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Cover and table of contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2024


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 0-19311

BIOGEN INC.

(Exact name of registrant as specified in its charter)


Delaware						33-0112644
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

225 Binney Street, Cambridge, MA 02142

(617) 679-2000

(Address, including zip code, and telephone number, including

area code, of registrant’s principal executive offices)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class						Trading Symbol(s)						Name of each exchange on which registered
Common Stock, $0.0005 par value						BIIB						The Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days: Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files): Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act:


Large accelerated filer	x	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No x

The number of shares of the issuer’s Common Stock, $0.0005 par value, outstanding as of October 29, 2024, was 145,719,340 shares.

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BIOGEN INC.

FORM 10-Q — Quarterly Report

For the Quarterly Period Ended September 30, 2024

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		Page
PART I — FINANCIAL INFORMATION

Item 1.	Financial Statements (unaudited)

	Condensed Consolidated Statements of Income — For the Three and Nine Months Ended September 30, 2024 and 2023	8

	Condensed Consolidated Statements of Comprehensive Income — For the Three and Nine Months Ended September 30, 2024 and 2023	9

	Condensed Consolidated Balance Sheets — As of September 30, 2024 and December 31, 2023	10

	Condensed Consolidated Statements of Cash Flow — For the Nine Months Ended September 30, 2024 and 2023	11

	Condensed Consolidated Statements of Equity — For the Three and Nine Months Ended September 30, 2024 and 2023	12

	Notes to Condensed Consolidated Financial Statements	14

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	52

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	80

Item 4.	Controls and Procedures	82

PART II — OTHER INFORMATION

Item 1.	Legal Proceedings	83

Item 1A.	Risk Factors	83

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	98

Item 5.	Other Information	98

Item 6.	Exhibits	99

Signatures		100

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NOTE REGARDING FORWARD-LOOKING STATEMENTS

This report contains forward-looking statements that are being made pursuant to the provisions of the Private Securities Litigation Reform Act of 1995 (the PSLRA) with the intention of obtaining the benefits of the “Safe Harbor” provisions of the PSLRA. These forward-looking statements may be accompanied by such words as “aim,” “anticipate,” “believe,” “could,” "contemplate," "continue," “estimate,” “expect,” “forecast,” "goal," “intend,” “may,” “plan,” “potential,” “possible,” "predict," "project", "should," "target," “will,” “would” or the negative of these words or other words and terms of similar meaning. Reference is made in particular to forward-looking statements regarding:

the anticipated amount, timing and accounting of revenue; contingent, milestone, royalty and other payments under licensing, collaboration, acquisition or divestiture agreements; tax positions and contingencies; collectability of receivables; pre-approval inventory; cost of sales; research and development costs; compensation and other selling, general and administrative expense; amortization of intangible assets; foreign currency exchange risk; estimated fair value of assets and liabilities; and impairment assessments;
expectations, plans and prospects relating to product approvals, sales, pricing, growth, reimbursement and launch of our marketed and pipeline products;
the potential impact of increased product competition in the markets in which we compete, including increased competition from new originator therapies, generics, prodrugs and biosimilars of existing products and products approved under abbreviated regulatory pathways, including generic or biosimilar versions of our marketed products or competing products;
patent terms, patent term extensions, patent office actions and expected availability and periods of regulatory exclusivity;
our plans and investments in our portfolio as well as implementation of our corporate strategy;
the execution of our strategic and growth initiatives, including the ultimate success of our acquisitions of Reata and HI-Bio and our ability to realize the anticipated benefits from the acquisitions, including future performance of the SKYCLARYS product and further development of the felzartamab product and anticipated synergies;
the drivers for growing our business, including our plans and intention to commit resources relating to discovery, research and development programs and business development opportunities as well as the potential benefits and results of, and the anticipated completion of, certain business development transactions and cost-reduction measures, including our Fit for Growth program;
the expectations, development plans and anticipated timelines, including costs and timing of potential clinical trials, regulatory filings and approvals, of our products, drug candidates and pipeline programs, including collaborations with third-parties, as well as the potential therapeutic scope of the development and commercialization of our and our collaborators’ pipeline products;
the timing, outcome and impact of administrative, regulatory, legal and other proceedings related to our patents and other proprietary and intellectual property rights, tax audits, assessments and settlements, pricing matters, sales and promotional practices, product liability, investigations and other matters;
our ability to finance our operations and business initiatives and obtain funding for such activities;
adverse safety events involving our marketed or pipeline products, generic or biosimilar versions of our marketed products or any other products from the same class as one of our products;
the current and potential impacts of geopolitical tensions, acts of war and other large-scale crises, including impacts to our operations, sales and the possible disruptions or delay in our plans to conduct clinical trial activities in areas of geopolitical tension, including regions affected by Russia's invasion of Ukraine and the military conflict in the Middle East;
the direct and indirect impact of global health outbreaks or adverse weather events on our business and operations, including sales, expense, reserves and allowances, the supply chain, manufacturing, research and development costs, clinical trials and employees;
our use of information systems and data and the potential impacts of any breakdowns, invasions, corruptions, destructions and/or breaches of such systems or those of our business partners;

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the potential impact of healthcare reform in the U.S., including the IRA, and measures being taken worldwide designed to reduce healthcare costs and limit the overall level of government expenditures, including the impact of pricing actions and reduced reimbursement for our products;
our manufacturing capacity, use of third-party contract manufacturing organizations, plans and timing relating to changes in our manufacturing capabilities, activities in new or existing manufacturing facilities and the expected timeline for the gene therapy manufacturing facility in RTP, North Carolina to be operational;
the impact of the continued uncertainty of the credit and economic conditions in certain countries and our collection of accounts receivable in such countries;
lease commitments, purchase obligations and the timing and satisfaction of other contractual obligations; and
the impact of new laws (including tax), regulatory requirements, judicial decisions and accounting standards.

These forward-looking statements involve risks and uncertainties, including those that are described in Item 1A. Risk Factors included in this report and elsewhere in this report, that could cause actual results to differ materially from those reflected in such statements. Because some of these risks and uncertainties cannot be predicted or quantified and some are beyond our control, you should not rely on our forward-looking statements as predictions of future events and you should not place undue reliance on these statements. Moreover, we operate in a very competitive and rapidly changing environment, new risks and uncertainties may emerge from time to time and it is not possible for us to predict all risks nor identify all uncertainties. Forward-looking statements speak only as of the date of this report and are based on information and estimates available to us at this time. Except as required by law, we do not undertake any obligation to publicly update any forward-looking statements, whether as a result of new information, future developments or otherwise. You should read this report with the understanding that our actual future results, performance, events and circumstances might be materially different from what we expect.

NOTE REGARDING COMPANY AND PRODUCT REFERENCES

References in this report to:

“Biogen,” the “company,” “we,” “us” and “our” refer to Biogen Inc. and its consolidated subsidiaries; and
“RITUXAN” refers to both RITUXAN (the trade name for rituximab in the U.S., Canada and Japan) and MabThera (the trade name for rituximab outside the U.S., Canada and Japan).

NOTE REGARDING TRADEMARKS

ADUHELM®, AVONEX®, BYOOVIZ®, PLEGRIDY®, QALSODY®, RITUXAN®, RITUXAN HYCELA®, SKYCLARYS®, SPINRAZA®, TECFIDERA®, TYSABRI® and VUMERITY® are registered trademarks of Biogen.

BENEPALI™, FLIXABI™, FUMADERM™, IMRALDI™, OPUVIZ™ and TOFIDENCE™ are trademarks of Biogen.

ACTEMRA®, COLUMVI®, ENBREL®, EYLEA®, FAMPYRA™, GAZYVA®, LEQEMBI®, HUMIRA®, LUCENTIS®, LUNSUMIO®, OCREVUS®, REMICADE®, ZURZUVAE™ and other trademarks referenced in this report are the property of their respective owners.

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DEFINED TERMS


2023 Form 10-K			Annual Report on Form 10-K for the year ended December 31, 2023
2020 Share Repurchase Program			Board of Directors authorized program to repurchase up to $5.0 billion of our common stock
2024 Omnibus Equity Plan			Biogen Inc. 2024 Omnibus Equity Plan
2017 Omnibus Equity Plan			Biogen Inc. 2017 Omnibus Equity Plan
2024 ESPP			Biogen Inc. 2024 Employee Stock Purchase Plan
2015 ESPP			Biogen Inc. 2015 Employee Stock Purchase Plan
2023 Term Loan			$1.5 billion term loan credit agreement
AbbVie			AbbVie Inc.
Acorda			Acorda Therapeutics, Inc.
AI			Artificial Intelligence
Alkermes			Alkermes plc
ALS			Amyotrophic Lateral Sclerosis
AMR			Antibody-Mediated Rejection
AOCI			Accumulated Other Comprehensive Income (Loss)
ASO			Antisense Oligonucleotide
ASU			Accounting Standards Update
ATV			Antibody Transport Vehicle
BLA			Biologics License Application
Blackstone			Blackstone Life Sciences
CCPA			California Consumer Privacy Act
CHMP			Committee for Medicinal Products for Human Use
CISA			Cybersecurity and Infrastructure Security Agency
CJEU			Court of Justice of the European Union
CLE			Cutaneous Lupus Erythematosus
CLL			Chronic Lymphocytic Leukemia
CLO			Chief Legal Officer
CODM			Chief Operating Decision Maker
Convergence			Convergence Pharmaceuticals Ltd.
CRL			Complete Response Letter
CROs			Contract Research Organizations
DEA			Drug Enforcement Agency
Denali			Denali Therapeutics Inc.
Directors Plan			Biogen Inc. 2015 Non-Employee Directors Equity Plan
District Court			U.S. District Court for the District of Massachusetts
DOJ			U.S. Department of Justice
EC			European Commission
Eisai			Eisai Co., Ltd.
EMA			European Medicines Agency
EPO			European Patent Office
ERM			Enterprise Risk Management
E.U.			European Union
FA			Friedreich's Ataxia
FASB			Financial Accounting Standards Board
FCPA			Foreign Corrupt Practices Act
FDA			U.S. Food and Drug Administration
FDIC			Federal Deposit Insurance Corporation

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DEFINED TERMS (continued)


Fit for Growth			Cost saving program initiated in 2023
FSS			Federal Supply Schedule
Genentech			Genentech, Inc.
GILTI			Global Intangible Low Tax Income
GloBE			Global Anti-Base Erosion
GMP			Good Manufacturing Practices
HI-Bio			Human Immunology Biosciences, Inc.
Humana			Humana Inc.
IgAN			Immunoglobulin A Nephropathy
IPR&D			In-process Research and Development
Ionis			Ionis Pharmaceuticals Inc.
IRA			Inflation Reduction Act of 2022
IT			Information Technology
IV			Intravenous
LHI			Large Hemispheric Infarction
LRRK2			Leucine-Rich Repeat Kinase 2
MAA			Marketing Authorization Application
MDD			Major Depressive Disorder
MS			Multiple Sclerosis
Mylan Ireland			Mylan Ireland Ltd.
NCD			National Coverage Decision
NDA			New Drug Application
Neurimmune			Neurimmune SubOne AG
NMPA			National Medicinal Products Administration
OECD			Organization for Economic Co-operation and Development
ODD			Orphan Drug Designation
OIE			Other (Income) Expense, Net
PDUFA			Prescription Drug User Fee Act
PMN			Primary Membranous Nephropathy
Polpharma			Polpharma Biologics S.A.
PPACA			Patient Protection and Affordable Care Act
PPD			Postpartum Depression
PPMS			Primary Progressive MS
PRV			Priority Review Voucher
R&D			Research and Development
Reata			Reata Pharmaceuticals, Inc.
RMS			Relapsing MS
RRMS			Relapsing-Remitting MS
RTP			Research Triangle Park
Sage			Sage Therapeutics, Inc.
Samsung Bioepis			Samsung Bioepis Co., Ltd.
Samsung BioLogics			Samsung BioLogics Co., Ltd.
Sangamo			Sangamo Therapeutics, Inc.
SEC			U.S. Securities and Exchange Commission
SG&A			Selling, General and Administrative
SLE			Systemic Lupus Erythematosus
SMA			Spinal Muscular Atrophy

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DEFINED TERMS (continued)


SMN			Survival Motor Neuron
SOD1			Superoxide Dismutase 1
SWISSMEDIC			Swiss Agency for Therapeutic Products
TBA			Technical Boards of Appeal
Transition Toll Tax			A one-time mandatory deemed repatriation tax on accumulated foreign subsidiaries' previously untaxed foreign earnings
U.K.			United Kingdom
U.S.			United States
U.S. GAAP			Accounting Principles Generally Accepted in the U.S.
VA			Veterans Administration

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PART I FINANCIAL INFORMATION

BIOGEN INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(unaudited, in millions, except per share amounts)


	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2024		2023		2024		2023
Revenue:
Product, net	$	1,769.4	$	1,805.2	$	5,380.9	$	5,414.3
Revenue from anti-CD20 therapeutic programs	446.2		420.9		1,284.7		1,253.8
Contract manufacturing, royalty and other revenue	250.2		304.2		555.6		781.2
Total revenue	2,465.8		2,530.3		7,221.2		7,449.3
Cost and expense:
Cost of sales, excluding amortization and impairment of acquired intangible assets	638.7		659.6		1,726.9		1,915.1
Research and development	542.7		736.3		1,509.5		1,891.1
Selling, general and administrative	588.4		788.2		1,723.7		1,941.2
Amortization and impairment of acquired intangible assets	130.3		60.9		295.5		164.0
Collaboration profit sharing/(loss reimbursement)	69.3		50.5		197.3		164.5
(Gain) loss on fair value remeasurement of contingent consideration	23.8		—		23.8		—

Restructuring charges	6.8		76.0		24.9		120.0
Gain on sale of priority review voucher, net	—		—		(88.6)		—
Other (income) expense, net	14.8		300.0		193.7		248.2
Total cost and expense	2,014.8		2,671.5		5,606.7		6,444.1
Income (loss) before income tax (benefit) expense	451.0		(141.2)		1,614.5		1,005.2
Income tax (benefit) expense	62.5		(72.9)		249.0		92.6

Net income (loss)	388.5		(68.3)		1,365.5		912.6
Net income (loss) attributable to noncontrolling interests, net of tax	—		(0.2)		—		1.2
Net income (loss) attributable to Biogen Inc.	$	388.5	$	(68.1)	$	1,365.5	$	911.4

Net income (loss) per share:
Basic earnings (loss) per share attributable to Biogen Inc.	$	2.67	$	(0.47)	$	9.38	$	6.30
Diluted earnings (loss) per share attributable to Biogen Inc.	$	2.66	$	(0.47)	$	9.35	$	6.26

Weighted-average shares used in calculating:
Basic earnings (loss) per share attributable to Biogen Inc.	145.7		144.8		145.5		144.7
Diluted earnings (loss) per share attributable to Biogen Inc.	146.1		144.8		146.0		145.5

See accompanying notes to these unaudited condensed consolidated financial statements.

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BIOGEN INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(unaudited, in millions)


	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2024		2023		2024		2023
Net income (loss) attributable to Biogen Inc.	$	388.5	$	(68.1)	$	1,365.5	$	911.4
Other comprehensive income (loss):
Unrealized gains (losses) on securities available for sale, net of tax	—		14.5		—		15.7
Unrealized gains (losses) on cash flow hedges, net of tax	(41.0)		29.6		(6.2)		1.1

Unrealized gains (losses) on pension benefit obligation, net of tax	0.3		(0.1)		0.2		0.6
Currency translation adjustment	41.0		(30.5)		14.0		(11.8)
Total other comprehensive income (loss), net of tax	0.3		13.5		8.0		5.6
Comprehensive income (loss) attributable to Biogen Inc.	388.8		(54.6)		1,373.5		917.0
Comprehensive income (loss) attributable to noncontrolling interests, net of tax	—		(0.2)		—		1.2
Comprehensive income (loss)	$	388.8	$	(54.8)	$	1,373.5	$	918.2

See accompanying notes to these unaudited condensed consolidated financial statements.

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BIOGEN INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited, in millions, except per share amounts)


	As of September 30, 2024		As of December 31, 2023
ASSETS
Current assets:
Cash and cash equivalents	$	1,699.2	$	1,049.9

Accounts receivable, net of allowance for doubtful accounts of $2.0 and $2.4, respectively	1,536.2		1,664.1
Due from anti-CD20 therapeutic programs	451.9		435.9
Inventory	2,469.2		2,527.4
Other current assets	674.0		1,182.0
Total current assets	6,830.5		6,859.3

Property, plant and equipment, net	3,210.9		3,309.7
Operating lease assets	380.4		420.0
Intangible assets, net	9,805.5		8,363.0
Goodwill	6,485.8		6,219.2
Deferred tax asset	968.7		928.6
Investments and other assets	631.4		745.0
Total assets	$	28,313.2	$	26,844.8
LIABILITIES AND EQUITY
Current liabilities:
Current portion notes payable and term loan	$	1,748.1	$	150.0
Taxes payable	499.1		257.4
Accounts payable	422.7		403.3
Accrued expense and other	2,755.1		2,623.6
Total current liabilities	5,425.0		3,434.3
Notes payable and term loan	4,545.8		6,788.2
Deferred tax liability	882.4		641.8
Long-term operating lease liabilities	357.0		400.0
Other long-term liabilities	744.1		781.1
Total liabilities	11,954.3		12,045.4
Commitments, contingencies and guarantees
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	488.5		302.5
Accumulated other comprehensive income (loss)	(145.7)		(153.7)
Retained earnings	18,993.1		17,627.6
Treasury stock, at cost	(2,977.1)		(2,977.1)


Total equity	16,358.9		14,799.4
Total liabilities and equity	$	28,313.2	$	26,844.8

See accompanying notes to these unaudited condensed consolidated financial statements.

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BIOGEN INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW

(unaudited, in millions)


	For the Nine Months Ended September 30,
	2024		2023
Cash flow from operating activities:
Net income	$	1,365.5	$	912.6
Adjustments to reconcile net income to net cash flow from operating activities:
Depreciation and amortization	489.2		354.7
Impairment of intangible assets	20.2		—
Excess and obsolescence charges related to inventory	68.7		62.1
Amortization of acquired inventory step-up	185.1		—

Share-based compensation	216.1		209.3
Contingent consideration	23.8		—
Deferred income taxes	(99.7)		(377.7)
(Gain) loss on strategic investments	22.7		275.7


Gain on sale of priority review voucher, net	(88.6)		—
Other	95.1		98.6
Changes in operating assets and liabilities, net of effects of business acquired:
Accounts receivable	127.6		(76.5)
Due from anti-CD20 therapeutic programs	(15.9)		3.1
Inventory	(207.4)		(34.9)
Accrued expense and other current liabilities	(84.2)		293.9
Income tax assets and liabilities	62.1		(114.8)
Other changes in operating assets and liabilities, net	(65.7)		(71.4)
Net cash flow provided by (used in) operating activities	2,114.6		1,534.7
Cash flow from investing activities:
Purchases of property, plant and equipment	(114.4)		(211.8)
Proceeds from sales and maturities of marketable securities	—		7,380.8
Purchases of marketable securities	—		(5,140.7)
Acquisition of Reata, net of cash acquired	—		(6,335.6)
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	88.6		—


Acquisitions of intangible assets	(179.1)		(34.4)
Proceeds from sales of strategic investments	96.7		106.2
Other	(4.4)		(1.3)
Net cash flow provided by (used in) investing activities	(780.6)		(3,448.7)
Cash flow from financing activities:

Payments related to issuance of stock for share-based compensation arrangements, net	(34.8)		(48.0)
Repayment of borrowings	(650.0)		(159.9)
Proceeds from borrowings	—		997.2

Net (distribution) contribution to noncontrolling interest	—		4.2
Other	(6.6)		1.9
Net cash flow provided by (used in) financing activities	(691.4)		795.4
Net increase (decrease) in cash and cash equivalents	642.6		(1,118.6)
Effect of exchange rate changes on cash and cash equivalents	6.7		(12.8)
Cash and cash equivalents, beginning of the period	1,049.9		3,419.3
Cash and cash equivalents, end of the period	$	1,699.2	$	2,287.9

See accompanying notes to these unaudited condensed consolidated financial statements.

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BIOGEN INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(unaudited, in millions)


	For the Three Months Ended September 30, 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, June 30, 2024	—	$	—	169.5	$	0.1	$	407.5	$	(146.0)		$	18,604.6		(23.8)	$	(2,977.1)	$	15,889.1
Net income (loss)	—	—		—	—		—		—			388.5			—	—		388.5
Other comprehensive income (loss), net of tax	—	—		—	—		—		0.3			—			—	—		0.3




Issuance of common stock under stock option and stock purchase plans	—	—		—	—		7.6		—			—			—	—		7.6
Issuance of common stock under stock award plan	—	—		—	—		(1.6)		—			—			—	—		(1.6)
Compensation related to share-based payments	—	—		—	—		75.0		—			—			—	—		75.0
Other	—	—		—	—		—		—			—			—	—		—
Balance, September 30, 2024	—	$	—	169.5	$	0.1	$	488.5	$	(145.7)		$	18,993.1		(23.8)	$	(2,977.1)	$	16,358.9

	For the Nine Months Ended September 30, 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 (loss)	—	—		—	—		—		—			1,365.5			—	—		1,365.5
Other comprehensive income (loss), net of tax	—	—		—	—		—		8.0			—			—	—		8.0




Issuance of common stock under stock option and stock purchase plans	—	—		0.2	—		31.2		—			—			—	—		31.2
Issuance of common stock under stock award plan	—	—		0.6	—		(66.0)		—			—			—	—		(66.0)
Compensation related to share-based payments	—	—		—	—		224.0		—			—			—	—		224.0
Other	—	—		—	—		(3.2)		—			—			—	—		(3.2)
Balance, September 30, 2024	—	$	—	169.5	$	0.1	$	488.5	$	(145.7)		$	18,993.1		(23.8)	$	(2,977.1)	$	16,358.9

See accompanying notes to these unaudited condensed consolidated financial statements.

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BIOGEN INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY - (Continued)

(unaudited, in millions)


	For the Three Months Ended September 30, 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, June 30, 2023	—	$	—	168.6	$	0.1	$	170.7	$	(172.8)		$	17,446.0		(23.8)	$	(2,977.1)	$	14,466.9	$	(6.4)	$	14,460.5
Net income (loss)	—	—		—	—		—		—			(68.1)			—	—		(68.1)		(0.2)		(68.3)
Other comprehensive income (loss), net of tax	—	—		—	—		—		13.5			—			—	—		13.5		—		13.5

Capital contribution from noncontrolling interest	—	—		—	—		—		—			—			—	—		—		2.5		2.5


Issuance of common stock under stock option and stock purchase plans	—	—		0.1	—		9.3		—			—			—	—		9.3		—		9.3
Issuance of common stock under stock award plan	—	—		—	—		(2.7)		—			—			—	—		(2.7)		—		(2.7)
Compensation related to share-based payments	—	—		—	—		64.8		—			—			—	—		64.8		—		64.8
Other	—	—		—	—		0.1		—			—			—	—		0.1		—		0.1
Balance, September 30, 2023	—	$	—	168.7	$	0.1	$	242.2	$	(159.3)		$	17,377.9		(23.8)	$	(2,977.1)	$	14,483.8	$	(4.1)	$	14,479.7

	For the Nine Months Ended September 30, 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 (loss)	—	—		—	—		—		—			911.4			—	—		911.4		1.2		912.6
Other comprehensive income (loss), net of tax	—	—		—	—		—		5.6			—			—	—		5.6		—		5.6

Capital contribution from noncontrolling interest	—	—		—	—		—		—			—			—	—		—		4.2		4.2


Issuance of common stock under stock option and stock purchase plans	—	—		0.2	—		38.7		—			—			—	—		38.7		—		38.7
Issuance of common stock under stock award plan	—	—		0.6	—		(86.7)		—			—			—	—		(86.7)		—		(86.7)
Compensation related to share-based payments	—	—		—	—		217.8		—			—			—	—		217.8		—		217.8
Other	—	—		—	—		(0.9)		—			—			—	—		(0.9)		—		(0.9)
Balance, September 30, 2023	—	$	—	168.7	$	0.1	$	242.2	$	(159.3)		$	17,377.9		(23.8)	$	(2,977.1)	$	14,483.8	$	(4.1)	$	14,479.7

See accompanying notes to these unaudited condensed consolidated financial statements.

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BIOGEN INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)


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 worldwide. 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. Through our 2023 acquisition of Reata we market the first and only drug approved in the U.S. and the E.U. for the treatment of Friedreich's Ataxia 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 TECFIDERA, VUMERITY, AVONEX, PLEGRIDY, TYSABRI and FAMPYRA for the treatment of MS; SPINRAZA for the treatment of SMA; SKYCLARYS for the treatment of Friedreich's Ataxia; QALSODY for the treatment of ALS; and FUMADERM for the treatment of severe plaque psoriasis.

We also have collaborations with Eisai on the commercialization of LEQEMBI for the treatment of Alzheimer's disease and Sage 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 and follicular lymphoma; 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.

On July 2, 2024, we completed the acquisition of HI-Bio. As a result of this transaction we acquired HI-Bio's lead asset, felzartamab, an anti-CD38 antibody currently being evaluated for three leading indications, AMR, PMN and IgAN. For additional information on our acquisition of HI-Bio, please read Note 2, Acquisitions, to these condensed consolidated financial statements.

We commercialize a portfolio of biosimilars of advanced biologics including BENEPALI, an etanercept biosimilar referencing ENBREL; IMRALDI, an adalimumab biosimilar referencing HUMIRA; FLIXABI, an infliximab biosimilar referencing REMICADE; and BYOOVIZ, a ranibizumab biosimilar referencing LUCENTIS, in certain international markets, as well as TOFIDENCE, a tocilizumab biosimilar referencing ACTEMRA, in the U.S. and certain international markets. We also have commercialization rights related to OPUVIZ, an aflibercept biosimilar referencing EYLEA.

For additional information on our collaboration arrangements, please read Note 19, Collaborative and Other Relationships, to these unaudited condensed consolidated financial statements (condensed consolidated financial statements).

Basis of Presentation

In the opinion of management, our condensed consolidated financial statements include all adjustments, consisting of normal recurring accruals, necessary for a fair statement of our financial statements for interim periods in accordance with U.S. GAAP. The information included in this quarterly report on Form 10-Q should be read in conjunction with our audited consolidated financial statements and the accompanying notes included in our 2023 Form 10-K. Our accounting policies are described in the Notes to Consolidated Financial Statements in our 2023 Form 10-K and updated, as necessary, in this report. The year-end condensed consolidated balance sheet data presented for comparative purposes was derived from our audited financial statements, but does not include all disclosures required by U.S. GAAP. The results of operations for the three and nine months ended September 30, 2024, are not necessarily indicative of the operating results for the full year or for any other subsequent interim period.

We operate as one operating segment, focused on advancing our pipeline in neurology, specialized immunology and rare diseases.

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BIOGEN INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited, continued)

Consolidation

Our condensed consolidated financial statements reflect our financial statements, those of our wholly-owned subsidiaries and certain 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 (loss) attributable to noncontrolling interests, net of tax in our condensed 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. For additional information on the deconsolidation of Neurimmune, please read Note 20, Investments in Variable Interest Entities, to these condensed consolidated financial statements.

Use of Estimates

The preparation of our condensed 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 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.

Significant Accounting Policies

There have been no material changes to our significant accounting policies disclosed in Note 1, Summary of Significant Accounting Policies, to our audited consolidated financial statements included in our 2023 Form 10-K.

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 had or may have a material impact on our condensed consolidated financial statements or disclosures.

Climate-Related Disclosures

In March 2024 the SEC issued a final rule under SEC Release No. 33-11275, The Enhancement and Standardization of Climate-Related Disclosures for Investors. This new rule will require large accelerated filers to disclose material climate-related risks that are reasonably likely to have a material impact on their business, results of operations or financial condition. The required information about climate-related risks will also include disclosure of material direct greenhouse gas emissions from operations owned or controlled (Scope 1) and/or material indirect greenhouse gas emissions from purchased energy consumed in owned or controlled operations (Scope 2). Additionally, the new rules will require disclosure within the notes to the financial statements of the effects of severe weather events and other natural conditions and information on any climate-related targets or goals, subject to certain materiality thresholds. The final rule, if adopted, includes a phased-in compliance period which will begin phasing in with our annual report for the year ending December 31, 2025.

In April 2024 the SEC voluntarily stayed implementation of the new climate-related disclosure requirements pending judicial review. Once the litigation is resolved, and if the rule remains in effect, the SEC will announce a new effective date. We are currently evaluating the potential impact that this new rule will have on our company's disclosures.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited, continued)

Segment Reporting

In November 2023 the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosure. This standard requires disclosure of significant segment expenses that are regularly provided to the CODM and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items to reconcile to segment profit or loss and the title and position of the entity's CODM. The amendments in this update also expand the interim segment disclosure requirements. All disclosure requirements under this standard are also required for public entities with a single reportable segment. This standard is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted and the amendments in this update are required to be applied on a retrospective basis. While this accounting standard will increase disclosures, we do not expect the adoption of this standard to have a material impact on our consolidated financial position or results of operations.

Income Taxes

In December 2023 the FASB issued 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. This standard is effective for fiscal years beginning after December 15, 2024. Early adoption is permitted and the amendments in this update are required to be applied on a prospective basis with the option to apply it retrospectively. While this accounting standard will increase disclosures, we do not expect the adoption of this standard to have a material impact on our consolidated financial position or results of operations.


Note 2:			Acquisitions

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 three leading indications, Antibody-Mediated Rejection (AMR), Primary Membranous Nephropathy (PMN) and Immunoglobulin A Nephropathy (IgAN). Felzartamab has received Breakthrough Therapy Designation and ODD from the FDA for development in the treatment of PMN and AMR and has received ODD in the treatment of antibody-mediated rejection in kidney transplant recipients. 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 an additional $650.0 million in potential future development and regulatory milestone payments. The $1.15 billion paid includes 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 condensed consolidated statements of income for the three and nine months ended September 30, 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.

In addition to the lead program felzartamab, the HI-Bio pipeline acquired includes izastobart/HIB210, an anti-C5aR1 antibody currently in a Phase 1 trial, and the potential for continued development in a range of complement-mediated diseases.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited, 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, 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 condensed consolidated balance sheets. The short-term liability relates to the fourth patient dosed in a phase 3 clinical trial of felzartamab in a first and second indication, which would trigger milestone payments of $150.0 million each.

Subsequent changes in the fair value of the contingent consideration obligation will be recognized as (gain) loss on fair value remeasurement of contingent consideration within our condensed consolidated statements of income. This fair value measurement was 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 condensed consolidated financial statements.

Other Contractual Commitments: We acquired HI-Bio's pre-existing in-license commitments under third-party agreements, which include tiered royalties on potential future sales of felzartamab and izastobart/HIB210, ranging from high-single digit to mid-teen percentages, as well as potential future development, regulatory and commercial milestone payments related to felzartamab and izastobart/HIB210 of up to $130.0 million, $230.0 million and $640.0 million, respectively. Because the achievement of these milestones was not considered probable as of the transaction close date, such contingencies have not been recorded in our financial statements.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited, continued)

Preliminary Purchase Price Allocation

The following table summarizes the preliminary purchase price allocation of the separately identifiable assets acquired and liabilities assumed as of July 2, 2024:


(In millions)	Estimated Fair Value as of July 2, 2024
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	1.0

Operating lease assets	1.2
Accounts payable	(1.1)
Accrued liabilities	(35.0)
Deferred tax liability	(304.4)
Operating lease liabilities	(1.2)

Total identifiable net assets	1,365.9
Goodwill	256.5
Total assets acquired and liabilities assumed	$	1,622.4

Intang****ible assets: Intangible assets comprised of $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 $256.5 million, which 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 expenses: 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 condensed consolidated statements of income for the three and nine months ended September 30, 2024.

Assumptions in the Allocations of Purchase Price

The results of operations of HI-Bio, along with the estimated fair values of the assets acquired and liabilities assumed in the HI-Bio acquisition, have been included in our condensed consolidated financial statements since the closing of the HI-Bio acquisition on July 2, 2024.

Our preliminary estimate of the fair value of the specifically identifiable assets acquired and liabilities assumed as of the date of acquisition is subject to the finalization of management's analysis related to certain matters, such as finalizing our assessment of intangible assets, goodwill and income taxes, among other items. The final determination of these fair values will be completed as additional information becomes available but no later than one year from the acquisition date. The final determination may result in asset and liability fair values that are different than the preliminary estimates. There were no purchase price allocation adjustments during the third quarter of 2024.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited, continued)

Subsequent to the acquisition date, our results of operations include the results of operations of HI-Bio. HI-Bio operations had an immaterial impact on our results of operations for the three and nine months ended September 30, 2024. Due to the immateriality of HI-Bio's historic revenue and expenses, additional pro forma information combining the results of operations of Biogen and HI-Bio have not been included.

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. and the E.U. for the treatment of Friedreich's Ataxia in adults and adolescents aged 16 years and older, as well as other clinical and preclinical pipeline programs. The acquisition of Reata is expected to complement our global portfolio of neuromuscular and rare disease therapies. The addition of SKYCLARYS is anticipated to provide potential operating synergies with SPINRAZA and QALSODY.

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 condensed consolidated statements of income for the three and nine months ended September 30, 2023. These amounts were associated with the accelerated vesting of stock options and RSUs previously granted to Reata employees and 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 condensed 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 common stock 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.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited, 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 condensed 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) September 30, 2024
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 the first quarter of 2024 that increased accrued expense and other by $4.9 million, deferred tax liability by $4.1 million and goodwill by $9.0 million, as well as measurement period adjustments recorded in the third quarter of 2024 that increased other current assets by $1.0 million and accrued expense and other by $3.9 million, and decreased deferred tax liability by $7.2 million and goodwill by $4.3 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 within our condensed consolidated statements of income as the inventory is sold, which is expected to be sold over a period of approximately 4 years from the acquisition date. For the three and nine months ended September 30, 2024, amortization from the fair value step-up adjustment was approximately $50.9 million and $185.1 million, respectively. The three and nine months ended September 30, 2024, include approximately $2.5 million and $48.5 million, respectively, of inventory used for clinical purposes, which is reflected within research and development expense within our condensed consolidated statements of income.

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(unaudited, continued)

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 priority voucher 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 priority review voucher was based on recent external purchase and sale transactions of similar vouchers.

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 E.U. regulatory approval 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 represents 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 represents our estimate of the fair value for a market participant of the current rental market in the Dallas, Texas area. Included in our estimate of the market rental rate is 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 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 expenses: Acquisition-related expense, primarily comprised of regulatory, advisory and legal fees, and other transaction costs, totaled approximately $26.3 million and were recorded within selling, general and administrative expense within our condensed consolidated statements of income for the three and nine months ended September 30, 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 nine months ended September 30, 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 nine months ended September 30, 2023, we recognized a gain of approximately $13.7 million to reflect the change in fair value associated with changes in interest rates and the passage of time related to the first deferred payment due to us, which was received in April 2023. Additionally, for the three and nine months ended September 30, 2023, we recognized gains of approximately $7.1 million and $16.9 million, respectively, to reflect the changes in fair value associated with changes in interest rates and the passage of time related to the second deferred payment due to us, which was received in April 2024. These changes were recorded in other (income) expense, net in our condensed consolidated statements of income.

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For additional information on the sale of our equity interest in Samsung Bioepis, please read Note 3, Dispositions, to our consolidated financial statements included in our 2023 Form 10-K.

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 condensed consolidated statements of income for the nine months ended September 30, 2024.


Note 4:			Restructuring

2023 Fit for Growth Restructuring Program

In July 2023 we initiated additional 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 is expected to generate approximately $1.0 billion in gross operating expense savings by the end of 2025, some of which will be reinvested in various initiatives. The Fit for Growth program is currently estimated to include net headcount reductions of approximately 1,000 employees and we expect to incur restructuring charges ranging from approximately $260.0 million to $280.0 million.

Total charges incurred from our 2023 cost saving initiatives are summarized as follows:


	For the Three Months Ended September 30,
	2024						2023
(In millions)	Severance Costs		Accelerated Depreciation and Other Costs		Total		Severance Costs		Accumulated Depreciation and Other Costs		Total
Selling, general and administrative	$	—	$	9.1	$	9.1	$	—	$	5.9	$	5.9
Research and development	—		3.5		3.5		—		0.2		0.2
Restructuring charges	4.6		—		4.6		37.7		17.3		55.0
Total charges	$	4.6	$	12.6	$	17.2	$	37.7	$	23.4	$	61.1

	For the Nine Months Ended September 30,
	2024						2023
(In millions)	Severance Costs		Accelerated Depreciation and Other Costs		Total		Severance Costs		Accumulated Depreciation and Other Costs		Total
Selling, general and administrative	$	—	$	12.5	$	12.5	$	—	$	17.4	$	17.4
Research and development	—		10.6		10.6		—		0.7		0.7
Restructuring charges	20.2		—		20.2		62.6		33.8		96.4
Total charges	$	20.2	$	23.1	$	43.3	$	62.6	$	51.9	$	114.5

Other Costs: includes costs associated with items such as asset abandonment and write-offs, facility closure costs, pretax 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 estimate we will incur total integration charges ranging from approximately $35.0 million to $40.0 million, related to severance and employment costs, which are expected to be paid by the end of 2024. These amounts were substantially incurred during 2023.

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Total charges incurred from our Reata integration are summarized as follows:


	For the Three Months Ended September 30,
	2024						2023
(In millions)	Severance Costs		Accelerated Depreciation and Other Costs		Total		Severance Costs		Accumulated Depreciation and Other Costs		Total
Selling, general and administrative	$	—	$	1.6	$	1.6	$	—	$	—	$	—
Research and development	—		2.9		2.9		—		—		—
Restructuring charges	0.7		—		0.7		21.0		—		21.0
Total charges	$	0.7	$	4.5	$	5.2	$	21.0	$	—	$	21.0

	For the Nine Months Ended September 30,
	2024						2023
(In millions)	Severance Costs		Accelerated Depreciation and Other Costs		Total		Severance Costs		Accumulated Depreciation and Other Costs		Total
Selling, general and administrative	$	—	$	4.9	$	4.9	$	—	$	—	$	—
Research and development	—		8.9		8.9		—		—		—
Restructuring charges	3.2		—		3.2		21.0		—		21.0
Total charges	$	3.2	$	13.8	$	17.0	$	21.0	$	—	$	21.0

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 condensed consolidated financial statements.

HI-Bio Integration

Additionally, following the close of our HI-Bio acquisition in July 2024, we implemented an integration plan designed to realize operating synergies through cost savings and avoidance. Under this initiative, we incurred approximately $1.5 million of severance and employment costs, which are reflected in restructuring charges within our condensed consolidated statements of income for the three and nine months ended September 30, 2024.

Restructuring Reserve

Charges and spending related to workforce reductions are summarized as follows:


	Workforce Reductions
(In millions)	2024		2023

Restructuring reserve as of January 1	$	75.4		$	35.9
Expense	11.5			7.1
Payment	(42.2)			(15.6)
Foreign currency and other adjustments	0.8			0.6
Restructuring reserve as of March 31	45.5			28.0
Expense	6.6			17.8
Payment	(11.9)			(13.4)
Foreign currency and other adjustments	—			(0.1)
Restructuring reserve as of June 30	40.2			32.3
Expense	6.8			58.7
Payment	(4.7)			(31.8)
Foreign currency and other adjustments	(2.1)			0.1
Restructuring reserve as of September 30	$	40.2		$	59.3

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Note 5:			Revenue

Product Revenue

Revenue by product is summarized as follows:


	For the Three Months Ended September 30,
	2024						2023
(In millions)	United States		Rest of World		Total		United States		Rest of World		Total
Multiple Sclerosis:
TECFIDERA	$	40.1	$	192.7	$	232.8	$	58.1	$	181.4	$	239.5
VUMERITY	134.9		23.2		158.1		148.8		16.7		165.5
Total Fumarate	175.0		215.9		390.9		206.9		198.1		405.0
AVONEX	115.6		60.6		176.2		148.7		63.5		212.2
PLEGRIDY	27.9		33.4		61.3		31.4		34.1		65.5
Total Interferon	143.5		94.0		237.5		180.1		97.6		277.7
TYSABRI	227.5		178.6		406.1		244.8		211.5		456.3
FAMPYRA	—		19.4		19.4		—		20.0		20.0
Subtotal: Multiple Sclerosis	546.0		507.9		1,053.9		631.8		527.2		1,159.0

Rare Disease:
SPINRAZA	153.1		228.3		381.4		150.5		297.7		448.2
SKYCLARYS(1)	81.8		20.5		102.3		—		—		—
QALSODY(2)	5.5		5.6		11.1		1.6		0.1		1.7
Subtotal: Rare Disease	240.4		254.4		494.8		152.1		297.8		449.9

Biosimilars:
BENEPALI	—		118.1		118.1		—		112.8		112.8
IMRALDI	—		54.1		54.1		—		54.4		54.4
FLIXABI	—		16.2		16.2		—		20.2		20.2
BYOOVIZ(3)	4.1		3.9		8.0		6.1		0.8		6.9
TOFIDENCE(4)	0.2		—		0.2		—		—		—
Subtotal: Biosimilars	4.3		192.3		196.6		6.1		188.2		194.3

Other:
ZURZUVAE(5)	22.0		—		22.0		—		—		—


Other(6)	0.3		1.8		2.1		0.9		1.1		2.0
Subtotal: Other	22.3		1.8		24.1		0.9		1.1		2.0
Total product revenue, net	$	813.0	$	956.4	$	1,769.4	$	790.9	$	1,014.3	$	1,805.2

(1) SKYCLARYS was obtained as part of our acquisition of Reata in September 2023. SKYCLARYS became commercially available in the U.S. during the second quarter of 2023 and we began recognizing revenue from SKYCLARYS in the U.S. during the fourth quarter of 2023, subsequent to our acquisition. SKYCLARYS was approved and became commercially available in the E.U. during the first quarter of 2024.

(2) QALSODY became commercially available in the U.S. during the second quarter of 2023 and commercially available in the E.U. during the second quarter of 2024.

(3) BYOOVIZ became commercially available in certain international markets in 2023.

(4) TOFIDENCE became commercially available in the U.S. during the second quarter of 2024.

(5) ZURZUVAE became commercially available in the U.S. during the fourth quarter of 2023.

(6) Other includes FUMADERM and ADUHELM.

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	For the Nine Months Ended September 30,
	2024						2023
(In millions)	United States		Rest of World		Total		United States		Rest of World		Total
Multiple Sclerosis:
TECFIDERA	$	127.9	$	611.4	$	739.3	$	199.3	$	568.9	$	768.2
VUMERITY	385.0		66.4		451.4		372.6		47.3		419.9
Total Fumarate	512.9		677.8		1,190.7		571.9		616.2		1,188.1
AVONEX	344.0		193.5		537.5		397.2		207.7		604.9
PLEGRIDY	84.7		109.8		194.5		95.4		125.4		220.8
Total Interferon	428.7		303.3		732.0		492.6		333.1		825.7
TYSABRI	690.0		609.6		1,299.6		750.1		662.1		1,412.2
FAMPYRA	—		57.3		57.3		—		67.5		67.5
Subtotal: Multiple Sclerosis	1,631.6		1,648.0		3,279.6		1,814.6		1,678.9		3,493.5

Rare Disease:
SPINRAZA	458.9		692.9		1,151.8		453.0		875.6		1,328.6
SKYCLARYS(1)	230.4		49.9		280.3		—		—		—
QALSODY(2)	14.5		6.2		20.7		2.5		0.1		2.6
Subtotal: Rare Disease	703.8		749.0		1,452.8		455.5		875.7		1,331.2

Biosimilars:
BENEPALI	—		354.1		354.1		—		331.0		331.0
IMRALDI	—		162.1		162.1		—		167.6		167.6
FLIXABI	—		47.1		47.1		—		60.7		60.7
BYOOVIZ(3)	18.1		9.2		27.3		21.3		1.2		22.5
TOFIDENCE(4)	1.0		—		1.0		—		—		—
Subtotal: Biosimilars	19.1		572.5		591.6		21.3		560.5		581.8

Other:
ZURZUVAE(5)	49.3		—		49.3		—		—		—


Other(6)	2.0		5.6		7.6		1.9		5.9		7.8
Subtotal: Other	51.3		5.6		56.9		1.9		5.9		7.8
Total product revenue, net	$	2,405.8	$	2,975.1	$	5,380.9	$	2,293.3	$	3,121.0	$	5,414.3

(2) QALSODY became commercially available in the U.S. during the second quarter of 2023 and commercially available in the E.U. during the second quarter of 2024.

(3) BYOOVIZ became commercially available in certain international markets in 2023.

(4) TOFIDENCE became commercially available in the U.S. during the second quarter of 2024.

(5) ZURZUVAE became commercially available in the U.S. during the fourth quarter of 2023.

(6) Other includes FUMADERM and ADUHELM.

We recognized revenue from two wholesalers accounting for 25.9% and 14.8% of gross product revenue for the three months ended September 30, 2024, and 25.6% and 12.9% of gross product revenue for the nine months ended September 30, 2024.

We recognized revenue from two wholesalers accounting for 26.9% and 10.5% of gross product revenue for the three months ended September 30, 2023, and 27.1% and 9.1% of gross product revenue for the nine months ended September 30, 2023.

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An analysis of the change in reserves for discounts and allowances is summarized as follows:


(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	605.1		2,004.7		15.6		2,625.4
Adjustments relating to prior years	7.6		(33.6)		13.1		(12.9)
Payments/credits relating to sales in current year	(439.7)		(1,391.1)		(0.4)		(1,831.2)
Payments/credits relating to sales in prior years	(160.8)		(514.1)		(17.4)		(692.3)
Balance, September 30, 2024	$	185.5	$	923.0	$	42.5	$	1,151.0

The total reserves above, which are included in our condensed consolidated balance sheets, are summarized as follows:


(In millions)	As of September 30, 2024		As of December 31, 2023
Reduction of accounts receivable	$	150.7	$	135.5
Component of accrued expense and other	1,000.3		926.5
Total revenue-related reserves	$	1,151.0	$	1,062.0

Revenue from Anti-CD20 Therapeutic Programs

Revenue from anti-CD20 therapeutic programs is summarized in the table below. For the purposes of this footnote, we refer to RITUXAN and RITUXAN HYCELA collectively as RITUXAN.


	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
(In millions)	2024		2023		2024		2023
Royalty revenue on sales of OCREVUS	$	346.8	$	319.1	$	985.8	$	928.2
Biogen’s share of pre-tax profits in the U.S. for RITUXAN, GAZYVA and LUNSUMIO	94.8		98.9		285.3		315.0
Other revenue from anti-CD20 therapeutic programs	4.6		2.9		13.6		10.6
Total revenue from anti-CD20 therapeutic programs	$	446.2	$	420.9	$	1,284.7	$	1,253.8

For additional information on our collaboration arrangements with Genentech, please read Note 19, Collaborative and Other Relationships, to these condensed consolidated financial statements.

Contract Manufacturing, Royalty and Other Revenue

Contract manufacturing, royalty and other revenue is summarized in the table below.


	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
(In millions)	2024		2023		2024		2023
Contract manufacturing revenue	$	221.9	$	252.9	$	474.1	$	742.9
Royalty and other revenue	28.3		51.3		81.5		38.3
Total contract manufacturing, royalty and other revenue	$	250.2	$	304.2	$	555.6	$	781.2

Contract Manufacturing Revenue

Contract manufacturing revenue primarily reflects amounts earned under contract manufacturing agreements with our strategic customers. During the first quarter of 2023 we began recognizing contract manufacturing revenue for LEQEMBI, upon accelerated approval of LEQEMBI in the U.S. Prior to accelerated approval, our share of contract manufacturing amounts related to LEQEMBI were recognized in research and development expense within our condensed consolidated statements of income.

Royalty and Other Revenue

Royalty and other revenue primarily reflects royalty revenue on biosimilar products from our license arrangements with Samsung Bioepis and our 50.0% share of LEQEMBI product revenue, net and cost of sales, including royalties,

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as we are not the principal, as well as 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 condensed consolidated financial statements.


Note 6:			Inventory

The components of inventory are summarized as follows:


(In millions)	As of September 30, 2024		As of December 31, 2023
Raw materials	$	368.9	$	426.9
Work in process	1,803.8		1,926.8
Finished goods	391.0		255.4
Total inventory	$	2,563.7	$	2,609.1

Balance Sheet Classification:
Inventory	$	2,469.2	$	2,527.4
Investments and other assets	94.5		81.7
Total inventory	$	2,563.7	$	2,609.1

Long-term inventory is included in investments and other assets within our condensed consolidated balance sheets.

We recorded approximately $1.3 billion of acquired inventory, which includes measurement period adjustments, related to SKYCLARYS as a result of our acquisition of Reata in September 2023. 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 within our condensed consolidated statements of income as the inventory is sold, which is expected to be sold over a period of approximately 4 years from the acquisition date. For the three and nine months ended September 30, 2024, amortization from the fair value step-up adjustment was approximately $50.9 million and $185.1 million, respectively. The three and nine months ended September 30, 2024, include approximately $2.5 million and $48.5 million, respectively, of inventory used for clinical purposes, which is reflected within research and development expense within our condensed consolidated statements of income. For additional information on our acquisition of Reata, please read Note 2, Acquisitions, to these condensed consolidated financial statements.


Note 7:			Intangible Assets and Goodwill

Intangible Assets

Intangible assets, net of accumulated amortization, impairment charges and adjustments are summarized as follows:


		As of September 30, 2024						As of December 31, 2023
(In millions)	Estimated Life	Cost		Accumulated Amortization		Net		Cost		Accumulated Amortization		Net
Completed technology:
Acquired and in-licensed rights and patents	2-21 years	$	10,552.9	$	(2,697.9)	$	7,855.0	$	8,180.2	$	(2,440.7)	$	5,739.5
Developed technology and other	13-31 years	3,548.6		(3,445.0)		103.6		3,548.6		(3,429.1)		119.5
Total completed technology		14,101.5		(6,142.9)		7,958.6		11,728.8		(5,869.8)		5,859.0
In-process research and development	Indefinite until commercialization	1,682.9		—		1,682.9		2,340.0		—		2,340.0
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		$	15,948.4	$	(6,142.9)	$	9,805.5	$	14,232.8	$	(5,869.8)	$	8,363.0

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Amortization and Impairments

For the three and nine months ended September 30, 2024, amortization and impairment of acquired intangible assets, totaled $130.3 million and $295.5 million, respectively, compared to $60.9 million and $164.0 million, respectively, in the prior year comparative periods.

For the three and nine months ended September 30, 2024, amortization of acquired intangible assets, excluding impairment charges, totaled $110.1 million and $275.3 million, respectively, compared to $60.9 million and $164.0 million, respectively, in the prior year comparative periods. The increases were primarily due to amortization for the Reata acquisition acquired intangible assets associated with SKYCLARYS.

For the three and nine months ended September 30, 2024, amortization and impairment of acquired intangible assets reflects impairment charges of $20.2 million, related to intangible assets associated with Samsung Bioepis commercialization rights terminated during the third quarter of 2024. For the three and nine months ended September 30, 2023, we had no impairment charges.

For additional information on our 2019 Development and Commercialization Agreement with Samsung Bioepis, please read Note 19, Collaborative and Other Relationships, to these condensed consolidated financial statements.

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 2 to 31 years, with a remaining weighted average useful life of 13 years for acquired and in-licensed rights and patents and 10 years for developed technology and other. In connection with our acquisition of Reata in September 2023 we acquired SKYCLARYS, a commercially-approved product in the U.S., with an estimated fair value of approximately $4.2 billion, which includes measurement period adjustments. During the first quarter of 2024 SKYCLARYS was approved in the E.U. and became commercially available, which resulted in the reclassification of the related intangible asset, with an estimated fair value of approximately $2.3 billion, from IPR&D to completed technology.

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. Included in IPR&D balances are adjustments related to foreign currency exchange rate fluctuations.

The carrying value associated with our IPR&D assets as of December 31, 2023, related to the IPR&D programs we acquired in connection with our acquisition of Reata in September 2023, with an estimated fair value of approximately $2.3 billion, which includes measurement period adjustments. During the first quarter of 2024 SKYCLARYS was approved in the E.U. and became commercially available, which resulted in the reclassification of the related intangible asset from IPR&D to completed technology.

The carrying value associated with our IPR&D assets as of September 30, 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 that may be used to obtain priority review by the FDA for a future regulatory submission or sold to a third party. We recorded the priority review voucher based on its estimated fair value of $100.0 million as an intangible asset. The estimated fair value was based on recent external purchase and sale transactions of similar vouchers.

For additional information on our acquisitions of Reata and HI-Bio, please read Note 2, Acquisitions, to these condensed consolidated financial statements.

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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 September 30, 2024
2024 (remaining three months)	$	125.0
2025	510.0
2026	550.0
2027	585.0
2028	615.0
2029	655.0

Goodwill

The following table provides a roll forward of the changes in our goodwill balance:


(In millions)	As of September 30, 2024
Goodwill, December 31, 2023	$	6,219.2
Goodwill resulting from HI-Bio acquisition	256.5
Goodwill resulting from Reata acquisition(1)	4.7
Other	5.4
Goodwill, September 30, 2024	$	6,485.8

(1) Relates to Reata measurement period adjustments recognized during the nine months ended September 30, 2024.

For additional information on our acquisitions of Reata and HI-Bio, please read Note 2, Acquisitions, to these condensed consolidated financial statements.

As of September 30, 2024, we had no accumulated impairment losses related to goodwill. Other includes adjustments related to foreign currency exchange rate fluctuations.

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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 September 30, 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	$	802.4	$	—	$	802.4	$	—




Marketable equity securities	304.7		304.7		—		—
Other current assets:

Derivative contracts	6.0		—		6.0		—
Other non-current assets:
Plan assets for deferred compensation	42.8		—		42.8		—
Derivative contracts	0.1		—		0.1		—
Total	$	1,156.0	$	304.7	$	851.3	$	—
Liabilities:
Other current liabilities:
Derivative contracts	$	31.6	$	—	$	31.6	$	—
Contingent consideration obligations	287.1		—		—		287.1
Other non-current liabilities:
Derivative contracts	2.4		—		2.4		—
Contingent consideration obligations	221.8		—		—		221.8
Total	$	542.9	$	—	$	34.0	$	508.9

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(unaudited, continued)


	Fair Value Measurements on a Recurring Basis
	As of December 31, 2023
(In millions)	Total		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Cash equivalents	$	610.7	$	—	$	610.7	$	—




Marketable equity securities	416.8		416.8		—		—
Other current assets:
Receivable from Samsung BioLogics(1)	430.0		—		—		430.0
Derivative contracts	11.9		—		11.9		—
Other non-current assets:

Plan assets for deferred compensation	37.5		—		37.5		—
Total	$	1,506.9	$	416.8	$	660.1	$	430.0
Liabilities:
Derivative contracts	$	31.6	$	—	$	31.6	$	—

Total	$	31.6	$	—	$	31.6	$	—

(1) Represents the fair value of the second deferred payment due from Samsung BioLogics as a result of the sale of our 49.9% equity interest in Samsung Bioepis to Samsung BioLogics during the second quarter of 2022, for which we elected the fair value option. For additional information on the sale of our equity interest in Samsung Bioepis, please read Note 3, Dispositions, to these condensed consolidated financial statements.

Our marketable equity securities represent investments in publicly traded equity securities. Our ability to liquidate our investments in Denali, Sage and Sangamo 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, Sangamo and Sage common stock, please read Note 19, Collaborative and Other Relationships, to our consolidated financial statements included in our 2023 Form 10-K.

There have been no material impairments of our assets measured and carried at fair value as of September 30, 2024 and December 31, 2023. In addition, there have been no changes to our valuation techniques as of September 30, 2024 and December 31, 2023.

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 our consolidated financial statements included in our 2023 Form 10-K.

Level 3 Assets and Liabilities Held at Fair Value

The following table presents 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 September 30, 2024
(In millions)	Fair Value		Valuation Technique	Significant Unobservable Input(s)	Range	Weighted Average
Liabilities:
Contingent consideration obligations	$	508.9	Discounted cash flow	Discount rate	5.4% - 5.8%	5.6	%
				Expected timing of achievement of development milestones	2025 - 2030	—

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(unaudited, continued)

The weighted average discount rates were calculated based on the relative fair value of our contingent consideration obligations. In addition, we apply various probabilities of technological and regulatory success to the valuation models to estimate the fair values of our contingent consideration obligations, which ranged from 67.0% to near certain probability as of September 30, 2024.

There were no transfers of assets or liabilities into or out of Level 3 as of September 30, 2024 and December 31, 2023.

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 obligation, which was classified as a Level 3 measurement:



(In millions)	For the Three and Nine Months Ended September 30, 2024
Fair value, beginning of period	$	—
Contingent consideration resulting from HI-Bio acquisition	485.1
Changes in fair value	23.8

Fair value, end of period	$	508.9

Changes in the fair value of our contingent consideration obligations are recorded in (gain) loss on fair value remeasurement of contingent consideration in our condensed consolidated statements of income.

As of September 30, 2024, approximately $287.1 million of the fair value of the total contingent consideration obligation was classified as short-term and reflected as a component of accrued expense and other within our condensed consolidated balance sheets with the remaining $221.8 million reflected as a component of other long-term liabilities in our condensed consolidated balance sheets.

For the three and nine months ended September 30, 2024, the 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.

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 condensed 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.

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(unaudited, continued)

Debt Instruments

The fair and carrying values of our debt instruments, which are Level 2 liabilities, are summarized as follows:


	As of September 30, 2024				As of December 31, 2023
(In millions)	Fair Value		Carrying Value		Fair Value		Carrying Value
Current portion:
2023 Term Loan 364-day tranche	$	—	$	—	$	150.0	$	150.0

4.050% Senior Notes due September 15, 2025	1,739.9		1,748.1		—		—
Current portion of notes payable and term loan	1,739.9		1,748.1		150.0		150.0

Non-current portion:
2023 Term Loan three-year tranche	—		—		500.0		500.0
4.050% Senior Notes due September 15, 2025	—		—		1,721.5		1,746.6
2.250% Senior Notes due May 1, 2030	1,339.4		1,494.5		1,279.3		1,493.8
5.200% Senior Notes due September 15, 2045	1,079.2		1,101.0		1,089.7		1,100.7
3.150% Senior Notes due May 1, 2050	1,034.1		1,474.8		1,049.0		1,474.3
3.250% Senior Notes due February 15, 2051	490.9		475.5		498.2		472.8
Non-current portion of notes payable and term loan	3,943.6		4,545.8		6,137.7		6,788.2
Total notes payable and term loan	$	5,683.5	$	6,293.9	$	6,287.7	$	6,938.2

In connection with our acquisition of Reata we drew $1.0 billion from our 2023 Term Loan, comprised of a $500.0 million floating rate 364-day tranche and a $500.0 million floating rate three-year tranche. As of September 30, 2024, our 2023 Term Loan was repaid in full. For additional information on our 2023 Term Loan, please read Note 13, Indebtedness, to these condensed consolidated financial statements.

The fair values of each of our series of Senior Notes were determined through market, observable and corroborated sources. The fair values of our Senior Notes as of September 30, 2024, compared to December 31, 2023, remained flat reflecting a mix of higher and lower U.S. treasury yields and credit spreads across the maturity spectrum. For additional information related to our Senior Notes, please read Note 13, Indebtedness, to our consolidated financial statements included in our 2023 Form 10-K.


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 condensed consolidated balance sheets:


(In millions)	As of September 30, 2024		As of December 31, 2023


Money market funds	$	802.4	$	610.7


Total	$	802.4	$	610.7

The carrying value of our money market funds approximates fair value due to their short-term maturities.

Our marketable equity securities gains (losses) are recorded in other (income) expense, net in our condensed consolidated statements of income. The following tables summarize our marketable equity securities, classified as available-for-sale:


	As of September 30, 2024
(In millions)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value












Marketable equity securities
Marketable equity securities, current	$	58.3	$	—	$	(8.2)	$	50.1
Marketable equity securities, non-current	676.0		—		(421.4)		254.6
Total marketable equity securities	$	734.3	$	—	$	(429.6)	$	304.7

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(unaudited, continued)


	As of December 31, 2023
(In millions)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value












Marketable equity securities
Marketable equity securities, current	$	31.6	$	—	$	(21.0)	$	10.6
Marketable equity securities, non-current	948.3		—		(542.1)		406.2
Total marketable equity securities	$	979.9	$	—	$	(563.1)	$	416.8

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:



(In millions)	For the Three Months Ended September 30, 2023		For the Nine Months Ended September 30, 2023
Proceeds from maturities and sales	$	5,698.6	$	7,380.8
Realized gains	1.0		1.4
Realized losses	16.3		18.4

We partially funded our Reata acquisition through available cash, cash equivalents and marketable securities. As of December 31, 2023, we have sold all of our marketable debt securities. For additional information on our acquisition of Reata, please read Note 2, Acquisitions, to these condensed consolidated financial statements.

Realized losses for the three and nine months ended September 30, 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 condensed 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 September 30, 2024 and December 31, 2023, our strategic investment portfolio was comprised of investments totaling $353.3 million and $460.7 million, respectively, which are included in other current assets and investments and other assets within our condensed consolidated balance sheets.

The decrease in our strategic investment portfolio as of September 30, 2024, was primarily due to the decrease in the fair value of our investment in Sage common stock, partially offset by an increase in the fair value of our investment in Denali common stock. Additionally, we sold a portion of our Denali and Sangamo common stock during 2024.

For additional information on our strategic investments in Denali, Sangamo and Sage common stock, please read Note 19, Collaborative and Other Relationships, to our consolidated financial statements included in our 2023 Form 10-K.


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 September 30, 2024 and December 31, 2023, had durations of 1 to 15 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

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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 condensed consolidated statements of income that have been impacted by the hedged item.

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
(In millions)	As of September 30, 2024		As of December 31, 2023
Euro	$	1,569.2	$	1,169.0
British pound	32.9		—
Swiss franc	72.1		—

Canadian dollar	12.7		—
Total foreign currency forward contracts and options	$	1,686.9	$	1,169.0

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:



(In millions)	As of September 30, 2024		As of December 31, 2023
Unrealized gains	$	1.5	$	—
Unrealized (losses)	(43.0)		(34.8)
Net unrealized gains (losses)	$	(41.5)	$	(34.8)

We expect the net unrealized losses of approximately $41.5 million to be settled over the next 15 months, of which approximately $38.5 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 September 30, 2024 and December 31, 2023, credit risk did not materially change the fair value of our foreign currency forward contracts and forward currency options.

The following tables summarize the effect of foreign currency forward contracts and forward currency options designated as hedging instruments in our condensed consolidated statements of income (in millions):


For the Three Months Ended September 30,
Net Gains/(Losses) Reclassified from AOCI into Operating Income					Net Gains/(Losses) Excluded from Effectiveness Testing and Recognized in Operating Income
Location	2024		2023		Location	2024		2023
Revenue	$	(7.6)	$	(1.7)	Revenue	$	2.9	$	(2.1)
Operating expense	(1.5)		1.2		Operating expense	0.3		0.9

For the Nine Months Ended September 30,
Net Gains/(Losses) Reclassified from AOCI into Operating Income					Net Gains/(Losses) Excluded from Effectiveness Testing and Recognized in Operating Income
Location	2024		2023		Location	2024		2023
Revenue	$	2.9	$	18.3	Revenue	$	4.0	$	(1.5)
Operating expense	(8.5)		2.1		Operating expense	(1.6)		(2.0)

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 $1,339.6 million and $1,301.5 million as of September 30, 2024 and December 31, 2023, respectively. Net gains of $23.4 million and

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net losses of $6.6 million related to these contracts were recorded as a component of other (income) expense, net for the three and nine months ended September 30, 2024, respectively, compared to net losses of $22.6 million and $28.0 million, respectively, in the prior year comparative periods.

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 condensed consolidated balance sheets. The amounts in the table below would not be substantially different if the derivative assets and liabilities were offset.

The following table summarizes the fair value and presentation in our condensed consolidated balance sheets of our outstanding derivative instruments, including those designated as hedging instruments:


(In millions)	Balance Sheet Location	As of September 30, 2024		As of December 31, 2023
Cash Flow Hedging Instruments:
Asset derivative instruments	Other current assets	$	0.9	$	0.3
	Investments and other assets	0.1		—
Liability derivative instruments	Accrued expense and other	29.2		26.5
	Other long-term liabilities	2.4		—





Other Derivative Instruments:
Asset derivative instruments	Other current assets	5.1		11.6
Liability derivative instruments	Accrued expense and other	2.4		5.1


Note 11:			Property, Plant and Equipment

Property, plant and equipment are recorded at historical cost, net of accumulated depreciation. Accumulated depreciation on property, plant and equipment was $2,604.4 million and $2,402.5 million as of September 30, 2024 and December 31, 2023, respectively. For the three and nine months ended September 30, 2024, depreciation expense totaled $72.7 million and $213.9 million, respectively, compared to $64.1 million and $190.7 million, respectively, in the prior year comparative periods.

Solothurn, Switzerland Manufacturing Facility

In order to support our future growth and drug development pipeline, we built a large-scale biologics manufacturing facility in Solothurn, Switzerland. This facility includes 393,000 square feet related to a large-scale biologics manufacturing facility, 290,000 square feet of warehouse, utilities and support space and 51,000 square feet of administrative space. As of December 31, 2023, we had approximately $728.8 million capitalized as construction in progress related to this facility. In the second quarter of 2021 a portion of this facility (the first manufacturing suite) received a GMP multi-product license from SWISSMEDIC and was placed into service. The second manufacturing suite, which was also licensed to operate by SWISSMEDIC, became operational in the first quarter of 2024, resulting in approximately $717.3 million of fixed assets being placed into service. Solothurn has been approved for the manufacture of LEQEMBI.

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(unaudited, continued)


Note 12:			Leases

6100 Legacy Drive Lease

In connection with our acquisition of Reata in September 2023 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 represents 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 represents our estimate of the fair value for a market participant of the current rental market in the Dallas, Texas area. Included in our estimate of the market rental rate is 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.

For additional information on our acquisition of Reata, please read Note 2, Acquisitions, to these condensed consolidated financial statements.


Note 13:			Indebtedness

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.

Additionally, during the first quarter of 2024 we repaid $250.0 million of the three-year tranche, with the remaining $250.0 million portion of the three-year tranche 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 condensed consolidated financial statements.


Note 14:			Equity

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 share repurchases of our common stock during the three and nine months ended September 30, 2024 and 2023. Approximately $2.1 billion remained available under our 2020 Share Repurchase Program as of September 30, 2024.

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(unaudited, continued)

Accumulated Other Comprehensive Income (Loss)

The following tables summarize the changes in AOCI, net of tax by component:


	For the Three Months Ended September 30, 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		Total
Balance, June 30, 2024	$	9.8	$	(2.7)	$	(153.1)	$	(146.0)
Other comprehensive income (loss) before reclassifications	(49.1)		0.3		41.0		(7.8)
Amounts reclassified from AOCI	8.1		—		—		8.1
Net current period other comprehensive income (loss)	(41.0)		0.3		41.0		0.3
Balance, September 30, 2024	$	(31.2)	$	(2.4)	$	(112.1)	$	(145.7)

	For the Nine Months Ended September 30, 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		Total
Balance, December 31, 2023	$	(25.0)	$	(2.6)	$	(126.1)	$	(153.7)
Other comprehensive income (loss) before reclassifications	(11.4)		0.2		14.0		2.8
Amounts reclassified from AOCI	5.2		—		—		5.2
Net current period other comprehensive income (loss)	(6.2)		0.2		14.0		8.0
Balance, September 30, 2024	$	(31.2)	$	(2.4)	$	(112.1)	$	(145.7)


	For the Three Months Ended September 30, 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		Total
Balance, June 30, 2023	$	(14.5)	$	(13.4)	$	(0.4)	$	(144.5)	$	(172.8)
Other comprehensive income (loss) before reclassifications	2.5		29.0		(0.1)		(30.5)		0.9
Amounts reclassified from AOCI	12.0		0.6		—		—		12.6
Net current period other comprehensive income (loss)	14.5		29.6		(0.1)		(30.5)		13.5
Balance, September 30, 2023	$	—	$	16.2	$	(0.5)	$	(175.0)	$	(159.3)

	For the Nine Months Ended September 30, 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		Total
Balance, December 31, 2022	$	(15.7)	$	15.1	$	(1.1)	$	(163.2)	$	(164.9)
Other comprehensive income (loss) before reclassifications	2.3		18.9		0.6		(11.8)		10.0
Amounts reclassified from AOCI	13.4		(17.8)		—		—		(4.4)
Net current period other comprehensive income (loss)	15.7		1.1		0.6		(11.8)		5.6
Balance, September 30, 2023	$	—	$	16.2	$	(0.5)	$	(175.0)	$	(159.3)

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited, continued)

The following table summarizes the amounts reclassified from AOCI:


(In millions)		Amounts Reclassified from AOCI											Income Statement Location
	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2024			2023			2024			2023
Gains (losses) on securities available for sale		$	—		$	(15.2)		$	—		$	(17.0)	Other (income) expense
		—			3.2			—			3.6		Income tax (benefit) expense

Gains (losses) on cash flow hedges		(7.6)			(1.7)			2.9			18.3		Revenue
		(1.5)			1.2			(8.5)			2.1		Operating expense
		(0.1)			(0.1)			(0.2)			(0.3)		Other (income) expense
		1.1			—			0.6			(2.3)		Income tax (benefit) expense





Total reclassifications, net of tax		$	(8.1)		$	(12.6)		$	(5.2)		$	4.4


Note 15:			Earnings per Share

Basic and diluted shares outstanding used in our earnings per share calculation are calculated as follows:


	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
(In millions)	2024		2023		2024		2023
Numerator:
Net income (loss) attributable to Biogen Inc.	$	388.5	$	(68.1)	$	1,365.5	$	911.4
Denominator:
Weighted average number of common shares outstanding	145.7		144.8		145.5		144.7
Effect of dilutive securities:

Time-vested restricted stock units	0.3		—		0.4		0.7

Performance stock units settled in stock	0.1		—		0.1		0.1
Dilutive potential common shares	0.4		—		0.5		0.8
Shares used in calculating diluted earnings per share	146.1		144.8		146.0		145.5

Amounts excluded from the calculation of net income (loss) 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 condensed consolidated statements of income:


	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
(In millions)	2024		2023		2024		2023
Research and development	$	69.8	$	217.1	$	124.5	$	276.3
Selling, general and administrative	61.3		234.9		150.9		333.4

Subtotal	131.1		452.0		275.4		609.7
Capitalized share-based compensation costs	(2.4)		(2.6)		(8.0)		(8.5)
Share-based compensation expense included in total cost and expense	128.7		449.4		267.4		601.2
Income tax effect	(24.2)		(98.5)		(50.5)		(126.5)
Share-based compensation expense included in net income (loss) attributable to Biogen Inc.	$	104.5	$	350.9	$	216.9	$	474.7

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(unaudited, continued)

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 condensed consolidated statements of income for the three and nine months ended September 30, 2023. These amounts were associated with the accelerated vesting of stock options and RSUs previously granted to Reata employees and required no future services to vest.For additional information on our acquisition of Reata, please read Note 2, Acquisitions, to these condensed consolidated financial statements.

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 condensed consolidated statements of income for the three and nine months ended September 30, 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. For additional information on our acquisition of HI-Bio, please read Note 2, Acquisitions, to these condensed consolidated financial statements.

The following table summarizes share-based compensation expense associated with each of our share-based compensation programs:


	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
(In millions)	2024		2023		2024		2023
Time-vested restricted stock units	$	59.1	$	53.4	$	174.7	$	175.0


Performance stock units settled in stock	13.0		7.8		35.2		27.1
Employee stock purchase plan	1.9		2.0		8.2		8.8
Performance stock units settled in cash	(0.5)		0.1		(2.5)		4.8
Stock options	1.0		1.0		2.8		2.8
Market stock units	0.2		0.7		0.6		4.2
Reata equity awards(1)	—		387.0		—		387.0
HI-Bio equity awards(1)	56.4		—		56.4		—
Subtotal	131.1		452.0		275.4		609.7
Capitalized share-based compensation costs	(2.4)		(2.6)		(8.0)		(8.5)
Share-based compensation expense included in total cost and expense	$	128.7	$	449.4	$	267.4	$	601.2

(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 and required no future services to vest. For additional information on our acquisition of Reata and HI-Bio, please read Note 2, Acquisitions, to these condensed consolidated financial statements.

We estimate the fair value of our obligations associated with our performance stock units settled in cash at the end of each reporting period through expected settlement. Cumulative adjustments to these obligations are recognized each quarter to reflect changes in the stock price and estimated outcome of the performance-related conditions.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited, continued)

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 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.

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.


Note 17:			Income Taxes

Tax Rate

A reconciliation between the U.S. federal statutory tax rate and our effective tax rate is summarized as follows:


	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2024		2023		2024		2023
Statutory rate	21.0	%	21.0	%	21.0	%	21.0	%
State taxes	2.5		(1.3)		1.7		1.6
Taxes on foreign earnings, including valuation allowances	(11.9)		2.6		(7.0)		(6.1)
Tax credits	(1.2)		24.6		(1.7)		(7.7)
Purchased inventory valuation step-up and intangible assets	3.3		(2.3)		2.0		0.7



GILTI	(1.1)		14.8		(1.4)		(1.7)







Other, including permanent items	1.3		(7.8)		0.8		1.4
Effective tax rate	13.9	%	51.6	%	15.4	%	9.2	%

Changes in Tax Rate

For the three and nine months ended September 30, 2024, compared to the same periods in 2023, our effective tax rate includes a decrease in our valuation allowance related to changes in projected future foreign taxable income, partially offset by the impact of certain foreign uncertain tax positions.

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(unaudited, continued)

The effective tax rate for the three months ended September 30, 2023, reflects a tax benefit of $72.9 million recognized as a result of a pretax loss from operations of $141.2 million recorded during the third quarter of 2023, which was driven, in part, by the impact of the non-cash changes in the value of our equity investments and Reata acquisition-related expenses. For all other periods presented, the effective tax rates reflect tax expense on pretax income from operations in the respective periods.

The nine months ended September 30, 2023, was also impacted by the resolution of an uncertain tax matter related to tax credits.

For additional information on our acquisition of Reata, please read Note 2, Acquisitions, to these condensed consolidated financial statements.

Accounting for Uncertainty in Income Taxes

We and our subsidiaries are routinely examined by various taxing authorities. 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 2019 or state, local or non-U.S. income tax examinations for years before 2013.

The IRS and other national tax authorities routinely examine our intercompany transfer pricing with respect to intellectual property related transactions and it is possible that they may disagree with one or more positions we have taken with respect to such valuations.

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.

We estimate that it is reasonably possible that our gross unrecognized tax benefits, exclusive of interest, could

decrease by up to approximately $55.0 million in the next 12 months as a result of various audit closures, settlements and expiration of the statute of limitations.


Note 18:			Other Consolidated Financial Statement Detail

Other (Income) Expense, Net

Components of other (income) expense, net, are summarized as follows:


	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
(In millions)	2024		2023		2024		2023


Interest income	$	(11.6)	$	(95.9)	$	(49.1)	$	(252.7)
Interest expense	59.8		63.8		190.3		175.4
(Gains) losses on investments, net	(39.1)		317.3		22.2		289.6
Foreign exchange (gains) losses, net	4.9		11.4		25.6		30.8
Other, net	0.8		3.4		4.7		5.1
Total other (income) expense, net	$	14.8	$	300.0	$	193.7	$	248.2

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.

The following table summarizes our (gains) losses on investments, net that relate to our equity securities held during the following periods:


	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
(In millions)	2024		2023		2024		2023
Net (gains) losses recognized on equity securities	$	(39.1)	$	302.0	$	21.9	$	273.6
Less: Net (gains) losses realized on equity securities	(10.9)		4.4		(5.4)		5.3
Net unrealized (gains) losses recognized on equity securities	$	(28.2)	$	297.6	$	27.3	$	268.3

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(unaudited, continued)

The net unrealized gains recognized during the three months ended September 30, 2024, primarily reflect an increase in the aggregate fair value of our investments in Denali and Sangamo common stock of approximately $53.3 million, partially offset by a decrease in the fair value of Sage common stock of approximately $22.7 million.

The net unrealized losses recognized during the three months ended September 30, 2023, primarily reflect a decrease in the aggregate fair value of our investments in Sage, Denali and Sangamo common stock of approximately $295.6 million.

The net unrealized losses recognized during the nine months ended September 30, 2024, primarily reflect a decrease in the aggregate fair value of our investments in Sage common stock of approximately $90.2 million, partially offset by an increase in the fair value of Denali and Sangamo common stock of approximately $70.1 million.

The net unrealized losses recognized during the nine months ended September 30, 2023, primarily reflect a decrease in the aggregate fair value of our investments in Sage, Denali, Sangamo and Ionis common stock of approximately $265.0 million.

Accrued Expense and Other

Accrued expense and other consists of the following:


(In millions)	As of September 30, 2024		As of December 31, 2023
Revenue-related reserves for discounts and allowances	$	1,000.3	$	926.5
Employee compensation and benefits	288.7		335.1
Collaboration expense	280.6		214.6
Royalties and licensing fees	178.7		191.5

Current portion of contingent consideration obligations	287.1		—
Reata related accrued expense	82.3		117.5
Other	637.4		838.4
Total accrued expense and other	$	2,755.1	$	2,623.6

Other Long-term Liabilities

Other long-term liabilities were $744.1 million and $781.1 million as of September 30, 2024 and December 31, 2023, respectively, and included accrued income taxes totaling $162.0 million and $403.2 million, respectively.


Note 19:			Collaborative and Other Relationships

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 and follicular lymphoma; 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.

RITUXAN

Genentech and its affiliates are responsible for the worldwide manufacture of RITUXAN as well as all development and commercialization activities as follows:

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*•*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.

GAZYVA

The Roche Group and its sub-licensees maintain sole responsibility for the development, manufacture and commercialization 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.

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 if a biosimilar to OCREVUS is approved in the U.S.

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.

LUNSUMIO (mosunetuzumab)

In January 2022 we exercised our option with Genentech to participate in the joint development and commercialization of LUNSUMIO. Under our collaboration with Genentech, we were responsible for 30.0% of development costs for LUNSUMIO prior to FDA approval and will be 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. In December 2022 LUNSUMIO was granted accelerated approval by the FDA for the treatment of relapsed or refractory follicular lymphoma.

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 condensed 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.

COLUMVI (glofitamab)

In December 2022 we entered into an agreement with Genentech related to the commercialization and sharing of economics for COLUMVI, a bispecific antibody for the treatment of B-cell non-Hodgkin's lymphoma, which was subsequently granted accelerated approval by the FDA in June 2023. Under the terms of this agreement, we will have no payment obligations. Genentech will have sole decision-making rights on the commercialization of COLUMVI within the U.S. and we will 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.

In April 2024 Roche announced that COLUMVI, in combination with chemotherapy GemOx (glofitamab-gxbm), demonstrated a statistically significant improvement in overall survival for people with relapsed or refractory diffuse large B-cell lymphoma.

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(unaudited, continued)

Profit-sharing Formulas

RITUXAN and LUNSUMIO Profit Share

Our current pretax 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. As a result of the FDA approval of LUNSUMIO 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	%

First Threshold Date means the earlier of (i) the first day of the calendar quarter following the date U.S. gross sales of GAZYVA within any consecutive 12-month period have reached $500.0 million or (ii) the first date in any calendar year in which U.S. gross sales of LUNSUMIO have reached $150.0 million.

Second Threshold Date means the later of (i) the first date the gross sales in any calendar year in which U.S. gross sales of LUNSUMIO reach $350.0 million or (ii) January 1 of the calendar year following the calendar year in which the First Threshold Date occurs.

In March 2023 the First Threshold Date was achieved. As a result, beginning in April 2023 the pre-tax profit share for RITUXAN and LUNSUMIO was 35.0%.

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 each calendar year. Our share of annual co-promotion profits in excess of $50.0 million varies upon the following events, as summarized in the table below:



Until Second GAZYVA Threshold Date	37.5	%
After Second GAZYVA Threshold Date	35.0	%

Second GAZYVA Threshold Date means the first day of the calendar quarter following the date U.S. gross sales of GAZYVA within any consecutive 12-month period have reached $500.0 million. The Second GAZYVA Threshold Date can be achieved regardless of whether GAZYVA has been approved in a non-CLL indication.

In March 2023 the Second GAZYVA Threshold Date was achieved. As a result, beginning in April 2023 the pre-tax profit share for GAZYVA was 35.0%.

For additional information on our collaboration arrangements with Genentech, please read Note 19, Collaborative and Other Relationships, to our audited consolidated financial statements included in our 2023 Form 10-K.

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 condensed consolidated statements of income for the nine months ended September 30, 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 LEQEMBI Collaboration).

Eisai serves as the lead of LEQEMBI development and regulatory submissions globally with both companies co-commercializing and co-promoting the product, and Eisai having final decision-making authority. All costs, including research, development, sales and marketing expense, are shared equally between us and Eisai. We and Eisai co-promote LEQEMBI and share profits and losses equally. We currently manufacture LEQEMBI drug substance and drug product and in March 2022 we extended our supply agreement with Eisai related to LEQEMBI from five years to ten years for the manufacture of LEQEMBI drug substance.

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(unaudited, continued)

In July 2023 the FDA granted traditional approval of LEQEMBI. 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 Japan (September 2023), China (January 2024), South Korea (May 2024), Hong Kong (July 2024), Israel (July 2024), United Arab Emirates (August 2024) and Great Britain (August 2024).

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 other revenue in our condensed 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 condensed consolidated statements of income.

A summary of development and sales and marketing expense related to the LEQEMBI Collaboration is as follows:


	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
(In millions)	2024		2023		2024		2023
Total development expense incurred by the collaboration related to the advancement of LEQEMBI	$	77.7	$	88.5	$	255.6	$	282.6
Biogen's share of the LEQEMBI Collaboration development expense reflected in research and development expense in our condensed consolidated statements of income	38.8		44.3		127.8		141.3
Total sales and marketing expense incurred by the LEQEMBI Collaboration	164.6		163.4		476.2		191.0
Biogen's share of the LEQEMBI Collaboration sales and marketing expense reflected in selling, general and administrative expense in our condensed consolidated statements of income	82.3		81.7		238.1		95.5

Amounts receivable from Eisai related to the agreements discussed above were approximately $93.2 million and $1.4 million as of September 30, 2024 and December 31, 2023, respectively. Amounts payable to Eisai related to the agreements discussed above were approximately $146.2 million and $118.4 million as of September 30, 2024 and December 31, 2023, respectively.

For additional information on our collaboration arrangements with Eisai, please read Note 19, Collaborative and Other Relationships, to our consolidated financial statements included in our 2023 Form 10-K.

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 co-promote dapirolizumab pegol and share profits and losses equally.

A summary of development expense related to the UCB collaboration agreement is as follows:


	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
(In millions)	2024		2023		2024		2023
Total UCB collaboration development expense	$	19.2	$	13.6	$	52.3	$	46.2
Biogen's share of UCB collaboration development expense reflected in research and development expense in our condensed consolidated statements of income	9.5		6.8		26.1		23.1

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 and potential treatment of MDD and BIIB124 (SAGE-324) for the potential treatment of essential tremor with potential in other neurological conditions such as

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epilepsy. In July 2024 we and Sage announced that the Phase 2 KINETIC 2 dose-range study of BIIB124 did not meet its endpoints. Based on these results, we discontinued our further development of BIIB124.

In August 2023 the FDA approved ZURZUVAE for adults with PPD, pending DEA scheduling, which was completed in October 2023. 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. ZURZUVAE for PPD became commercially available in the U.S. during the fourth quarter of 2023. Additionally, the FDA issued a CRL for the NDA for zuranolone in the treatment of adults with MDD. In October 2024 we and Sage agreed to not pursue further development of zuranolone for the potential treatment of MDD. This decision was based on the significant new investment and time we expect would be needed to conduct the additional studies required to support approval of this indication.

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 Sage potential tiered royalties in the high teens to low twenties. 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 condensed consolidated balance sheets, and subsequently paid in January 2024.

For the three and nine months ended September 30, 2024, we recognized net profit-sharing expense of approximately $9.0 million and $20.5 million, respectively, to reflect Sage's 50.0% share of net collaboration results in the U.S. for ZURZUVAE for PPD, compared to net loss reimbursement of approximately $5.9 million in both prior year comparative periods. These amounts are recognized in collaboration profit sharing/(loss reimbursement) in our condensed consolidated statements of income.

A summary of development and sales and marketing expense related to the Sage collaboration is as follows:


	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
(In millions)	2024		2023		2024		2023
Total Sage collaboration development expense	$	8.4	$	72.0	$	29.6	$	158.9
Biogen's share of Sage collaboration development expense reflected in research and development expense in our condensed consolidated statements of income	4.2		36.0		14.8		79.5
Total sales and marketing expense incurred by the Sage collaboration	28.4		54.0		82.9		152.3
Biogen's share of Sage collaboration sales and marketing expense reflected in selling, general and administrative expense and collaboration profit sharing/(loss reimbursement) in our condensed consolidated statements of income	14.2		27.0		41.5		76.1

Denali Therapeutics Inc.

In August 2020 we entered into a collaboration and license agreement with Denali to co-develop and co-commercialize Denali's small molecule inhibitors of LRRK2 for Parkinson's disease (LRRK2 Collaboration) and also entered into a separate agreement to obtain an exclusive option to license two preclinical programs from Denali's Transport Vehicle platform, including its ATV-enabled anti-amyloid beta program and a second program utilizing its Transport Vehicle technology. In July 2024 we terminated our license with Denali for the ATV-enabled anti-amyloid beta program. This termination also results in the termination of the exclusive option agreement, as discussed above.

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 Three Months Ended September 30,				For the Nine Months Ended September 30,
(In millions)	2024		2023		2024		2023
Total Denali collaboration development expense	$	14.9	$	12.6	$	44.5	$	51.3
Biogen's share of Denali collaboration development expense reflected in research and development expense in our condensed consolidated statements of income	8.9		7.6		26.7		30.8

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Other Research and Discovery 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 three and nine months ended September 30, 2024, we recorded approximately $26.5 million and $42.5 million, respectively, as research and development expense in our condensed consolidated statements of income related to other research and discovery related arrangements, compared to zero and $2.8 million, respectively, in the prior year comparative periods.

Samsung Bioepis Co., Ltd.

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 (ranibizumab-nuna), 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. 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 condensed consolidated statements of income for the three and nine months ended September 30, 2024. Biogen will transfer commercialization rights for BYOOVIZ and OPUVIZ in the U.S. and Canada back to Samsung Bioepis over a period of up to 18 months. During this transition period, we will continue to commercialize BYOOVIZ. The termination does not impact the other markets in the DCA Agreement.

We may also pay Samsung Bioepis up to approximately $165.0 million in additional development, regulatory and sales-based milestones associated with the remaining major markets covered by the agreement.

2013 Commercial Agreement

We reflect revenue on sales of BENEPALI, IMRALDI and FLIXABI to third parties in product revenue, net in our condensed consolidated statements of income and record the related cost of revenue and sales and marketing expense in our condensed 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 condensed consolidated statements of income.

We share 50.0% of the profit or loss related to our commercial agreement with Samsung Bioepis, which is recognized in collaboration profit sharing/(loss reimbursement) in our condensed consolidated statements of income. For the three and nine months ended September 30, 2024, we recognized net profit-sharing expense of approximately $60.3 million and $176.8 million, respectively, to reflect Samsung Bioepis' 50.0% sharing of the net collaboration profits, compared to a net profit-sharing expense of approximately $56.4 million and $170.4 million, respectively, in the prior year comparative periods.

In July 2024 we exercised our option to extend the term of our 2013 commercial agreement for BENEPALI, IMRALDI and FLIXABI by an additional five years. In connection with this exercise, we paid Samsung Bioepis an option exercise fee of $60.0 million in July 2024 which was recognized in intangible assets, net within our condensed consolidated balance sheets.

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 condensed consolidated statements of income.

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Amounts receivable from Samsung Bioepis related to the agreements discussed above were approximately $20.9 million and $9.9 million as of September 30, 2024 and December 31, 2023, respectively. Amounts payable to Samsung Bioepis related to the agreements discussed above were approximately $82.6 million and $73.7 million as of September 30, 2024 and December 31, 2023, respectively.

For additional information on our collaboration arrangements with Samsung Bioepis and our other significant collaboration arrangements, please read Note 19, Collaborative and Other Relationships, to our consolidated financial statements included in our 2023 Form 10-K.


Note 20:			Investments in Variable Interest Entities

Consolidated Variable Interest Entities

Our condensed 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, included in our 2023 Form 10-K.

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 September 30, 2024 and December 31, 2023, the carrying value of our investments in certain biotechnology companies representing potential unconsolidated variable interest entities totaled $23.6 million and $16.4 million, respectively. 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 development expense in our condensed consolidated statements of income as they are incurred. We have provided no financing to these variable interest entities other than previous contractually required amounts.

For additional information on our investments in Neurimmune and other variable interest entities, please read Note 20, Investments in Variable Interest Entities, to our consolidated financial statements included in our 2023 Form 10-K.


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 our consolidated financial statements included in our 2023 Form 10-K.

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

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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 asserted against Biogen

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 and related to ADUHELM, one filed by the Oklahoma Firefighters Pension and Retirement System in February 2022 and related to ADUHELM and one filed by Thomas Allen Gray in June 2024 and related to statements about our compliance controls, 2023 earnings guidance and other matters. 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.

Securities Litigation asserted against Reata

As previously disclosed, in March 2024 the United States District Court for the Eastern District of Texas granted final approval of the previously disclosed settlement of litigation filed by putative stockholders of Reata (later acquired by Biogen) alleging violations of the federal securities laws by Reata, certain of its former officers and directors, and certain underwriters under 15 U.S.C. §78j(b) and §78t(a), 17 C.F.R. §240.10b-5, and 15U.S.C. §§77k, 77l(a)(2) and 77o, and dismissed the action with prejudice.

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 in February 2022, one filed by Elaine Wang in July 2022, one filed by Jonathan Blaufarb (Blaufarb I) in July 2024, one filed by Lawrence 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 and Hollin actions relate to statements about 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. The Booth and Wang actions are stayed.

IMRALDI Patent Litigation

In June 2024, the Technical Boards of Appeal of the European Patent Office upheld the validity of Fresenius Kabi Deutschland GmbH's (Fresenius Kabi's) European Patent 3 145 488 (the EP '488 Patent), which expires in May 2035. 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 that IMRALDI, the adalimumab biosimilar product of Samsung Bioepis that Biogen commercializes in Europe, infringes the French counterpart of the EP ‘488 Patent. In March 2024 the Düsseldorf Regional Court dismissed Fresenius Kabi's claim of infringement of the German counterpart of the EP '488 Patent and Fresenius Kabi has appealed to the Higher Regional Court of Düsseldorf.

Litigation with Former Convergence Shareholders

In 2015 Biogen acquired Convergence, a U.K. company. In 2019 Shareholder Representative Services LLC, on behalf of the former shareholders of Convergence, asserted claims of $200.0 million for alleged breaches of the contract pursuant to which we acquired Convergence. In June 2023 Shareholder Representative Services LLC and 24 former 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, interest and costs.

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Humana Patient Assistance Litigation

In March 2023 the District Court dismissed the previously disclosed action filed against us by Humana in September 2020. Humana had alleged damages related to our providing MS patients with free medications and making charitable contributions to non-profit organizations that assist MS patients and had alleged violations of the federal RICO Act and state laws. In December 2023 Humana appealed to the United States Court of Appeals for the First Circuit and the appeal is pending.

Genentech Litigation

In February 2023 Genentech, Inc. filed suit against us in the U.S. District Court for the Northern District of California and claims that it is owed royalties of approximately $92.7 million on sales of TYSABRI that occurred after the expiration of a patent licensed by Genentech to Biogen, together with interest and costs.

Lender Litigation

In April 2024, BioPharma Credit PLC, BPCR Limited Partnership, and BioPharma Credit Investments V (Master) LP filed suit against us and Reata Pharmaceuticals, Inc. in the Supreme Court of the State of New York alleging breach of a loan agreement with Reata and seeking payment of approximately $23.2 million, plus interest, costs and attorneys' fees.

Antitrust Litigation

In August and September 2024, four suits were filed against us in the U.S. District Court for the Northern District of Illinois, by Local No. 1 Health Fund; the Mayor and City Council of Baltimore; New York State Teamsters Council Health and Hospital Fund; and Teamsters Local 237 Welfare Fund and Teamsters Local 237 Retirees' Benefit Fund. Plaintiffs allege violations of federal antitrust laws including 15 U.S.C. §§ 1, 2 and 13(c) and various state laws, based on contracts with pharmacy benefit managers related to TECFIDERA and VUMERITY. Plaintiffs seek declarations of the actions as class actions, monetary, declaratory and equitable relief, and attorneys' fees and costs.

Other Matters

Government Investigations

We have received subpoenas from the SEC seeking information relating to ADUHELM and its launch, and our equity plans. We have also received subpoenas from the DOJ and SEC seeking information relating to our business operations in several foreign countries. The Italian Competition Authority is investigating Biogen and other companies in relation to our biosimilar product BYOOVIZ.

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.

Annulment Proceedings in the General Court of the European Union relating to TECFIDERA

In November 2020 Mylan Ireland filed an action in the General Court of the European Union (General Court) to annul the EMA's decision not to validate its applications to market generic versions of TECFIDERA on the grounds that TECFIDERA benefits from regulatory data protection. In October 2024 the General Court dismissed the action.

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.

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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Next: Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS