible to cash and that mature within three months from date of purchase to be cash equivalents. As of December 31, 2025, cash equivalents were comprised of money market funds, overnight reverse repurchase agreements, short-term debt securities and commercial paper with maturities less than three months from the date of purchase. As of December 31, 2024, cash equivalents were comprised of money market funds with maturities less than three months from the date of purchase.
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Accounts Receivable
The majority of our accounts receivable arise from product sales and primarily represent amounts due from our wholesale and other third-party distributors, public hospitals, pharmacies and other government entities and have standard payment terms that generally require payment within 30 to 90 days.
We do not adjust our receivables for the effects of a significant financing component at contract inception if we expect to collect the receivables in one year or less from the time of sale.
We provide reserves against accounts receivable for estimated losses that may result from a customer's inability to pay. Amounts determined to be uncollectible are charged or written-off against the reserve.
Concentration of Credit Risk
Financial instruments that potentially subject us to concentrations of credit risk include cash and cash equivalents, investments, derivatives and accounts receivable. We attempt to minimize the risks related to cash and cash equivalents and investments by investing in a broad and diverse range of financial instruments as previously defined by us. We have established guidelines related to credit ratings and maturities intended to safeguard principal balances and maintain liquidity. Our investment portfolio is maintained in accordance with our investment policy, which defines allowable investments, specifies credit quality standards and limits the credit exposure of any single issuer. We minimize credit risk resulting from derivative instruments by choosing only highly rated financial institutions as counterparties.
Concentrations of credit risk with respect to receivables, which are typically unsecured, are somewhat mitigated due to the wide variety of customers and markets using our products, as well as their dispersion across many different geographic areas. We monitor the financial performance and creditworthiness of our customers so that we can properly assess and respond to changes in their credit profile. We continue to monitor these conditions and assess their possible impact on our business.
Marketable Securities and Other Investments
Marketable Debt Securities
Available-for-sale marketable debt securities are recorded at fair market value and unrealized gains and losses are included in AOCI in equity, net of related tax effects, unless the security has experienced a credit loss, we have determined that we have the intent to sell the security or we have determined that it is more likely than not that we will have to sell the security before its expected recovery. Realized gains and losses are reported in other (income) expense, net on a specific identification basis.
Marketable Equity Securities and Venture Capital Funds
Our marketable equity securities are recorded at fair market value and unrealized gains and losses are included in other (income) expense, net in our consolidated statements of income. Our marketable equity securities represent investments in publicly traded equity securities and are included in investments and other assets in our consolidated balance sheets.
Our investments in venture capital funds are recorded at net asset value, which approximates fair value, and unrealized gains and losses are included in other (income) expense, net in our consolidated statements of income. The underlying investments of the venture capital funds in which we invest are in equity securities of certain biotechnology companies and are included in investments and other assets in our consolidated balance sheets.
Non-Marketable Equity Securities
We also invest in equity securities of companies whose securities are not publicly traded and where fair value is not readily available. These investments are recorded using either the equity method of accounting or the cost minus impairment adjusted for observable price changes, depending on our ownership percentage and other factors that suggest we have significant influence. We monitor these investments to evaluate whether any increase or decline in their value has occurred, based on the implied value of recent company financings, public market prices of comparable companies and general market conditions. These investments are included in investments and other assets in our consolidated balance sheets.
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Evaluating Marketable Debt Securities for Other-than-Temporary Impairments
When we hold marketable debt securities, we conduct periodic reviews to identify and evaluate each investment that has an unrealized loss, in accordance with the meaning of other-than-temporary impairment. An unrealized loss exists when the current fair value of an individual security is less than its amortized cost basis. Unrealized losses on available-for-sale debt securities that are determined to be temporary, and not related to credit loss, are recorded, net of tax, in AOCI.
For available-for-sale debt securities with unrealized losses, management performs an analysis to assess whether we intend to sell or whether we would more likely than not be required to sell the security before the expected recovery of the amortized cost basis. Where we intend to sell a security, or may be required to do so, the security’s decline in fair value is deemed to be other-than-temporary and the full amount of the unrealized loss is reflected in earnings as an impairment loss.
Regardless of our intent to sell a security, we perform additional analysis on all securities with unrealized losses to evaluate losses associated with the creditworthiness of the security. Credit losses are identified where we do not expect to receive cash flows sufficient to recover the amortized cost basis of a security.
Equity Method of Accounting
In circumstances where we have the ability to exercise significant influence over the operating and financial policies of a company in which we have an investment, we utilize the equity method of accounting for recording investment activity. In assessing whether we exercise significant influence, we consider the nature and magnitude of our investment, the voting and protective rights we hold, any participation in the governance of the other company and other relevant factors such as the presence of a collaborative or other business relationship. Under the equity method of accounting, we record in our consolidated statements of income our share of income or loss of the other company. If our share of losses exceeds the carrying value of our investment, we will suspend recognizing additional losses and will continue to do so unless we commit to providing additional funding.
Inventory
Inventories are stated at the lower of cost or net realizable value with cost based on the first-in, first-out method. We classify our inventory costs as long-term when we expect to utilize the inventory beyond our normal operating cycle and include these costs in investments and other assets in our consolidated balance sheets. Inventory that can be used in either the production of clinical or commercial products is expensed as research and development costs when identified for use in a clinical manufacturing campaign.
Capitalization of Inventory Costs
We capitalize inventory costs associated with our products prior to regulatory approval, when, based on management’s judgment, future commercialization is considered probable and the future economic benefit is expected to be realized. We consider numerous attributes in evaluating whether the costs to manufacture a particular product should be capitalized as an asset. We assess the regulatory approval process and where the particular product stands in relation to that approval process, including any known safety or efficacy concerns, potential labeling restrictions and other impediments to approval. We evaluate our anticipated research and development initiatives and constraints relating to the product and the indication in which it will be used. We consider our manufacturing environment including our supply chain in determining logistical constraints that could hamper approval or commercialization. We consider the shelf life of the product in relation to the expected timeline for approval and we consider patent related or contract issues that may prevent or delay commercialization. We also base our judgment on the viability of commercialization, trends in the marketplace and market acceptance criteria. Finally, we consider the reimbursement strategies that may prevail with respect to the product and assess the economic benefit that we are likely to realize. We expense previously capitalized costs related to pre-approval inventory upon changes in such judgments, due to, among other potential factors, a denial or significant delay of approval by necessary regulatory bodies.
Obsolescence and Unmarketable Inventory
At each reporting period we review our inventories for excess or obsolescence and write-down obsolete or otherwise unmarketable inventory to its estimated net realizable value. If the actual net realizable value is less than that estimated by us, or if it is determined that inventory utilization will further diminish based on estimates of demand, additional inventory write-downs may be required. Additionally, our products are subject to strict quality control and
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monitoring that we perform throughout the manufacturing process. In the event that certain batches or units of product no longer meet quality specifications, we will record a charge to cost of sales to write-down any unmarketable inventory to its estimated net realizable value. In all cases, product inventory is carried at the lower of cost or its estimated net realizable value. Amounts written-down due to unmarketable inventory are charged to cost of sales in our consolidated statements of income.
Property, Plant and Equipment
Property, plant and equipment are carried at cost, subject to reviews for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. The cost of normal, recurring or periodic repairs and maintenance activities related to property, plant and equipment are expensed as incurred. The cost for planned major maintenance activities, including the related acquisition or construction of assets, is capitalized if the repair will result in future economic benefits.
Interest costs incurred during the construction of major capital projects are capitalized until the underlying asset is ready for its intended use, at which point the interest costs are amortized as depreciation expense over the life of the underlying asset. We also capitalize certain direct and incremental costs associated with the validation effort required for licensing by regulatory agencies of new manufacturing equipment for the production of a commercially approved drug. These costs primarily include direct labor and material and are incurred in preparing the equipment for its intended use. The validation costs are either amortized over the life of the related equipment or expensed as cost of sales when the product produced in the validation process is sold.
In addition, we capitalize certain internal use computer software development costs. If the software is an integral part of production assets, these costs are included in machinery and equipment and are amortized on a straight-line basis over the estimated useful lives of the related software, which generally range from three to five years.
We generally depreciate or amortize the cost of our property, plant and equipment using the straight-line method over the estimated useful lives of the respective assets, which are summarized as follows:
| Asset Category | Useful Lives | ||||
| Land | Not depreciated | ||||
| Buildings | 15 to 40 years | ||||
| Leasehold Improvements | Lesser of the useful life or the term of the respective lease | ||||
| Furniture and Fixtures | 5 to 7 years | ||||
| Machinery and Equipment | 5 to 20 years | ||||
| Computer Software and Hardware | 3 to 5 years |
When we dispose of property, plant and equipment, we remove the associated cost and accumulated depreciation from the related accounts in our consolidated balance sheets and include any resulting gain or loss in our consolidated statements of income.
Leases
We determine if an arrangement is a lease at contract inception. Operating lease assets represent our right to use an underlying asset for the lease term and operating lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease assets and liabilities are recognized at the commencement date of the lease based upon the present value of lease payments over the lease term. When determining the lease term, we include options to extend or terminate the lease when it is reasonably certain that they will be exercised.
We use the implicit rate when readily determinable and use our incremental borrowing rate when the implicit rate is not readily determinable based upon the information available at the commencement date in determining the present value of the lease payments. Our incremental borrowing rate is determined using a secured borrowing rate for the same currency and term as the associated lease.
The lease payments used to determine our operating lease assets may include lease incentives, stated rent increases and escalation clauses linked to rates of inflation when determinable and are recognized in our operating lease assets in our consolidated balance sheets. Our lease agreements may include both lease and non-lease components, which we account for as a single lease component when the payments are fixed. Variable payments included in the lease agreement are expensed as incurred. For certain equipment leases, such as vehicles, we apply a portfolio approach to effectively account for the operating lease assets and liabilities.
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Our operating leases are reflected in operating lease assets, accrued expense and other and long-term operating lease liabilities in our consolidated balance sheets. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term.
We also have real estate lease agreements which are subleased to third parties. Operating leases for which we are the sublessor are included in accrued expense and other and other long-term liabilities in our consolidated balance sheets. We recognize sublease income on a straight-line basis over the lease term in our consolidated statements of income.
For additional information on our leases, please read Note 12, Leases, to these consolidated financial statements.
Intangible Assets
Our intangible assets primarily consist of completed technology (comprising of acquired and in-licensed rights and patents, and developed technology), IPR&D acquired after January 1, 2009, acquired priority review vouchers and trademarks and trade names. Our intangible assets are recorded at fair value at the time of their acquisition and are stated in our consolidated balance sheets net of accumulated amortization and impairments, if applicable.
Intangible assets related to completed technology are amortized over their estimated useful lives using the economic consumption method if anticipated future revenue can be reasonably estimated. The straight-line method is used when revenue cannot be reasonably estimated. Amortization is recorded within amortization and impairment of acquired intangible assets in our consolidated statements of income.
The economic consumption method is based on revenue generated from the products underlying the related intangible assets. An analysis of the anticipated lifetime revenue of our marketed products is performed annually during our long-range planning cycle and whenever events or changes in circumstances would significantly affect anticipated lifetime revenue of the relevant products.
Intangible assets related to trademarks, trade names, IPR&D prior to commercialization and priority review vouchers are not amortized because they have indefinite lives; however, they are subject to review for impairment. We review our intangible assets with indefinite lives for impairment annually, as of October 31, and whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable.
Acquired In-process Research and Development
Acquired IPR&D represents the fair value assigned to research and development assets that have not reached technological feasibility. The value assigned to acquired IPR&D is determined by estimating the costs to develop the acquired technology into commercially viable products, estimating the resulting revenue from the projects and discounting the net cash flow to present value. The revenue and cost projections used to value acquired IPR&D are, as applicable, reduced based on the probability of success of developing a new drug. Additionally, the projections consider the relevant market sizes and growth factors, expected trends in technology and the nature and expected timing of new product introductions by us and our competitors. The rates utilized to discount the net cash flow to present value are commensurate with the stage of development of the projects and uncertainties in the economic estimates used in the projections. Upon the acquisition of IPR&D, we complete an assessment of whether our acquisition constitutes the purchase of a single asset or a group of assets. We consider multiple factors in this assessment, including the nature of the technology acquired, the presence or absence of separate cash flow, the development process and stage of completion, quantitative significance and our rationale for entering into the transaction.
If we acquire a business as defined under applicable accounting standards, then the acquired IPR&D is capitalized as an intangible asset. If we acquire an asset or group of assets with no alternative future use that do not meet the definition of a business under applicable accounting standards, then the acquired IPR&D is expensed on its acquisition date. Future costs to develop these assets are recorded to research and development expense within our consolidated statements of income as they are incurred.
When performing our impairment assessment, we calculate the fair value using the same methodology as described above. If the carrying value of our acquired IPR&D exceeds its fair value, then the intangible asset is written down to its fair value. Changes in estimates and assumptions used in determining the fair value of our acquired IPR&D could result in an impairment. Acquired IPR&D impairments are recorded within amortization and impairment of acquired intangible assets in our consolidated statements of income.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Goodwill
Goodwill represents the difference between the purchase price and the fair value of the identifiable tangible and intangible net assets when accounted for using the purchase method of accounting. Goodwill is not amortized, but is reviewed for impairment annually, as of October 31, and whenever events or changes in circumstances indicate that the carrying value of the goodwill may not be recoverable.
We compare the fair value of our reporting unit to its carrying value. If the carrying value of the net assets assigned to the reporting unit exceeds the fair value of our reporting unit, we would record an impairment loss equal to the difference. As described in Note 25, Segment Information, to these consolidated financial statements, we operate as one operating segment, which is our only reporting unit.
Impairment of Long-Lived Assets
Long-lived assets to be held and used, including property, plant and equipment, and definite-lived intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets or asset group may not be recoverable.
Determination of recoverability is based on an estimate of undiscounted future cash flow resulting from the use of the assets and eventual disposition. In the event that such cash flow is not expected to be sufficient to recover the carrying amount of the assets, the assets are written-down to their fair values. Long-lived assets to be disposed of are carried at fair value less costs to sell.
Contingent Consideration
The consideration for our acquisitions often includes future payments that are contingent upon the occurrence of a particular event or events. We record an obligation for such contingent payments at fair value on the acquisition date. We estimate the fair value of contingent consideration obligations through valuation models that incorporate probability-adjusted assumptions related to the achievement of the milestones and thus likelihood of making related payments. We revalue our contingent consideration obligations each reporting period. Changes in the fair value of our contingent consideration obligations are recognized in our consolidated statements of income. Changes in the fair value of the contingent consideration obligations can result from changes to one or multiple inputs, including adjustments to the discount rates, changes in the amount or timing of expected expenditures associated with product development, changes in the amount or timing of cash flow and reserves associated with products upon commercialization, changes in the assumed achievement or timing of any cumulative sales-based and development milestones, changes in the probability of certain clinical events and changes in the assumed probability associated with regulatory approval.
Discount rates in our valuation models represent a measure of the credit risk associated with settling the liability. The period over which we discount our contingent obligations is based on the current development stage of the product candidates, our specific development plan for that product candidate adjusted for the probability of completing the development step and when the contingent payments would be triggered. In estimating the probability of success, we utilize data regarding similar milestone events from several sources, including industry studies and our own experience. These fair value measurements are based on significant inputs not observable in the market. Significant judgment is employed in determining the appropriateness of these assumptions as of the acquisition date and for each subsequent period.
Derivative Instruments and Hedging Activities
Cash Flow and Fair Value Derivative Instruments
We recognize all derivative instruments as either assets or liabilities at fair value in our consolidated balance sheets. Changes in the fair value of our derivative instruments are recognized each period in current earnings or AOCI, depending on whether the derivative instrument is designated as part of a hedge transaction and, if so, the type of hedge transaction. We classify the cash flow from these instruments in the same category as the cash flow from the hedged items. We do not hold or issue derivative instruments for trading or speculative purposes.
We assess at inception and on an ongoing basis, whether the derivative instruments that are used in hedging transactions are highly effective in offsetting the changes in cash flow or fair values of the hedged items. We exclude the forward points portion of the derivative instruments used in a hedging transaction from the effectiveness test and record the fair value gain or loss related to this portion each period in our consolidated statements of income in
F-17
BIOGEN INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
the same line as the underlying hedged item. If we determine that a forecasted transaction is no longer probable of occurring, we discontinue hedge accounting for the affected portion of the hedge instrument, and any related unrealized gain or loss on the contract is recognized in current earnings.
Translation of Foreign Currencies
The functional currency for most of our foreign subsidiaries is their local currency. For our non-U.S. subsidiaries that transact in a functional currency other than the U.S. dollar, assets and liabilities are translated at current rates of exchange at the balance sheet date. Income and expense items are translated at the average foreign currency exchange rates for the period. Adjustments resulting from the translation of the financial statements of our foreign operations into U.S. dollars are excluded from the determination of net income and are recorded in AOCI, as a separate component of equity. For subsidiaries where the functional currency of the assets and liabilities differ from the local currency, non-monetary assets and liabilities are translated at the rate of exchange in effect on the date assets were acquired while monetary assets and liabilities are translated at current rates of exchange as of the balance sheet date. Income and expense items are translated at the average foreign currency rates for the period. Translation adjustments of these subsidiaries are included in other (income) expense, net in our consolidated statements of income.
Royalty Cost of Sales
We make royalty payments to a number of third parties under license or purchase agreements associated with our acquisition of intellectual property. These royalty payments are typically calculated as a percentage (royalty rate) of the sales of our products in a particular year. That royalty rate may remain constant, increase or decrease within each year based on the total amount of sales during the annual period. Each quarterly period, we estimate our total royalty obligation for the full year and recognize the proportional amount as cost of sales based on actual quarterly sales as a percentage of full year estimated sales. For example, if the level of net sales in any calendar year increases the royalty rate within the year, we will record our cost of sales at an even rate over the year, based on the estimated blended royalty rate.
Accounting for Share-Based Compensation
Our share-based compensation programs grant awards that have included stock options, time-vested RSUs, performance-vested stock units that vest based upon meeting both a performance condition and a service condition and shares issued under our ESPP. Compensation expense is recognized based on the estimated fair value of the awards at grant date. We recognize compensation expense for the number of awards expected to vest after taking into consideration an estimate of award forfeitures over the requisite service period, which is generally the vesting period. Where awards are made with non-substantive vesting periods (for instance, where a portion of the award vests upon retirement eligibility), we estimate and recognize expense based on the period from the grant date to the date the employee becomes retirement eligible.
The fair values of our stock option grants are estimated as of the date of grant using a Black-Scholes option valuation model. The estimated fair values of the stock options are then expensed over the options' vesting periods.
The fair values of our RSUs are based on the market value of our stock on the date of grant. Compensation expense for RSUs is recognized straight-line over the applicable service period. If the service condition is not met or not expected to be met, any compensation expense previously recognized to date associated with the awards will be reversed.
The fair values of our PSUs that settle in stock and have market-based metrics are estimated using a lattice model with a Monte Carlo simulation. Compensation expense is recognized straight-line over the applicable service period for these awards. The probability of actual shares expected to be earned is considered in the grant date valuation, therefore the expense is not adjusted to reflect the actual units earned.
The fair values of PSUs that settle in stock and do not have market-based metrics are based on the market value of our stock on the date of grant. Compensation expense is recognized for the number of units expected to be earned after assessing the probability that certain performance criteria will be met and the targeted payout level associated with the performance criteria expected to be achieved. Cumulative adjustments are recorded each quarter to reflect the estimated outcome of the performance-related conditions until the date results are determined and settled. If the performance criteria are not met or not expected to be met, any compensation expense previously recognized to date associated with the awards will be reversed.
F-18
BIOGEN INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Research and Development Expense
Research and development expense consists of expenses incurred in performing research and development activities, which include compensation and benefits, facilities and overhead expense, clinical trial expense and fees paid to CROs, clinical supply and manufacturing expense, fair value step-up adjustment amortization of inventory used for clinical purposes and other outside expense. Research and development expense is expensed as incurred. Payments we make for research and development services prior to the services being rendered are recorded as prepaid assets in our consolidated balance sheets and are expensed as the services are provided. We also accrue the costs of ongoing clinical trials associated with programs that have been terminated or discontinued for which there is no future economic benefit at the time the decision is made to terminate or discontinue the program.
From time to time, we enter into development agreements in which we share expenses with a collaborative partner. We record payments received from our collaborative partners for their share of the development costs as a reduction of research and development expense, except as discussed in Note 19, Collaborative and Other Relationships, to these consolidated financial statements. Expenses incurred by Genentech in the ongoing development of RITUXAN, GAZYVA, LUNSUMIO and other products for which an initial indication has been approved are not recorded as research and development expense, but rather reduce our share of profits recorded as a component of revenue from anti-CD20 therapeutic programs.
Acquired In-process Research and Development, Upfront and Milestone Expense
Acquired in-process research and development, upfront and milestone expense consists of upfront fees and milestones paid to third-party collaborators as well as charges associated with the acquisition of an asset or group of assets with no alternative future use that did not meet the definition of a business under applicable accounting standards. Upfront and milestone payments made to third-party collaborators are expensed as incurred up to the point of regulatory approval. Milestone payments made upon regulatory approval are capitalized and amortized over the remaining useful life of the related product.
Selling, General and Administrative Expense
Selling, general and administrative expense is primarily comprised of compensation and benefits associated with sales and marketing, finance, human resources, legal, information technology and other administrative personnel, outside marketing, advertising and legal expense and other general and administrative costs.
Advertising costs are expensed as incurred. For the years ended December 31, 2025, 2024 and 2023, advertising costs totaled approximately $71.9 million, $66.8 million and $71.4 million, respectively.
Income Taxes
The provision for income taxes includes federal, state, local and foreign taxes. Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences of temporary differences between the financial statement carrying amounts and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the year in which the temporary differences are expected to be recovered or settled. We evaluate the realizability of our deferred tax assets and establish a valuation allowance when it is more likely than not that all or a portion of deferred tax assets will not be realized. We recognize deferred taxes associated with our GILTI tax calculations.
The income tax consequences from the intra-entity transfers of inventory within our consolidated group, both current and deferred, are recorded as a prepaid tax or deferred charge and recognized through our consolidated statements of income when the inventory is sold to a third party. The income tax consequences from the intra-entity transfer of assets other than inventory and associated changes to deferred taxes are recognized when the transfer occurs.
We account for uncertain tax positions using a “more likely than not” threshold for recognizing and resolving uncertain tax positions. We evaluate uncertain tax positions on a quarterly basis and consider various factors including, but not limited to, changes in tax law, the measurement of tax positions taken or expected to be taken in tax returns, the effective settlement of matters subject to audit, information obtained during in process audit activities and changes in facts or circumstances related to a tax position. We also accrue for potential interest and penalties related to unrecognized tax benefits in income tax (benefit) expense in our consolidated statements of income.
F-19
BIOGEN INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Contingencies
We are currently involved in various claims and legal proceedings. Loss contingency provisions are recorded if the potential loss from any claim, asserted or unasserted, or legal proceeding is considered probable and the amount can be reasonably estimated or a range of loss can be determined. These accruals represent management’s best estimate of probable loss. Disclosure also is provided when it is reasonably possible that a loss will be incurred or when it is reasonably possible that the amount of a loss will exceed the recorded provision. On a quarterly basis, we review the status of each significant matter and assess its potential financial exposure. Significant judgment is required in both the determination of probability and as to whether an exposure is reasonably estimable. Because of uncertainties related to these matters, accruals are based only on the best information available at the time. As additional information becomes available, we reassess the potential liability related to pending claims and litigation and may change our estimates. Legal costs associated with legal proceedings are expensed when incurred.
Earnings per Share
Basic earnings per share is computed by dividing undistributed net income attributable to Biogen Inc. by the weighted-average number of common shares outstanding during the period. Diluted earnings per share is computed based on the treasury method by dividing net income by the weighted-average number of common shares outstanding during the period plus potentially dilutive common equivalent shares outstanding.
Business Combinations
Business combinations are recorded using the acquisition method of accounting. The results of operations of the acquired company are included in our results of operations beginning on the acquisition date, and assets acquired and liabilities assumed are recognized on the acquisition date at their respective fair values. Any excess of consideration transferred over the net carrying value of the assets acquired and liabilities assumed as of the acquisition date is recognized as goodwill.
We use the multi-period excess earnings method, which is a form of the income approach, utilizing post-tax cash flow and discount rates in estimating the fair value of identifiable intangible assets acquired when allocating the purchase consideration paid for the acquisition. The estimates of the fair value of identifiable intangible assets involve significant judgment by management and include assumptions with measurement uncertainty, such as the amount and timing of projected cash flow, long-term sales forecasts, discount rates and additionally for IPR&D intangible assets, the timing and probability of regulatory and commercial success.
We use the net realizable value method in estimating the fair value of acquired finished goods and work-in-process inventory. Raw materials acquired are valued using the replacement cost method.
Transaction and restructuring costs related to business combinations are expensed as incurred. The fair value of assets acquired and liabilities assumed in certain cases may be subject to revision based on the final determination of fair value during a period of time not to exceed 12 months from the acquisition date. If we determine the assets acquired do not meet the definition of a business, the transaction will be accounted for as an asset acquisition rather than a business combination.
F-20
BIOGEN INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
New Accounting Pronouncements
From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies that we adopt as of the specified effective date. Unless otherwise discussed below, we do not believe that the adoption of recently issued standards have or may have a material impact on our consolidated financial statements or disclosures.
| Standard | Description | Effective Date | Effects on the Financial Statements | |||||||||||||||||
| ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures | This standard establishes incremental disaggregation of income tax disclosures pertaining to the effective tax rate reconciliation and income taxes paid. The amendments in this update are required to be applied on a prospective basis with the option to apply it retrospectively. | Annual reporting for fiscal years beginning after December 15, 2024. Early adoption is permitted. | We adopted this standard and applied the disclosure requirements on a prospective basis effective for the year ended December 31, 2025. The adoption did not have a material impact on our consolidated financial position or results of operations. Refer to Note 17, Income Taxes, for our updated income tax disclosure. | |||||||||||||||||
| ASU No. 2024-03, Income Statement (Subtopic 220-40): Reporting Comprehensive Income - Expense Disaggregation Disclosures | This standard requires disclosure in the notes to the financial statements, at each interim and annual reporting period, of specified information about certain costs and expense including purchases of inventory, employee compensation, depreciation and intangible asset amortization included in each relevant expense caption. This standard also requires a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated, as well as disclosure of the total amount of selling expenses, and, in annual reporting periods, an entity’s definition of selling expenses. | Annual reporting for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. | We are currently evaluating the potential impact that this new standard will have on our consolidated financial statements and related disclosures, and expect to apply this standard prospectively upon adoption. | |||||||||||||||||
| ASU No. 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software | This standard modernizes the accounting for software costs, including updating guidance on the recognition and measurement of costs incurred in connection with development and implementation activities related to internal-use software. | Annual reporting for fiscal periods beginning after December 15, 2027, and interim periods within those annual reporting periods. Early adoption is permitted. | We are currently evaluating the potential impact that this new standard will have on our consolidated financial statements and related disclosures. | |||||||||||||||||
| ASU No. 2025-07, Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606): Derivatives Scope Refinements and Scope Clarification for Share-Based Noncash Consideration from a Customer in a Revenue Contract | This standard refines and expands the existing scope exceptions that exclude certain contracts, including certain R&D funding arrangements, from derivative accounting, and clarifies the accounting for share-based noncash consideration received from a customer. | Annual reporting for fiscal years beginning after December 15, 2026, and interim periods within those annual reporting periods. Early adoption is permitted. | We have early adopted this new standard on a modified retrospective basis as of January 1, 2025. Adoption did not have a material impact on our condensed consolidated financial statements and related disclosures. |
F-21
BIOGEN INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
| Note 2: | Acquisitions |
Alcyone Therapeutics, Inc.
In November 2025 we completed the acquisition of all of the issued and outstanding shares of Alcyone Therapeutics, Inc., a clinical-stage biotechnology company focused on pediatric care through precision CNS therapeutics and dosing platforms. Alcyone's lead asset is ThecaFlex DRx, an implantable subcutaneous port and catheter device being investigated for the intrathecal delivery of ASOs, including SPINRAZA, which is designed to provide an alternative to repeat lumbar punctures in chronic intrathecal administration of medicines.
Total consideration for this transaction, which was recorded in acquired in-process research and development, upfront and milestone expense in our consolidated statements of income for the year ended December 31, 2025, was approximately $85.0 million, comprising a $50.0 million payment made upon closing and a $35.0 million payment that was considered probable as of December 31, 2025, and made upon FDA approval of a supplemental application in January 2026.
We may pay additional development and regulatory milestone payments to the former shareholders of Alcyone of up to a total of $75.0 million if approval is received for ThecaFlex DRx administration of SPINRAZA or other additional pipeline products.
We accounted for this transaction as an asset acquisition as the value being acquired primarily relates to a single asset. Under the terms of this acquisition, we will oversee the end-to-end development, manufacturing and commercialization of ThecaFlex DRx.
Alcyone's remaining therapeutic assets were divested from Alcyone into Neela Therapeutics, Inc., a newly formed independent company, prior to the closing of this acquisition.
Human Immunology Biosciences
On July 2, 2024, we completed the acquisition of all of the issued and outstanding shares of HI-Bio, a privately-held clinical-stage biotechnology company focused on targeted therapies for patients with severe immune-mediated diseases. HI-Bio's lead asset, felzartamab, an anti-CD38 antibody, is currently being evaluated for several indications, including three leading indications, AMR, PMN and IgAN. Felzartamab has received Breakthrough Therapy Designation and ODD from the FDA for development in the treatment of PMN and AMR. Subsequent to our acquisition, felzartamab received ODD in the E.U. in PMN, IgAN and solid organ transplantation. The acquisition of HI-Bio is expected to augment our pipeline and build on our expertise in immunology.
Under the terms of this acquisition, we paid shareholders of HI-Bio approximately $1.15 billion at closing and may pay up to a total of $650.0 million in contingent development and regulatory milestone payments. The $1.15 billion paid included approximately $74.5 million related to HI-Bio's outstanding, non-vested equity awards, inclusive of employer taxes, of which $56.4 million was recognized as share-based compensation payments to settle non-vested equity awards attributable to the post-acquisition service period and therefore not reflected as a component of total purchase price paid. Of the total $56.4 million, we recognized approximately $42.5 million as a charge to research and development expense with the remaining $13.9 million as a charge to selling, general and administrative expense within our consolidated statements of income for the year ended December 31, 2024. These amounts were associated with the accelerated vesting of stock options and RSUs previously granted to HI-Bio employees and required no future services to vest.
Upon closing we also paid an additional $43.7 million related to working capital adjustments as of the transaction close date, which was included as a component of total purchase price paid.
We funded this acquisition through available cash on hand and accounted for this acquisition as a business combination using the acquisition method of accounting in accordance with ASC Topic 805, Business Combinations, and recorded assets acquired and liabilities assumed at their respective fair values as of the acquisition date.
F-22
BIOGEN INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Purchase Price Consideration
Total consideration transferred for the acquisition of HI-Bio is summarized as follows:
| (In millions) | As of July 2, 2024 | |||||||
| Cash consideration paid to HI-Bio shareholders(1) | $ | 1,137.3 | ||||||
| Contingent consideration | 485.1 | |||||||
| Total consideration | $ | 1,622.4 |
(1) Represents total consideration paid to shareholders of HI-Bio of $1.15 billion, plus an additional $43.7 million related to working capital adjustments as of the transaction close date, less $56.4 million of cash paid for HI-Bio's outstanding, non-vested equity awards, inclusive of employer taxes, which were recognized as compensation attributable to the post-acquisition service period and therefore not reflected as a component of total consideration.
Contingent Consideration: We may make certain contingent payments to the former shareholders of HI-Bio upon the achievement of certain development and regulatory milestones. As of the acquisition date, the maximum aggregate amount payable for these potential milestones was $650.0 million. The acquisition-date fair value of these milestones was approximately $485.1 million and was estimated utilizing a probability-adjusted discounted cash flow calculation using an appropriate discount rate dependent on the nature and timing of the milestone payments, which ranged from 6.2% to 7.0%, and probabilities of technological and regulatory success ranging from 67.0% to near-certain probability.
Of the total contingent consideration recorded as of the transaction close date, approximately $279.3 million related to milestones classified as short-term and reflected as a component of accrued expense and other with the remaining $205.8 million reflected as a component of other long-term liabilities within our consolidated balance sheets. The short-term liability related to the fourth patient dosed in a Phase 3 clinical trial of felzartamab in a first and second indication, which would each result in the achievement of a $150.0 million milestone payment.
Changes in the fair value of the contingent consideration obligation subsequent to the transaction close date are being recognized as (gain) loss on fair value remeasurement of contingent consideration within our consolidated statements of income. This fair value measurement is based on significant inputs that are not observable in the market and thus represent Level 3 fair value measurements. For additional information related to the fair value of this obligation, please read Note 8, Fair Value Measurements, to these consolidated financial statements.
Other Contractual Commitments: We acquired HI-Bio's pre-existing in-license commitments under third-party agreements with MorphoSys, which include tiered royalties on potential future sales ranging from high-single digit to mid-teen percentages, as well as potential future development, regulatory and commercial milestone payments of up to $130.0 million, $230.0 million and $640.0 million, respectively. At the transaction close date the achievement of these milestones was not considered probable and therefore not recorded in our financial statements.
F-23
BIOGEN INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Purchase Price Allocation
We finalized purchase accounting for this acquisition in the second quarter of 2025.
The following table summarizes the amounts recognized for assets acquired and liabilities assumed as of the acquisition date, and reflects measurement period adjustments made to the amounts initially recorded as of the acquisition date on July 2, 2024. The related impact to our consolidated statements of income that would have been recognized in previous periods if the adjustments were recognized as of the acquisition date is immaterial.
| (In millions) | Amounts Recognized as of Acquisition Date (as adjusted) | |||||||||||||||||||||||||
| Cash and cash equivalents | $ | 62.5 | ||||||||||||||||||||||||
| Intangible assets: | ||||||||||||||||||||||||||
| IPR&D - felzartamab (IgAN) | 920.0 | |||||||||||||||||||||||||
| IPR&D - felzartamab (AMR) | 450.0 | |||||||||||||||||||||||||
| IPR&D - felzartamab (PMN) | 265.0 | |||||||||||||||||||||||||
| Other clinical programs | 7.9 | |||||||||||||||||||||||||
| Prepaid expense and other assets(1) | 1.4 | |||||||||||||||||||||||||
| Operating lease assets | 1.2 | |||||||||||||||||||||||||
| Accounts payable | (1.1) | |||||||||||||||||||||||||
| Accrued liabilities | (35.0) | |||||||||||||||||||||||||
| Deferred tax liability(1) | (309.3) | |||||||||||||||||||||||||
| Operating lease liabilities | (1.2) | |||||||||||||||||||||||||
| Total identifiable net assets | 1,361.4 | |||||||||||||||||||||||||
| Goodwill(1) | 261.0 | |||||||||||||||||||||||||
| Total assets acquired and liabilities assumed | $ | 1,622.4 |
(1) Includes measurement period adjustments recorded in 2025 that increased prepaid expense and other assets by $0.4 million, net deferred tax liability by $4.9 million and goodwill by $4.5 million.
Intang****ible assets: Intangible assets comprised of approximately $1.6 billion of IPR&D related to HI-Bio's lead asset felzartamab. This includes $920.0 million of IPR&D related to felzartamab indication for IgAN, $450.0 million of IPR&D related to felzartamab indication for AMR and $265.0 million of IPR&D related to felzartamab indication for PMN. The estimated fair values of the program related intangible assets were determined using a multi-period excess earnings method, a form of the income approach, utilizing cash flow analyses and a discount rate of 14.5%. These fair value measurements were based on significant inputs that are not observable in the market and thus represent Level 3 fair value measurements.
Goodwill: Goodwill was calculated as the excess of the consideration transferred over the net assets recognized and represents the future economic benefits arising from the other assets acquired that could not be individually identified and separately recognized. We recognized goodwill of approximately $261.0 million, which includes measurement period adjustments, and is not deductible for tax purposes. The goodwill recognized from our acquisition of HI-Bio is primarily the result of the deferred tax consequences from the transaction recorded for financial statement purposes.
Acquisition-related expense: Acquisition-related expense, primarily comprised of advisory and legal fees, and other transaction costs, totaled approximately $2.8 million and were recorded within selling, general and administrative expense within our consolidated statements of income for the year ended December 31, 2024.
Reata Pharmaceuticals, Inc.
On September 26, 2023, we completed the acquisition of all of the issued and outstanding shares of Reata, a biopharmaceutical company focused on developing therapeutics that regulate cellular metabolism and inflammation in serious neurologic diseases. As a result of this transaction we acquired SKYCLARYS (omaveloxolone), the first and only drug approved in the U.S., the E.U. and certain international markets for the treatment of FA in adults and adolescents aged 16 years and older, as well as other clinical and preclinical pipeline programs.
F-24
BIOGEN INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Under the terms of this acquisition, we paid Reata shareholders $172.50 in cash for each issued and outstanding Reata share, which totaled approximately $6.6 billion. In addition, we agreed to pay approximately $983.9 million in cash for Reata's outstanding equity awards, inclusive of employer taxes, of which approximately $590.5 million was attributable to pre-acquisition services and is therefore reflected as a component of total purchase price paid. Of the $983.9 million paid to Reata's equity award holders, we recognized approximately $393.4 million as compensation attributable to the post-acquisition service period, of which $196.4 million was recognized as a charge to selling, general and administrative expense with the remaining $197.0 million as a charge to research and development expense within our consolidated statements of income for the year ended December 31, 2023. These amounts were associated with the accelerated vesting of stock options and RSUs previously granted to Reata employees that required no future services to vest.
We funded this acquisition through available cash, cash equivalents and marketable securities, supplemented by the issuance of a $1.0 billion term loan under our 2023 Term Loan. For additional information on our 2023 Term Loan, please read Note 13, Indebtedness, to these consolidated financial statements.
We accounted for this acquisition as a business combination using the acquisition method of accounting in accordance with ASC Topic 805, Business Combinations, and recorded assets acquired and liabilities assumed at their respective fair values as of the acquisition date.
Purchase Price Consideration
Total consideration transferred for the acquisition of Reata is summarized as follows:
| (In millions) | As of September 26, 2023 | |||||||
| Cash consideration paid to Reata shareholders(1) | $ | 6,602.9 | ||||||
| Fair value of Reata equity compensation pre-acquisition services and related taxes(2) | 590.5 | |||||||
| Total consideration | $ | 7,193.4 |
(1) Represents cash consideration transferred of $172.50 per outstanding Reata ordinary share based on 38.3 million Reata shares outstanding at closing.
(2) Represents the fair value of Reata stock options and stock units issued to Reata equity award holders and the related taxes attributable to pre-acquisition vesting services.
F-25
BIOGEN INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Purchase Price Allocation
We finalized purchase accounting for this acquisition in the third quarter of 2024. The following table summarizes the amounts recognized for assets acquired and liabilities assumed as of the acquisition date, and reflects measurement period adjustments made to the amounts initially recorded as of the acquisition date on September 26, 2023. The measurement period adjustments summarized below resulted from updates to our valuation assumptions related to the estimated amounts and timing of future cash flows associated with certain intangible assets, updates of our assumptions related to the quantities, selling location and remaining manufacturing and selling costs of acquired inventory, and other assets and liabilities. The related impact to our consolidated statements of income that would have been recognized in previous periods if the adjustments were recognized as of the acquisition date is immaterial.
| (In millions) | Amounts Recognized as of Acquisition Date (as adjusted) | |||||||
| Cash and cash equivalents | $ | 267.3 | ||||||
| Accounts receivable | 15.9 | |||||||
| Inventory | 1,259.0 | |||||||
| Other current assets(1) | 54.6 | |||||||
| Intangible assets: | ||||||||
| Completed technology for SKYCLARYS (U.S.) | 4,200.0 | |||||||
| In-process research and development (omaveloxolone) | 2,300.0 | |||||||
| Priority review voucher | 100.0 | |||||||
| Other clinical programs | 40.0 | |||||||
| Operating lease assets | 121.2 | |||||||
| Accrued expense and other(1) | (110.3) | |||||||
| Debt payable | (159.9) | |||||||
| Contingent payable to Blackstone | (300.0) | |||||||
| Deferred tax liability(1) | (909.3) | |||||||
| Operating lease liabilities | (151.8) | |||||||
| Other assets and liabilities, net | (2.5) | |||||||
| Total identifiable net assets | 6,724.2 | |||||||
| Goodwill(1) | 469.2 | |||||||
| Total assets acquired and liabilities assumed | $ | 7,193.4 |
(1) Includes measurement period adjustments recorded in 2024 that increased other current assets by $1.0 million, accrued expense and other by $8.8 million and goodwill by $4.7 million, and decreased deferred tax liability by $3.1 million.
Inventory: Total inventory acquired was approximately $1.3 billion, which reflects a step-up in the fair value of finished goods and work-in-process inventory for SKYCLARYS. The fair value was determined based on the estimated selling price of the inventory, less the remaining manufacturing and selling costs and a normal profit margin on those manufacturing and selling efforts. This fair value step-up adjustment is being amortized to cost of sales as the inventory is sold or research and development expense as the inventory is used for clinical purposes within our consolidated statements of income. We expect this amount to be fully amortized by the end of 2028.
Intang****ible assets: Intangible assets are comprised of $4.2 billion related to SKYCLARYS commercialization rights in the U.S., $2.3 billion of IPR&D related to the omaveloxolone program outside the U.S., which had not yet received regulatory approval in the E.U. as of the acquisition date, $100.0 million related to a rare pediatric disease PRV which may be used to obtain priority review by the FDA for a future regulatory submission or sold to a third party and $40.0 million related to other clinical programs. The estimated fair values of the program related intangible assets were determined using a multi-period excess earnings method, a form of the income approach, utilizing a discount rate of 14.3% and the estimated fair value of the PRV was based on recent external purchase and sale transactions of similar vouchers.
F-26
BIOGEN INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Our valuation of the SKYCLARYS commercialization rights reflects the assumption that, using an economic consumption model, the related $4.2 billion intangible asset will be amortized over its expected economic life. Upon SKYCLARYS receiving regulatory approval in the E.U. in February 2024, we began selling the product in certain countries in Europe, and began amortizing the $2.3 billion IPR&D asset related to the program outside the U.S. over its expected economic life using an economic consumption model.
These fair value measurements were based on significant inputs not observable in the market and thus represent Level 3 fair value measurements.
Leases: We assumed responsibility for a single-tenant, build-to-suit building of approximately 327,400 square feet of office and laboratory space located in Plano, Texas, with an initial lease term of 16 years. We recorded a lease liability of approximately $151.8 million, which represented the net present value of rental expense over the remaining lease term of approximately 15 years, with a corresponding right-of-use asset of approximately $121.2 million, which represented our estimate of the fair value for a market participant of the rental market in the Dallas, Texas area. Included in our estimate of the market rental rate was the value of any leasehold improvements or tenant allowances related to the building. We do not intend to occupy this building and are evaluating opportunities to sublease the property.
Goodwill: Goodwill was calculated as the excess of the consideration transferred over the net assets recognized and represents the future economic benefits arising from the other assets acquired that could not be individually identified and separately recognized. We recognized goodwill of approximately $469.2 million, which includes measurement period adjustments, and is not deductible for tax purposes. The goodwill recognized from our acquisition of Reata is primarily the result of the deferred tax consequences from the transaction recorded for financial statement purposes.
Acquisition-related expense: Acquisition-related expense, primarily comprised of regulatory, advisory and legal fees, and other transaction costs, totaled approximately $28.4 million and were recorded in selling, general and administrative expense within our consolidated statements of income for the year ended December 31, 2023.
| Note 3: | Dispositions |
Sale of Joint Venture Equity Interest in Samsung Bioepis
In April 2022 we completed the sale of our 49.9% equity interest in Samsung Bioepis to Samsung BioLogics in exchange for total consideration of approximately $2.3 billion. Under the terms of this transaction, we received approximately $1.0 billion in cash at closing, with approximately $1.3 billion in cash to be deferred over two payments. The first deferred payment of $812.5 million was received in April 2023 and the second deferred payment of $437.5 million was received in April 2024.
For the year ended December 31, 2024, we recognized a gain of approximately $7.5 million to reflect the change in fair value associated with the passage of time related to the second deferred payment due to us, which was received in April 2024. For the year ended December 31, 2023, we recognized gains of approximately $13.7 million and $24.6 million to reflect the changes in fair value associated with changes in interest rates and the passage of time related to the first and second deferred payments due to us, respectively, which were received in April 2023 and April 2024, respectively. These changes were recorded in other (income) expense, net within our consolidated statements of income.
Sale of Priority Review Voucher
In April 2024 we completed the sale of our rare pediatric disease PRV, generated by the development associated with SPINRAZA, to a third party. In consideration for the PRV we received a cash payment of $103.0 million upon the closing of the PRV purchase, of which approximately $14.4 million was paid to Ionis. Our net portion of approximately $88.6 million was recognized in gain on sale of priority review voucher, net within our consolidated statements of income for the year ended December 31, 2024.
Sale of TOFIDENCE
In March 2025 we completed the sale of our regulatory and commercial rights in the U.S. for TOFIDENCE, a tocilizumab biosimilar referencing ACTEMRA, to Organon. Under the terms of this transaction, we received a payment
F-27
BIOGEN INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
of approximately $51.0 million in July 2025 and recognized a de minimis loss within our consolidated statements of income for the year ended December 31, 2025.
Sale of BYOOVIZ and OPUVIZ Rights
In October 2025 we completed the sale of our remaining commercial rights to two ophthalmology assets in Europe: BYOOVIZ, a ranibizumab biosimilar referencing LUCENTIS, and OPUVIZ, an aflibercept biosimilar referencing EYLEA. Samsung Bioepis will have full responsibility for commercialization of BYOOVIZ upon the transfer of commercial rights from Biogen back to Samsung Bioepis, which became effective as of January 2026. Under the terms of this transaction, we received a payment of $28.0 million in November 2025 and recognized a minimal gain on disposal within our consolidated statements of income for the year ended December 31, 2025.
For additional information on our license arrangements with Samsung Bioepis, please read Note 19, Collaborative and Other Relationships, to these consolidated financial statements.
| Note 4: | Restructuring |
2023 Fit for Growth Restructuring Program
In 2023 we initiated cost saving measures as part of our Fit for Growth program to reduce operating costs, while improving operating efficiency and effectiveness. The Fit for Growth program generated approximately $1.0 billion in gross operating expense savings by the end of 2025, some of which has been reinvested in various initiatives. The Fit for Growth program included net headcount reductions of approximately 1,400 employees and we incurred total restructuring charges of approximately $320.0 million by the end of 2025.
Total charges incurred from our 2023 Fit for Growth program are summarized as follows:
| For the Years Ended December 31, | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (In millions) | Severance Costs | Accelerated Depreciation and Other | Total | Severance Costs | Accelerated Depreciation and Other | Total | Severance Costs | Accelerated Depreciation and Other | Total | |||||||||||||||||||||||||||||||||||||||||||||||
| Selling, general and administrative | $ | — | $ | (1.4) | $ | (1.4) | $ | — | $ | 13.8 | $ | 13.8 | $ | — | $ | 23.3 | $ | 23.3 | ||||||||||||||||||||||||||||||||||||||
| Research and development | — | 10.1 | 10.1 | — | 11.7 | 11.7 | — | 1.2 | 1.2 | |||||||||||||||||||||||||||||||||||||||||||||||
| Restructuring charges | 48.7 | — | 48.7 | 24.2 | — | 24.2 | 153.4 | 34.6 | 188.0 | |||||||||||||||||||||||||||||||||||||||||||||||
| Total charges | $ | 48.7 | $ | 8.7 | $ | 57.4 | $ | 24.2 | $ | 25.5 | $ | 49.7 | $ | 153.4 | $ | 59.1 | $ | 212.5 | ||||||||||||||||||||||||||||||||||||||
Other Costs: Includes costs associated with items such as asset abandonment and write-offs, facility closure costs, pre-tax gains and losses resulting from the termination of certain leases, employee non-severance expense, consulting fees and other costs.
Reata Integration
Following the close of our Reata acquisition in September 2023, we implemented an integration plan designed to realize operating synergies through cost savings and avoidance. Under this initiative, we estimated we would incur total integration charges of approximately $35.0 million related to severance and employment costs, which were substantially incurred during 2023.
F-28
BIOGEN INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Total charges incurred from our Reata integration are summarized as follows:
| For the Years Ended December 31, | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (In millions) | Severance Costs | Accelerated Depreciation and Other | Total | Severance Costs | Accelerated Depreciation and Other | Total | Severance Costs | Accelerated Depreciation and Other | Total | |||||||||||||||||||||||||||||||||||||||||||||||
| Selling, general and administrative | $ | — | $ | 6.8 | $ | 6.8 | $ | — | $ | 6.3 | $ | 6.3 | $ | — | $ | — | $ | — | ||||||||||||||||||||||||||||||||||||||
| Research and development | — | 14.3 | 14.3 | — | 11.9 | 11.9 | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
| Restructuring charges | (0.7) | — | (0.7) | 3.4 | — | 3.4 | 30.4 | — | 30.4 | |||||||||||||||||||||||||||||||||||||||||||||||
| Total charges | $ | (0.7) | $ | 21.1 | $ | 20.4 | $ | 3.4 | $ | 18.2 | $ | 21.6 | $ | 30.4 | $ | — | $ | 30.4 |
In connection with our acquisition of Reata we assumed responsibility for a single-tenant, build-to-suit building of approximately 327,400 square feet of office and laboratory space located in Plano, Texas, with an initial lease term of 16 years. We do not intend to occupy this building and are evaluating opportunities to sublease the property. For additional information on our acquisition of Reata, please read Note 2, Acquisitions, to these consolidated financial statements.
Restructuring Reserve
Charges and spending related to workforce reductions are summarized as follows:
| (In millions) | Workforce Reductions | |||||||||||||||||||
| Restructuring reserve, December 31, 2023 | $ | 75.4 | ||||||||||||||||||
| Expense | 30.2 | |||||||||||||||||||
| Payment | (73.8) | |||||||||||||||||||
| Foreign currency and other adjustments | 0.1 | |||||||||||||||||||
| Restructuring reserve, December 31, 2024 | 31.9 | |||||||||||||||||||
| Expense | 48.6 | |||||||||||||||||||
| Payment | (61.5) | |||||||||||||||||||
| Foreign currency and other adjustments | (3.2) | |||||||||||||||||||
| Restructuring reserve, December 31, 2025 | $ | 15.8 |
F-29
BIOGEN INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
| Note 5: | Revenue |
Product Revenue
Revenue by product are summarized as follows:
| For the Years Ended December 31, | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (In millions) | United States | Rest of World | Total | United States | Rest of World | Total | United States | Rest of World | Total | |||||||||||||||||||||||||||||||||||||||||||||||
| Multiple Sclerosis: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| TECFIDERA | $ | 168.5 | $ | 511.2 | $ | 679.7 | $ | 169.2 | $ | 797.9 | $ | 967.1 | $ | 263.1 | $ | 749.4 | $ | 1,012.5 | ||||||||||||||||||||||||||||||||||||||
| VUMERITY | 651.2 | 95.6 | 746.8 | 538.6 | 89.4 | 628.0 | 512.1 | 64.2 | 576.3 | |||||||||||||||||||||||||||||||||||||||||||||||
| Total Fumarate | 819.7 | 606.8 | 1,426.5 | 707.8 | 887.3 | 1,595.1 | 775.2 | 813.6 | 1,588.8 | |||||||||||||||||||||||||||||||||||||||||||||||
| AVONEX | 482.9 | 212.6 | 695.5 | 451.3 | 256.2 | 707.5 | 536.7 | 274.3 | 811.0 | |||||||||||||||||||||||||||||||||||||||||||||||
| PLEGRIDY | 104.9 | 145.2 | 250.1 | 111.4 | 149.1 | 260.5 | 126.2 | 168.5 | 294.7 | |||||||||||||||||||||||||||||||||||||||||||||||
| Total Interferon | 587.8 | 357.8 | 945.6 | 562.7 | 405.3 | 968.0 | 662.9 | 442.8 | 1,105.7 | |||||||||||||||||||||||||||||||||||||||||||||||
| TYSABRI | 965.0 | 700.4 | 1,665.4 | 920.0 | 795.0 | 1,715.0 | 997.9 | 879.0 | 1,876.9 | |||||||||||||||||||||||||||||||||||||||||||||||
| FAMPYRA(1) | — | 1.4 | 1.4 | — | 71.7 | 71.7 | — | 90.5 | 90.5 | |||||||||||||||||||||||||||||||||||||||||||||||
| Subtotal: Multiple Sclerosis | 2,372.5 | 1,666.4 | 4,038.9 | 2,190.5 | 2,159.3 | 4,349.8 | 2,436.0 | 2,225.9 | 4,661.9 | |||||||||||||||||||||||||||||||||||||||||||||||
| Rare Disease: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SPINRAZA | 625.5 | 921.3 | 1,546.8 | 625.7 | 947.5 | 1,573.2 | 610.5 | 1,130.7 | 1,741.2 | |||||||||||||||||||||||||||||||||||||||||||||||
| SKYCLARYS(2) | 310.6 | 209.9 | 520.5 | 301.1 | 81.4 | 382.5 | 55.9 | — | 55.9 | |||||||||||||||||||||||||||||||||||||||||||||||
| QALSODY(3) | 30.1 | 56.8 | 86.9 | 20.9 | 11.5 | 32.4 | 5.8 | 0.1 | 5.9 | |||||||||||||||||||||||||||||||||||||||||||||||
| Subtotal: Rare Disease | 966.2 | 1,188.0 | 2,154.2 | 947.7 | 1,040.4 | 1,988.1 | 672.2 | 1,130.8 | 1,803.0 | |||||||||||||||||||||||||||||||||||||||||||||||
| Biosimilars: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| BENEPALI | — | 453.2 | 453.2 | — | 479.1 | 479.1 | — | 438.8 | 438.8 | |||||||||||||||||||||||||||||||||||||||||||||||
| IMRALDI | — | 190.2 | 190.2 | — | 213.1 | 213.1 | — | 222.1 | 222.1 | |||||||||||||||||||||||||||||||||||||||||||||||
| FLIXABI | — | 52.6 | 52.6 | — | 63.2 | 63.2 | — | 77.4 | 77.4 | |||||||||||||||||||||||||||||||||||||||||||||||
| BYOOVIZ | 13.0 | 19.4 | 32.4 | 23.0 | 13.6 | 36.6 | 29.2 | 2.5 | 31.7 | |||||||||||||||||||||||||||||||||||||||||||||||
| TOFIDENCE | 0.7 | — | 0.7 | 1.1 | — | 1.1 | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
| Subtotal: Biosimilars | 13.7 | 715.4 | 729.1 | 24.1 | 769.0 | 793.1 | 29.2 | 740.8 | 770.0 | |||||||||||||||||||||||||||||||||||||||||||||||
| Other: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ZURZUVAE | 195.1 | — | 195.1 | 72.2 | — | 72.2 | 1.6 | — | 1.6 | |||||||||||||||||||||||||||||||||||||||||||||||
| Other(4) | 0.4 | 1.7 | 2.1 | 2.8 | 7.5 | 10.3 | 2.4 | 7.8 | 10.2 | |||||||||||||||||||||||||||||||||||||||||||||||
| Subtotal: Other | 195.5 | 1.7 | 197.2 | 75.0 | 7.5 | 82.5 | 4.0 | 7.8 | 11.8 | |||||||||||||||||||||||||||||||||||||||||||||||
| Total product revenue, net | $ | 3,547.9 | $ | 3,571.5 | $ | 7,119.4 | $ | 3,237.3 | $ | 3,976.2 | $ | 7,213.5 | $ | 3,141.4 | $ | 4,105.3 | $ | 7,246.7 |
(1) Effective January 1, 2025, our collaboration and license agreement for FAMPYRA global commercialization rights was terminated.
(2) SKYCLARYS became commercially available in the E.U. during the first quarter of 2024.
(3) QALSODY became commercially available in the E.U. during the second quarter of 2024.
(4) Other includes FUMADERM and ADUHELM.
We recognized revenue from two wholesalers accounting for 28.0% and 15.8% of gross product revenue in 2025, 25.9% and 13.4% of gross product revenue in 2024 and 27.0% and 9.9% of gross product revenue in 2023, respectively.
As of December 31, 2025, two wholesale distributors individually accounted for approximately 25.4% and 15.2% of net accounts receivable associated with our product sales, as compared to 27.2% and 11.7% as of December 31, 2024, respectively.
F-30
BIOGEN INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
An analysis of the change in reserves for discounts and allowances is summarized as follows:
| As of December 31, 2025 | ||||||||||||||||||||||||||
| (In millions) | Discounts | Contractual Adjustments | Returns | Total | ||||||||||||||||||||||
| Balance, December 31, 2024 | $ | 162.7 | $ | 880.8 | $ | 48.1 | $ | 1,091.6 | ||||||||||||||||||
| Current provisions relating to sales in current year | 832.4 | 2,773.1 | 31.9 | 3,637.4 | ||||||||||||||||||||||
| Adjustments relating to prior years | 2.2 | (83.4) | 0.7 | (80.5) | ||||||||||||||||||||||
| Payments/credits relating to sales in current year | (728.3) | (1,905.8) | (1.7) | (2,635.8) | ||||||||||||||||||||||
| Payments/credits relating to sales in prior years | (153.3) | (618.6) | (30.0) | (801.9) | ||||||||||||||||||||||
| Balance, December 31, 2025 | $ | 115.7 | $ | 1,046.1 | $ | 49.0 | $ | 1,210.8 |
| As of December 31, 2024 | ||||||||||||||||||||||||||
| (In millions) | Discounts | Contractual Adjustments | Returns | Total | ||||||||||||||||||||||
| Balance, December 31, 2023 | $ | 173.3 | $ | 857.1 | $ | 31.6 | $ | 1,062.0 | ||||||||||||||||||
| Current provisions relating to sales in current year | 824.2 | 2,687.5 | 23.6 | 3,535.3 | ||||||||||||||||||||||
| Adjustments relating to prior years | 8.0 | (38.7) | 14.2 | (16.5) | ||||||||||||||||||||||
| Payments/credits relating to sales in current year | (670.9) | (1,989.7) | (0.6) | (2,661.2) | ||||||||||||||||||||||
| Payments/credits relating to sales in prior years | (171.9) | (635.4) | (20.7) | (828.0) | ||||||||||||||||||||||
| Balance, December 31, 2024 | $ | 162.7 | $ | 880.8 | $ | 48.1 | $ | 1,091.6 |
| As of December 31, 2023 | ||||||||||||||||||||||||||
| (In millions) | Discounts | Contractual Adjustments | Returns | Total | ||||||||||||||||||||||
| Balance, December 31, 2022 | $ | 153.8 | $ | 857.7 | $ | 23.5 | $ | 1,035.0 | ||||||||||||||||||
| Current provisions relating to sales in current year | 735.6 | 2,720.1 | 19.0 | 3,474.7 | ||||||||||||||||||||||
| Adjustments relating to prior years | (0.4) | (38.4) | 19.2 | (19.6) | ||||||||||||||||||||||
| Payments/credits relating to sales in current year | (572.9) | (1,944.8) | (2.1) | (2,519.8) | ||||||||||||||||||||||
| Payments/credits relating to sales in prior years | (142.8) | (737.5) | (28.0) | (908.3) | ||||||||||||||||||||||
| Balance, December 31, 2023 | $ | 173.3 | $ | 857.1 | $ | 31.6 | $ | 1,062.0 |
The total reserves above, which are included in our consolidated balance sheets, are summarized as follows:
| As of December 31, | ||||||||||||||
| (In millions) | 2025 | 2024 | ||||||||||||
| Reduction of accounts receivable | $ | 210.4 | $ | 154.1 | ||||||||||
| Component of accrued expense and other | 1,000.4 | 937.5 | ||||||||||||
| Total revenue-related reserves | $ | 1,210.8 | $ | 1,091.6 |
Revenue from Anti-CD20 Therapeutic Programs
Revenue from anti-CD20 therapeutic programs is summarized in the table below. For purposes of this footnote, we refer to RITUXAN and RITUXAN HYCELA collectively as RITUXAN.
| For the Years Ended December 31, | ||||||||||||||||||||
| (In millions) | 2025 | 2024 | 2023 | |||||||||||||||||
| Royalty revenue on sales of OCREVUS | $ | 1,414.9 | $ | 1,339.5 | $ | 1,266.2 | ||||||||||||||
| Biogen's share of pre-tax profits in the U.S. for RITUXAN, GAZYVA and LUNSUMIO | 420.2 | 392.0 | 409.4 | |||||||||||||||||
| Other revenue from anti-CD20 therapeutic programs | 25.5 | 18.4 | 14.0 | |||||||||||||||||
| Total revenue from anti-CD20 therapeutic programs | $ | 1,860.6 | $ | 1,749.9 | $ | 1,689.6 |
F-31
BIOGEN INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Approximately 18.8%, 18.1% and 17.2% of our total revenue in 2025, 2024 and 2023, respectively, was derived from our collaboration arrangements with Genentech. For additional information on our collaboration arrangements with Genentech, please read Note 19, Collaborative and Other Relationships, to these consolidated financial statements.
Alzheimer's Collaboration Revenue
Alzheimer's collaboration revenue consists of our 50.0% share of LEQEMBI product revenue, net and cost of sales, including royalties, as we are not the principal. We began recognizing Alzheimer's collaboration revenue upon the accelerated approval of LEQEMBI in the U.S. during the first quarter of 2023.
For the years ended December 31, 2025 and 2024, we recognized Alzheimer's collaboration revenue of approximately $177.7 million and $59.9 million, respectively, within our consolidated statements of income. For the year ended December 31, 2023, our share of LEQEMBI product revenue, net, was fully offset by our share of cost of sales, including royalties, resulting in a zero net impact to Alzheimer's collaboration revenue within our consolidated statements of income.
For additional information on our collaboration arrangements with Eisai, please read Note 19, Collaborative and Other Relationships, to these consolidated financial statements.
Contract Manufacturing, Royalty and Other Revenue
Contract manufacturing, royalty and other revenue is summarized as follows:
| For the Years Ended December 31, | ||||||||||||||||||||
| (In millions) | 2025 | 2024 | 2023 | |||||||||||||||||
| Contract manufacturing revenue | $ | 679.4 | $ | 592.1 | $ | 848.2 | ||||||||||||||
| Royalty and other revenue | 53.5 | 60.5 | 51.1 | |||||||||||||||||
| Total contract manufacturing, royalty and other revenue | $ | 732.9 | $ | 652.6 | $ | 899.3 |
Contract Manufacturing Revenue
Contract manufacturing revenue primarily reflects amounts earned under contract manufacturing agreements with our strategic customers and batches of LEQEMBI related to our collaboration with Eisai.
Royalty and Other Revenue
Royalty and other revenue primarily reflects royalty revenue on biosimilar products from our license arrangements with Samsung Bioepis and royalties we receive from net sales on products related to patents that we have out-licensed.
For additional information on our license arrangements with Samsung Bioepis and our collaboration arrangements with Eisai, please read Note 19, Collaborative and Other Relationships, to these consolidated financial statements.
F-32
BIOGEN INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
| Note 6: | Inventory |
The components of inventory are summarized as follows:
| As of December 31, | ||||||||||||||
| (In millions) | 2025 | 2024 | ||||||||||||
| Raw materials | $ | 293.4 | $ | 317.8 | ||||||||||
| Work in process | 1,595.2 | 1,882.8 | ||||||||||||
| Finished goods | 424.9 | 353.8 | ||||||||||||
| Total inventory | $ | 2,313.5 | $ | 2,554.4 | ||||||||||
| Balance Sheet Classification: | ||||||||||||||
| Inventory | $ | 2,168.1 | $ | 2,460.5 | ||||||||||
| Investments and other assets | 145.4 | 93.9 | ||||||||||||
| Total inventory | $ | 2,313.5 | $ | 2,554.4 |
Long-term inventory is included in investments and other assets within our consolidated balance sheets.
As a result of our acquisition of Reata in September 2023 we recorded a fair value step-up adjustment related to the acquired inventory of SKYCLARYS of approximately $1.3 billion. This fair value step-up adjustment is being amortized to cost of sales as the inventory is sold or research and development expense as the inventory is used for clinical purposes within our consolidated statements of income. We expect this amount to be fully amortized by the end of 2028. For the years ended December 31, 2025, 2024 and 2023, amortization from the fair value step-up adjustment was approximately $240.8 million, $230.0 million and $31.5 million, respectively. For the years ended December 31, 2025 and 2024, amortization from the fair value step-up adjustment includes approximately $23.9 million and $48.5 million, respectively, of inventory used for clinical purposes, which is reflected in research and development expense within our consolidated statements of income. For additional information on our acquisition of Reata, please read Note 2, Acquisitions, to these consolidated financial statements.
Write Downs and Other Charges
Inventory amounts written down as a result of excess, obsolescence or unmarketability are charged to cost of sales, and totaled $29.2 million, $101.9 million and $124.4 million for the years ended December 31, 2025, 2024 and 2023, respectively.
| Note 7: | Intangible Assets and Goodwill |
Intangible Assets
Intangible assets, net of accumulated amortization, impairment charges and adjustments are summarized as follows:
| As of December 31, 2025 | As of December 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||
| (In millions) | Estimated Life | Cost | Accumulated Amortization | Net | Cost | Accumulated Amortization | Net | |||||||||||||||||||||||||||||||||||||
| Completed technology | 1-30 years | $ | 14,067.3 | $ | (6,687.8) | $ | 7,379.5 | $ | 14,138.4 | $ | (6,254.1) | $ | 7,884.3 | |||||||||||||||||||||||||||||||
| In-process research and development | Indefinite until commercialization | 1,635.0 | — | 1,635.0 | 1,642.9 | — | 1,642.9 | |||||||||||||||||||||||||||||||||||||
| Priority review voucher | Indefinite | 100.0 | — | 100.0 | 100.0 | — | 100.0 | |||||||||||||||||||||||||||||||||||||
| Trademarks and trade names | Indefinite | 64.0 | — | 64.0 | 64.0 | — | 64.0 | |||||||||||||||||||||||||||||||||||||
| Total intangible assets | $ | 15,866.3 | $ | (6,687.8) | $ | 9,178.5 | $ | 15,945.3 | $ | (6,254.1) | $ | 9,691.2 |
Amortization and Impairments
Amortization and impairment of acquired intangible assets totaled $515.0 million, $446.7 million and $240.6 million for the years ended December 31, 2025, 2024 and 2023, respectively.
Amortization of acquired intangible assets, excluding impairment charges, totaled $507.1 million, $386.5 million and $240.6 million for the years ended December 31, 2025, 2024 and 2023, respectively. The increase in
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BIOGEN INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
amortization of acquired intangible assets, excluding impairment charges, was primarily due to amortization for the acquired intangible assets associated with SKYCLARYS and TYSABRI.
For the year ended December 31, 2025, amortization and impairment of acquired intangible assets reflects the impact of $7.9 million in impairment charges related to compounds acquired from HI-Bio.
For the year ended December 31, 2024, amortization and impairment of acquired intangible assets reflects the impact of a $40.0 million impairment charge related to intangible assets from other clinical programs we acquired from Reata, reducing the remaining book value of these IPR&D intangible assets to zero, and a $20.2 million impairment charge related to intangible assets associated with the termination of Samsung Bioepis' commercialization rights during the third quarter of 2024. For the year ended December 31, 2023, we had no impairment charges.
We monitor events and expectations regarding product performance. If new information indicates that the assumptions underlying our most recent analysis are substantially different than those utilized in our current estimates, our analysis would be updated and may result in a significant change in the anticipated lifetime revenue of the relevant products. The occurrence of an adverse event could substantially increase the amount of amortization expense related to our acquired intangible assets as compared to previous periods or our current expectations, which may result in a significant negative impact on our future results of operations.
Completed Technology
Completed technology primarily relates to our other marketed products and programs acquired through asset acquisitions, licenses and business combinations. Completed technology intangible assets are amortized over their estimated useful lives, which range between approximately 1 to 30 years, with a remaining weighted average useful life of 12 years, as of December 31, 2025.
IPR&D Related to Business Combinations
IPR&D represents the fair value assigned to research and development assets that we acquired as part of a business combination and had not yet reached technological feasibility at the date of acquisition. We review amounts capitalized as acquired IPR&D for impairment annually, as of October 31, and whenever events or changes in circumstances indicate to us that the carrying value of the assets might not be recoverable.
The carrying value associated with our IPR&D assets as of December 31, 2025 and 2024, primarily relates to the IPR&D programs we acquired in connection with our acquisition of HI-Bio in July 2024, with an estimated fair value of approximately $1.6 billion.
Priority Review Voucher
In connection with our acquisition of Reata in September 2023 we acquired a rare pediatric disease PRV which may be used to obtain priority review by the FDA for a future regulatory submission or sold to a third party. We recorded the PRV based on its estimated fair value of $100.0 million as an intangible asset.
For additional information on our acquisitions of Reata and HI-Bio, please read Note 2, Acquisitions, to these consolidated financial statements.
Estimated Future Amortization of Intangible Assets
The estimated future amortization of finite-lived intangible assets for the next five years is expected to be as follows:
| (In millions) | As of December 31, 2025 | |||||||
| 2026 | $ | 485.0 | ||||||
| 2027 | 485.0 | |||||||
| 2028 | 525.0 | |||||||
| 2029 | 575.0 | |||||||
| 2030 | 645.0 |
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BIOGEN INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Goodwill
The following table provides a roll forward of the changes in our goodwill balance:
| As of December 31, | ||||||||||||||
| (In millions) | 2025 | 2024 | ||||||||||||
| Goodwill, January 1 | $ | 6,478.9 | $ | 6,219.2 | ||||||||||
| Goodwill resulting from HI-Bio acquisition(1) | 4.5 | 256.5 | ||||||||||||
| Goodwill resulting from Reata acquisition(2) | — | 4.7 | ||||||||||||
| Other(3) | 7.7 | (1.5) | ||||||||||||
| Goodwill, December 31 | $ | 6,491.1 | $ | 6,478.9 |
(1) Goodwill resulting from the HI-Bio acquisition for the year ended December 31, 2025, relates to HI-Bio measurement period adjustments recognized during 2025.
(2) Goodwill resulting from the Reata acquisition for the year ended December 31, 2024, relates to Reata measurement period adjustments recognized during 2024.
(3) Other includes adjustments related to foreign currency exchange rate fluctuations.
For additional information on our acquisitions of Reata and HI-Bio, please read Note 2, Acquisitions, to these consolidated financial statements.
As of December 31, 2025 and 2024, we had no accumulated impairment losses related to goodwill.
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BIOGEN INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
| Note 8: | Fair Value Measurements |
The tables below present information about our assets and liabilities that are regularly measured and carried at fair value and indicate the level within the fair value hierarchy of the valuation techniques we utilized to determine such fair value:
| Fair Value Measurements on a Recurring Basis | ||||||||||||||||||||||||||
| As of December 31, 2025 | ||||||||||||||||||||||||||
| (In millions) | Total | Quoted Prices in Active Markets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||||||||||||
| Assets: | ||||||||||||||||||||||||||
| Cash equivalents | $ | 2,233.2 | $ | — | $ | 2,233.2 | $ | — | ||||||||||||||||||
| Marketable debt securities: | ||||||||||||||||||||||||||
| Corporate debt securities | 537.6 | — | 537.6 | — | ||||||||||||||||||||||
| Government securities | 648.8 | — | 648.8 | — | ||||||||||||||||||||||
| Mortgage and other asset backed securities | 52.7 | — | 52.7 | — | ||||||||||||||||||||||
| Marketable equity securities | 118.1 | 118.1 | — | — | ||||||||||||||||||||||
| Other current assets: | ||||||||||||||||||||||||||
| Derivative contracts | 10.0 | — | 10.0 | — | ||||||||||||||||||||||
| Other non-current assets: | ||||||||||||||||||||||||||
| Convertible notes(1) | 35.0 | — | — | 35.0 | ||||||||||||||||||||||
| Plan assets for deferred compensation | 52.2 | — | 52.2 | — | ||||||||||||||||||||||
| Derivative contracts | 0.4 | — | 0.4 | — | ||||||||||||||||||||||
| Total | $ | 3,688.0 | $ | 118.1 | $ | 3,534.9 | $ | 35.0 | ||||||||||||||||||
| Liabilities: | ||||||||||||||||||||||||||
| Other current liabilities: | ||||||||||||||||||||||||||
| Derivative contracts | $ | 56.7 | $ | — | $ | 56.7 | $ | — | ||||||||||||||||||
| Other non-current liabilities: | ||||||||||||||||||||||||||
| Derivative contracts | 2.2 | — | 2.2 | — | ||||||||||||||||||||||
| Contingent consideration obligations | 246.4 | — | — | 246.4 | ||||||||||||||||||||||
| Total | $ | 305.3 | $ | — | $ | 58.9 | $ | 246.4 |
(1) Convertible notes includes a $30.0 million convertible note we invested in as part of our strategic research arrangement with City Therapeutics during 2025, as well as a $5.0 million convertible note we invested into Neela Therapeutics, Inc. during 2025. We elected the fair value option for both convertible notes. For additional information on the arrangement with City Therapeutics, please read Note 19, Collaborative and Other Relationships, to these consolidated financial statements.
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BIOGEN INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
| Fair Value Measurements on a Recurring Basis | ||||||||||||||||||||||||||
| As of December 31, 2024 | ||||||||||||||||||||||||||
| (In millions) | Total | Quoted Prices in Active Markets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||||||||||||
| Assets: | ||||||||||||||||||||||||||
| Cash equivalents | $ | 1,664.9 | $ | — | $ | 1,664.9 | $ | — | ||||||||||||||||||
| Marketable equity securities | 179.7 | 179.7 | — | — | ||||||||||||||||||||||
| Other current assets: | ||||||||||||||||||||||||||
| Derivative contracts | 62.5 | — | 62.5 | — | ||||||||||||||||||||||
| Other non-current assets: | ||||||||||||||||||||||||||
| Plan assets for deferred compensation | 42.8 | — | 42.8 | — | ||||||||||||||||||||||
| Total | $ | 1,949.9 | $ | 179.7 | $ | 1,770.2 | $ | — | ||||||||||||||||||
| Liabilities: | ||||||||||||||||||||||||||
| Other current liabilities: | ||||||||||||||||||||||||||
| Derivative contracts | $ | 11.7 | $ | — | $ | 11.7 | $ | — | ||||||||||||||||||
| Contingent consideration obligations | 291.2 | — | — | 291.2 | ||||||||||||||||||||||
| Other non-current liabilities: | ||||||||||||||||||||||||||
| Contingent consideration obligations | 221.6 | — | — | 221.6 | ||||||||||||||||||||||
| Total | $ | 524.5 | $ | — | $ | 11.7 | $ | 512.8 |
Our marketable equity securities represent investments in publicly traded equity securities. Our ability to liquidate our investments in Denali may be limited by the size of our interest, the volume of market-related activity, our concentrated level of ownership and potential restrictions resulting from our status as a collaborator. Therefore, we may realize significantly less than the current value of such investments. For additional information on our investments in Denali common stock, please read Note 9, Financial Instruments, and Note 18, Other Consolidated Financial Statement Detail, to these consolidated financial statements.
There have been no material impairments of our assets measured and carried at fair value as of December 31, 2025 and 2024. In addition, there have been no changes to our valuation techniques as of December 31, 2025 and 2024.
For a description of our validation procedures related to prices provided by third-party pricing services and our option pricing valuation model, please read Note 1, Summary of Significant Accounting Policies - Fair Value Measurements, to these consolidated financial statements.
Level 3 Assets and Liabilities Held at Fair Value
The following tables present quantitative information, as of the dates indicated, about the valuation techniques and significant unobservable inputs used in the valuation of our Level 3 financial assets and liabilities measured at fair value on a recurring basis:
| Quantitative Information about Level 3 Fair Value Measurements | ||||||||||||||||||||||||||||||||
| As of December 31, 2025 | ||||||||||||||||||||||||||||||||
| (In millions) | Fair Value | Valuation Technique | Significant Unobservable Input(s) | Range | Weighted Average | |||||||||||||||||||||||||||
| Liabilities: | ||||||||||||||||||||||||||||||||
| Contingent consideration obligations | $ | 246.4 | Discounted cash flow | Discount rate | 5.3% - 5.4% | 5.4% | ||||||||||||||||||||||||||
| Expected timing of achievement of development milestones | 2028 - 2030 | — |
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BIOGEN INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
| Quantitative Information about Level 3 Fair Value Measurements | ||||||||||||||||||||||||||||||||
| As of December 31, 2024 | ||||||||||||||||||||||||||||||||
| (In millions) | Fair Value | Valuation Technique | Significant Unobservable Input(s) | Range | Weighted Average | |||||||||||||||||||||||||||
| Liabilities: | ||||||||||||||||||||||||||||||||
| Contingent consideration obligations | $ | 512.8 | Discounted cash flow | Discount rate | 6.2% - 6.3% | 6.2% | ||||||||||||||||||||||||||
| Expected timing of achievement of development milestones | 2025 - 2030 | — |
The weighted average discount rates were calculated based on the relative fair values of each distinct contingent consideration obligation related to our acquisition of HI-Bio in July 2024. In addition, we apply various probabilities of technological and regulatory success to the valuation models to estimate the fair values of these contingent consideration obligations, which ranged from approximately 70.0% to 95.0% as of December 31, 2025.
There were no transfers of assets or liabilities into or out of Level 3 as of December 31, 2025 and 2024.
Contingent Consideration Obligations
In connection with our acquisition of HI-Bio in July 2024 we agreed to make additional payments based upon the achievement of certain milestone events. The following table provides a roll forward of the fair value of our contingent consideration obligations, which were classified as Level 3 measurements:
| As of December 31, | ||||||||||||||
| (In millions) | 2025 | 2024 | ||||||||||||
| Fair value, beginning of year | $ | 512.8 | $ | — | ||||||||||
| Contingent consideration resulting from HI-Bio acquisition | — | 485.1 | ||||||||||||
| Changes in fair value | 33.6 | 27.7 | ||||||||||||
| Payments | (300.0) | — | ||||||||||||
| Fair value, end of year | $ | 246.4 | $ | 512.8 |
Changes in the fair values of our contingent consideration obligations, other than changes due to payments, are recognized as a (gain) loss on fair value remeasurement of contingent consideration within our consolidated statements of income. The fair values of the contingent consideration liabilities were based on a probability-adjusted discounted cash flow calculation using Level 3 fair value measurements and inputs. For additional information on the valuation techniques and inputs utilized in the valuation of our financial assets and liabilities, please read Note 1, Summary of Significant Accounting Policies, to these consolidated financial statements.
As of December 31, 2025, the total remaining fair value of our contingent consideration obligations of $246.4 million was classified as long-term and reflected as a component of other long-term liabilities within our consolidated balance sheets.
As of December 31, 2024, approximately $291.2 million of the fair value of our total contingent consideration obligations was classified as short-term and reflected as a component of accrued expense and other with the remaining $221.6 million reflected as a component of other long-term liabilities within our consolidated balance sheets.
For the year ended December 31, 2025, changes in the fair value of our contingent consideration obligations were primarily due to changes in interest rates used to revalue our contingent consideration liabilities and the passage of time. For the year ended December 31, 2024, changes in the fair value of our contingent consideration obligations were primarily due to changes in interest rates used to revalue our contingent consideration liabilities, the passage of time and updates to the expected timing of achieving certain milestones which will trigger contingent consideration payments.
During the second quarter of 2025 the first milestone related to the fourth patient dosed in a Phase 3 clinical trial of felzartamab for AMR was achieved, resulting in a $150.0 million milestone payment made to the former shareholders of HI-Bio, which was paid during the third quarter of 2025. In October 2025 the second milestone related to the fourth patient dosed in a Phase 3 clinical trial of felzartamab for IgAN was achieved, resulting in a
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BIOGEN INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
$150.0 million milestone payment made to the former shareholders of HI-Bio, which was paid during the fourth quarter of 2025.
Financial Instruments Not Carried at Fair Value
Other Financial Instruments
Due to the short-term nature of certain financial instruments, the carrying value reflected in our consolidated balance sheets for current accounts receivable, due from anti-CD20 therapeutic programs, other current assets, accounts payable and accrued expense and other, approximates fair value.
Debt Instruments
The fair values of our debt instruments, which are Level 2 liabilities, are summarized as follows:
| Fair Value As of December 31, | ||||||||||||||
| (In millions) | 2025 | 2024 | ||||||||||||
| Current portion: | ||||||||||||||
| 4.050% Senior Notes due September 15, 2025(1) | $ | — | $ | 1,741.0 | ||||||||||
| Current portion of notes payable | — | 1,741.0 | ||||||||||||
| Non-current portion: | ||||||||||||||
| 2.250% Senior Notes due May 1, 2030 | 1,378.7 | 1,295.6 | ||||||||||||
| 5.050% Senior Notes due January 15, 2031(1) | 413.0 | — | ||||||||||||
| 5.750% Senior Notes due May 15, 2035(1) | 684.5 | — | ||||||||||||
| 5.200% Senior Notes due September 15, 2045 | 1,029.5 | 1,008.0 | ||||||||||||
| 3.150% Senior Notes due May 1, 2050 | 973.0 | 943.7 | ||||||||||||
| 3.250% Senior Notes due February 15, 2051 | 461.8 | 448.9 | ||||||||||||
| 6.450% Senior Notes due May 15, 2055(1) | 737.6 | — | ||||||||||||
| Non-current portion of notes payable | 5,678.1 | 3,696.2 | ||||||||||||
| Total notes payable | $ | 5,678.1 | $ | 5,437.2 |
(1) In May 2025 we issued our 2025 Senior Notes for an aggregate principal amount of $1.75 billion. In June 2025 we used the net proceeds from the sale of our 2025 Senior Notes to redeem in full our 4.050% Senior Notes due September 15, 2025, prior to maturity. For additional information, please read Note 13, Indebtedness, to these consolidated financial statements.
The fair values of each of our series of Senior Notes were determined through market, observable and corroborated sources. The changes in the fair values of our Senior Notes as of December 31, 2025, compared to 2024, are primarily related to decreases in credit spreads used to value our Senior Notes since December 31, 2024. For additional information related to our Senior Notes, please read Note 13, Indebtedness, to these consolidated financial statements.
| Note 9: | Financial Instruments |
The following table summarizes our financial assets with maturities of less than 90 days from the date of purchase included in cash and cash equivalents in our consolidated balance sheets:
| As of December 31, | ||||||||||||||
| (In millions) | 2025 | 2024 | ||||||||||||
| Money market funds | $ | 2,027.7 | $ | 1,664.9 | ||||||||||
| Overnight reverse repurchase agreements | 70.0 | — | ||||||||||||
| Short-term debt securities | 15.4 | — | ||||||||||||
| Commercial paper | 120.1 | — | ||||||||||||
| Total | $ | 2,233.2 | $ | 1,664.9 |
The carrying value of our money market funds, overnight reverse repurchase agreements, short-term debt securities and commercial paper, including accrued interest, approximates fair value due to their short-term maturities.
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BIOGEN INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Our marketable equity securities gains (losses) are recorded in other (income) expense, net in our consolidated statements of income. The following tables summarize our marketable debt and equity securities, classified as available-for-sale:
| As of December 31, 2025 | ||||||||||||||||||||||||||
| (In millions) | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | ||||||||||||||||||||||
| Marketable debt securities: | ||||||||||||||||||||||||||
| Corporate debt securities: | ||||||||||||||||||||||||||
| Current | $ | 246.8 | $ | — | $ | — | $ | 246.8 | ||||||||||||||||||
| Non-current | 290.6 | 0.2 | — | 290.8 | ||||||||||||||||||||||
| Government securities: | ||||||||||||||||||||||||||
| Current | 560.4 | — | — | 560.4 | ||||||||||||||||||||||
| Non-current | 88.4 | — | — | 88.4 | ||||||||||||||||||||||
| Mortgage and other asset backed securities: | ||||||||||||||||||||||||||
| Non-current | 52.7 | — | — | 52.7 | ||||||||||||||||||||||
| Total marketable debt securities | $ | 1,238.9 | $ | 0.2 | $ | — | $ | 1,239.1 | ||||||||||||||||||
| Marketable equity securities: | ||||||||||||||||||||||||||
| Marketable equity securities, non-current | $ | 227.7 | $ | — | $ | (109.6) | $ | 118.1 | ||||||||||||||||||
| Total marketable equity securities | $ | 227.7 | $ | — | $ | (109.6) | $ | 118.1 |
| As of December 31, 2024 | ||||||||||||||||||||||||||
| (In millions) | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | ||||||||||||||||||||||
| Marketable equity securities: | ||||||||||||||||||||||||||
| Marketable equity securities, non-current | $ | 668.7 | $ | — | $ | (489.0) | $ | 179.7 | ||||||||||||||||||
| Total marketable equity securities | $ | 668.7 | $ | — | $ | (489.0) | $ | 179.7 |
Summary of Contractual Maturities: Available-for-Sale Debt Securities
The estimated fair value and amortized cost of our marketable debt securities classified as available-for-sale by contractual maturity are summarized as follows:
| As of December 31, 2025 | ||||||||||||||
| (In millions) | Estimated Fair Value | Amortized Cost | ||||||||||||
| Due in one year or less | $ | 807.2 | $ | 807.2 | ||||||||||
| Due after one year through five years | 419.5 | 419.3 | ||||||||||||
| Due after five years | 12.4 | 12.4 | ||||||||||||
| Total marketable debt securities | $ | 1,239.1 | $ | 1,238.9 |
The average maturity of our marketable debt securities classified as available-for-sale as of December 31, 2025, was approximately 5 months.
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BIOGEN INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Proceeds from Marketable Debt Securities
The proceeds from maturities and sales of marketable debt securities and resulting realized gains and losses are summarized as follows:
| For the Years Ended December 31, | ||||||||||||||||||||
| (In millions) | 2025 | 2024 | 2023 | |||||||||||||||||
| Proceeds from maturities and sales | $ | 23.0 | $ | — | $ | 7,380.8 | ||||||||||||||
| Realized gains | — | — | 1.4 | |||||||||||||||||
| Realized losses | — | — | 18.4 |
Realized losses for the year ended December 31, 2023, primarily relate to sales of U.S. treasuries and corporate bonds.
Strategic Investments
Our strategic investment portfolio includes investments in equity securities of certain biotechnology companies, which are reflected within our disclosures included in Note 8, Fair Value Measurements, to these consolidated financial statements, as well as venture capital funds where the underlying investments are in equity securities of certain biotechnology companies and non-marketable equity securities.
As of December 31, 2025 and 2024, our strategic investment portfolio was comprised of investments totaling $186.6 million and $226.7 million, respectively, which are included in investments and other assets within our consolidated balance sheets.
The decrease in our strategic investment portfolio as of December 31, 2025, compared to 2024, was primarily due to the decrease in the fair value of our investment in Denali common stock as well as the sale of our remaining investment in Sage common stock during the third quarter of 2025.
For additional information on our investments in Denali and Sage common stock, please read Note 8, Fair Value Measurements, and Note 18, Other Consolidated Financial Statement Detail, to these consolidated financial statements.
| Note 10: | Derivative Instruments |
Foreign Currency Forward Contracts - Hedging Instruments
Due to the global nature of our operations, portions of our revenue and operating expense are recorded in currencies other than the U.S. dollar. The value of revenue and operating expense measured in U.S. dollars is therefore subject to changes in foreign currency exchange rates. We enter into foreign currency forward contracts and foreign currency options with financial institutions with the primary objective to mitigate the impact of foreign currency exchange rate fluctuations on our international revenue and operating expense.
Foreign currency forward contracts and foreign currency options in effect as of December 31, 2025 and 2024, had durations of 1 to 21 months and 1 to 12 months, respectively. These contracts have been designated as cash flow hedges and unrealized gains and losses on the portion of these foreign currency forward contracts and foreign currency options that are included in the effectiveness test are reported in AOCI. Realized gains and losses of such contracts and options are recognized in revenue when the sale of product in the currency being hedged is recognized and in operating expense when the expense in the currency being hedged is recorded. We recognize all cash flow hedge reclassifications from AOCI and fair value changes of excluded portions in the same line item in our consolidated statements of income that have been impacted by the hedged item.
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BIOGEN INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
The notional amount of foreign currency forward contracts and foreign currency options that were entered into to hedge forecasted revenue and operating expense is summarized as follows:
| Notional Amount As of December 31, | ||||||||||||||
| (In millions) | 2025 | 2024 | ||||||||||||
| Euro | $ | 1,531.0 | $ | 1,062.6 | ||||||||||
| British pound | — | 133.8 | ||||||||||||
| Canadian dollar | — | 38.6 | ||||||||||||
| Total foreign currency forward contracts and options | $ | 1,531.0 | $ | 1,235.0 |
The pre-tax portion of the fair value of these foreign currency forward contracts and foreign currency options that were included in AOCI in total equity is summarized as follows:
| For the Years Ended December 31, | ||||||||||||||||||||
| (In millions) | 2025 | 2024 | 2023 | |||||||||||||||||
| Unrealized gains | $ | — | $ | 50.6 | $ | — | ||||||||||||||
| Unrealized (losses) | (73.3) | (0.3) | (34.8) | |||||||||||||||||
| Net unrealized gains (losses) | $ | (73.3) | $ | 50.3 | $ | (34.8) |
We expect the net unrealized losses of approximately $73.3 million to be settled over the next 15 months, of which approximately $68.5 million of these net unrealized losses are expected to be settled over the next 12 months, with any amounts in AOCI to be reported as an adjustment to revenue or operating expense. We consider the impact of our and our counterparties’ credit risk on the fair value of the contracts as well as the ability of each party to execute its contractual obligations. As of December 31, 2025 and 2024, credit risk did not materially change the fair value of our foreign currency forward contracts and forward currency options.
The following table summarizes the effect of foreign currency forward contracts and forward currency options designated as hedging instruments in our consolidated statements of income:
| For the Years Ended December 31, | ||||||||||||||||||||||||||||||||||||||||||||
| Net Gains/(Losses) Reclassified from AOCI into Operating Income (in millions) | Net Gains/(Losses) Excluded from Effectiveness Testing and Recognized in Operating Income (in millions) | |||||||||||||||||||||||||||||||||||||||||||
| Location | 2025 | 2024 | 2023 | Location | 2025 | 2024 | 2023 | |||||||||||||||||||||||||||||||||||||
| Revenue | $ | (72.4) | $ | 18.1 | $ | 11.6 | Revenue | $ | 9.7 | $ | (0.8) | $ | (2.4) | |||||||||||||||||||||||||||||||
| Operating expense | 21.3 | (12.9) | 3.7 | Operating expense | — | — | — |
Foreign Currency Forward Contracts - Other Derivative Instruments
We also enter into other foreign currency forward contracts, usually with durations of one month or less, to mitigate the foreign currency risk related to certain balance sheet positions. We have not elected hedge accounting for these transactions.
The aggregate notional amount of these outstanding foreign currency forward contracts was $1,193.7 million and $738.7 million as of December 31, 2025 and 2024, respectively. Net gains of $33.5 million, net losses of $49.7 million and net gains of $3.8 million related to these contracts were recorded as a component of other (income) expense, net for the years ended December 31, 2025, 2024 and 2023, respectively.
Summary of Derivative Instruments
While certain of our derivative instruments are subject to netting arrangements with our counterparties, we do not offset derivative assets and liabilities in our consolidated balance sheets. The amounts in the table below would not be substantially different if the derivative assets and liabilities were offset.
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BIOGEN INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
The following table summarizes the fair value and presentation in our consolidated balance sheets of our outstanding derivative instruments, including those designated as hedging instruments:
| As of December 31, | ||||||||||||||||||||
| (In millions) | Balance Sheet Location | 2025 | 2024 | |||||||||||||||||
| Cash Flow Hedging Instruments: | ||||||||||||||||||||
| Asset derivative instruments | Other current assets | $ | 0.1 | $ | 58.4 | |||||||||||||||
| Investments and other assets | 0.4 | — | ||||||||||||||||||
| Liability derivative instruments | Accrued expense and other | 54.0 | 0.3 | |||||||||||||||||
| Other long-term liabilities | 2.2 | — | ||||||||||||||||||
| Other Derivative Instruments: | ||||||||||||||||||||
| Asset derivative instruments | Other current assets | 9.9 | 4.1 | |||||||||||||||||
| Liability derivative instruments | Accrued expense and other | 2.7 | 11.4 |
| Note 11: | Property, Plant and Equipment |
Property, plant and equipment are recorded at historical cost, net of accumulated depreciation. Components of property, plant and equipment, net are summarized as follows:
| As of December 31, | ||||||||||||||
| (In millions) | 2025 | 2024 | ||||||||||||
| Land | $ | 216.7 | $ | 202.4 | ||||||||||
| Buildings | 2,140.3 | 1,963.7 | ||||||||||||
| Leasehold improvements | 143.5 | 137.8 | ||||||||||||
| Machinery and equipment | 2,167.4 | 2,109.8 | ||||||||||||
| Computer software and hardware | 1,093.5 | 1,070.5 | ||||||||||||
| Furniture and fixtures | 62.1 | 59.5 | ||||||||||||
| Construction in progress | 163.1 | 308.4 | ||||||||||||
| Total cost(1) | 5,986.6 | 5,852.1 | ||||||||||||
| Less: accumulated depreciation | (2,931.2) | (2,670.8) | ||||||||||||
| Total property, plant and equipment, net | $ | 3,055.4 | $ | 3,181.3 |
(1) During the first quarter of 2024 the second manufacturing suite at our Solothurn, Switzerland facility become operational, resulting in approximately $717.3 million of fixed assets being placed into service.
Depreciation expense totaled $272.8 million, $286.7 million and $254.2 million for the years ended December 31, 2025, 2024 and 2023, respectively.
For the years ended December 31, 2025, 2024 and 2023, we capitalized interest costs related to construction in progress totaling approximately $3.4 million, $3.2 million and $21.7 million, respectively.
| Note 12: | Leases |
We lease real estate, including laboratory and office space, and certain equipment.
Our leases have remaining lease terms ranging from less than one year to twenty-two years. Certain leases include one or more options to renew, exercised at our sole discretion, with renewal terms that can extend the lease term from less than one year to fifteen years.
In addition, we sublease certain real estate to third parties. Our sublease portfolio consists of operating leases, with remaining lease terms ranging from three years to four years.
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BIOGEN INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
All of our leases qualify as operating leases. The following table summarizes the presentation in our consolidated balance sheets of our operating leases:
| As of December 31, | |||||||||||||||||
| (In millions) | Balance sheet location | 2025 | 2024 | ||||||||||||||
| Assets: | |||||||||||||||||
| Operating lease assets | Operating lease assets | $ | 265.4 | $ | 356.4 | ||||||||||||
| Liabilities | |||||||||||||||||
| Current operating lease liabilities | Accrued expense and other | $ | 80.4 | $ | 86.4 | ||||||||||||
| Non-current operating lease liabilities | Long-term operating lease liabilities | 290.4 | 334.5 | ||||||||||||||
| Total operating lease liabilities | $ | 370.8 | $ | 420.9 |
The following table summarizes the effect of lease costs in our consolidated statements of income:
| For the Years Ended December 31, | ||||||||||||||||||||||||||
| (In millions) | Income Statement Location | 2025 | 2024 | 2023 | ||||||||||||||||||||||
| Operating lease cost | Research and development | $ | 0.9 | $ | 2.4 | $ | 2.0 | |||||||||||||||||||
| Selling, general and administrative | 100.7 | 110.1 | 128.1 | |||||||||||||||||||||||
| Variable lease cost | Research and development | 0.1 | 0.4 | 0.5 | ||||||||||||||||||||||
| Selling, general and administrative | 34.5 | 31.2 | 37.3 | |||||||||||||||||||||||
| Sublease income | Selling, general and administrative | (9.6) | (14.8) | (23.5) | ||||||||||||||||||||||
| Other (income) expense, net | (4.0) | (4.0) | (4.1) | |||||||||||||||||||||||
| Net lease cost | $ | 122.6 | $ | 125.3 | $ | 140.3 |
Variable lease cost primarily related to operating expense, taxes and insurance associated with our operating leases. As these costs are generally variable in nature, they are not included in the measurement of the operating lease asset and related lease liability.
The minimum lease payments for the next five years and thereafter are expected to be as follows:
| (In millions) | As of December 31, 2025 | |||||||
| 2026 | $ | 94.1 | ||||||
| 2027 | 97.5 | |||||||
| 2028 | 56.4 | |||||||
| 2029 | 26.1 | |||||||
| 2030 | 23.1 | |||||||
| Thereafter | 148.3 | |||||||
| Total lease payments | 445.5 | |||||||
| Less: interest | 74.7 | |||||||
| Present value of operating lease liabilities | $ | 370.8 |
The weighted average remaining lease term and weighted average discount rate of our operating leases are as follows:
| As of December 31, | ||||||||||||||||||||
| 2025 | 2024 | |||||||||||||||||||
| Weighted average remaining lease term in years | 7.11 | 7.20 | ||||||||||||||||||
| Weighted average discount rate | 4.6 | % | 4.5 | % |
F-44
BIOGEN INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Supplemental disclosure of cash flow information related to our operating leases included in cash flow provided by operating activities in our consolidated statements of cash flow is as follows:
| As of December 31, | ||||||||||||||||||||
| (In millions) | 2025 | 2024 | 2023 | |||||||||||||||||
| Cash paid for amounts included in the measurement of lease liabilities | $ | 110.7 | $ | 115.8 | $ | 116.4 | ||||||||||||||
| Operating lease assets obtained in exchange for lease obligations | 30.7 | 16.9 | 146.0 |
New Corporate Headquarters Lease
In March 2025 we entered into a lease agreement with MIT Investment Management Company and BioMed Realty for the lease of approximately 580,000 square feet of office and research and development space located at 75 Broadway, Cambridge, Massachusetts, which will be used as our new global corporate headquarters, as well as integrating our research and development and technical operations teams alongside our North American commercial organization. As part of a multi-year real estate consolidation plan that is expected to result in a reduction of approximately 40% of our real estate footprint in Massachusetts, this new lease is intended to replace two existing leases, both in Cambridge, Massachusetts, including our current corporate headquarters. We expect the initial lease term of approximately 15.5 years to commence on May 31, 2028. The estimated minimum lease payments as a result of the new lease total approximately $1.5 billion over the initial lease term. We have an option to extend the lease for three extension periods of five years each and one six-month short-term extension, at then market-based rates. We will account for this lease as a right-of-use asset and lease liability upon the lease commencement date.
For additional information on our accounting policies relating to leases, please read Note 1, Summary of Significant Accounting Policies - Leases, to these consolidated financial statements.
Reata Lease
As part of our acquisition of Reata, we assumed responsibility for a single-tenant, build-to-suit building of approximately 327,400 square feet of office and laboratory space located in Plano, Texas, with an initial lease term of 16 years. We recorded a lease liability of approximately $151.8 million, with a corresponding right-of-use asset of approximately $121.2 million. We are continuing to evaluate opportunities to sublease the property.
During the fourth quarter of 2025 we performed an impairment assessment for this right-of use asset. This assessment involved estimating undiscounted future cash flows, including potential sublease income and remaining lease obligations. Given the carrying value exceeded the estimated undiscounted cash flows, primarily as the result of lower expected sublease income, we determined fair value using market data for similar properties and a probability-adjusted discounted cash flow calculation using a discount rate of 5.0%. As a result of this impairment assessment, we recorded an impairment charge of approximately $52.9 million related to this Reata lease, which is included in impairment of ROU asset within our consolidated statements of income for the year ended December 31, 2025. This fair value measurement was based on significant inputs that are not observable in the market and thus represent a Level 3 fair value measurement.
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BIOGEN INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
| Note 13: | Indebtedness |
Our indebtedness is summarized as follows:
| As of December 31, | ||||||||||||||
| (In millions) | 2025 | 2024 | ||||||||||||
| Current portion: | ||||||||||||||
| 4.050% Senior Notes due September 15, 2025 | $ | — | $ | 1,748.6 | ||||||||||
| Current portion of notes payable | $ | — | $ | 1,748.6 | ||||||||||
| Non-current portion: | ||||||||||||||
| 2.250% Senior Notes due May 1, 2030 | $ | 1,495.7 | $ | 1,494.7 | ||||||||||
| 5.050% Senior Notes due January 15, 2031 | 398.0 | — | ||||||||||||
| 5.750% Senior Notes due May 15, 2035 | 645.5 | — | ||||||||||||
| 5.200% Senior Notes due September 15, 2045 | 1,101.5 | 1,101.1 | ||||||||||||
| 3.150% Senior Notes due May 1, 2050 | 1,475.6 | 1,475.0 | ||||||||||||
| 3.250% Senior Notes due February 15, 2051 | 480.3 | 476.4 | ||||||||||||
| 6.450% Senior Notes due May 15, 2055 | 690.2 | — | ||||||||||||
| Non-current portion of notes payable | $ | 6,286.8 | $ | 4,547.2 |
As of December 31, 2025, we were in compliance with our senior note covenants.
2025 Senior Notes
On May 12, 2025, we issued senior unsecured notes for an aggregate principal amount of $1.75 billion, consisting of the following:
-
$400.0 million of 5.050% Senior Notes due January 15, 2031, valued at 99.981% of par;
-
$650.0 million of 5.750% Senior Notes due May 15, 2035, valued at 99.924% of par; and
-
$700.0 million of 6.450% Senior Notes due May 15, 2055, valued at 99.657% of par.
Our 2025 Senior Notes are senior unsecured obligations and may be redeemed at our option at any time at 100% of the principal amount plus accrued interest and, until a specified period before maturity, a specified make-whole amount. Our 2025 Senior Notes contain a change-of-control provision that, under certain circumstances, may require us to purchase our 2025 Senior Notes at a price equal to 101% of the principal amount plus accrued and unpaid interest to the date of repurchase.
We incurred approximately $13.9 million of costs associated with this offering which have been recorded as a reduction to the carrying amount of the debt on our consolidated balance sheets. These costs will be amortized as additional interest expense using the effective interest rate method over the period from issuance through maturity. The discounts will be amortized as additional interest expense over the period from issuance through maturity using the effective interest rate method.
Interest on our 2031 Senior Notes is payable January 15 and July 15 of each year, commencing January 15, 2026. Interest on our 2035 Senior Notes and 2055 Senior Notes is payable May 15 and November 15 of each year, commencing on November 15, 2025.
2023 Term Loan Credit Agreement
In connection with our acquisition of Reata in September 2023 we entered into a $1.5 billion term loan credit agreement. On the closing date of the Reata acquisition we drew $1.0 billion from the 2023 Term Loan, comprised of a $500.0 million floating rate 364-day tranche and a $500.0 million floating rate three-year tranche. The remaining unused commitment of $500.0 million was terminated. As of December 31, 2023, we repaid $350.0 million of the 364-day tranche. The remaining $150.0 million portion of the 364-day tranche was repaid during the first quarter of 2024.
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BIOGEN INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Additionally, during the first quarter of 2024 we repaid $250.0 million of the three-year tranche, with the remaining $250.0 million portion being subsequently repaid in full during the second quarter of 2024. For additional information on our acquisition of Reata, please read Note 2, Acquisitions, to these consolidated financial statements.
2021 Exchange Offer Senior Notes
The following is a summary of our currently outstanding senior unsecured notes issued in 2021 as part of our Exchange Offer (the 2021 Exchange Offer Senior Notes), consisting of the following:
- $700.7 million aggregate principal amount of 3.25% Senior Notes due February 15, 2051, valued at 99.298% of par.
Our 2021 Exchange Offer Senior Notes are senior unsecured obligations and may be redeemed at our option at any time at 100.0% of the principal amount plus accrued interest and a specified make-whole amount. Our 2021 Exchange Offer Senior Notes contain a change of control provision that may require us to purchase the notes at a price equal to 101.0% of the principal amount plus accrued and unpaid interest to the date of purchase under certain circumstances.
The costs associated with this exchange offer of approximately $5.4 million have been recorded as a reduction to the carrying amount of the debt in our consolidated balance sheets. These costs along with the discounts will be amortized as additional interest expense using the effective interest rate method over the period from issuance through maturity. Interest on our 2021 Exchange Offer Senior Notes is payable February 15 and August 15 of each year, commencing August 15, 2021.
2020 Senior Notes
The following is a summary of our currently outstanding senior unsecured notes issued in 2020 (2020 Senior Notes), consisting of the following:
-
$1.5 billion aggregate principal amount of 2.250% Senior Notes due May 1, 2030, valued at 99.973% of par; and
-
$1.5 billion aggregate principal amount of 3.150% Senior Notes due May 1, 2050, valued at 99.174% of par.
Our 2020 Senior Notes are senior unsecured obligations and may be redeemed at our option at any time at 100.0% of the principal amount plus accrued interest and, until a specified period before maturity, a specified make-whole amount. Our 2020 Senior Notes contain a change-of-control provision that, under certain circumstances, may require us to purchase our 2020 Senior Notes at a price equal to 101.0% of the principal amount plus accrued and unpaid interest to the date of repurchase.
The original costs associated with this offering of approximately $24.4 million have been recorded as a reduction to the carrying amount of the debt in our consolidated balance sheets. These costs along with the discounts will be amortized as additional interest expense using the effective interest rate method over the period from issuance through maturity. Interest on our 2020 Senior Notes is payable May 1 and November 1 of each year, commencing November 1, 2020.
2015 Senior Notes
The following is a summary of our currently outstanding senior unsecured notes issued in 2015 (the 2015 Senior Notes), consisting of the following:
- $1.12 billion aggregate principal amount of 5.200% Senior Notes due September 15, 2045, valued at 99.294% of par.
Our 2015 Senior Notes are senior unsecured obligations and may be redeemed at our option at any time at 100.0% of the principal amount plus accrued interest and a specified make-whole amount. Our 2015 Senior Notes contain a change of control provision that may require us to purchase the notes at a price equal to 101.0% of the principal amount plus accrued and unpaid interest to the date of purchase under certain circumstances.
The original costs associated with this offering of approximately $47.5 million, of which approximately $10.7 million pertains to our currently outstanding notes, have been recorded as a reduction to the carrying amount of the debt in our consolidated balance sheets. These costs along with the discounts will be amortized as additional interest expense using the effective interest rate method over the period from issuance through maturity. Interest on our 2015 Senior Notes is payable March 15 and September 15 of each year, commencing March 15, 2016.
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BIOGEN INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
4.050% Senior Notes due September 15, 2025
On September 15, 2015, we issued $1.75 billion aggregate principal amount of 4.050% Senior Notes due September 15, 2025, at 99.764% of par. In June 2025 we used the net proceeds from the sale of our 2025 Senior Notes to redeem our 4.050% Senior Notes due September 15, 2025, prior to maturity. No gain or loss was recognized upon redemption.
2024 Revolving Credit Facility
In August 2024 we entered into a $1.5 billion, five-year senior unsecured revolving credit facility under which we are permitted to draw funds for working capital and general corporate purposes. The terms of the revolving credit facility include a financial covenant that requires us not to exceed a maximum consolidated leverage ratio. This revolving credit facility replaced the revolving credit facility that we entered into in January 2020. As of December 31, 2025, we had no outstanding borrowings and were in compliance with all covenants under this facility.
Debt Maturity
The total gross principal payments due under our debt arrangements are as follows:
| (In millions) | As of December 31, 2025 | |||||||
| 2026 | $ | — | ||||||
| 2027 | — | |||||||
| 2028 | — | |||||||
| 2029 | — | |||||||
| 2030 | 1,500.0 | |||||||
| 2031 and thereafter | 5,067.3 | |||||||
| Total current and non-current debt | 6,567.3 | |||||||
| Less: debt discount and issuance fees | (280.5) | |||||||
| Total current and non-current debt, net | $ | 6,286.8 |
The fair value of our debt is disclosed in Note 8, Fair Value Measurements, to these consolidated financial statements.
| Note 14: | Equity |
Preferred Stock
We have 8.0 million shares of Preferred Stock authorized, of which 1.75 million shares are authorized as Series A, 1.0 million shares are authorized as Series X junior participating and 5.25 million shares are undesignated. Shares may be issued without a vote or action of shareholders from time to time in classes or series with the designations, powers, preferences and the relative, participating, optional or other special rights of the shares of each such class or series and any qualifications, limitations or restrictions thereon as set forth in the instruments governing such shares. Any such Preferred Stock may rank prior to common stock as to dividend rights, liquidation preference or both, and may have full or limited voting rights and may be convertible into shares of common stock. No shares of Preferred Stock were issued and outstanding during 2025, 2024 and 2023.
Common Stock
The following table describes the number of shares authorized, issued and outstanding of our common stock as of December 31, 2025, 2024 and 2023:
| As of December 31, 2025 | As of December 31, 2024 | As of December 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (In millions) | Authorized | Issued | Outstanding | Authorized | Issued | Outstanding | Authorized | Issued | Outstanding | |||||||||||||||||||||||||||||||||||||||||||||||
| Common stock | 1,000.0 | 170.5 | 146.8 | 1,000.0 | 169.5 | 145.8 | 1,000.0 | 168.7 | 144.9 |
Share Repurchases
In October 2020 our Board of Directors authorized our 2020 Share Repurchase Program, which is a program to repurchase up to $5.0 billion of our common stock. Our 2020 Share Repurchase Program does not have an expiration date. All shares repurchased under our 2020 Share Repurchase Program were retired. There were no
F-48
BIOGEN INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
repurchases of our common stock during the years ended December 31, 2025, 2024 and 2023. Approximately $2.1 billion remained available under our 2020 Share Repurchase Program as of December 31, 2025.
Amounts paid to repurchase shares in excess of their par value are allocated between additional paid-in-capital and retained earnings, with payments in excess of our additional paid-in-capital balance recorded as a reduction to retained earnings.
Accumulated Other Comprehensive Income (Loss)
The following tables summarize the changes in AOCI, net of tax by component:
| December 31, 2025 | ||||||||||||||||||||||||||||||||
| (In millions) | Unrealized Gains (Losses) on Securities Available for Sale, Net of Tax | Unrealized Gains (Losses) on Cash Flow Hedges, Net of Tax | Unrealized Gains (Losses) on Pension Benefit Obligation, Net of Tax | Currency Translation Adjustments, Net of Tax | Total | |||||||||||||||||||||||||||
| Balance, December 31, 2024 | $ | — | $ | 51.6 | $ | (16.6) | $ | (171.2) | $ | (136.2) | ||||||||||||||||||||||
| Other comprehensive income (loss) before reclassifications | 0.2 | (156.4) | 7.2 | 57.3 | (91.7) | |||||||||||||||||||||||||||
| Amounts reclassified from AOCI | — | 45.9 | — | — | 45.9 | |||||||||||||||||||||||||||
| Net current period other comprehensive income (loss) | 0.2 | (110.5) | 7.2 | 57.3 | (45.8) | |||||||||||||||||||||||||||
| Balance, December 31, 2025 | $ | 0.2 | $ | (58.9) | $ | (9.4) | $ | (113.9) | $ | (182.0) |
| December 31, 2024 | ||||||||||||||||||||||||||||||||
| (In millions) | Unrealized Gains (Losses) on Cash Flow Hedges, Net of Tax | Unrealized Gains (Losses) on Pension Benefit Obligation, Net of Tax | Currency Translation Adjustments, Net of Tax | Total | ||||||||||||||||||||||||||||
| Balance, December 31, 2023 | $ | (25.0) | $ | (2.6) | $ | (126.1) | $ | (153.7) | ||||||||||||||||||||||||
| Other comprehensive income (loss) before reclassifications | 80.8 | (14.0) | (45.1) | 21.7 | ||||||||||||||||||||||||||||
| Amounts reclassified from AOCI | (4.2) | — | — | (4.2) | ||||||||||||||||||||||||||||
| Net current period other comprehensive income (loss) | 76.6 | (14.0) | (45.1) | 17.5 | ||||||||||||||||||||||||||||
| Balance, December 31, 2024 | $ | 51.6 | $ | (16.6) | $ | (171.2) | $ | (136.2) |
| December 31, 2023 | ||||||||||||||||||||||||||||||||
| (In millions) | Unrealized Gains (Losses) on Securities Available for Sale, Net of Tax | Unrealized Gains (Losses) on Cash Flow Hedges, Net of Tax | Unrealized Gains (Losses) on Pension Benefit Obligation, Net of Tax | Currency Translation Adjustments, Net of Tax | Total | |||||||||||||||||||||||||||
| Balance, December 31, 2022 | $ | (15.7) | $ | 15.1 | $ | (1.1) | $ | (163.2) | $ | (164.9) | ||||||||||||||||||||||
| Other comprehensive income (loss) before reclassifications | 2.3 | (26.8) | (1.5) | 37.1 | 11.1 | |||||||||||||||||||||||||||
| Amounts reclassified from AOCI | 13.4 | (13.3) | — | — | 0.1 | |||||||||||||||||||||||||||
| Net current period other comprehensive income (loss) | 15.7 | (40.1) | (1.5) | 37.1 | 11.2 | |||||||||||||||||||||||||||
| Balance, December 31, 2023 | $ | — | $ | (25.0) | $ | (2.6) | $ | (126.1) | $ | (153.7) |
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BIOGEN INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
The following table summarizes the amounts reclassified from AOCI:
| (In millions) | Amounts Reclassified from AOCI | Income Statement Location | ||||||||||||||||||||||||
| For the Years Ended December 31, | ||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||||||||
| Gains (losses) on securities available for sale | $ | — | $ | — | $ | (17.0) | Other (income) expense, net | |||||||||||||||||||
| — | — | 3.6 | Income tax (benefit) expense | |||||||||||||||||||||||
| Gains (losses) on cash flow hedges | (72.4) | 18.1 | 11.6 | Revenue | ||||||||||||||||||||||
| 21.3 | (12.9) | 3.7 | Operating expense | |||||||||||||||||||||||
| (0.3) | (0.4) | (0.3) | Other (income) expense, net | |||||||||||||||||||||||
| 5.5 | (0.6) | (1.7) | Income tax (benefit) expense | |||||||||||||||||||||||
| Total reclassifications, net of tax | $ | (45.9) | $ | 4.2 | $ | (0.1) |
| Note 15: | Earnings per Share |
Basic and diluted shares outstanding used in our earnings per share calculation are calculated as follows:
| For the Years Ended December 31, | ||||||||||||||||||||
| (In millions) | 2025 | 2024 | 2023 | |||||||||||||||||
| Numerator: | ||||||||||||||||||||
| Net income attributable to Biogen Inc. | $ | 1,292.9 | $ | 1,632.2 | $ | 1,161.1 | ||||||||||||||
| Denominator: | ||||||||||||||||||||
| Weighted-average number of common shares outstanding | 146.5 | 145.6 | 144.7 | |||||||||||||||||
| Effect of dilutive securities: | ||||||||||||||||||||
| Time-vested restricted stock units | 0.5 | 0.3 | 0.7 | |||||||||||||||||
| Performance stock units settled in stock | 0.1 | — | 0.2 | |||||||||||||||||
| Dilutive potential common shares | 0.6 | 0.3 | 0.9 | |||||||||||||||||
| Shares used in calculating diluted earnings per share | 147.1 | 145.9 | 145.6 |
Amounts excluded from the calculation of net income per diluted share because their effects were anti-dilutive were insignificant.
| Note 16: | Share-Based Payments |
Share-Based Compensation Expense
The following table summarizes share-based compensation expense included in our consolidated statements of income:
| For the Years Ended December 31, | ||||||||||||||||||||
| (In millions) | 2025 | 2024 | 2023 | |||||||||||||||||
| Research and development | $ | 115.7 | $ | 154.1 | $ | 296.7 | ||||||||||||||
| Selling, general and administrative | 187.8 | 198.6 | 371.7 | |||||||||||||||||
| Subtotal | 303.5 | 352.7 | 668.4 | |||||||||||||||||
| Capitalized share-based compensation costs | (12.4) | (10.3) | (10.2) | |||||||||||||||||
| Share-based compensation expense included in total cost and expense | 291.1 | 342.4 | 658.2 | |||||||||||||||||
| Income tax effect | (57.0) | (63.4) | (132.6) | |||||||||||||||||
| Share-based compensation expense included in net income attributable to Biogen Inc. | $ | 234.1 | $ | 279.0 | $ | 525.6 |
In connection with our acquisition of HI-Bio in July 2024 we recognized HI-Bio equity-based compensation expense, inclusive of employer taxes, of approximately $56.4 million attributable to the post-acquisition service period, of which $42.5 million was recognized as a charge to research and development expense with the remaining $13.9 million as a charge to selling, general and administrative expense within our consolidated statements of
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BIOGEN INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
income for the year ended December 31, 2024. These amounts were associated with the accelerated vesting of stock options and RSUs previously granted to HI-Bio employees and required no future services to vest.
In connection with our acquisition of Reata in September 2023 we recognized Reata equity-based compensation expense, inclusive of employer taxes, of approximately $393.4 million attributable to the post-acquisition service period, of which $196.4 million was recognized as a charge to selling, general and administrative expense with the remaining $197.0 million as a charge to research and development expense within our consolidated statements of income for the year ended December 31, 2023. These amounts were associated with the accelerated vesting of stock options and RSUs previously granted to Reata employees that required no future services to vest.
For additional information on our acquisitions of HI-Bio and Reata, please read Note 2, Acquisitions, to these consolidated financial statements.
The following table summarizes share-based compensation expense associated with each of our share-based compensation programs:
| For the Years Ended December 31, | ||||||||||||||||||||
| (In millions) | 2025 | 2024 | 2023 | |||||||||||||||||
| Time-vested restricted stock units | $ | 249.3 | $ | 236.4 | $ | 220.0 | ||||||||||||||
| Performance stock units settled in stock | 42.3 | 48.4 | 35.5 | |||||||||||||||||
| Performance stock units settled in cash | — | (2.5) | 6.8 | |||||||||||||||||
| Employee stock purchase plan | 8.4 | 9.7 | 10.5 | |||||||||||||||||
| Stock options | 3.5 | 3.7 | 3.7 | |||||||||||||||||
| Market stock units | — | 0.6 | 4.9 | |||||||||||||||||
| Reata equity awards(1) | — | — | 387.0 | |||||||||||||||||
| HI-Bio equity awards(1) | — | 56.4 | — | |||||||||||||||||
| Subtotal | 303.5 | 352.7 | 668.4 | |||||||||||||||||
| Capitalized share-based compensation costs | (12.4) | (10.3) | (10.2) | |||||||||||||||||
| Share-based compensation expense included in total cost and expense | $ | 291.1 | $ | 342.4 | $ | 658.2 |
(1) Relates to the Reata and HI-Bio equity-based compensation expense attributable to the post-acquisition service period, associated with the accelerated vesting of stock options and RSUs previously granted to Reata and HI-Bio employees that required no future services to vest. For additional information on our acquisitions of Reata and HI-Bio, please read Note 2, Acquisitions, to these consolidated financial statements.
As of December 31, 2025, unrecognized compensation cost related to unvested share-based compensation was approximately $292.6 million, net of estimated forfeitures. We expect to recognize the cost of these unvested awards over a weighted-average period of 1.9 years.
Share-Based Compensation Plans
We have two share-based compensation plans pursuant to which awards are currently being made: (i) the Biogen Inc. 2024 Omnibus Equity Plan (2024 Omnibus Equity Plan); and (ii) the Biogen Inc. 2024 Employee Stock Purchase Plan (2024 ESPP).
We have three share-based compensation plans pursuant to which outstanding awards have been made, but from which no further awards can or will be made: (i) the Biogen Inc. 2006 Non-Employee Directors Equity Plan (2006 Directors Plan); (ii) the Biogen Inc. 2017 Omnibus Equity Plan (2017 Omnibus Equity Plan); and (iii) the Biogen Inc. 2015 Employee Stock Purchase Plan (2015 ESPP).
2024 Omnibus Equity Plan
In June 2024 our shareholders approved the 2024 Omnibus Equity Plan for share-based awards to our prospective and current employees, non-employee directors, officers or consultants. Awards granted from the 2024 Omnibus Equity Plan may include stock options, shares of restricted stock, restricted stock units, performance shares, stock appreciation rights and other awards in such amounts and with such terms and conditions as may be determined by a committee of our Board of Directors, subject to the provisions of the plan. Shares of common stock available for grant under the 2024 Omnibus Equity Plan consist of 3.7 million shares reserved for this purpose, plus shares of common stock that remained available for grant under our 2017 Omnibus Equity Plan (including shares available by
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
reason of a predecessor plan) on the date that our shareholders approved the 2024 Omnibus Equity Plan, plus shares that were subject to awards under the 2017 Omnibus Equity Plan (including shares available by reason of a predecessor plan) that remain unissued upon the cancellation, surrender, exchange, termination or forfeiture of such awards. The 2024 Omnibus Equity Plan provides that awards other than stock options and stock appreciation rights will be counted against the total number of shares available under the plan in a 1.5-to-1 ratio.
We have not made any awards pursuant to the 2017 Omnibus Equity Plan or the Directors Plan since our shareholders approved the 2024 Omnibus Equity Plan, and do not intend to make any awards pursuant to the 2017 Omnibus Equity Plan or the Directors Plan in the future, except that unused shares under the 2017 Omnibus Equity Plan have been carried over for use under the 2024 Omnibus Equity Plan. Awards outstanding under the 2017 Omnibus Equity Plan and the Directors Plan as of the date our shareholders approved the 2024 Omnibus Equity Plan will remain outstanding and subject to the terms and conditions of the 2017 Omnibus Equity Plan and the Directors Plan, as applicable, and the relevant award agreements.
Stock Options
In 2022 we granted approximately 81,000 stock options to our CEO (2022 CEO Grant) under the 2017 Omnibus Plan with a grant date fair value of $139.10 per option for a total of approximately $11.2 million. The fair value of the stock option grant is estimated as of the date of grant using a Black-Scholes option valuation model. The estimated fair value of the stock option is then expensed over the options' vesting periods. The 2022 CEO Grant is eligible to vest in equal annual installments over a three-year period from the grant date, subject to the CEO’s continued employment. The outstanding stock option has a 10-year term and is exercisable at a price per share not less than the fair market value of the underlying common stock on the date of grant.
| December 31, 2025 | ||||||||||||||||||||||||||
| Shares | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term | ||||||||||||||||||||||||
| Outstanding at December 31, 2024 | 81,000 | $ | 301.85 | 7.9 years | ||||||||||||||||||||||
| Granted | — | — | ||||||||||||||||||||||||
| Exercised | — | — | ||||||||||||||||||||||||
| Forfeited | — | — | ||||||||||||||||||||||||
| Outstanding at December 31, 2025 | 81,000 | $ | 301.85 | 6.9 years | ||||||||||||||||||||||
| Exercisable at December 31, 2025 | 81,000 | $ | 301.85 | 6.9 years | ||||||||||||||||||||||
Market Stock Units
MSUs awarded to employees in 2014 and thereafter vested in three equal annual increments beginning on the first anniversary of the grant date, and participants could ultimately earn between zero and 200.0% of the target number of units granted based on actual stock performance. The vesting of these awards was subject to the respective employee’s continued employment.
Beginning in 2022 we no longer grant MSUs as part of our long term incentive program and have replaced with granting performance-vested RSUs. The fair values of the remaining MSUs vested in 2024 and 2023 totaled $6.3 million and $20.7 million, respectively.
Performance Stock Units
PSUs Settled in Stock
During the first quarter of 2018 we began granting awards for performance-vested RSUs that will settle in stock. PSUs awarded to employees have a three-year performance period and vest on the third anniversary of the grant date. The vesting of these awards is subject to the respective employee’s continued employment. The number of PSUs granted represents the target number of units that are eligible to be earned based on the achievement of cumulative three-year performance measures established at the beginning of the performance period, which ends on December 31 of the third year of the performance period.
Participants may ultimately earn between zero and 200.0% of the target number of PSUs granted based on the degree of achievement of the applicable performance metric. Accordingly, additional PSUs may be issued or currently outstanding PSUs may be cancelled upon final determination of the number of units earned.
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Beginning in 2022 we no longer grant MSUs as part of our long term incentive program and have replaced with granting PSUs with a performance metric based on a three-year cumulative relative total shareholder return (rTSR) metric.
Beginning in 2024 we began granting PSUs with a performance metric based on the three-year cumulative aggregate growth rate of our earnings per share during the performance period.
The following table summarizes our PSUs that settle in stock activity:
| December 31, 2025 | |||||||||||
| Shares | Weighted Average Grant Date Fair Value | ||||||||||
| Unvested at December 31, 2024 | 550,000 | $ | 310.61 | ||||||||
| Granted(1) | 477,000 | 161.28 | |||||||||
| Vested | — | — | |||||||||
| Forfeited | (222,000) | 176.41 | |||||||||
| Unvested at December 31, 2025 | 805,000 | $ | 227.39 |
(1) PSUs settled in stock granted in 2025 include awards granted in conjunction with our annual awards made in February 2025 and PSUs granted in conjunction with the hiring of employees. These grants reflect the target number of shares eligible to be earned at the time of grant.
PSUs settled in stock granted in 2024 and 2023 had weighted average grant date fair values of $280.60 and $383.61, respectively.
We value grants of PSUs with a performance metric based on a three-year cumulative rTSR metric using a lattice model with a Monte Carlo simulation. This valuation methodology utilizes several key assumptions, the 30 calendar day average closing stock price on the date of grant for PSUs, expected volatility of our stock price, risk-free rates of return and expected dividend yield.
The assumptions used in our valuation are summarized as follows:
| For the Years Ended December 31, | ||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||
| Expected dividend yield | —% | —% | —% | |||||||||||||||||
| Range of expected stock price volatility | 34.5% | 35.1% | 44.7% | |||||||||||||||||
| Range of risk-free interest rates | 4.2% | 4.1% | 4.1% | |||||||||||||||||
| 30 calendar day average stock price on grant date | $146.46 | $251.69 | $283.93 | |||||||||||||||||
| Weighted-average per share grant date fair value | $196.13 | $280.60 | $383.61 |
The fair values of PSUs settled in stock that vested in 2024 and 2023 totaled $13.2 million and $28.6 million, respectively.
PSUs Settled in Cash
During the first quarter of 2018 we began granting awards for performance-vested restricted stock units that would settle in cash. PSUs awarded to employees had three performance periods and vested on the third anniversary of the grant date. The vesting of these awards was subject to the respective employee’s continued employment. PSUs were classified as liability awards and were settled in cash based on the 30 calendar day average closing stock price through the vesting date, once the actual vested and earned number of PSUs was determined. Since no shares were issued, these awards did not dilute equity.
Beginning in 2022 we no longer grant PSUs settled in cash as part of our long term incentive program and have replaced with granting time-vested RSUs. The fair values of the remaining PSUs settled in cash that vested in 2024 and 2023 totaled $9.5 million and $11.7 million, respectively.
Time-Vested Restricted Stock Units
RSUs awarded to employees generally vest no sooner than one-third per year over three years on the anniversary of the date of grant, or upon the third anniversary of the date of the grant, provided the employee remains continuously employed with us, except as otherwise provided in the plan. Shares of our common stock will be delivered to the employee upon vesting, subject to payment of applicable withholding taxes. RSUs awarded to directors for service on
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
our Board of Directors vest on the first anniversary of the date of grant, provided in each case that the director continues to serve on our Board of Directors through the vesting date. Shares of our common stock will be delivered to the director upon vesting and are not subject to any withholding taxes.
The following table summarizes our RSU activity:
| Shares | Weighted Average Grant Date Fair Value | ||||||||||
| Unvested at December 31, 2024 | 2,051,000 | $ | 246.22 | ||||||||
| Granted(1) | 2,385,000 | 141.71 | |||||||||
| Vested | (997,000) | 243.92 | |||||||||
| Forfeited | (363,000) | 188.28 | |||||||||
| Unvested at December 31, 2025 | 3,076,000 | $ | 172.75 |
(1) RSUs granted in 2025 primarily represent RSUs granted in conjunction with our annual awards made in February 2025 and awards made in conjunction with the hiring of new employees. RSUs granted in 2025 also include approximately 24,500 RSUs granted to our Board of Directors.
RSUs granted in 2024 and 2023 had weighted average grant date fair values of $235.82 and $282.92, respectively.
The fair values of RSUs vested in 2025, 2024 and 2023 totaled $141.6 million, $193.6 million and $232.1 million, respectively.
Employee Stock Purchase Plan
2024 Employee Stock Purchase Plan
In June 2024 our shareholders approved the 2024 ESPP. The 2024 ESPP, which became effective on July 1, 2024, replaced the 2015 ESPP, which expired on June 30, 2024. The maximum number of shares of our common stock that may be purchased under the 2024 ESPP is 2.5 million.
The following table summarizes our ESPP activity:
| For the Years Ended December 31, | ||||||||||||||||||||
| (In millions, except share amounts) | 2025 | 2024 | 2023 | |||||||||||||||||
| Shares issued under the 2024 ESPP | 295,000 | 40,000 | — | |||||||||||||||||
| Shares issued under the 2015 ESPP | — | 175,000 | 199,000 | |||||||||||||||||
| Cash received under the 2024 ESPP | $ | 34.0 | $ | 5.1 | $ | — | ||||||||||||||
| Cash received under the 2015 ESPP | $ | — | $ | 31.2 | $ | 45.1 |
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
| Note 17: | Income Taxes |
Income Tax Expense
Income before income tax (benefit) expense and the income tax (benefit) expense consist of the following:
| For the Years Ended December 31, | ||||||||||||||||||||
| (In millions) | 2025 | 2024 | 2023 | |||||||||||||||||
| Income before income tax (benefit) expense: | ||||||||||||||||||||
| Domestic | $ | 1,225.2 | $ | 853.4 | $ | 192.4 | ||||||||||||||
| Foreign | 331.3 | 1,052.6 | 1,104.4 | |||||||||||||||||
| Total income before income tax (benefit) expense | $ | 1,556.5 | $ | 1,906.0 | $ | 1,296.8 | ||||||||||||||
| Income tax (benefit) expense: | ||||||||||||||||||||
| Current: | ||||||||||||||||||||
| Federal | $ | 10.1 | $ | 448.9 | $ | 377.6 | ||||||||||||||
| State | 47.3 | 50.5 | 15.1 | |||||||||||||||||
| Foreign | (155.4) | (67.5) | 48.4 | |||||||||||||||||
| Total current | (98.0) | 431.9 | 441.1 | |||||||||||||||||
| Deferred: | ||||||||||||||||||||
| Federal | 346.1 | (154.5) | (587.4) | |||||||||||||||||
| State | (25.1) | (17.3) | (12.7) | |||||||||||||||||
| Foreign | 40.6 | 13.7 | 294.3 | |||||||||||||||||
| Total deferred | 361.6 | (158.1) | (305.8) | |||||||||||||||||
| Total income tax (benefit) expense | $ | 263.6 | $ | 273.8 | $ | 135.3 |
The lower Federal current provision in 2025 reflects the impact of a tax deduction for certain previously deferred capitalized research and development expenditures under the OBBBA and the impact of recording a capital loss on our sale of Sage common stock.
Foreign current benefit reflects the non-cash benefit of current year valuation allowance changes.
Transition Toll Tax
The Tax Cuts and Jobs Act of 2017 eliminated the deferral of U.S. income tax on the historical unrepatriated earnings by imposing the one-time mandatory deemed repatriation tax on accumulated foreign subsidiaries' previously untaxed foreign earnings. The Transition Toll Tax was assessed on our share of our foreign corporations' accumulated foreign earnings that were not previously taxed. Earnings in the form of cash and cash equivalents were taxed at a rate of 15.5% and all other earnings were taxed at a rate of 8.0%.
As of December 31, 2024, we accrued income tax liabilities of approximately $234.0 million under the Transition Toll Tax, which was subsequently paid in full in April 2025.
Unremitted Earnings
At December 31, 2025, we considered our earnings not to be permanently reinvested outside the U.S. and therefore recorded deferred tax liabilities associated with an estimate of the total withholding taxes expected as a result of our repatriation of earnings. Other than for earnings, we are permanently reinvested for book/tax basis differences, primarily arising through the impacts of purchase accounting. These permanently reinvested basis differences could reverse through sales of the foreign subsidiaries, as well as various other events, none of which were considered probable as of December 31, 2025. The residual U.S. tax liability, if these differences reverse, would be between $300.0 million and $400.0 million as of December 31, 2025.
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BIOGEN INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Deferred Tax Assets and Liabilities
Significant components of our deferred tax assets and liabilities are summarized as follows:
| As of December 31, | ||||||||||||||
| (In millions) | 2025 | 2024 | ||||||||||||
| Deferred tax assets: | ||||||||||||||
| Tax credits | $ | 286.1 | $ | 294.0 | ||||||||||
| Inventory, other reserves and accruals | 246.9 | 219.2 | ||||||||||||
| Intangibles, net | 886.5 | 989.6 | ||||||||||||
| Capitalized research and development | 457.2 | 733.9 | ||||||||||||
| Net operating loss | 1,082.8 | 1,357.2 | ||||||||||||
| Share-based compensation | 36.1 | 34.4 | ||||||||||||
| Other | 141.7 | 318.4 | ||||||||||||
| Valuation allowance | (832.2) | (1,013.7) | ||||||||||||
| Total deferred tax assets | $ | 2,305.1 | $ | 2,933.0 | ||||||||||
| Deferred tax liabilities: | ||||||||||||||
| Purchased inventory valuation step-up and intangible assets | $ | (1,456.1) | $ | (1,529.6) | ||||||||||
| GILTI | (891.3) | (1,054.8) | ||||||||||||
| Depreciation, amortization and other | (172.8) | (214.9) | ||||||||||||
| Total deferred tax liabilities | $ | (2,520.2) | $ | (2,799.3) |
As of December 31, 2025, 2024, 2023 and 2022, we had a valuation allowance of $832.2 million, $1,013.7 million, $1,278.7 million and $2,003.3 million, respectively, related to net operating losses in Switzerland and Neurimmune's tax basis in ADUHELM.
The change in the valuation allowance between December 31, 2025 and 2024, was primarily driven by movements in net operating loss deferred tax assets in Switzerland. The net income tax impact of the changes in the valuation allowance was a benefit of approximately $37.9 million for the year ended December 31, 2025.
The change in the valuation allowance between December 31, 2024 and 2023, was primarily driven by movements in net operating loss deferred tax assets in Switzerland. The net income tax impact of the changes in the valuation allowance was a benefit of approximately $56.8 million for the year ended December 31, 2024.
The change in the valuation allowance between December 31, 2023 and 2022, was primarily driven by a reduction of approximately $470.3 million related to the elimination of Neurimmune's tax basis in ADUHELM as a result of its deconsolidation and reduction of approximately $230.3 million due to movements in net operating loss deferred tax assets in Switzerland. The net income tax impact of the changes in the valuation allowance was an expense of approximately $7.4 million for the year ended December 31, 2023. For additional information on the deconsolidation and our collaboration arrangement with Neurimmune, please read Note 20, Investments in Variable Interest Entities, to these consolidated financial statements.
In addition to deferred tax assets and liabilities, we have recorded deferred charges related to intra-entity sales of inventory. As of December 31, 2025 and 2024, the total deferred charges were $498.8 million and $273.1 million, respectively.
2025 OBBBA Tax Provisions
On July 4, 2025, the U.S. signed into law the H.R.1 legislation formally titled "An Act to Provide for Reconciliation Pursuant to Title II of H. Con. Res. 14", commonly referred to as the OBBBA.
The OBBBA contains tax provisions, such as the permanent extension or revision of certain expiring provisions of the Tax Cuts and Jobs Act enacted in 2017, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The provisions of the OBBBA have multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. The OBBBA did not result in any material adjustments to our total income tax provision for the year ended December 31, 2025, and we have adjusted our deferred tax balances to reflect the impacts of the OBBBA enactment.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Pillar Two
The OECD has issued model rules, which generally provide for a jurisdictional minimum effective tax rate of 15.0% as defined in those rules. Various countries have or are in the process of enacting legislation intended to implement the principles. Our income tax provision for the years ended December 31, 2025 and 2024, reflects currently enacted legislation and guidance related to the OECD model rules including the Pillar Two side-by-side package announced by the OECD in January 2026. This enacted legislation and guidance related to the OECD model rules did not result in any material adjustments to our income tax provision or income tax balances as of December 31, 2025 and 2024.
Tax Rate
For the year ended December 31, 2025, we adopted ASU 2023-09 on a prospective basis. In preparing the tabular rate reconciliation, we are presenting the effects of cross-border tax laws net of the related U.S. tax credits. The tax effects for all jurisdictions of changes in judgment related to tax positions taken in prior annual reporting periods, and associated interest, are reported in the changes in unrecognized tax benefits category. Unrecognized tax benefits related to current year tax positions are shown net with the reconciling item that relates to the uncertain tax position.
The following table is a reconciliation of the U.S. federal statutory rate of 21.0% to our effective tax rate for the year ended December 31, 2025, in accordance with the guidance in ASU 2023-09.
| For the Year Ended December 31, 2025 | ||||||||||||||
| (In millions, except percentages) | Amount | Rate | ||||||||||||
| Statutory rate | $ | 326.9 | 21.0 | % | ||||||||||
| State and local income taxes, net of federal income tax effect(1) | 8.5 | 0.5 | ||||||||||||
| Foreign tax effects: | ||||||||||||||
| Italy | ||||||||||||||
| Withholding tax | (20.4) | (1.3) | ||||||||||||
| Other | 1.8 | 0.1 | ||||||||||||
| Switzerland | ||||||||||||||
| Statutory tax rate difference | (22.1) | (1.4) | ||||||||||||
| Cantonal tax impact | 11.9 | 0.8 | ||||||||||||
| Pillar Two taxes | (17.2) | (1.1) | ||||||||||||
| Changes in valuation allowances | (190.2) | (12.2) | ||||||||||||
| Taxable intercompany dividend | 22.8 | 1.5 | ||||||||||||
| Other | (6.1) | (0.4) | ||||||||||||
| U.K. | ||||||||||||||
| Litigation matter | 21.0 | 1.3 | ||||||||||||
| Other | 0.7 | — | ||||||||||||
| Other foreign jurisdictions | 9.5 | 0.6 | ||||||||||||
| Effects of changes in tax laws or rates | (11.5) | (0.7) | ||||||||||||
| Effects of cross-border tax laws | ||||||||||||||
| GILTI, net of foreign tax credits | 88.0 | 5.7 | ||||||||||||
| Other, net of foreign tax credits | 18.5 | 1.2 | ||||||||||||
| Tax Credits | ||||||||||||||
| Orphan drug credits | (31.3) | (2.0) | ||||||||||||
| Other credits | (4.5) | (0.3) | ||||||||||||
| Nontaxable or nondeductible items | ||||||||||||||
| Equity compensation | 18.9 | 1.2 | ||||||||||||
| Other permanent differences | 16.9 | 1.1 | ||||||||||||
| Changes in unrecognized tax benefits | 9.6 | 0.6 | ||||||||||||
| Other adjustments | 11.9 | 0.7 | ||||||||||||
| Income tax expense and effective tax rate | $ | 263.6 | 16.9 | % |
(1) State taxes in Tennessee, Massachusetts, Kentucky and North Carolina made up the majority (greater than 50.0%) of the tax effect in this category.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
The following table is a reconciliation of the U.S. federal statutory tax rate of 21.0% to our effective tax rate for the years ended December 31, 2024 and 2023, in accordance with the guidance prior to the adoption of ASU 2023-09:
| For the Years Ended December 31, | ||||||||||||||||||||
| 2024 | 2023 | |||||||||||||||||||
| Statutory rate | 21.0 | % | 21.0 | % | ||||||||||||||||
| State taxes | 1.8 | 1.1 | ||||||||||||||||||
| Taxes on foreign earnings, including valuation allowances | (7.6) | (5.9) | ||||||||||||||||||
| Tax credits | (2.2) | (7.3) | ||||||||||||||||||
| Purchased inventory valuation step-up and intangible assets | 2.1 | 0.7 | ||||||||||||||||||
| GILTI | (1.6) | (0.6) | ||||||||||||||||||
| Internal reorganization | — | (0.1) | ||||||||||||||||||
| Other, including permanent items | 0.9 | 1.5 | ||||||||||||||||||
| Effective tax rate | 14.4 | % | 10.4 | % |
In the reconciliation for the year ended December 31, 2025, in accordance with the guidance in ASU 2023-09, the GILTI foreign tax credit impacts of changes in foreign valuation allowances are included within the GILTI, net of foreign tax credits line. For reconciliation for the years ended December 31, 2024 and 2023, the GILTI foreign tax credit impacts of changes in foreign valuation allowances are included within the taxes on foreign earnings, including valuation allowances line.
Changes in Tax Rate
For the year ended December 31, 2025, compared to 2024, the increase in our effective tax rate was partially driven by changes in the territorial mix of our profitability and the impact of certain share-based compensation awards that vested during the first quarter of 2025, partially offset by the impact of the elimination of Italian withholding tax.
For the year ended December 31, 2024, compared to 2023, the increase in our effective tax rate was partially driven by the relative deferred tax effects of the changes in the value of our equity investments and amortization of purchased intangible assets and inventory. Further, 2023 benefited from the combined impacts of Reata acquisition-related expenses and the resolution of an uncertain tax matter related to tax credits. This was partially offset by a 2024 benefit related to a decrease in our valuation allowance related to projected future foreign taxable income, as discussed in the Deferred Tax Assets and Liabilities section above.
For additional information on our acquisition of Reata, please read Note 2, Acquisitions, to these consolidated financial statements.
Tax Attributes
As of December 31, 2025, we had credit carry forwards for U.S. federal income tax purposes of approximately $146.2 million that begin to expire in 2030 and net operating losses of approximately $142.8 million that do not expire. For U.S. state income tax purposes, we had research and investment credit carry forwards of approximately $172.1 million that begin to expire in 2027 and net operating losses of approximately $356.6 million that begin to expire in 2028. For foreign income tax purposes, we had $9.1 billion of federal net operating loss carryforwards that begin to expire in 2027 and $8.4 billion of Swiss cantonal net operating loss carryforwards that begin to expire in 2027.
In assessing the realizability of our deferred tax assets, we have considered whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. In making this determination, under the applicable financial reporting standards, we are allowed to consider the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies. Based upon the level of historical taxable income and income tax liability and projections for future taxable income over the periods in which the deferred tax assets are utilizable, we believe it is more likely than not that we will realize the net benefits of the deferred tax assets of our wholly owned subsidiaries, net of the recorded valuation allowance. In the event that actual results differ from our estimates or we adjust our estimates in future
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
periods, we may need to adjust or establish a valuation allowance, which could materially impact our consolidated financial position and results of operations.
Income Taxes Paid
The following table presents income taxes paid (net of refunds received) for the year ended December 31, 2025.
| (In millions) | For the Year Ended December 31, 2025 | |||||||
| Federal | $ | 721.0 | ||||||
| State | 48.4 | |||||||
| Foreign | 94.6 | |||||||
| Total | $ | 864.0 |
No individual state or foreign jurisdiction accounted for 5.0% or more of the total taxes paid in 2025.
Accounting for Uncertainty in Income Taxes
A reconciliation of the beginning and ending amount of our unrecognized tax benefits is summarized as follows:
| For the Years Ended December 31, | ||||||||||||||||||||
| (In millions) | 2025 | 2024 | 2023 | |||||||||||||||||
| Beginning balance | $ | 186.3 | $ | 173.4 | $ | 606.4 | ||||||||||||||
| Additions based on tax positions related to the current period | 3.6 | 1.2 | 5.2 | |||||||||||||||||
| Additions for tax positions of prior periods | 12.4 | 31.5 | 60.2 | |||||||||||||||||
| Reductions for tax positions of prior periods | (3.9) | (3.1) | (485.0) | |||||||||||||||||
| Statute expirations | (6.6) | (12.7) | (2.1) | |||||||||||||||||
| Settlement refund (payment) | (11.8) | (4.0) | (11.3) | |||||||||||||||||
| Ending balance | $ | 180.0 | $ | 186.3 | $ | 173.4 |
As of December 31, 2022, the unrecognized tax benefits related to a deferred tax asset for Swiss tax purposes for Neurimmune's tax basis in ADUHELM was approximately $450.0 million. This unrecognized tax benefit was recorded as a reduction to the gross deferred tax asset, resulting in a net deferred tax asset and not as a separate liability on our consolidated balance sheets. During the year ended December 31, 2023, we decreased our gross unrecognized tax benefits by approximately $450.0 million related to this item as a result of the deconsolidation of Neurimmune.
We file income tax returns in various U.S. states and in U.S. federal and other foreign jurisdictions. With few exceptions, we are no longer subject to U.S. federal tax examination for years before 2022 or state, local or non-U.S. income tax examinations for years before 2013.
Included in the balance of unrecognized tax benefits as of December 31, 2025, 2024 and 2023, are $127.6 million, $139.3 million and $147.6 million (net of the federal benefit on state issues), respectively, of unrecognized tax benefits that, if recognized, would affect the effective income tax rate in future periods.
We recognize potential interest and penalties related to unrecognized tax benefits in income tax (benefit) expense within our consolidated statements of income. During the years ended December 31, 2025, 2024 and 2023, we recognized total interest and penalty expense of $12.6 million, $13.8 million and $5.1 million, respectively. We have accrued $48.5 million and $40.7 million for the payment of interest and penalties as of December 31, 2025 and 2024, respectively.
It is reasonably possible that we will adjust the value of our uncertain tax positions related to certain transfer pricing, collaboration matters, withholding taxes and other issues as we receive additional information from various taxing authorities, including reaching settlements with such authorities.
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| Note 18: | Other Consolidated Financial Statement Detail |
Supplemental Cash Flow Information
Supplemental disclosure of cash flow information is summarized as follows:
| For the Years Ended December 31, | ||||||||||||||||||||
| (In millions) | 2025 | 2024 | 2023 | |||||||||||||||||
| Cash paid during the year for: | ||||||||||||||||||||
| Interest | $ | 264.1 | $ | 245.4 | $ | 252.2 | ||||||||||||||
| Income taxes | 864.0 | 355.1 | 740.7 |
Other (Income) Expense, Net
Components of other (income) expense, net, are summarized as follows:
| For the Years Ended December 31, | ||||||||||||||||||||
| (In millions) | 2025 | 2024 | 2023 | |||||||||||||||||
| Interest income | $ | (125.0) | $ | (67.6) | $ | (276.5) | ||||||||||||||
| Interest expense | 267.5 | 250.3 | 246.9 | |||||||||||||||||
| (Gains) losses on investments, net | 19.7 | 100.4 | 291.2 | |||||||||||||||||
| Litigation related expense | 139.5 | 26.3 | 3.9 | |||||||||||||||||
| Foreign exchange (gains) losses, net | 28.6 | 30.9 | 50.4 | |||||||||||||||||
| Other, net | (24.7) | 3.3 | (0.4) | |||||||||||||||||
| Total other (income) expense, net | $ | 305.6 | $ | 343.6 | $ | 315.5 |
The (gains) losses on investments, net, as reflected in the table above, relate to debt securities, equity securities of certain biotechnology companies, venture capital funds where the underlying investments are in equity securities of certain biotechnology companies and non-marketable equity securities.
In 2025 we recorded $139.5 million related to various litigation matters, including our agreement in principle to resolve all claims relating to Biogen's acquisition of Convergence. For additional information on our legal matters, please read Note 21, Litigation, to these consolidated financial statements.
The following table summarizes our (gains) losses on investments, net that relate to our equity securities held during the following periods:
| For the Years Ended December 31, | ||||||||||||||||||||
| (In millions) | 2025 | 2024 | 2023 | |||||||||||||||||
| Net (gains) losses recognized on equity securities | $ | 19.7 | $ | 100.4 | $ | 275.2 | ||||||||||||||
| Less: Net (gains) losses realized on equity securities | 1.5 | (2.0) | 5.2 | |||||||||||||||||
| Net unrealized (gains) losses recognized on equity securities | $ | 18.2 | $ | 102.4 | $ | 270.0 |
The net unrealized losses recognized during the year ended December 31, 2025, primarily reflect a decrease in the aggregate fair value of our investment in Denali common stock of approximately $27.7 million, partially offset by an increase in the fair value of Sage common stock of approximately $23.0 million.
The net unrealized losses recognized during the year ended December 31, 2024, primarily reflect a decrease in the aggregate fair value of our investment in Sage common stock of approximately $101.4 million, partially offset by an increase in the fair value of Denali and Sangamo common stock of approximately $7.5 million.
The net unrealized losses recognized during the year ended December 31, 2023, primarily reflect a decrease in the aggregate fair value of our investments in Sage, Denali, Sangamo and Ionis common stock of approximately $248.5 million.
Other Current Assets
Other current assets includes prepaid taxes of $693.6 million and $307.2 million as of December 31, 2025 and 2024, respectively.
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Accrued Expense and Other
Accrued expense and other consists of the following:
| As of December 31, | ||||||||||||||
| (In millions) | 2025 | 2024 | ||||||||||||
| Revenue-related reserves for discounts and allowances | $ | 1,000.4 | $ | 937.5 | ||||||||||
| Employee compensation and benefits | 375.8 | 375.8 | ||||||||||||
| Collaboration expense | 280.0 | 309.0 | ||||||||||||
| Royalties and licensing fees | 302.4 | 190.2 | ||||||||||||
| Current portion of contingent consideration obligations | — | 291.2 | ||||||||||||
| Other | 844.0 | 704.0 | ||||||||||||
| Total accrued expense and other | $ | 2,802.6 | $ | 2,807.7 |
Other Long-term Liabilities
Other long-term liabilities were $748.5 million and $732.3 million as of December 31, 2025 and 2024, respectively, and included accrued income taxes totaling $166.4 million and $156.7 million, respectively.
| Note 19: | Collaborative and Other Relationships |
In connection with our business strategy, we have entered into various collaboration agreements that provide us with rights to develop, produce and market products using certain know-how, technology and patent rights maintained by our collaborative partners. Terms of the various collaboration agreements may require us to make milestone payments upon the achievement of certain product research and development objectives and pay royalties on future sales, if any, of commercial products resulting from the collaboration.
Depending on the collaborative arrangement, we may record funding receivable or payable balances with our collaboration partners, based on the nature of the cost-sharing mechanism and activity within the collaboration. Our significant collaborative arrangements are discussed below.
Genentech, Inc. (Roche Group)
We have certain business and financial rights with respect to RITUXAN for the treatment of non-Hodgkin's lymphoma, CLL and other conditions; RITUXAN HYCELA for the treatment of non-Hodgkin's lymphoma and CLL; GAZYVA for the treatment of CLL, follicular lymphoma and, following its approval in October 2025, lupus nephritis; OCREVUS for the treatment of PPMS and RMS; LUNSUMIO for the treatment of relapsed or refractory follicular lymphoma; COLUMVI, a bispecific antibody for the treatment of non-Hodgkin's lymphoma; and have the option to add other potential anti-CD20 therapies, pursuant to our collaboration arrangements with Genentech, a wholly owned member of the Roche Group. For purposes of this footnote, we refer to RITUXAN and RITUXAN HYCELA collectively as RITUXAN.
Our collaboration with Genentech was created through a contractual arrangement and not through a joint venture or other legal entity.
RITUXAN
Under our collaboration with Genentech, we are entitled to a tiered share of co-promotion operating profits and losses of RITUXAN in the U.S., as summarized in the table below. Genentech and its affiliates are responsible for the worldwide manufacture of RITUXAN as well as all development and commercialization activities as follows:
*•*U.S.: We have co-exclusively licensed our rights to develop, commercialize and market RITUXAN in the U.S.
*•*Canada: We have co-exclusively licensed our rights to develop, commercialize and market RITUXAN in Canada.
If we undergo a change in control, as defined in our collaboration agreement, Genentech has the right to present an offer to buy the rights to RITUXAN and we must either accept Genentech’s offer or purchase Genentech’s rights on the same terms as its offer. Genentech will also be deemed concurrently to have purchased our rights to the remaining products in the collaboration on the terms set forth below.
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GAZYVA
The Roche Group and its sub-licensees maintain sole responsibility for the development, manufacture and commercialization of GAZYVA and we are entitled to a tiered share of co-promotion operating profits and losses of GAZYVA in the U.S. The level of gross sales of GAZYVA in the U.S. has impacted our percentage of the co-promotion profits for RITUXAN and LUNSUMIO, as summarized in the table below.
If we undergo a change in control, as defined in our collaboration agreement, Genentech will be deemed to have purchased our rights to GAZYVA in exchange for the continued payment of the current compensation payable for GAZYVA under the collaboration arrangement until the 11 year anniversary of the first commercial sale of GAZYVA in the U.S.
OCREVUS
Pursuant to the terms of our collaboration arrangements with Genentech, we receive a tiered royalty on U.S. net sales from 13.5% and increasing up to 24.0% if annual net sales exceed $900.0 million. There will be a 50.0% reduction to these royalties upon the first entry of an FDA approved biosimilar to OCREVUS.
In addition, we receive a gross 3.0% royalty on net sales of OCREVUS outside the U.S., with the royalty period lasting 11 years from the first commercial sale of OCREVUS on a country-by-country basis.
The commercialization of OCREVUS does not impact the percentage of the co-promotion profits we receive for RITUXAN, LUNSUMIO or GAZYVA. Genentech is solely responsible for development and commercialization of OCREVUS and funding future costs. Genentech cannot develop OCREVUS in CLL, non-Hodgkin's lymphoma or rheumatoid arthritis.
OCREVUS royalty revenue is based on our estimates from third party and market research data of OCREVUS sales occurring during the corresponding period. Differences between actual and estimated royalty revenue will be adjusted for in the period in which they become known, which is generally expected to be the following quarter.
If we undergo a change in control, as defined in our collaboration agreement, Genentech will be deemed to have purchased our rights to OCREVUS in exchange for the continued payment of the current royalties on net sales (as defined in our collaboration agreement and summarized above) in the U.S. only, until the 11 year anniversary of the first commercial sale of OCREVUS in the U.S.
LUNSUMIO
Under our collaboration with Genentech, we are entitled to a tiered share of co-promotion operating profits and losses in the U.S., as summarized in the table below. In addition, we receive low-single digit royalties on sales of LUNSUMIO outside the U.S.
If we undergo a change in control, as defined in our collaboration agreement, Genentech will be deemed to have purchased our rights to LUNSUMIO in exchange for 30.0% of the U.S. co-promotion operating profits or losses until the 11 year anniversary of the first commercial sale of LUNSUMIO in the U.S.
COLUMVI
Genentech has sole decision-making rights on the commercialization of COLUMVI within the U.S. and we receive tiered royalties in the mid-single digit range on net sales of COLUMVI in the U.S. The commercialization of COLUMVI does not impact the percentage of the co-promotion profits we receive for RITUXAN, LUNSUMIO or GAZYVA.
If we undergo a change in control, as defined in our collaboration agreement, Genentech will be deemed to have purchased our rights to COLUMVI in exchange for a mid-single digit royalty on net sales (as defined in our collaboration agreement) in the U.S. only, until the 11 year anniversary of the first commercial sale of the product in the U.S.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Profit-sharing Formulas
RITUXAN and LUNSUMIO Profit Share
Our current pre-tax co-promotion profit-sharing formula for RITUXAN and LUNSUMIO in the U.S. provides for a 30.0% share on the first $50.0 million of combined co-promotion operating profits earned each calendar year. Our share of the combined annual co-promotion profits for RITUXAN and LUNSUMIO in excess of $50.0 million varies upon the following events, as summarized in the table below:
| After LUNSUMIO Approval until the First Threshold Date | 37.5 | % | |||
| After First Threshold Date until the Second Threshold Date | 35.0 | % | |||
| After Second Threshold Date | 30.0 | % |
In March 2023 the First Threshold Date was achieved when U.S. gross sales of GAZYVA within a consecutive 12-month period reached $500.0 million. As a result, beginning in April 2023 the pre-tax profit share for RITUXAN and LUNSUMIO has been 35.0%. The Second Threshold Date would be achieved on the first date in any calendar year in which U.S. gross sales of LUNSUMIO have reached $350.0 million.
GAZYVA Profit Share
Our current pretax profit-sharing formula for GAZYVA provides for a 35.0% share on the first $50.0 million of operating profits earned in the U.S. in each calendar year. In March 2023 U.S. gross sales of GAZYVA within a consecutive 12-month period reached $500.0 million. As a result, beginning in April 2023 the pre-tax profit share for GAZYVA decreased from 37.5% to 35.0%.
Revenue from Anti-CD20 Therapeutic Programs
Revenue from anti-CD20 therapeutic programs is summarized as follows:
| For the Years Ended December 31, | ||||||||||||||||||||
| (In millions) | 2025 | 2024 | 2023 | |||||||||||||||||
| Royalty revenue on sales of OCREVUS | $ | 1,414.9 | $ | 1,339.5 | $ | 1,266.2 | ||||||||||||||
| Biogen's share of pre-tax profits in the U.S. for RITUXAN, GAZYVA and LUNSUMIO | 420.2 | 392.0 | 409.4 | |||||||||||||||||
| Other revenue from anti-CD20 therapeutic programs | 25.5 | 18.4 | 14.0 | |||||||||||||||||
| Total revenue from anti-CD20 therapeutic programs | $ | 1,860.6 | $ | 1,749.9 | $ | 1,689.6 |
Prior to regulatory approval, we record our share of the expense incurred by the collaboration for the development of anti-CD20 products in research and development expense and pre-commercialization costs within selling, general and administrative expense in our consolidated statements of income. After an anti-CD20 product is approved, we record our share of the development and sales and marketing expense related to that product as a reduction of our share of pre-tax profits in revenue from anti-CD20 therapeutic programs.
Ionis Pharmaceuticals, Inc.
SPINRAZA
In January 2012 we entered into a collaboration and license agreement with Ionis pursuant to which we have an exclusive, worldwide license to develop and commercialize SPINRAZA for the treatment of SMA.
Under our agreement with Ionis, we make royalty payments to Ionis on annual worldwide net sales of SPINRAZA using a tiered royalty rate between 11.0% and 15.0%, which are recognized in cost of sales within our consolidated statements of income. Royalty cost of sales related to sales of SPINRAZA for the years ended December 31, 2025, 2024 and 2023, totaled approximately $212.3 million, $216.1 million and $240.2 million, respectively.
2018 Ionis Agreement
In June 2018 we entered into a 10-year exclusive collaboration agreement with Ionis to develop novel ASO drug candidates for a broad range of neurological diseases for a total payment of $1.0 billion, consisting of an upfront payment of $375.0 million and the purchase of approximately 11.5 million shares of Ionis common stock at a cost of $625.0 million.
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We have the option to license therapies arising out of this agreement and will be responsible for the development and commercialization of such therapies. We may pay development milestones to Ionis of up to $125.0 million or $270.0 million for each program, depending on the indication plus an annual license fee, as well as royalties on potential net commercial sales.
During the years ended December 31, 2025, 2024 and 2023, we incurred milestones of $7.5 million, $7.5 million and $7.5 million, respectively, related to the advancement of neurological targets identified under this agreement, which were recorded as research and development expense in our consolidated statements of income.
2017 SMA Collaboration Agreement
In December 2017 we entered into a collaboration agreement with Ionis to identify new ASO drug candidates for the potential treatment of SMA. Under this agreement, we have options to license therapies arising out of this collaboration and will be responsible for the development and commercialization of such therapies.
In December 2021 we exercised our option with Ionis and obtained a worldwide, exclusive, royalty-bearing license to develop and commercialize salanersen (BIIB115), an investigational ASO in development for SMA.
We may pay Ionis up to $155.0 million in additional development and regulatory milestone payments related to salanersen, including a $45.0 million milestone payment due upon the initiation of a Phase 3 trial. Upon commercialization, we may also pay Ionis up to $400.0 million in additional performance-based milestone payments and tiered royalties on potential net sales of such therapies ranging from the mid-teens to high-twenties percentages.
2013 Long-term Strategic Research Agreement
In September 2013 we entered into a six-year research collaboration agreement with Ionis under which both companies collaborated to perform discovery level research and subsequent development and commercialization activities of antisense or other therapeutics for the potential treatment of neurological diseases.
In December 2018 we exercised our option with Ionis and obtained a worldwide, exclusive, royalty-bearing license to develop and commercialize QALSODY (tofersen), for the treatment of ALS with SOD1 mutations. Following the option exercise, we are solely responsible for the costs and expense related to the development, manufacturing and commercialization of QALSODY.
In April 2023 the FDA approved QALSODY for the treatment of ALS in adults who have a mutation in the SOD1 gene. This indication is approved under accelerated approval based on reduction in plasma neurofilament light chain observed in patients treated with QALSODY. Continued approval for this indication may be contingent upon verification of clinical benefit in confirmatory trial(s). Under this agreement, we make royalty payments to Ionis on annual worldwide net sales of QALSODY using a tiered royalty rate between 11.0% and 15.0%, which are recognized in cost of sales within our consolidated statements of income.
During the year ended December 31, 2024, we incurred a milestone payment of $20.0 million to Ionis following the approval of QALSODY in the E.U., which was recorded within intangible assets, net in our consolidated balance sheets. Additionally, during the year ended December 31, 2024, we accrued a milestone payment of $10.0 million to Ionis following the approval of QALSODY in Japan, which was recorded within intangible assets, net in our consolidated balance sheets, and paid during the first quarter of 2025.
During the year ended December 31, 2023, we incurred a milestone payment of $16.0 million to Ionis following the FDA's approval of QALSODY, which was recorded within intangible assets, net in our consolidated balance sheets.
2012 Ionis Agreement
In December 2012 we entered into an agreement with Ionis for the development and commercialization of up to three gene targets.
In December 2019 we exercised our option with Ionis and obtained a worldwide, exclusive, royalty-bearing license to develop and commercialize BIIB080 (tau ASO), which is currently in Phase 2 development for the potential treatment of Alzheimer's disease. Following the option exercise, we are solely responsible for global development, regulatory and commercialization. Future payments may include additional milestone payments of up to $155.0 million and royalties on future sales in the low- to mid-teens if we successfully develop the product candidate after option exercise.
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Eisai Co., Ltd.
During the first quarter of 2023 we accrued a $31.0 million payable to Eisai related to the termination of an agreement whereby Eisai co-promoted or distributed our MS products in certain Asia-Pacific markets and settings. As of December 31, 2023, we paid approximately $16.0 million of the $31.0 million payable. The remaining portion was subsequently paid in January 2024. This termination fee is included in selling, general and administrative expense in our consolidated statements of income for the year ended December 31, 2023.
LEQEMBI (lecanemab) Collaboration
We have a collaboration agreement with Eisai to jointly develop and commercialize LEQEMBI (lecanemab), an anti-amyloid antibody for the treatment of Alzheimer's disease. The FDA granted traditional approval of LEQEMBI in July 2023. Prior to receiving traditional approval, LEQEMBI had been granted accelerated approval by the FDA in January 2023, at which time it became commercially available in the U.S. Outside of the U.S., LEQEMBI is now approved in the E.U. (April 2025), Australia (September 2025), China (January 2024), Japan (September 2023) and other international markets. LEQEMBI monthly IV maintenance dosing for the treatment of early Alzheimer's disease was approved in the U.S. and China in January 2025 and September 2025, respectively, and LEQEMBI subcutaneous autoinjector (IQLIK) for weekly maintenance dosing was approved in the U.S. in August 2025.
All costs, including research, development, sales and marketing expense, are shared equally between us and Eisai. We also share profits and losses equally. We currently have a supply agreement with Eisai to manufacture LEQEMBI drug substance and drug product through the end of 2031.
Subject to the limitations in the LEQEMBI Collaboration Agreement, Eisai has final decision-making authority on all matters relating to the collaboration and serves as the lead of LEQEMBI development and regulatory submissions globally. We co-commercialize and co-promote LEQEMBI with Eisai. Our Collaboration Agreement provides that each commercialization plan shall allocate the responsibilities for the activities under the plan in an equitable fashion taking into account Biogen's and Eisai's respective capabilities and provides a meaningful role for each party.
Upon commercialization of LEQEMBI in the U.S., we began recognizing our 50.0% share of LEQEMBI product revenue, net and cost of sales, including royalties, within Alzheimer's collaboration revenue in our consolidated statements of income, as we are not the principal.
Our share of LEQEMBI sales and marketing expense and development expense are recorded within selling, general and administrative expense and research and development expense, respectively, within our consolidated statements of income.
If either company undergoes a change of control, as defined in our LEQEMBI Collaboration Agreement, the non-acquired party may elect to initiate an operational separation, as defined in the LEQEMBI Collaboration Agreement. In the event of an operational separation, we would work with Eisai to effect a timely transition of any development, manufacturing or commercial responsibilities regarding LEQEMBI from us to Eisai. In this scenario, as of six months following the change of control, our ongoing responsibility for LEQEMBI related cost-sharing would be reduced to an amount equal to 80.0% of what we would have owed prior to the operational separation, and all other economic rights would remain unchanged.
In addition, in the event either company undergoes a change of control in which the acquirer is engaged in commercialization of a competing product, as defined in the LEQEMBI Collaboration Agreement, the non-acquired party may also request that the acquired party cease commercializing the competing product. Should the acquired party elect to continue commercializing the competing product, the non-acquired party may terminate the LEQEMBI Collaboration Agreement. Furthermore, in the event we are the non-acquired party, we may choose either to sell our interest in LEQEMBI to Eisai or purchase Eisai's interest in LEQEMBI, subject to the parameters set forth in the LEQEMBI Collaboration Agreement.
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A summary of development and sales and marketing expense related to the LEQEMBI Collaboration is as follows:
| For the Years Ended December 31, | ||||||||||||||||||||
| (In millions) | 2025 | 2024 | 2023 | |||||||||||||||||
| Total development expense incurred by the collaboration related to the advancement of LEQEMBI | $ | 253.1 | $ | 329.6 | $ | 371.9 | ||||||||||||||
| Biogen's share of the LEQEMBI Collaboration development expense reflected in research and development expense in our consolidated statements of income | 126.5 | 164.8 | 186.0 | |||||||||||||||||
| Total sales and marketing expense incurred by the LEQEMBI Collaboration | 701.6 | 647.0 | 304.4 | |||||||||||||||||
| Biogen's share of the LEQEMBI Collaboration sales and marketing expense reflected in selling, general and administrative expense in our consolidated statements of income | 350.8 | 323.5 | 152.2 |
Amounts receivable from Eisai related to the agreements discussed above were approximately $90.2 million and $16.7 million as of December 31, 2025 and 2024, respectively. Amounts payable to Eisai related to the agreements discussed above were approximately $95.5 million and $138.0 million as of December 31, 2025 and 2024, respectively.
UCB
We have a collaboration agreement with UCB, effective November 2003, to jointly develop and commercialize dapirolizumab pegol, an anti-CD40L pegylated Fab, for the potential treatment of SLE and other future agreed indications. Either we or UCB may propose development of dapirolizumab pegol in additional indications. If the parties do not agree to add an indication as an agreed indication to the collaboration, we or UCB may, at the sole expense of the applicable party, pursue development in such excluded indication(s), subject to an opt-in right of the non-pursuing party after proof of clinical activity.
All costs incurred for agreed indications, including research, development, sales and marketing expense, are shared equally between us and UCB. If marketing approval is obtained, both companies will jointly commercialize dapirolizumab pegol and share profits and losses equally.
A summary of development expense related to the UCB collaboration agreement is as follows:
| For the Years Ended December 31, | ||||||||||||||||||||
| (In millions) | 2025 | 2024 | 2023 | |||||||||||||||||
| Total UCB collaboration development expense | $ | 79.9 | $ | 77.5 | $ | 60.7 | ||||||||||||||
| Biogen's share of the UCB collaboration development expense reflected in research and development expense in our consolidated statements of income | 39.9 | 38.7 | 30.3 |
Supernus Pharmaceuticals, Inc. (previously Sage Therapeutics, Inc.)
In November 2020 we entered into a global collaboration and license agreement with Sage to jointly develop and commercialize ZURZUVAE (zuranolone) for the treatment of PPD. In July 2025 Sage was acquired by Supernus. ZURZUVAE was approved in the U.S. in August 2023 and in the E.U. in September 2025. Upon approval, ZURZUVAE became the first and only oral, once-daily, 14-day treatment that can provide rapid improvements in depressive symptoms by day 15 for women with PPD.
Under this collaboration, both companies will share equal responsibility and costs for development as well as profits and losses for commercialization in the U.S. Outside of the U.S., we are responsible for development and commercialization, excluding Japan, Taiwan and South Korea, with respect to zuranolone and may pay Supernus potential tiered royalties in the high-teens to low-twenties percentages. During the fourth quarter of 2023 we accrued a milestone payment due to Sage of $75.0 million upon the first commercial sale of ZURZUVAE for PPD in the U.S., which was recorded within intangible assets, net in our consolidated balance sheets, and subsequently paid in January 2024.
We may pay Supernus development and commercial milestone payments that could total up to approximately $700.0 million if all the specified milestones set forth in this collaboration are achieved.
We reflect revenue on sales of ZURZUVAE to third parties in product revenue, net in our consolidated statements of income and record the related cost of revenue and sales and marketing expense in our consolidated statements of income to their respective line items when these costs are incurred.
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We share 50.0% of the net collaboration results in the U.S. with Supernus, which are recognized in collaboration profit sharing/(loss reimbursement) in our consolidated statements of income. For the years ended December 31, 2025, 2024 and 2023, we recognized net profit-sharing expense of approximately $71.0 million and $27.0 million, and net loss reimbursement of approximately $4.7 million, respectively, to reflect Supernus' 50.0% share of net collaboration results in the U.S.
A summary of development and sales and marketing expense related to the Supernus collaboration is as follows:
| For the Years Ended December 31, | ||||||||||||||||||||
| (In millions) | 2025 | 2024 | 2023 | |||||||||||||||||
| Total Supernus collaboration development expense | $ | 2.7 | $ | 34.2 | $ | 176.7 | ||||||||||||||
| Biogen's share of the Supernus collaboration development expense reflected in research and development expense in our consolidated statements of income | 1.3 | 17.1 | 88.3 | |||||||||||||||||
| Total sales and marketing expense incurred by the Supernus collaboration | 173.0 | 118.5 | 187.0 | |||||||||||||||||
| Biogen's share of the Supernus collaboration sales and marketing expense reflected in selling, general and administrative expense and collaboration profit sharing/(loss reimbursement) in our consolidated statements of income | 86.5 | 59.2 | 93.5 |
Denali Therapeutics Inc.
In August 2020 we entered into a collaboration and license agreement with Denali to co-develop and co-commercialize BIIB122, a small molecule inhibitor of LRRK2 for Parkinson's disease (LRRK2 Collaboration).
We may pay Denali development and commercial milestone payments that could total up to approximately $1.1 billion if the milestones related to the LRRK2 Collaboration are achieved.
Under the LRRK2 Collaboration, both companies share responsibility and costs for global development based on specified percentages as well as profits and losses for commercialization in the U.S. and China. Outside the U.S. and China we are responsible for commercialization and may pay Denali potential tiered royalties.
A summary of development expense related to the Denali collaboration is as follows:
| For the Years Ended December 31, | ||||||||||||||||||||
| (In millions) | 2025 | 2024 | 2023 | |||||||||||||||||
| Total Denali collaboration development expense | $ | 44.1 | $ | 53.1 | $ | 65.0 | ||||||||||||||
| Biogen's share of the Denali collaboration development expense reflected in research and development expense in our consolidated statements of income | 26.5 | 31.9 | 39.0 |
Stoke Therapeutics, Inc.
In February 2025 we entered into a collaboration and license agreement with Stoke to co-develop and commercialize zorevunersen, an investigational ASO that targets the SCN1A gene for the potential treatment of Dravet syndrome, a rare form of genetic epilepsy associated with refractory seizures and neurodevelopmental impairments. Zorevunersen dosed its first patient in August 2025, advancing zorevunersen to a global Phase 3 trial.
Under the terms of this agreement, Stoke will continue to lead global development and retain exclusive development and commercialization rights for zorevunersen in the U.S., Canada and Mexico and we will have exclusive rights to commercialize zorevunersen in the rest of the world. Both companies will share responsibility for external clinical development costs, where Stoke is responsible for 70.0% of these development costs and we are responsible for the remaining 30.0% of these development costs.
In connection with the closing of this transaction we made an upfront payment of $165.0 million to Stoke, which was recognized in acquired in-process research and development, upfront and milestone expense within our consolidated statements of income for the year ended December 31, 2025. We may also pay Stoke potential development and commercial milestone payments of up to $50.0 million and $335.0 million, respectively, if all the specified milestones set forth in this collaboration are achieved. In addition, we may pay Stoke tiered royalties on potential net sales of any products developed under this collaboration in the low-double digit to high-teen percentages.
We also have an exclusive option to license certain future follow-on ASO products targeting the SCN1A gene in all territories worldwide other than the U.S., Canada and Mexico, in exchange for separate milestone, cost sharing and royalty considerations.
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A summary of development expense related to the Stoke collaboration agreement is as follows:
| (In millions) | For the Year Ended December 31, 2025 | |||||||||||||||||||
| Total Stoke collaboration development expense | $ | 39.4 | ||||||||||||||||||
| Biogen's share of the Stoke collaboration development expense reflected in research and development expense in our consolidated statements of income | 11.8 |
Samsung Bioepis Co., Ltd.
Joint Venture Agreement
In February 2012 we entered into a joint venture agreement with Samsung BioLogics establishing an entity, Samsung Bioepis, to develop, manufacture and market biosimilar products.
In April 2022 we completed the sale of our 49.9% equity interest in Samsung Bioepis to Samsung BioLogics in exchange for total consideration of approximately $2.3 billion. Under the terms of this transaction, we received approximately $1.0 billion in cash at closing, with approximately $1.3 billion in cash to be deferred over two payments. The first deferred payment of $812.5 million was received in April 2023 and the second deferred payment of $437.5 million was received in April 2024.
For additional information on the sale of our equity interest in Samsung Bioepis, please read Note 3, Dispositions, to these consolidated financial statements.
2019 Development and Commercialization Agreement
In December 2019 we completed a transaction with Samsung Bioepis and secured the exclusive rights to commercialize two potential ophthalmology biosimilar products, BYOOVIZ, a ranibizumab biosimilar referencing LUCENTIS, and OPUVIZ, an aflibercept biosimilar referencing EYLEA, in major markets worldwide, including the U.S., Canada, Europe, Japan and Australia. The agreement established that Samsung Bioepis will be responsible for development and will supply both products to us at a pre-specified gross margin of approximately 45.0%.
In October 2024 we notified Samsung Bioepis of our decision to terminate our 2019 Development and Commercialization Agreement (the DCA Agreement) solely within the U.S. and Canada. As a result of this termination we recognized impairment charges of approximately $20.2 million, which were recorded within amortization and impairment of acquired intangible assets within our consolidated statements of income for the year ended December 31, 2024. The transfer of commercialization rights for BYOOVIZ and OPUVIZ in the U.S. and Canada back to Samsung Bioepis was completed as of December 31, 2025.
In October 2025 we completed the sale of our remaining commercial rights to two ophthalmology assets in Europe: BYOOVIZ, a ranibizumab biosimilar referencing LUCENTIS, and OPUVIZ, an aflibercept biosimilar referencing EYLEA. Samsung Bioepis will have full responsibility for commercialization of BYOOVIZ upon the transfer of commercial rights from Biogen back to Samsung Bioepis, which became effective as of January 2026. Under the terms of this transaction, we received a payment of $28.0 million in November 2025 and recognized a minimal gain on disposal within our consolidated statements of income for the year ended December 31, 2025.
We reflected revenue on sales of BYOOVIZ to third parties in product revenue, net in our consolidated statements of income and recorded the related cost of revenue and sales and marketing expense in our consolidated statements of income to their respective line items when these costs were incurred.
2013 Commercial Agreement
In December 2013 we entered into an agreement with Samsung Bioepis to commercialize, over a 10-year term, three anti-TNF biosimilar product candidates which includes IMRALDI, an adalimumab biosimilar referencing HUMIRA, FLIXABI, an infliximab biosimilar referencing REMICADE, and BENEPALI, an etanercept biosimilar referencing ENBREL, in Europe.
In July 2024 we exercised an option to extend this agreement by an additional five years and paid Samsung Bioepis an option exercise fee of $60.0 million, which was recorded within intangible assets, net within our consolidated balance sheets as of December 31, 2024.
We reflect revenue on sales of BENEPALI, IMRALDI and FLIXABI to third parties in product revenue, net in our consolidated statements of income and record the related cost of revenue and sales and marketing expense in our
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consolidated statements of income to their respective line items when these costs are incurred. Royalty payments to AbbVie on sales of IMRALDI are recognized in cost of sales within our consolidated statements of income.
We share 50.0% of the profit or loss related to our 2013 commercial agreement with Samsung Bioepis, which is recognized in collaboration profit sharing/(loss reimbursement) in our consolidated statements of income. For the years ended December 31, 2025, 2024 and 2023, we recognized net profit-sharing expense of approximately $219.2 million, $227.4 million and $223.5 million, respectively, to reflect Samsung Bioepis' 50.0% sharing of the net collaboration profits.
Other Services
Simultaneous with the formation of Samsung Bioepis, we also entered into a license agreement with Samsung Bioepis. Under this license agreement, we granted Samsung Bioepis an exclusive license to use, develop, manufacture and commercialize biosimilar products created by Samsung Bioepis using Biogen product-specific technology. In exchange, we receive single-digit royalties on biosimilar products developed and commercialized by Samsung Bioepis. Royalty revenue under the license agreement is recognized as a component of contract manufacturing, royalty and other revenue in our consolidated statements of income.
For the years ended December 31, 2025, 2024 and 2023, we recognized approximately $15.5 million, $14.4 million and $13.6 million, respectively, as a component of contract manufacturing, royalty and other revenue in our consolidated statements of income related to the license agreement.
Amounts receivable from Samsung Bioepis related to the agreements discussed above were approximately $4.4 million and $7.6 million as of December 31, 2025 and 2024, respectively. Amounts payable to Samsung Bioepis related to the agreements discussed above were approximately $42.7 million and $60.8 million as of December 31, 2025 and 2024, respectively.
Merz Therapeutics (previously Acorda Therapeutics, Inc.)
In June 2009 we entered into a collaboration and license agreement with Acorda to develop and commercialize products containing fampridine, such as FAMPYRA, in markets outside the U.S.
Under this agreement, we pay tiered royalties based on the level of ex-U.S. net sales and we may pay potential milestone payments based on the successful achievement of certain regulatory and commercial milestones.
In January 2024 we notified Acorda of our decision to terminate our collaboration and license agreement, effective January 1, 2025, whereby Acorda regained global commercialization rights to FAMPYRA. On April 1, 2024, Acorda filed for bankruptcy protection and announced its intention to sell substantially all of Acorda's assets to a third party. On July 10, 2024, Merz Therapeutics announced that its subsidiary Merz Pharmaceuticals LLC had completed the acquisition of FAMPYRA, and related assets from Acorda, and in 2025 we transitioned the global commercialization rights of FAMPYRA to Merz Therapeutics.
For the years ended December 31, 2024 and 2023, total cost of sales related to royalties and commercial supply of FAMPYRA reflected in our consolidated statements of income were approximately $52.4 million and $55.2 million, respectively.
Other Research and Discovery Arrangements and Funding Arrangements
These arrangements may include the potential for future milestone payments based on the achievement of certain clinical and commercial development payable over a period of several years.
Other
For the years ended December 31, 2025, 2024 and 2023, we recorded approximately $13.4 million, $54.0 million and $4.1 million, respectively, as research and development expense in our consolidated statements of income related to other research and discovery related arrangements.
Royalty Pharma Funding Arrangement
In February 2025 we entered into a funding agreement with Royalty Pharma under which we received $200.0 million in 2025 and will receive up to $50.0 million in 2026 to co-fund our development costs for the litifilimab program. As there is a substantive transfer of risk to the financial partner for the amount invested, the development funding will be recognized by us as an obligation to perform contractual services. This funding is being recognized as a reduction to research and development expense within our consolidated statements of income, proportionate to the related
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expense. For the year ended December 31, 2025, we recorded a reduction to research and development expense of $200.0 million within our consolidated statements of income.
If the litifilimab clinical trials are successful for the indications based on the applicable clinical trials, upon regulatory approval in the U.S. or certain major markets in the world, Royalty Pharma will be eligible to receive approval-based fixed milestone payments of up to $250.0 million. The milestone payments due upon approval will be recorded as a component of other (income) expense, net within our consolidated statements of income, when incurred.
If litifilimab receives regulatory approval, Royalty Pharma will be eligible to receive royalties of a mid-single digit percentage of the applicable net sales. Royalties on net sales will be recorded as cost of sales within our consolidated statements of income.
MorphoSys AG
As part of our acquisition of HI-Bio in July 2024, we acquired HI-Bio's pre-existing in-license commitments under third-party agreements with MorphoSys, which included tiered royalties on potential future sales ranging from high-single digit to mid-teen percentages, as well as potential development, regulatory and commercial milestone payments of up to $130.0 million, $230.0 million and $640.0 million, respectively. These amounts included milestone payments due upon the first patient dosed in a Phase 3 clinical trial of felzartamab in a first and second indication of $35.0 million and $30.0 million, respectively.
During 2025 we made milestone payments to MorphoSys of $35.0 million and $30.0 million upon the first patient dosed in a Phase 3 clinical trial of felzartamab for the treatment of AMR and IgAN, respectively, which were recognized in acquired in-process research and development, upfront and milestone expense within our consolidated statements of income for the year ended December 31, 2025.
City Therapeutics, Inc.
In May 2025 we entered into a strategic research arrangement with City Therapeutics to develop select novel RNAi therapies. Through this arrangement, City Therapeutics will leverage its next-generation RNAi engineering technologies to develop an RNAi trigger molecule (or molecules) combined with our proprietary drug delivery technology. The collaboration will initially focus on a single target that mediates key CNS diseases, utilizing tissue enhanced delivery technologies with the aim of allowing for systemic administration of medicines. We will be responsible for IND-enabling studies and global clinical development along with any regulatory submissions and all activities related to commercialization, including manufacturing.
In connection with the closing of this transaction we made an upfront payment of $16.0 million to City Therapeutics, which was recognized in acquired in-process research and development, upfront and milestone expense within our consolidated statements of income for the year ended December 31, 2025, and invested $30.0 million in exchange for a City Therapeutics convertible note, representing a minority equity interest in City Therapeutics, if converted. This convertible note was recorded as a component of investments and other assets within our consolidated balance sheets as of December 31, 2025.
We may also pay City Therapeutics potential research, development and sales-based milestone payments of up to $21.5 million, $360.0 million and $625.0 million, respectively, plus tiered royalties on potential future net sales, ranging from high-single digit to low-double digit percentages.
We also have the option to select one additional target in the collaboration, subject to an additional payment and availability of the target.
Dayra Therapeutics, Inc.
In October 2025 we entered into a research collaboration with Dayra to discover and develop oral macrocyclic peptides for priority targets in immunological conditions.
Under the terms of this agreement, both companies will collaborate to identify, validate and optimize oral macrocycle candidates for high-priority immunological targets, with our company advancing the molecules through further development and potential commercialization, including manufacturing.
In connection with the closing of this transaction we made an upfront payment of $50.0 million to Dayra, which was recognized in acquired in-process research and development, upfront and milestone expense within our consolidated statements of income for the year ended December 31, 2025.
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This agreement also provides us with the option to acquire the development candidates from Dayra, subject to additional payments per program. Dayra will also be eligible to receive potential preclinical and clinical development milestone payments per program.
Vanqua Bio, Inc.
In October 2025 we entered into a license agreement with Vanqua granting us exclusive worldwide rights to further develop, manufacture and commercialize Vanqua's preclinical oral C5aR1 antagonist compound.
In connection with the closing of this transaction we made an upfront payment of $70.0 million to Vanqua, which was recognized in acquired in-process research and development, upfront and milestone expense within our consolidated statements of income for the year ended December 31, 2025.
We may pay Vanqua potential development, regulatory or commercial, and sales milestone payments of up to $135.0 million, $295.0 million and $560.0 million, respectively, if all the specified milestones set forth in this collaboration are achieved. In addition, we may pay Vanqua tiered royalties on potential net sales of any licensed product under this collaboration in the mid-single digit to low-double digit percentages.
| Note 20: | Investments in Variable Interest Entities |
Consolidated Variable Interest Entities
Our consolidated financial statements include the financial results of variable interest entities in which we are the primary beneficiary. The following are our significant variable interest entities.
Neurimmune SubOne AG
Beginning in 2007 we consolidated the results of Neurimmune as we determined we were the primary beneficiary because we had the power through the collaboration to direct the activities that most significantly impacted the entity's economic performance and we were required to fund 100.0% of the research and development costs incurred in support of the collaboration. The collaboration and license agreement with Neurimmune was for the development and commercialization of antibodies for the potential treatment of Alzheimer's disease, including ADUHELM (as amended, the Neurimmune Agreement).
In November 2023 we notified Neurimmune of our decision to terminate the Neurimmune Agreement. Subsequent to the termination, we reconsidered our relationship with Neurimmune and determined that we were no longer the primary beneficiary of the variable interest entity. As a result, we recorded a net gain on the deconsolidation of Neurimmune of approximately $3.0 million, which was recorded in other (income) expense, net within our consolidated statements of income for the year ended December 31, 2023.
Research and development costs for which we reimbursed Neurimmune were reflected in research and development expense in our consolidated statements of income. For the year ended December 31, 2023, amounts reimbursed were immaterial.
Unconsolidated Variable Interest Entities
We have relationships with various variable interest entities that we do not consolidate as we lack the power to direct the activities that significantly impact the economic success of these entities. These relationships include investments in certain biotechnology companies and research collaboration agreements.
As of December 31, 2025 and 2024, the carrying value of our investments in certain biotechnology companies representing potential unconsolidated variable interest entities totaled $49.8 million and $23.6 million, respectively. The increase was primarily due to convertible note investments entered into during 2025, including a $30.0 million convertible note invested in City Therapeutics as part of our strategic research arrangement and a $5.0 million convertible note invested in Neela Therapeutics, Inc. For additional information on our arrangement with City Therapeutics, please read Note 19, Collaborative and Other Relationships, to these consolidated financial statements. Our maximum exposure to loss related to these variable interest entities is limited to the carrying value of our investments.
We have also entered into research collaboration agreements with certain variable interest entities where we are required to fund certain development activities. These development activities are included in research and
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development expense in our consolidated statements of income as they are incurred. We have provided no financing to these variable interest entities other than previous contractually required amounts.
| Note 21: | Litigation |
We are currently involved in various claims, investigations and legal proceedings, including the matters described below. For information as to our accounting policies relating to claims and legal proceedings, including use of estimates and contingencies, please read Note 1, Summary of Significant Accounting Policies, to these consolidated financial statements.
With respect to some loss contingencies, an estimate of the possible loss or range of loss cannot be made until management has further information, including, for example, (i) which claims, if any, will survive dispositive motion practice; (ii) information to be obtained through discovery; (iii) information as to the parties' damages claims and supporting evidence; (iv) the parties’ legal theories; and (v) the parties' settlement positions. If an estimate of the possible loss or range of loss can be made at this time, it is included in the potential loss contingency description below.
The claims and legal proceedings in which we are involved also include challenges to the scope, validity or enforceability of the patents relating to our products, pipeline or processes and challenges to the scope, validity or enforceability of the patents held by others. These include claims by third parties that we infringe their patents. An adverse outcome in any of these proceedings could result in one or more of the following and have a material impact on our business or consolidated results of operations and financial position: (i) loss of patent protection; (ii) inability to continue to engage in certain activities; and (iii) payment of significant damages, royalties, penalties and/or license fees to third parties.
Loss Contingencies
Securities Litigation
We and certain current and former officers are defendants in three securities actions pending in the District Court, one filed by Nadia Shash and Amjad Khan in November 2020, which relates to statements about ADUHELM, one filed by the Oklahoma Firefighters Pension and Retirement System in February 2022, which relates to statements about ADUHELM, and one filed by Thomas Allen Gray in June 2024, which relates to statements about LEQEMBI, TECFIDERA and VUMERITY. All allege violations of federal securities laws under 15 U.S.C. §78j(b) and §78t(a) and 17 C.F.R. §240.10b-5 and seek declarations of the actions as class actions and monetary relief.
Derivative Actions
We and members of the Board of Directors are named as defendants in five derivative actions pending in the District Court, one filed by The Booth Family Trust (Booth) in February 2022, one filed by Elaine Wang (Wang) in July 2022, one filed by Jonathan Blaufarb (Blaufarb I) in July 2024, one filed by Lawrence Hollin (Hollin) in October 2024 and one filed by Jonathan Blaufarb (Blaufarb II) in October 2024. The Booth, Wang and Blaufarb II actions relate to ADUHELM and other matters, and the Blaufarb I and Hollin actions relate to statements about LEQEMBI, our compliance controls, 2023 earnings guidance and other matters. The actions allege breach of fiduciary duty, waste of corporate assets and other common law claims, and violations of the Securities Exchange Act of 1934, 15 U.S.C. §78a et seq. The actions seek declaratory and injunctive relief, monetary relief payable to Biogen, and attorneys’ fees and costs payable to the plaintiffs. All derivative actions are stayed.
IMRALDI Patent Litigation
IMRALDI is an adalimumab biosimilar manufactured by Samsung Bioepis that Biogen commercializes in Europe.
In June 2022, Fresenius Kabi filed a claim for damages and injunctive relief against Biogen France SAS in the Tribunal de Grande Instance de Paris alleging infringement of the French counterpart of EP ‘3 145 488 Patent (the EP '488 Patent) by a formulation of IMRALDI no longer commercialized in France. Fresenius Kabi alleges damages of €13,450,000 plus interest and costs. Biogen disputes infringement and the validity of the patent. Trial is set for June 2026.
In May 2025 the Higher Regional Court of Düsseldorf, Germany held that a formulation of IMRALDI we no longer commercialize in Germany infringed the German counterpart of the EP '488 Patent, enjoined infringement and declared Fresenius Kabi's right to seek damages. Biogen has requested review of the decision by Germany's Federal Court of Justice and has challenged the validity of the patent in a separate proceeding.
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Litigation with Former Convergence Shareholders
In 2015 Biogen acquired Convergence, a U.K. company. In 2019 Shareholder Representative Services LLC, on behalf of former shareholders of Convergence, asserted claims of $200.0 million for alleged breaches of the contract pursuant to which we acquired Convergence and in June 2023 it and former Convergence shareholders filed a suit against us in the High Court of Justice of England and Wales asserting one of the 2019 claims and seeking payment of $49.9 million, plus interest and costs. The parties have reached an agreement in principle to resolve all claims relating to Biogen's acquisition of Convergence.
Humana Patient Assistance Litigation
In February 2025 Humana filed suit against Biogen Inc., Biogen U.S. Corp. and Advanced Care Scripts, Inc. in Jefferson Circuit Court in Kentucky alleging damages related to providing MS patients with free medications and to charitable contributions to non-profit organizations that provide financial assistance to MS patients. Humana alleges breach of contract, fraud and other claims under various state laws and seeks damages, attorneys' fees and costs.
Genentech Litigation
In February 2023 Genentech Inc. filed suit in the U.S. District Court for the Northern District of California claiming that it was owed royalties on sales of TYSABRI that occurred after the expiration of a patent licensed by Genentech to Biogen. In November 2025 the court entered judgment against us for approximately $124.3 million. We appealed and the appeal is pending.
Lender Litigation
In April 2025, by agreement of the parties, the Supreme Court of the State of New York discontinued with prejudice the suit filed in 2024 by BioPharma Credit PLC, BPCR Limited Partnership, and BioPharma Credit Investments V (Master) LP against us and Reata Pharmaceuticals, Inc. alleging breach of a loan agreement.
Antitrust Litigation
In October 2025 Local No. 1 Health Fund, the Mayor and City Council of Baltimore, Teamsters Local 237 Welfare Fund, Teamsters Local 237 Retirees' Benefit Fund, UFCW Local 1500 Welfare Fund, and Jacksonville Police Officers and Fire Fighters Health Insurance Trust filed an amended complaint against us in now consolidated proceedings in the U.S. District Court for the Northern District of Illinois (the Illinois federal court). The first complaint was filed in August 2024. The plaintiffs allege violations of federal antitrust laws including 15 U.S.C. §§ 1, 2 and 13(c), the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. §1962(c) and of various state laws, based on allegations about our contracts with pharmacy benefit managers related to TECFIDERA and VUMERITY and other allegations. Plaintiffs seek declarations of the actions as class actions, monetary, declaratory and equitable relief, and attorneys' fees and costs.
In addition, in September 2025 Walgreen Co. and The Kroger Co. sued us in the Illinois federal court, alleging violations of 15 U.S.C. §§ 1 and 2 based on allegations about our contracts with pharmacy benefit managers related to TECFIDERA and VUMERITY and other allegations. They seek monetary, declaratory and equitable relief, and attorneys' fees and costs.
Neurimmune Litigation
In May 2025 we sued Neurimmune Holding AG and Neurimmune Subone AG (collectively, "Neurimmune") in the District Court seeking declaratory judgment and permanent injunctive relief regarding our rights under a terminated collaboration agreement related to aducanumab. In September 2025 Neurimmune counterclaimed for declaratory judgment, breach of contract and unfair competition under Massachusetts G.L. 93A and seeking monetary, declaratory and equitable relief and attorneys' fees and costs.
TECFIDERA E.U. Litigation
In November 2023 we sued Neuraxpharm Pharmaceuticals S.L. and Neuraxpharm Netherlands B.V. (collectively, Neuraxpharm), Zaklady Farmaceutyzne Polpharma S.A. (Polpharma), Sandoz B.V. (Sandoz), Mylan Ireland Ltd. and Mylan B.V. in the District Court of Amsterdam Netherlands for damages for sales of generic versions of TECFIDERA in violation of our regulatory marketing protection. Neuraxpharm, Polpharma and Sandoz counterclaimed for damages based on our actions to enforce TECFIDERA's regulatory marketing protection.
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In June 2024 we sued Sandoz A/S in the Danish Maritime and Commercial High Court for damages for sales of its generic version of TECFIDERA in violation of our regulatory marketing protection. Sandoz A/S counterclaimed for damages based on our actions to enforce TECFIDERA's regulatory marketing protection. These cases are stayed.
In September 2025 the European General Court annulled the May 2023 European Commission decision granting TECFIDERA an additional year of regulatory marketing protection extending until February 2025. We and the European Commission appealed and the appeal is pending.
Germany Tax Matter
In December 2025 and January 2026 a German tax authority issued assessments against us of approximately $246.5 million including interest, which continues to accrue. We are challenging the assessments.
Other Matters
Government Investigations
In April 2025 the SEC Division of Enforcement informed us that it has closed the matter in which we had received subpoenas seeking information relating to ADUHELM and its launch and our equity plans, and in April and May 2025 the DOJ and SEC informed us that they closed the matters in which we had received subpoenas seeking information relating to our business operations in several foreign countries.
In May 2024 the Italian Competition Authority informed us that it is investigating Biogen and other companies in relation to our biosimilar product BYOOVIZ.
In September 2025 we received a Civil Investigative Demand from the Louisiana Department of Justice for information regarding our policies relating to the purchase of drugs by healthcare organizations that are covered entities under Section 340B of the Public Health Service Act.
In January 2026 we received a request for information regarding TECFIDERA from the European Commission Directorate-General for Competition.
TYSABRI Biosimilar Patent Matter
In September 2022 we filed an action in the U.S. District Court for the District of Delaware against Sandoz Inc., other Sandoz entities and Polpharma Biologics S.A. under the Biologics Price Competition and Innovation Act, 42 U.S.C. §262, seeking a declaratory judgment of patent infringement. Trial against Sandoz Inc. is scheduled for April 2027.
Hatch-Waxman Act Litigation relating to VUMERITY Orange-Book Listed Patents
In July 2023 Biogen and Alkermes Pharma Ireland Limited filed patent infringement proceedings relating to VUMERITY Orange-Book listed patents (U.S. Patent Nos. 8,669,281, 9,090,558 and 10,080,733) pursuant to the Drug Price Competition and Patent Term Restoration Act of 1984 (the Hatch-Waxman Act) in the U.S. District Court for the District of Delaware against Zydus Worldwide DMCC, Zydus Pharmaceuticals (USA) Inc. and Zydus Lifesciences Limited. In July 2025 the parties reached a settlement and the court dismissed the case pursuant to the parties' stipulation of dismissal.
Eisai Matter
In June 2025 we filed a request for arbitration in the International Court of Arbitration of the International Chamber of Commerce seeking adoption of a budget and commercialization plan for the European Territory that allocates commercialization activities to Biogen and Eisai in an equitable fashion taking into account our respective capabilities and provides a meaningful role for each party.
Product Liability and Other Legal Proceedings
We are also involved in product liability claims and other legal proceedings incidental to our normal business activities. While the outcome of any of these proceedings cannot be accurately predicted, we do not believe the ultimate resolution of any of these existing matters would have a material adverse effect on our business or financial condition.
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| Note 22: | Commitments and Contingencies |
Royalty Payments
TYSABRI
We are obligated to make contingent payments of 18.0% on annual worldwide net sales of TYSABRI up to $2.0 billion and 25.0% on annual worldwide net sales of TYSABRI that exceed $2.0 billion. Royalty payments are recognized as cost of sales in our consolidated statements of income.
SPINRAZA
We make royalty payments to Ionis on annual worldwide net sales of SPINRAZA using a tiered royalty rate between 11.0% and 15.0%, which are recognized in cost of sales within our consolidated statements of income.
For additional information on our collaboration arrangements with Ionis, please read Note 19, Collaborative and Other Relationships, to these consolidated financial statements.
QALSODY
We make royalty payments to Ionis on annual worldwide net sales of QALSODY using a tiered royalty rate between 11.0% and 15.0%, which are recognized in cost of sales within our consolidated statements of income.
For additional information on our collaboration arrangements with Ionis, please read Note 19, Collaborative and Other Relationships, to these consolidated financial statements.
VUMERITY
We make royalty payments to Alkermes on worldwide net sales of VUMERITY using a royalty rate of 15.0% on product that Alkermes has manufactured and 16.0% on product manufactured by us or a third-party designee, which are recognized as cost of sales in our consolidated statements of income.
SKYCLARYS
In connection with our acquisition of Reata in September 2023 we assumed additional contractual obligations related to royalty payments. Reata entered into agreements to pay royalties on annual worldwide net sales of SKYCLARYS, which will cumulatively range in the low to mid-single digit percentages. Royalty payments are recognized as cost of sales in our consolidated statements of income.
For additional information on our acquisition of Reata, please read Note 2, Acquisitions, to these consolidated financial statements.
Lease Commitments
In March 2025 we entered into a lease agreement with MIT Investment Management Company and BioMed Realty for the lease of approximately 580,000 square feet of office and research and development space located at 75 Broadway, Cambridge, Massachusetts, which will be used as our new global corporate headquarters, as well as integrating our research and development and technical operations teams alongside our North American commercial organization.
For additional information on our leases, please read Note 12, Leases, to these consolidated financial statements.
Contingent Consideration related to Business Combinations
In connection with our acquisition of HI-Bio in July 2024 we may make additional payments based upon the achievement of certain milestone events. We recognized the contingent consideration obligations associated with this acquisition at its fair value on the acquisition date and we revalue this obligation each reporting period. We may pay up to a total of $650.0 million in contingent development and regulatory milestone payments. The acquisition-date fair value of these milestones was approximately $485.1 million.
During the second quarter of 2025 the first milestone related to the fourth patient dosed in a Phase 3 clinical trial of felzartamab for AMR was achieved, resulting in a $150.0 million milestone payment made to the former shareholders of HI-Bio, which was paid during the third quarter of 2025. In October 2025 the second milestone related to the fourth patient dosed in a Phase 3 clinical trial of felzartamab for IgAN was achieved, resulting in a
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
$150.0 million milestone payment made to the former shareholders of HI-Bio, which was paid during the fourth quarter of 2025.
For additional information on our acquisition of HI-Bio, please read Note 2, Acquisitions, to these consolidated financial statements.
Contingent Development, Regulatory and Commercial Milestone Payments
Based on our development plans as of December 31, 2025, we could make potential future milestone payments to third parties of up to approximately $5.3 billion, including approximately $0.7 billion in development milestones, approximately $0.8 billion in regulatory milestones and approximately $3.8 billion in commercial milestones, as part of our various collaborations, including licensing and development programs. Payments under these agreements generally become due and payable upon achievement of certain development, regulatory or commercial milestones. Because the achievement of these milestones was not considered probable as of December 31, 2025, such contingencies have not been recorded in our financial statements. Amounts related to contingent milestone payments are not considered contractual obligations as they are contingent on the successful achievement of certain development, regulatory or commercial milestones.
If certain research milestones are met, we may pay up to approximately $67.5 million in additional milestones in 2026 under our current agreements, excluding opt-in payments. This amount includes a $45.0 million milestone payment due upon the initiation of a Phase 3 trial of salanersen.
Other Funding Commitments
As of December 31, 2025, we have several ongoing clinical studies in various clinical trial stages. Our most significant clinical trial expenditures are to CROs. The contracts with CROs are generally cancellable, with notice, at our option. We recorded accrued expense of approximately $39.3 million in our consolidated balance sheets for expenditures incurred by CROs as of December 31, 2025. We have approximately $524.9 million in cancellable future commitments based on existing CRO contracts as of December 31, 2025.
Tax Related Obligations
We exclude liabilities pertaining to uncertain tax positions from our summary of contractual obligations as we cannot make a reliable estimate of the period of cash settlement with the respective taxing authorities. As of December 31, 2025, we have approximately $166.8 million of liabilities associated with uncertain tax positions.
As of December 31, 2024, we accrued income tax liabilities of approximately $234.0 million under the Transition Toll Tax, which was subsequently paid in full in April 2025. For additional information on the Transition Toll Tax, please read Note 17, Income Taxes, to these consolidated financial statements.
| Note 23: | Guarantees |
As of December 31, 2025 and 2024, we did not have significant liabilities recorded for guarantees.
We enter into indemnification provisions under our agreements with other companies in the ordinary course of business, typically with business partners, contractors, clinical sites and customers. Under these provisions, we generally indemnify and hold harmless the indemnified party for losses suffered or incurred by the indemnified party as a result of our activities. These indemnification provisions generally survive termination of the underlying agreement. The maximum potential amount of future payments we could be required to make under these indemnification provisions is unlimited. However, to date we have not incurred material costs to defend lawsuits or settle claims related to these indemnification provisions. As a result, the estimated fair value of these agreements is minimal. Accordingly, we have no liabilities recorded for these agreements as of December 31, 2025 and 2024.
| Note 24: | Employee Benefit Plans |
We sponsor various retirement and pension plans. Our estimates of liabilities and expense for these plans incorporate a number of assumptions, including expected rates of return on plan assets and interest rates used to discount future benefits.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
401(k) Savings Plan
We maintain a 401(k) Savings Plan, which is available to substantially all regular employees in the U.S. over the age of 21. Participants may make voluntary contributions. We make matching contributions according to the 401(k) Savings Plan’s matching formula. All matching contributions and participant contributions vest immediately. The 401(k) Savings Plan also holds certain transition contributions on behalf of participants who previously participated in the Biogen, Inc. Retirement Plan. The expense related to our 401(k) Savings Plan primarily consists of our matching contributions.
Expense related to our 401(k) Savings Plan totaled approximately $52.6 million, $51.5 million and $55.9 million for the years ended December 31, 2025, 2024 and 2023, respectively.
Deferred Compensation Plan
We maintain a non-qualified deferred compensation plan, known as the SSP, which allows a select group of management employees in the U.S. to defer a portion of their compensation. The SSP also provides certain credits to highly compensated U.S. employees that are paid by the company. These credits are known as the Restoration Match. The deferred compensation amounts are accrued when earned. Such deferred compensation is distributable in cash in accordance with the rules of the SSP. Deferred compensation amounts under such plan as of December 31, 2025 and 2024, totaled approximately $152.8 million and $140.6 million, respectively, and are included in other long-term liabilities in our consolidated balance sheets. The SSP also holds certain transition contributions on behalf of participants who previously participated in the Biogen, Inc. Retirement Plan. The Restoration Match and participant contributions vest immediately. Distributions to participants can be either in one lump sum payment or annual installments as elected by the participants.
Pension Plans
Our retiree benefit plans include defined benefit plans for employees in our affiliates in Switzerland and Germany as well as other insignificant defined benefit plans in certain other countries where we maintain an operating presence.
Our Swiss plan is a government-mandated retirement fund that provides employees with a minimum investment return. The minimum investment return is determined annually by the Swiss government and was 1.75% in 2025, 1.00% in 2024 and 1.75% in 2023. Under the Swiss plan, both we and certain of our employees with annual earnings in excess of government determined amounts are required to make contributions into a fund managed by an independent investment fiduciary. Employer contributions must be in an amount at least equal to the employee’s contribution. Minimum employee contributions are based on the respective employee’s age, salary and gender. As of December 31, 2025 and 2024, the Swiss plan had an unfunded net pension obligation of $72.9 million and $61.5 million, respectively, and plan assets that totaled $285.3 million and $224.7 million, respectively. In 2025, 2024 and 2023 we recognized net expense totaling $16.8 million, $17.5 million and $17.6 million, respectively, related to our Swiss plan, of which $7.5 million, $6.0 million and $5.1 million, respectively, was included in other (income) expense, net in our consolidated statements of income.
The obligations under the German plans are unfunded and totaled $45.8 million and $45.6 million as of December 31, 2025 and 2024, respectively. Net periodic pension cost related to the German plans totaled $3.9 million, $3.8 million and $3.6 million for the years ended December 31, 2025, 2024 and 2023, respectively, of which $1.2 million, $1.1 million and $0.8 million, respectively, was included in other (income) expense, net in our consolidated statements of income.
| Note 25: | Segment Information |
We operate and are managed as one operating segment, and derive revenue from activities related to the discovery, development and delivery of innovative therapies for people living with serious and complex diseases.
Our research and development organization is responsible for the research and discovery of new product candidates and supports development and registration efforts for potential future products. Our pharmaceutical, operations and technology organization manages the development of the manufacturing processes, clinical trial supply, commercial product supply, distribution, buildings and facilities. Our commercial organization is responsible for U.S. and international development of our commercial products. We are also supported by corporate staff functions.
Our CEO, as the CODM, manages and allocates resources to the operations of our company on a total company basis by assessing the overall level of resources available and deciding how to best deploy these resources across
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
functions, therapeutic areas and research and development projects that are in line with our long-term company-wide strategic goals. In making these decisions, our CEO is provided with and uses consolidated financial information for purposes of evaluating performance, forecasting future period financial results, allocating resources and setting incentive targets. The CODM performs this assessment based on the segment’s net income. Through this analysis, which includes a comparison to budgeted results, the CODM assesses performance and how to allocate resources across the functions discussed above. The measure of segment assets used in determining how to manage and allocate resources is reported within our consolidated balance sheets as total assets.
The tables presented below, which were prepared in accordance with the accounting policies discussed in Note 1, Summary of Significant Accounting Policies, contain additional information on enterprise-wide disclosures about product revenue, other revenue and long-lived assets, as well as our segment’s revenue and profits, including significant segment expense and other segment items. Revenue is primarily attributed to individual countries based on location of the customer or licensee.
Geographic Information
The following tables contain certain financial information by geographic area:
| December 31, 2025 | ||||||||||||||||||||||||||||||||||||||
| (In millions) | U.S. | Europe**(1)** | Germany | Asia | Other | Total | ||||||||||||||||||||||||||||||||
| Product revenue from external customers | $ | 3,547.9 | $ | 1,871.6 | $ | 853.0 | $ | 419.1 | $ | 427.8 | $ | 7,119.4 | ||||||||||||||||||||||||||
| Revenue from anti-CD20 therapeutic programs | 1,775.4 | 1.8 | — | — | 83.4 | 1,860.6 | ||||||||||||||||||||||||||||||||
| Contract manufacturing, royalty and other revenue | 414.7 | 10.8 | — | 307.4 | — | 732.9 | ||||||||||||||||||||||||||||||||
| Long-lived assets | 1,236.7 | 2,053.8 | 12.2 | 5.9 | 12.2 | 3,320.8 | ||||||||||||||||||||||||||||||||
| December 31, 2024 | ||||||||||||||||||||||||||||||||||||||
| (In millions) | U.S. | Europe**(1)** | Germany | Asia | Other | Total | ||||||||||||||||||||||||||||||||
| Product revenue from external customers | $ | 3,237.3 | $ | 2,171.5 | $ | 955.6 | $ | 366.9 | $ | 482.2 | $ | 7,213.5 | ||||||||||||||||||||||||||
| Revenue from anti-CD20 therapeutic programs | 1,673.6 | 0.6 | — | — | 75.7 | 1,749.9 | ||||||||||||||||||||||||||||||||
| Contract manufacturing, royalty and other revenue | 395.0 | 0.4 | — | 257.2 | — | 652.6 | ||||||||||||||||||||||||||||||||
| Long-lived assets | 1,366.1 | 2,139.2 | 13.3 | 8.5 | 10.6 | 3,537.7 | ||||||||||||||||||||||||||||||||
| December 31, 2023 | ||||||||||||||||||||||||||||||||||||||
| (In millions) | U.S. | Europe**(1)** | Germany | Asia | Other | Total | ||||||||||||||||||||||||||||||||
| Product revenue from external customers | $ | 3,141.4 | $ | 2,127.4 | $ | 868.0 | $ | 649.4 | $ | 460.5 | $ | 7,246.7 | ||||||||||||||||||||||||||
| Revenue from anti-CD20 therapeutic programs | 1,618.5 | 0.4 | — | — | 70.7 | 1,689.6 | ||||||||||||||||||||||||||||||||
| Contract manufacturing, royalty and other revenue | 673.6 | 11.7 | — | 214.0 | — | 899.3 | ||||||||||||||||||||||||||||||||
| Long-lived assets | 1,443.0 | 2,248.0 | 17.5 | 8.3 | 12.9 | 3,729.7 |
(1) Represents amounts related to Europe less those attributable to Germany.
Long-Lived Assets
As of December 31, 2025, 2024 and 2023, approximately $2.0 billion, $2.1 billion and $2.2 billion, respectively, of our long-lived assets were related to the construction of our large-scale biologics manufacturing facility in Solothurn, Switzerland.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Additional Segment Information
The following table includes additional information about reported segment revenue, significant segment expense and segment measure of profitability:
| For the Years Ended December 31, | ||||||||||||||||||||
| (In millions) | 2025 | 2024 | 2023 | |||||||||||||||||
| Total revenue | $ | 9,890.6 | $ | 9,675.9 | $ | 9,835.6 | ||||||||||||||
| Less cost and expense: | ||||||||||||||||||||
| Cost of sales, excluding amortization and impairment of acquired intangible assets: | ||||||||||||||||||||
| Product cost of sales | 1,587.2 | 1,604.2 | 1,787.2 | |||||||||||||||||
| Royalty cost of sales | 817.0 | 706.2 | 746.2 | |||||||||||||||||
| Research and development: | ||||||||||||||||||||
| Research and discovery | 183.2 | 201.5 | 212.5 | |||||||||||||||||
| Early stage programs | 257.7 | 286.6 | 361.0 | |||||||||||||||||
| Late stage programs | 232.0 | 209.7 | 250.5 | |||||||||||||||||
| Marketed products | 412.8 | 534.7 | 766.1 | |||||||||||||||||
| Other research and development costs(1) | 692.9 | 747.8 | 855.3 | |||||||||||||||||
| Acquired in-process research and development, upfront and milestone expense | 471.8 | 61.5 | 16.6 | |||||||||||||||||
| Selling, general and administrative | 2,433.6 | 2,403.7 | 2,549.7 | |||||||||||||||||
| Other segment expense(2) | 1,509.5 | 1,287.8 | 1,129.4 | |||||||||||||||||
| Net Income attributable to Biogen Inc. | $ | 1,292.9 | $ | 1,632.2 | $ | 1,161.1 |
(1) Other research and development costs primarily consist of indirect costs incurred in support of overall research and development activities and non-specific programs, including activities that benefit multiple programs, such as management costs, as well as depreciation, information technology and facility-based expenses and are not allocated to a specific program or stage.
(2) Other segment expense includes: amortization and impairment of acquired intangible assets; collaboration profit sharing/(loss reimbursement); (gain) loss on fair value remeasurement of contingent consideration; impairment of ROU asset; restructuring charges; gain on sale of priority review voucher, net; other (income) expense, net; income tax (benefit) expense; and net income attributable to noncontrolling interests, net of tax.
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Report of Independent Registered Public Accounting Firm
To the Board of Directors and Shareholders of Biogen Inc.
Opinions on the Financial Statements and Internal Control over Financial Reporting
We have audited the accompanying consolidated balance sheets of Biogen Inc. and its subsidiaries (the “Company”) as of December 31, 2025 and 2024, and the related consolidated statements of income, of comprehensive income, of equity and of cash flow for each of the three years in the period ended December 31, 2025, including the related notes (collectively referred to as the “consolidated financial statements”). We also have audited the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.
Basis for Opinions
The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Annual Report on Internal Control over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.
Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
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Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Critical Audit Matters
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Reserves for Medicaid and Managed Care Rebates in the U.S.
As described in Notes 1 and 5 to the consolidated financial statements, the Company recognized revenue from product sales, net of reserves, including contractual adjustments related to Medicaid and managed care rebates in the U.S. Within accrued expense and other, revenue-related reserves amounted to $1,000.4 million as of December 31, 2025. A portion of this balance includes contractual adjustments for Medicaid and managed care rebates in the U.S. Medicaid rebates relate to the Company’s estimated obligations to states under established reimbursement arrangements. The Company’s liability for Medicaid rebates consists of estimates for claims that a state will make for the current quarter, claims for prior quarters that have been estimated for which an invoice has not been received, invoices received for claims from the prior quarters that have not been paid and an estimate of potential claims that will be made for inventory that exists in the distribution channel at period end. Managed care rebates in the U.S. represent the Company’s estimated obligations to third-parties, primarily pharmacy benefit managers. These rebates result from performance-based goals, formulary position and price increase limit allowances (price protection). The calculation of the accrual for these rebates is based on an estimate of the coverage patterns and the resulting applicable contractual rebate rate(s) to be earned over a contractual period. Rebate accruals for Medicaid and managed care in the U.S. are recorded in the same period the related revenue is recognized, resulting in a reduction of product revenue and the establishment of a liability which is included in accrued expense and other current liabilities. The estimates of the reserves for Medicaid and managed care in the U.S. reflect historical experience, current contractual and statutory requirements, specific known market events and trends, industry data and forecasted customer buying and payment patterns.
The principal considerations for our determination that performing procedures relating to reserves for Medicaid and managed care rebates in the U.S. is a critical audit matter are (i) the significant judgment by management due to the significant measurement uncertainty when developing the estimate of the reserves and (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management's significant assumptions related to historical experience, current contractual requirements, specific known market events, and forecasted customer buying and payment patterns.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to management's estimate of the reserves for Medicaid and managed care rebates in the U.S. These procedures also included, among others (i) developing an independent estimate of the reserves for Medicaid and managed care rebates in the U.S. by utilizing third-party data related to product demand, data related to price changes, the terms of the specific rebate programs, the historical trend of actual rebate claims paid and consideration of contractual requirement changes and market events; (ii) comparing the independent estimate to management’s estimate to evaluate the reasonableness of management's estimate; and (iii) testing, on a sample basis, rebate claims paid by the Company, including evaluating the claims for consistency with the contractual terms of the Company’s rebate agreements.
/s/PricewaterhouseCoopers LLP
Boston, Massachusetts
February 6, 2026
We have served as the Company's auditor since 2003.
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